UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F

(Mark one)



| |  ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------------

OR



| |  ̈ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ------------------------------------------------------------------------------------



OR



| |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------

OR



| | x | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | -------------------------------------------------------------------------------------------



Date of event requiring
this shell company report: September 19, 2014



Commission File Number: 001-35755



CIS ACQUISITION LTD.

(Exact name of the Registrant as specified
in its charter)



British Virgin Islands

(Jurisdiction of incorporation or organization)



16 Kaifa Avenue

Danyang, Jiangsu, China 212300

(Address of principal executive offices)



Xin Chao

Chief Executives Officer

16 Kaifa Avenue

Danyang, Jiangsu, China 212300

Tel: +86 511-8673-3102

Email: chaoxin77@sina.com

(Name, Telephone, E-mail
and/or Facsimile Number and Address of Company Contact Person)



with a copy to:



Richard Friedman, Esq.

Wei Wang, Esq.

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Fl.

New York, NY 10006



Securities registered or to be registered
pursuant to Section 12(b) of the Act:



| | Title of each class                        | Name of exchange on which registered | 
| | ------------------------------------------ | ------------------------------------ | 
| |                                            |                                      | 
| | Callable Class A Shares, $0.0001 par value | NASDAQ Capital Market                | 
| |                                            |                                      | 
| | Redeemable Ordinary Share                  |                                      | 
| | Purchase Warrants                          | NASDAQ Capital Market                | 
| |                                            |                                      | 
| | Units                                      | NASDAQ Capital Market                | 



Securities registered or to be registered
pursuant to Section 12(g) of the Act:



None.



Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act:



None.



On September 23, 2014, the issuer had 7,033,059* ordinary shares
outstanding.





*Excluding 1,500,000 Class C Shares in escrow that are subject
to certain net income targets and after giving effect to the redemption of 3,500,000 Class A Shares.







Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.

Yes ̈Nox



If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.

Yes ̈No ̈



Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.

YesxNo ̈



Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).

Yes ̈Nox



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act.



| ̈Large Accelerated filer |  ̈Accelerated filer | xNon-accelerated filer
|------------------------ | ------------------ | ----------------------



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



|xUS GAAP |  ̈ | International Financial Reporting Standards as issued by the International  Accounting Standards Board |  ̈Other
|-------- | - | ------------------------------------------------------------------------------------------------------ | ------



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow.

 ̈Item 17 ̈Item 18



If this is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes ̈No ̈











TABLE OF CONTENTS





|                                             |                                                       | Page
|-------------------------------------------- | ----------------------------------------------------- | ----
|                                             |                                                       |     
|PART I                                       |                                                      
|                                             |                                                      
|ITEM 1.                                      | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 5   
|                                             |                                                       |     
|A. Directors and Senior Management           | 5                                                    
|C. Auditors                                  | 6                                                    
|                                             |                                                       |     
|ITEM 2.                                      | OFFER STATISTICS AND EXPECTED TIMETABLE               | 7   
|                                             |                                                       |     
|A. Offer Statistics                          | 7                                                    
|B. Method and Expected Timetable             | 7                                                    
|                                             |                                                       |     
|ITEM 3.                                      | KEY INFORMATION                                       | 7   
|                                             |                                                       |     
|A. Selected Financial Data                   | 7                                                    
|B. Capitalization and Indebtedness           | 8                                                    
|C. Reasons for the Offer and Use of Proceeds | 8                                                    
|D. Risk Factors                              | 8                                                    
|                                             |                                                       |     
|ITEM 4.                                      | INFORMATION ON THE COMPANY                            | 25  
|                                             |                                                       |     
|A. History and Development of the Company    | 25                                                   
|B. Business Overview                         | 27                                                   
|C. Organizational Structure                  | 57                                                   
|D. Property, Plants and Equipment            | 57                                                   
|                                             |                                                       |     
|ITEM 4A.                                     | UNRESOLVED STAFF COMMENTS                             | 57  
|                                             |                                                       |     
|ITEM 5.                                      | OPERATING AND FINANCIAL REVIEW AND PROSPECTS          | 58  
|                                             |                                                       |     
|ITEM 6.                                      | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES            | 72  
|                                             |                                                       |     
|A. Directors and Senior Management           | 72                                                   
|B. Compensation                              | 72                                                   
|C. Board Practices                           | 74                                                   
|D. Employees                                 | 76                                                   
|E. Share Ownership                           | 76                                                   
|                                             |                                                       |     
|ITEM 7.                                      | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS     | 77  
|                                             |                                                       |     
|A. Major Shareholders                        | 77                                                   
|B. Related Party Transactions                | 78                                                   
|C. Interests of Experts and Counsel          | 78                                                   
|                                             |                                                       |     
|ITEM 8.                                      | FINANCIAL INFORMATION                                 | 78  



2







|A. Consolidated Statements and Other Financial Information | 78                                                        
|---------------------------------------------------------- | ----------------------------------------------------------
|B. Significant Changes                                     | 78                                                        
|                                                           |                                                           
|ITEM 9.                                                    | THE OFFER AND LISTING                                     
|                                                           |                                                           
|A. Offer and Listing Details                               | 78                                                        
|B. Plan of Distribution                                    | 79                                                        
|C. Markets                                                 | 79                                                        
|D. Selling Shareholders                                    | 79                                                        
|E. Dilution                                                | 80                                                        
|F. Expenses of the Issue                                   | 80                                                        
|ITEM 10.                                                   | ADDITIONAL INFORMATION                                    
|                                                           |                                                           
|A. Share Capital                                           | 80                                                        
|B. Memorandum and Articles of Association                  | 80                                                        
|C. Material Contracts                                      | 83                                                        
|D. Exchange Controls                                       | 83                                                        
|E. Taxation                                                | 84                                                        
|F. Dividends and Paying Agents                             | 94                                                        
|G. Statement by Experts                                    | 94                                                        
|H. Documents on Display                                    | 94                                                        
|I. Subsidiary Information                                  | 95                                                        
|                                                           |                                                           
|ITEM 11.                                                   | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|                                                           |                                                           
|ITEM 12.                                                   | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES    
|                                                           |                                                           
|PART II                                                    |                                                           
|                                                           |                                                           
|PART III                                                   |                                                           
|                                                           |                                                           
|ITEM 17.                                                   | FINANCIAL STATEMENTS                                      
|                                                           |                                                           
|ITEM 18.                                                   | FINANCIAL STATEMENTS                                      
|                                                           |                                                           
|ITEM 19.                                                   | EXHIBITS                                                  



3







INTRODUCTORY NOTES



Use of Certain Defined Terms



Except as otherwise indicated by the context and for the purposes
of this report only, references in this report to:



| | · | “CIS,” “we,”
    “us,” “our” and the “Company” refers  to CIS Acquisitions Ltd., a company organized
    in the BVI;
| | - | --------------------------------------------------------------------------------------------------------------------



| | · | “Elite” refers to Elite Ride Limited, which is our wholly owned subsidiary and a company organized in the BVI;                                                                                                                                                                                                                                                                                                                   
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | · | “Delta” refers to Delta
    Advanced Materials Limited, a Hong Kong company, as well as Delta’s four wholly-owned operating subsidiaries in the
    PRC: Jiangsu Yangtze Delta Fine Chemical Co., Ltd (“Jiangsu Delta”), Jiangsu Zhengxin New Material Research and
    Development Co., Ltd (“Jiangsu Zhengxin”), Jiangsu Delta Logistics Co., Ltd (“Jiangsu Logistics”),
    and Binhai Deda Chemical Co., Ltd (“Binhai Deda”).



| | · | “Business Combination” refers to our acquisition of Elite on September 19, 2014, pursuant to a share exchange transaction among us, Elite, Delta and shareholders of Elite;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | “BVI” are to the British Virgin Islands;
| | - | ----------------------------------------



| | · | “Hong Kong” are to the Hong Kong Special Administrative Region of the People’s Republic of China;
| | - | -------------------------------------------------------------------------------------------------



| | · | “PRC” and “China” are to the People’s Republic of China;
| | - | --------------------------------------------------------



| | · | “SEC” are to the Securities and Exchange Commission;
| | - | ----------------------------------------------------



| | · | “Exchange Act” are to the Securities Exchange Act of 1934, as amended;
| | - | ----------------------------------------------------------------------



| | · | “Securities Act” are to the Securities Act of 1933, as amended;
| | - | ---------------------------------------------------------------



| | · | “Renminbi” and “RMB” are to the legal currency of China;
| | - | --------------------------------------------------------



| | · | “Hong Kong dollars,” “HKD” and “HK$” are to the legal currency of Hong Kong; and
| | - | --------------------------------------------------------------------------------



| | · | “U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.
| | - | ---------------------------------------------------------------------------------



Forward-Looking Information



In addition to historical information,
this report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. We use words such as “believe,” “expect,” “anticipate,” “project,”
“target,” “plan,” “optimistic,” “intend,” “aim,” “will”
or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those
concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales,
earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future
operations; and any statements regarding future economic conditions or performance, as well as all assumptions, expectations, predictions,
intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, as well as assumptions, which, if they were to ever materialize or prove incorrect,
could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.
Potential risks and uncertainties include, among other things, the possibility that we may not be able to maintain or increase
our net revenues and profits due to our failure to anticipate consumer preferences and develop new menswear products, our failure
to execute our business expansion plan, changes in domestic and foreign laws, regulations and taxes, changes in economic conditions,
uncertainties related to China’s legal system and economic, political and social events in China, a general economic downturn,
a downturn in the securities markets, and other risks and uncertainties which are generally set forth under Item 3 “Key information—D.
Risk Factors” and elsewhere in this report.



4







Readers are urged to carefully review and
consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise
interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects.
The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required
by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or
future events.



PART I



|ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|------- | -----------------------------------------------------



A. Directors and Senior Management



Our directors and executive officers immediately
following the consummation of the Business Combination are as follows:



|Name                |  | Age |  | Position                            
|------------------- |  | --- |  | ------------------------------------
|Xin Chao            |  | 37  |  | Chairman and Chief Executive Officer
|Richard Yan         |  | 39  |  | Chief Financial Officer             
|David Chi-Ping Chow |  | 51  |  | Independent Director (1)(2)(3)      
|Richard Liu         |  | 44  |  | Independent Director (1)(2)(3)      
|Changguang Wu       |  | 46  |  | Executive Director                  
|George Kaufman      |  | 39  |  | Independent Director (1)(2)(3)      



|(1) | Member of audit committee.                    
|--- | ----------------------------------------------
|(2) | Member of compensation committee.             
|(3) | Member of governance and nominating committee.



Below is a summary of the business experience
of each of our executive officers and directors:



Xin Chaohas over 10 years
of experience in the fine chemical industry. From 1999 to 2000, Mr. Chao worked as a sales manager at Sinopec International Corporation
where he was actively involved in international trading matters. From 2000 to 2002, he worked at Lianshui County Zhengxin Chemical
Co., Ltd. as the general manager in charge of the entire business operations of the company. Subsequently, in August 2002 and August
2003, Mr. Chao co-founded (i) Danyang Beijiate Materials Trading (“Beijiate Materials”) and (ii) Danyang Beijiate Chemicals
Co., Ltd. (“Beijiate Chemicals”) respectively, where he was responsible for the daily operations of both Beijiate Materials
and Beijiate Chemicals. Mr. Chao co-found Jiangsu Delta, and he was the general manager of Jiangsu Delta when it was incorporated
as a wholly foreign-owned enterprise on 15 June 2007. Mr. Chao subsequently acquired the entire equity interest in Jiangsu Delta
from S&S International through Hong Kong Huilong International Investment Limited (formerly known as Hong Kong Zhengxin International
Investment Limited) (which was controlled by Mr. Chao) on 13 April 2008. Since its incorporation, Mr.Chao has been actively involved
in the operations and management of Jiangsu Delta. Mr. Xin Chao graduated from Nanjing University with a Bachelor’s Degree
in International Trading.



5







Hong Yan has been serving as
the chief financial officer of Delta Advanced Materials Limited since May 2011. He is responsible for the preparation of all financial
statements as well as for reviewing and developing effective financial policies and control procedures for Delta. From 1997 to
2002, Mr Yan was the Assistant Manager in the Financial Advisory Services Department of KPMG Shanghai, where he was responsible
for carrying out statutory audits, rendering an in depth understanding of the International Financial Reporting Standards. From
2002 to 2004, Mr Yan served as the Financial Controller of Hartcourt Companies Inc, where he supervised the company’s accounts
department. Hartcourt Companies Inc, which is listed on the US Stock Exchange, distributes computer hardware and peripherals made
by Samsung Electronics in Shanghai. From 2004 to 2006, he assumed the position of Vice President of Finance of Sancon Resources
Recovery Inc, an environmental service and waste management company that operates recycling facilities in China and Australia,
where he was responsible for overseeing the financial and accounting matters of the company, as well as liaising with and reporting
to the US Securities and Exchange Commission in relation to compliance issues. Sancon Resources Recovery Inc is also listed on
the US Stock Exchange. From 2006 to 2011, Mr Yan served as the managing partner of Shanghai KRC Business Consulting Co., Ltd.,
a consultancy on audit, tax and advisory services which he co-founded and still co-owns. Mr. Yan graduated with a Bachelor’s
Degree in Accounting and a Masters of Business Administration, both from Shanghai Jiao Tong University and is a member of the Chinese
Institute of Certified Public Accountants.



Changguang Wuhas been with
Delta as its Executive Director since 2007 and has been actively involved in the daily operations of Delta since its establishment
in 2007. From 1989 to 1992, Mr. Wu was a loan officer of People’s Bank of Danyang City. From 1992 to 2002, he worked as a
chief planner at Danyang City Trust and Investment Co., Ltd. Subsequently, in August 2002 and August 2003, Mr. Wu co-founded (i)
Danyang Beijiate Materials Trading (“Beijiate Materials”) and (ii) Danyang Beijiate Chemicals Co., Ltd. (“Beijiate
Chemicals”) respectively with Mr. Xin Chao, where he was mainly responsible for the management of both Beijiate Materials
and Beijiate Chemicals. While he was involved in the management of Beijiate Materials and Beijiate Chemicals, he was also the general
manager of Danyang Liansheng Chemicals Co., Ltd. (“Liansheng Chemicals”). He officially left Liansheng Chemicals and
joined the Target Group in November 2007. Mr. Wu graduated from Banking School of Jiangsu in 1989 with a diploma in Economic Management.



David Chi-Ping Chow is currently
the General Manager for China at Interclients LLC and a partner at Shanghai China Bay Partners. Mr. Chow is a United States Certified
Public Accountant and an American Certified Tax Practitioner. He has 27 years of experience in financial planning, corporate internal
control and audit, strategic planning and implementation. Mr. Chow previously has worked as the Chief Financial Officer for China
at General Mills and Haagen-Dazs, Xian Janssen Pharmaceutical (a subsidiary of Johnson & Johnson group), respectively. He was
the Chief Financial Officer for Greater China of Pillsbury and Haagen-Dazs, the Chief Financial Officer for China and Vice-President
of Supply Chain for Nabisco. He was a partner of Speakman & Price public accounting firm and a financial analyst of Motorola.
Mr. Chow graduated with a Bachelor in Accounting from Santa Clara University, California. He also received management training
from Columbia University and Northwestern University.



Richard Liu has over twenty
years’ experience in business and legal practice. He is a partner and director of securities investment section of Shanghai
Huiye Law Firm since December 12, 2006. He was a legal assistant at Baker& McKenzie’s Shanghai office from May 2004 through
October 2006. Prior to that, he was Senior Consultant of Overseas Consulting department, Shanghai Foreign Service Company from
June 2001 to April 2004. He received his bachelor’s degree in law from the Art College of Shanghai University.



George Kaufman is a Managing
Director of Investment Banking with Chardan Capital Markets, LLC, a New York based investment bank. Mr. Kaufman is a director of
Prime Acquisition Corp., a company that owns and operates office, commercial and industrial properties in Italy and is focused
on building a portfolio of high-yield assets primarily in Europe. Mr. Kaufman founded Detroit Coffee Company, LLC, a national roaster,
wholesaler and retail distributor of high-end specialty coffees, in January 2002 and currently serves as its chief executive officer.
Mr. Kaufman received a Bachelor of Arts degree in Economics from the University of Vermont in 1999.



B. Advisors



Forbes Hare acts as the BVI counsel to
us. Sichenzia Ross Friedman Ference LLP acts as United States counsel to us.



C. Auditors



From the Company’s inception through
the consummation of the Business Combination, Marcum LLP, an independent registered public accounting firm, 750 Third Avenue, New
York, NY 10017, has acted as the Company’s independent registered public accounting firm.



6







|ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE
|------- | ---------------------------------------



A. Offer Statistics



Not applicable.



B. Method and Expected Timetable



Not applicable.



|ITEM 3. | KEY INFORMATION
|------- | ---------------



A. Selected Financial Data





Selected Financial Data of CIS



The following selected financial data,
other than selected operating data, have been derived from CIS’ audited financial statements for the year ended October 31,
2013, the period from November 28, 2011 (Inception) to October 31, 2012 and from CIS’ unaudited financial statements for
the six months ended April 30, 2014. The financial statements are prepared and presented in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”).



|                                               |  | For the Six Months Ended April 30, 2014 |            |   | For the Six Months Ended April 30, 2013 |   |            | For the Year Ended October 31, 2013 |  |   | For the Period November 28, 2011 (Inception) Through October 31, 2012 |  
|---------------------------------------------- |  | --------------------------------------- | ---------- | - | --------------------------------------- | - | ---------- | ----------------------------------- |  | - | --------------------------------------------------------------------- | -
|                                               |  | (unaudited)                             |            |   | (unaudited)                             |   |            |                                     |  |   |                                                                       |  
|Statement of Operations Data                   |  |                                         |            |   |                                         |   |            |                                     |  |   |                                                                       |  
|Loss from operations                           |  | $                                       | (317,912   | ) |                                         | $ | (80,112    | )                                   |  | $ | (213,819                                                              | )
|Net loss                                       |  | $                                       | (265,132   | ) |                                         | $ | (4,068,131 | )                                   |  | $ | (3,429,198                                                            | )
|Loss from operations per share                 |  | $                                       | (0.19      | ) |                                         | $ | (0.05      | )                                   |  | $ | (0.14                                                                 | )
|Weighted average shares outstanding            |  |                                         | 1,636,000  |   |                                         |   | 1,460,309  |                                     |  |   | 1,548,877                                                             |  
|                                               |  |                                         |            |   |                                         |   |            |                                     |  |   |                                                                       |  
|Balance Sheet Data                             |  |                                         |            |   |                                         |   |            |                                     |  |   |                                                                       |  
|Working capital (deficiency)                   |  | $                                       | (172,693   | ) |                                         | $ | 285,907    |                                     |  | $ | 145,219                                                               |  
|Total assets                                   |  | $                                       | 41,671,382 |   |                                         | $ | 41,925,589 |                                     |  | $ | 41,819,280                                                            |  
|Total liabilities                              |  | $                                       | 3,406,674  |   |                                         | $ | 4,034,682  |                                     |  | $ | 3,289,440                                                             |  
|Value of shares which may be redeemed for cash |  | $                                       | 36,400,000 |   |                                         | $ | 36,400,000 |                                     |  | $ | 36,400,000                                                            |  
|Total shareholders’ equity                     |  | $                                       | 1,864,708  |   |                                         | $ | 1,490,907  |                                     |  | $ | 2,129,840                                                             |  



Selected Financial Data of Delta



Following
the Acquisition, Delta is considered to be our predecessor for accounting purposes, as further described in Item 18 of this report.
The following table presents selected financial data regarding Delta’s business. It should be read in conjunction with its
consolidated financial statements and related notes contained elsewhere in this report and the information under Item 5 “Operating
and Financial Review and Prospects.” The selected consolidated statement of income data for the fiscal years ended June
30, 2014, 2013 and 2012, and the selected consolidated balance sheet data as of June 30, 2014, 2013 and 2012 have been derived
from Delta’s audited consolidated financial statements that are included in this report in Item 18, beginning on page F-1.
Selected financial data for the fiscal years ended June 30, 2011 and 2010 below is derived from unaudited financial statements
of Delta for the specified periods.



Delta’s consolidated financial statements
were prepared and presented in accordance with U.S. GAAP and presented in U.S. dollars. The selected financial data information
is only a summary and should be read in conjunction with the historical consolidated financial statements and related notes contained
elsewhere herein. The financial statements contained elsewhere fully represent our financial condition and operations; however,
they are not indicative of our future performance.



|                             |  | For the Years Ended June 30, |             
|---------------------------- |  | ---------------------------- | ------------
|                             |  | 2014                         |             
|Statement of Income Data     |  |                              |             
|Revenue                      |  | $                            | 175,327,717 
|Cost of sales                |  | $                            | (157,904,729
|Gross profit                 |  | $                            | 17,422,988  
|Income from operations       |  | $                            | 11,634,940  
|Net income                   |  | $                            | 6,828,308   
|Comprehensive income         |  | $                            | 7,144,747   
|                             |  |                              |             
|Balance Sheet Data           |  |                              |             
|Working capital (deficiency) |  | $                            | (27,362,427 
|Total assets                 |  | $                            | 206,531,300 
|Total liabilities            |  | $                            | 151,071,926 
|Total equity                 |  | $                            | 55,459,374  









7









B. Capitalization and Indebtedness



Not applicable.



C. Reasons for the Offer and Use of Proceeds



Not applicable.



D. Risk Factors



You should carefully consider the following
risk factors in addition to the other information included or incorporated by reference in this report, including matters addressed
in the section entitled “Forward-Looking Statements”. We caution you not to place undue reliance on the forward-looking
statements contained in this report, which speak only as of the date hereof.



The risks and uncertainties described below
include all of the material risks applicable to us; however they are not the only risks and uncertainties that we face. Additional
risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations
or the Business Combination.



Risk Factors Relating to Delta



Delta is subject to the PRC's environmental
protection measures.



Delta’s business activities produce
certain pollutants such as waste water and waste gas, during the production process. The PRC has in recent years tightened its
environmental protection measures to be more in line with steps taken by developed countries.



Under the PRC Environmental Protection
Law, any enterprise which discharges pollutants is required to be registered with the relevant PRC governmental departments and
to obtain a pollutant discharge permit. Any such enterprise is also required to have waste water, waste gas, solid waste and noise
pollution treatment facilities that meet the relevant environmental standards and to have the pollutants treated before discharge.
The provincial and municipal governments of provinces, autonomous regions and municipalities may also set their own guidelines
for the discharge of pollutants within their own provinces or districts.



On October 20, 2012, Jiangsu Delta obtained
the Pollutant Discharge Permit of Zhenjiang issued by the Environment Protection Agency of Dantu District, Zhenjiang City for discharge
of the key production wastes, including inter alia, ammonia, nitrogen, totel phosphorus, petroleum waste, benzene, toluene, dimethylbenzene,
chlorobenzene, soot, hydrochloric acid, hydrochloric acid, maleic anhydride and sulphur dioxide. Such discharges must be made in
compliance with national environmental regulation. The Pollutant Discharge Permit is valid from October 20, 2012 to October 19,
2015, after which it will be due for renewal.



Additionally, its facilities may be subject
to periodic and annual environmental inspections. Penalties may be imposed for the discharge of pollutants that fail to meet relevant
environmental standards. The relevant governmental authorities may refuse to issue or renew a pollutant discharge permit if an
enterprise fails environmental inspections and in cases of severe violation of environmental standards, are also empowered to shut
down any enterprise that causes substantial environmental problems.



8







There is no assurance that the current
PRC environmental protection laws and regulations will not be amended in the future. In June 2012, as the local environmental protection
criteria were amended where more stringent standards were introduced by the relevant local authorities, Jiangsu Delta’s production
activities were temporarily suspended for approximately 45 days to enhance its waste water treatment facilities in order to meet
the revised standards. In July 2012, Jiangsu Delta was certified to have satisfied the new criteria and re-commenced its operations.
If more stringent environmental protection laws and regulations are introduced in the future, incident as such might happen again
and Delta may need to utilize significant financial and/or other resources to ensure compliance, which will result in an increase
in its operating costs and have an adverse effect on its profitability and prospects.



Furthermore, if Delta is unable to comply
with such stringent environmental protection standards, penalties (including fines and/or shutdown of processing facilities) may
be imposed on it, which in turn may adversely affect its financial performance.



Delta depends on its key personnel
for continued success.



Delta believes its success to date can
largely be attributed to the contributions, expertise and experience of its key management team, which is headed by its Executive
Chairman and Chief Executive Officer, Xin Chao. He is responsible for identifying business opportunities and implementing overall
business strategies to achieve its corporate goals.



Delta’s key management team also
includes Xin Chao, Wu Changguang, Xia Jianmin, Ming Chao and Hong Yan. The continued success its business is therefore dependent,
to a large extent, on its ability to retain the services of its directors and executive officers. Each of Chao Xin, Wu Changguang
and Ming Chao has more than 13 years of experience in the fine chemical and/or related industries. The loss of the services of
its key personnel without a suitable and timely replacement, or the inability to attract and retain other qualified personnel,
could adversely affect its operations and hence, its financial results.



Delta is subject to fluctuations
in the prices of principal raw materials in its operations.



The key components and raw materials used
in Delta’s production and manufacturing processes are Toluene, Chlorine, Benzene, Styrene and Phthalic Anhydride, Maleic
Anhydride, Propylene glycol and Ethylene diglycol which in aggregate constituted approximately 80% of its total cost of sales.
As these materials constitute key components of its manufacturing processes, any fluctuation in the prices of such raw materials
which may in turn have an impact on its production costs. In line with industry practice, Delta do not have long-term supply contracts
with its suppliers. A shortage of any key raw materials or components could limit its production, and is likely to increase the
costs of its products, thereby depressing the margins for its products. Further, although Delta produces a number of intermediary
materials such as MA, PCT and OCT in-house for the production of PCT/OCT downstream products and UPR products, there can be no
assurance that Delta will be able to continue to do so in a cost-effective manner.



There is no assurance that Delta will be
able to obtain an adequate supply of key raw materials at competitive prices. Market prices of such raw materials may also be volatile
due to factors beyond its control, such factors include, inter alia, general economic conditions, changes in the level of global
demand and the availability of supply. Any substantial increase in the prices of these raw materials is likely to have a material
adverse impact on its production costs. In the event of any significant increase in the cost of such raw materials, and should
Delta be unable to pass on such costs to its customers on a timely basis, its business, profitability and financial performance
will be adversely affected.



Delta is vulnerable to fluctuations
in the prices of its products.



Delta is subject to fluctuations in demand
for its products and services due to a variety of factors, including general economic conditions, competition, product obsolescence,
shifts in buying patterns, financial difficulties and budget constraints of its actual and potential customers and other factors.
Some of its products may experience great price fluctuation.



9







While such factors may, in some periods,
increase product sales, fluctuations in demand can also negatively impact its product sales. If demand for its products declines
or the prices of its products decline because of general economic conditions or for other reasons, its revenues and gross margin
could be adversely affected.



Delta may be affected by disruptions
to its processing facilities.



Delta’s processing facilities are
located at Zhenjiang City, Jiangsu Province, the PRC. The production facilities are subject to operational risks, such as industrial
accidents, which could cause personal injury or loss of human life, the breakdown or failure of equipment, power supplies or processes,
performance below expected levels of output or efficiency, obsolescence, labor disputes, natural disasters and the need to comply
with relevant regulatory and requirements. From time to time, Delta may need to carry out planned shutdowns of its processing plants
for routine maintenance, statutory inspections and testing and may need to shut down various plants for capacity expansions and
equipment upgrades. In addition, due to the nature of its business, and despite compliance with requisite safety requirements and
standards, the production process is still subject to operational risks, including discharges or releases of hazardous substances,
exposure to contamination and leakages from other factories and operations in the vicinity. These operational risks may cause personal
injury or loss of human life and could result in the imposition of civil and criminal penalties. The occurrence of any of these
events could have a material adverse effect on the productivity and profitability of a particular production facility and on its
business, results of operations and financial condition.



Although Delta has taken precautions to
minimize the risk of any significant operational problems at its production facilities, there can be no assurance that its business,
results of operations and financial condition may not be adversely affected by disruptions caused by operational hazards at its
production facilities, or at other factories and facilities in the vicinity. Moreover, its production processes are continuously
being modified and updated. As a result of manufacturing process updates and improvements, from time to time, Delta may experience
shutdowns, and disruptions to the operations.



The occurrence of any of the above events
may cause it to stop or suspend its processing operations and Delta may not be able to deliver the products to its customers on
a timely basis, which would have an adverse impact on its business, financial position and profitability.



Delta’s insurance coverage
may not adequately protect it against certain operating and other hazards which may have an adverse effect on its business.



Delta makes substantial investments in
complex manufacturing and production facilities and transportation equipment. Many of the production processes, raw materials and
certain finished products are potentially destructive and dangerous in uncontrolled or catastrophic circumstances, including operating
hazards, fires and explosions, and natural disasters such as typhoons, floods, earthquakes and major equipment failures for which
insurance may not be obtainable at a reasonable cost or at all. Delta maintains insurance policies covering losses due to fire
and other calamities. Delta also maintains insurance policies for fixed assets, such as vehicles, machineries, facilities and buildings
which cover against damage caused by certain accidents and natural disasters. Should an accident or natural disaster occur, it
may cause significant property damage, disruption to operations and personal injuries and its insurance coverage may be inadequate
to cover such loss. Should an uninsured loss or a loss in excess of insured limits occur, Delta could suffer from damage to its
reputation or lose all or a portion of production capacity as well as future revenues anticipated to derive from the relevant facilities.
While Delta maintains coverage from insurance policies for its production facilities which are in line with the industry norms,
Delta cannot assure you that its insurance coverage would be sufficient to cover all its potential losses.



10







Delta’s profitability may be
affected by a failure to compete effectively in a competitive environment.



Delta operates in a highly competitive
environment and is subject to competition from both existing competitors and new market entrants. Rapid technological advances
and aggressive pricing strategies by its competitors may continue to increase competition. In order to remain competitive, Delta
must continue to improve its materials supply chain, foster production self-sufficiency, upgrade technology and manufacturing process
and introduce new products to the market in a timely manner. Delta’s ability to do so depends on factors both within and
outside of its control and may be constrained by the distinct characteristics and production requirements of individual products.
There can be no assurance that Delta will be able to continue to improve production efficiency and maintain reasonable margins
for all of its existing products, or that Delta will be able to successfully introduce new products that are able to command higher
margins. Some of its competitors may have superior financial, marketing, manufacturing, research and development and technological
resources, greater brand name recognition and larger customer bases than it.



Accordingly, these competitors may have
the ability to respond more quickly to new or emerging technologies, adapt more quickly to changes in customer requirements and
devote greater resources to the development, promotion and sales of their products and/or services. There is no assurance that
Delta will be able to continue competing successfully against present and future competitors.



Management of Delta believes that the important
factors to achieving success in its industry include maintaining customer loyalty by cultivating long-term customer relationships
and maintaining the quality of its products and services. If Delta is unable to attain these, Delta may lose customers to its competitors
and this will adversely affect its market share. Increased competition may also force it to lower its prices, thus reducing its
profit margins and affecting its financial performance and condition. Such competition may have a material adverse effect on its
business, financial position and results of operations.



Delta’s business may be adversely
affected if its customers place lower than expected orders.



As is customary in its industry, Delta
does not obtain firm and long-term volume purchase commitments from its customers. Although Delta may from time to time enter into
sales agreements with its key customers which normally include general terms of sale, specification requirements and pricing policy,
such agreements generally do not specify a minimum purchase volume or a specific purchase price. The precise terms for each shipment,
such as pricing, product specifications and quantities, are normally confirmed at the time each order is placed.



Accordingly, Delta faces the risk that
its customers might place lower than expected orders, if at all, or cancel existing plans for orders. Although the customers might
be contractually obliged to purchase products on specific terms from it for particular orders, Delta may be unable to or, for other
business reasons, choose not to enforce its contractual rights if the customers terminate their orders. Cancellations, reductions
or instructions to delay production by a significant customer could materially and adversely affect its results of operations by
reducing its sales volume, as well as by possibly causing a delay in the customers’ repayment of its expenditures for inventory
and resulting in lower utilization of the manufacturing facilities, all of which may result in lower gross margins.



Delta’s reputation may suffer
if Delta fails to manufacture products within the acceptable quality range and optimal production yields.



Product quality can be affected by a number
of factors, including the level of contaminants in the manufacturing environment, the contamination of raw materials, equipment
malfunction, process adjustments made to manufacture new products, interruptions in availability of utilities, deficiencies in
quality control and inadequate sample testing. Many of Delta’s customers require stringent quality requirements in the procurement
of their supplies.



Delta has in place stringent quality control
processes as set out in the section “Quality Control” of this rep and ensure that its raw materials, manufacturing
systems and processes and products meet the highest standards of quality. If Delta fails to maintain high quality production standards,
its reputation may suffer and customers may cancel their orders or return their products for replacement, which will materially
and adversely affects its results of operations and financial condition.



Delta may be unable to adapt to technological
changes and other industry standards.



Delta operates in a technologically dependent
industry and is required to quickly adapt to technological changes and industry standards as well as the changing needs of customers.
In the event that Delta is unable to keep up with the technological developments and develop new products on time, or if Delta
fails to anticipate and adapt to changes in its customers’ requirements, its current products and technology may face the
risk of becoming obsolete and Delta would not be able to fully meet its customers’ needs. This may then result in a decrease
in demand for its products and have a negative impact on its financial performance.



11







Delta may be exposed to risk of infringement
of its intellectual property rights.



Delta relies primarily on patent, trademark,
trade secret, copyright law and other contractual restrictions to protect its intellectual property. Nevertheless, these afford
only limited protection and the actions Delta may take to protect its intellectual property rights may not be adequate. Third parties
may infringe or misappropriate its proprietary technologies or other intellectual property rights, which could have a material
adverse effect on its business, financial condition, results of operations and prospects. As of the date of this Offer to Purchase,
Delta owns five patents in respect of UPR production and is in the midst of applying for seven more patents.



Although Delta’s senior management
personnel would, under the relevant PRC laws relating to duties of directors or the terms of their employment contracts, have a
general duty of confidentiality, there is no assurance that there will be no unauthorised disclosure of its trade secrets or other
proprietary information. In the event that there is a leakage of such trade secrets or proprietary information to its competitors
and other third parties, it may limit its ability to maintain its competitive edge and to grow its business.



Further, as Delta has not yet received
patent protection for some of its proprietary information, there is no assurance that Delta will obtain adequate remedies in the
event of an unauthorised disclosure of the proprietary information to its competitors or other third parties. Should there be a
loss of proprietary information, its operations, financial position and prospects may be adversely affected.



Delta may not be able to ensure the
successful implementation of its future plans and strategies.



As set out in the section entitled “Strategies
and Future Plans”, Delta intends to, inter alia, expand its production capacity and product lines, as well as its distribution
network. Such initiatives involve various risks including but not limited to the investment costs in establishing a distribution
network within the PRC, setting up of new production facilities and offices and working capital requirements. There is no assurance
that such future plans can be successfully implemented as the successful execution of such future plans will depend on several
factors, some of which are not within its control, such as retaining and recruiting qualified and skilled staff, and the continued
demand for its products by its customers. Failure to implement any part of its future plans or executing such plan costs effectively,
may lead to a material adverse change in its operating environment or affect its ability to respond to market or industry changes,
which may, in turn, adversely affect its business and financial results.



Delta is exposed to the credit risks
of its customers.



Delta’s business and financial results
are dependent on the credit worthiness of its customers and this risk increases with, inter alia, the customer’s proportion
of purchases from it. Delta usually offers its customers credit terms of up to 120 days. Although there has not been any material
collection problem for trade receivables or any other allowance for doubtful debts during the past three fiscal years, there is
no assurance that Delta will not encounter bad debt problems in the future. Should Delta experience any unexpected delay or difficulty
in collections from its customers, its cash flow and financial results may be adversely affected.



In addition, any deterioration in the financial
position of its customers may materially affect its profits and cash flow as these customers may default on their payments to it.
Delta cannot assure you that such defaults will not increase in the future or that Delta will not experience cash flow problems
as a result of such defaults. Should these develop into actual events, its business and financial results will be adversely affected.



Delta may require additional funding
for future growth.



Delta’s business and the nature of
the industry in which Delta operates may require it to make substantial capital expenditures in terms of both plants, equipment
and for research and development capabilities. In particular, Delta may expand its production capacity in certain of its production
facilities to cater to the expected increase in demand. These capital expenditures will be spent in advance of any additional sales
to be generated by new or upgraded production facilities as a result of these expenditures. There is a risk that Delta may in the
future incur operating losses if its net operating revenue does not adequately recover its capital expenditures.



12







In connection with its business strategy,
Delta has continued to make regular capital investments and expenditures. Delta expects to incur further capital expenditures for
FY2015 in connection with the construction and the expansion of production facilities.



The additional funding and capital expenditures
is expected to be funded from proceeds from existing cash balances and credit lines, cash inflow from operations and existing and
future bank borrowing. However, in the event of adverse market conditions in the future or changes in its growth, manufacturing
process, product technologies, prices of machinery and equipment or interest rates, its actual expenditures may exceed its planned
expenditures and Delta may not have sufficient sources of liquidity to effect the current operational plan and would need to secure
additional financing from external sources. Delta’s failure to obtain any required financing could impair its ability to
both serve its existing clients base and develop new clients and could result in both a decrease in revenue and an increase in
its loss.



To the extent that Delta requires financing,
it would intend to seek funding for its capital needs through the issuance of debt, preferred stock, common equity, loan guarantees,
or a combination of these types of instruments. Delta may also seek to obtain financing through a private placement or a public
offering, a consequence of which could include the sale or issuance of stock to third parties. To the extent additional funding
is required, Delta cannot assure you that it will be able to get additional financing on any terms acceptable to it, and, if it
is able to raise funds, it may be necessary for it to sell its securities at a price which is at a significant discount from the
market price and on other terms which may be disadvantageous to it. In connection with any such financing, Delta may be required
to provide registration rights to the investors. The price and terms of any financing which would be available to it could result
in the issuance of a significant number of shares. If Delta is required to issue a significant number of shares, stockholders could
suffer substantial dilution.



Delta is dependent on its “DELTA”
brand.



Delta relies on its “DELTA”
brand in the marketing and distribution of its products. Delta believes that it has built significant goodwill in its brand in
terms of the quality of products and services and it is widely recognized by the fine chemical industry in the PRC. Delta considers
its “DELTA” brand to be vital in promoting product recognition and customer loyalty. Hence, if there are any major
defects in its products or adverse publicity on its brand, the goodwill in its brand will be adversely affected and its customers
may lose confidence in its products. This will adversely affect its sales of products, hence affecting its business and financial
performance.



In order to protect its trademark, Delta
has applied to register its “DELTA” label as a trademark in the PRC. Delta relies on PRC trademark laws but there is
no assurance that this means of protecting its trademark will be effective or that its competitors will not adopt product names
or trademarks that are similar to that of ours. Delta is also vulnerable to attempts by third parties to pass off their products
as ours by using its trademark. Adequate protection of its intellectual property is important to its business. Although Delta may
take legal action against those who infringe its intellectual property rights, it may need to incur substantial time and resources
and there is no assurance that Delta will be able to stop or prevent such infringement completely. Unauthorized use of its trademarks
could adversely affect its performance and business reputation. Should such counterfeit products be of inferior quality, the goodwill
in its brand may be eroded. Hence, its business and financial performance will be adversely affected if Delta is unable to protect
its intellectual property rights effectively.



Defective or non-compliant products
may lead to negative publicity which would adversely affect Delta’s business and profits.



Delta’s products are sold mainly
to manufacturers. Although Delta has not faced any adverse claims or complaints regarding its products to-date, there can be no
assurance that its products will not cause personal injury or health complications on users. Further, in the event that its products
are defective or non-compliant with specifications, Delta may be liable to complaints, lawsuits and claims from its customers which
in turn could generate negative publicity and materially and adversely affect its business and financial condition. Any successful
product liability claim against it may adversely affect its business and reputation. A product liability claim, even without merit,
could result in it incurring significant expenses and expending substantial time and efforts of its management in defending such
a claim. Even if Delta is able to successfully defend any such claim, there can be no assurance that its customers will not lose
confidence in its products, thereby affecting its business and reputation.



13







Additional Risk Factors to Consider



Because Delta’s contracts are
individual purchase orders and not long-term agreements, the results of its operations can vary significantly from quarter to quarter.



Delta currently does not have any long-term
contracts with its customers for its products. While Delta does not depend on any single customer for a significant portion of
its revenues, there is a risk that existing customers will elect not to do business with it in the future or will experience financial
difficulties. There is also a risk that its customers will attempt to impose new or additional requirements on it that reduce the
profitability of those customers for us. If Delta does not develop relationships with new customers, Delta may not be able to increase,
or even maintain, its revenue, and its financial condition, results of operations, business and/or prospects may be materially
adversely affected.



Potential claims alleging infringement
of third party’s intellectual property by Delta could harm its ability to compete and result in significant expense to it
and loss of significant rights.



From time to time, third parties may assert
patent, copyright, trademark and other intellectual property rights to technologies that are important to Delta’s business.
Any claims that its products or processes, whether in relation to the specific circumstances set out above or otherwise, infringe
the intellectual property rights of others, regardless of the merit or resolution of such claims, could cause it to incur significant
costs in responding to, defending, and resolving such claims, and may divert the efforts and attention of its management and technical
personnel away from the business. As a result of such intellectual property infringement claims, Delta could be required or otherwise
decide it is appropriate to pay third-party infringement claims; discontinue manufacturing, using, or selling particular products
subject to infringement claims; discontinue using the technology or processes subject to infringement claims; develop other technology
not subject to infringement claims, which could be time-consuming and costly or may not be possible; and/or license technology
from the third-party claiming infringement, which license may not be available on commercially reasonable terms. The occurrence
of any of the foregoing could result in unexpected expenses or require it to recognize an impairment of its assets, which would
reduce the value of the assets and increase expenses. In addition, if Delta alters or discontinue the production of affected items,
its revenue could be negatively impacted.



Risks Relating to Doing Business in
the PRC



Delta’s subsidiaries, main
operations and assets are located in the PRC. Shareholders may not be accorded the same rights and protection that would be accorded
under the US law. In addition, it would be difficult to enforce a U.S. judgment against its PRC subsidiaries and its officers and
directors.



Delta’s PRC subsidiaries, Jiangsu
Delta, Jiangsu Zhengxin R&D, Jiangsu Logistic and Binhai Deda were established in the PRC, and their main operations and assets
are located in the PRC. Delta’s PRC subsidiaries, main operations and assets are therefore subject to the relevant laws and
regulations of the PRC. In addition, a majority of its officers and directors are non-residents of the U.S., and substantially
all their assets are located outside the U.S. As a result, it could be more difficult for investors to effect service of process
in the U.S., or to enforce a judgment obtained in the U.S. against any of its PRC subsidiaries or any of these persons.



Delta’s business is subject
to certain PRC laws and regulations.



Delta’s business and operations in
the PRC are subject to government rules and regulations, including environmental, working safety, road transportation and health
regulations. Any changes in such government regulations may have a negative impact on its business.



14







Breaches or non-compliance with these PRC
laws and regulations may result in the suspension, withdrawal or termination of its business licenses or permits, or the imposition
of penalties, by the relevant authorities. Delta’s PRC subsidiaries’ business licences are also granted for a finite
period and any extension thereof is subject to the approval of the relevant authorities. Any suspension, withdrawal, termination
or refusal to extend its PRC subsidiaries’ business licenses or permits would cause the cessation of production of certain
or all of its products, and this would adversely affect its PRC subsidiaries’ business, financial performance and prospects.



Uncertainty in the PRC legal system
may make it difficult for Delta to predict the outcome of any disputes that it may be involved in.



The PRC legal system is based on the PRC
Constitution and is made up of written laws, regulations, circulars and directives. The PRC government is still in the process
of developing its legal system, so as to meet the needs of investors and to encourage foreign investment. As the PRC economy is
generally developing at a faster pace than its legal system, some degree of uncertainty exists in connection with whether and how
existing laws and regulations will apply to certain events or circumstances.



Some of the laws and regulations, and the
interpretation, implementation and enforcement thereof, are still subject to policy changes. There is no assurance that the introduction
of new laws, changes to existing laws and the interpretation or application thereof or the delays in obtaining approvals from the
relevant authorities will not have an adverse impact on Delta’s PRC subsidiaries’ business, financial performance and
prospects.



Further, precedents on the interpretation,
implementation and enforcement of the PRC laws and regulations are limited, and unlike other common law countries such as the United
States, decisions on precedent cases are not binding on lower courts. As such, the outcome of dispute resolutions may not be consistent
or predictable as in the other more developed jurisdictions and it may be difficult to obtain swift or equitable enforcement of
the laws in the PRC, or obtain enforcement of judgment by a court of another jurisdiction.



New rules on mergers and acquisitions
of domestic enterprise by foreign investors.



In particular, on August 8, 2006, Ministry
of Commerce (“MOC”), China Security and Regulatory Commission (“CSRC”), State Administration of Foreign
Exchange (“SAFE”) and State Administration for Industry and Commerce of the PRC (“SAIC”), State Administration
for Taxation (“SAT”) and National Development and Reform Commission (“NDRC”) promulgated the Provisions
on the Mergers and Acquisitions of Domestic Enterprise by Foreign Investors (“M&A Regulations” or “Provision
10”), which came into effect on September 8, 2006 and was revised on June 22, 2009 by MOC. The Provision 10 was supplemented
by the Provisions on indirect issuance of securities overseas by a domestic enterprise or overseas listing of its securities for
trading issued by CSRC on by the Guidelines on Domestic Enterprises indirectly issuing securities overseas or listing and trading
their securities overseas ("CSRC Guidelines") issued by the CSRC on September 21, 2006.



In the opinion of Delta’s PRC Counsel,
Jingtian & Gongcheng, based on its understanding of current PRC laws and regulations, Provision 10 does not apply to each of
Jiangsu Delta acquisition by Zhengxin International, Jiangsu Delta acquisition by Delta and Zhengxin R&D acquisition by Jiangsu
Delta (collectively the “PRC Acquisitions”), and hence the PRC Acquisitions are not subject to the MOC’s approval.



However, there is no assurance that the
relevant Chinese government agency, including the CSRC, would reach the same conclusion as the PRC Counsel. If the CSRC or any
other Chinese regulatory bodies subsequently determine that Delta needs to obtain the CSRC approval for the acquisition of PRC
subsidiaries of Delta, Delta may face regulatory actions or other sanctions from the CSRC or other Chinese regulatory bodies. This
may have a material adverse impact on Delta’s business, financial condition, results of operations, remittance of profits
as well as the trading prices of its shares.



Failure of Delta’s PRC resident
shareholders to comply with regulations on foreign exchange registration of overseas investment by PRC residents could cause it
to lose its ability to contribute capital to its PRC subsidiaries and remit profits out of the PRC as dividends.



15







The Notice on Relevant Issues Concerning
Foreign Exchange Administration for Domestic Residents to Engage in Overseas Financing and Round Trip Investment via Overseas Special
Purpose Vehicles (“Circular 75”), issued by the SAFE and effective on November 1, 2005, regulates the foreign exchange
matters in relation to the use of a “special purpose vehicle” by PRC residents to seek offshore equity financing and
conduct a “round trip investment” in China. Under Circular 75, a “special purpose vehicle” refers to an
offshore entity directly established or indirectly controlled by PRC resident natural or legal persons (“PRC residents”)
for the purpose of seeking offshore equity financing using assets or interests owned by such PRC residents in onshore companies,
while “round trip investment” refers to the direct investment in China by such PRC residents through the “special
purpose vehicles,” including, without limitation, establishing foreign-invested enterprises and using such foreign-invested
enterprises to purchase or control onshore assets through contractual arrangements. Circular 75 requires that, before establishing
or controlling a “special purpose vehicle”, PRC residents and PRC entities are required to complete a foreign exchange
registration with the competent local branches of the SAFE for their overseas investments. After the completion of a round-trip
investment or the overseas equity financing, the PRC residents are required to go through foreign exchange registration alteration
formalities of overseas investment in respect of net assets of special purpose vehicles that such PRC residents hold and the variation
thereof.



In addition, an amendment to the registration
is required if there is a material change in the “special purpose vehicle,” such as increase or reduction of share
capital and transfer of shares. Failure to comply with the registration procedures set forth in Circular 75 may result in restrictions
on the foreign exchange activities of the relevant foreign-invested enterprises, including the payment of dividends and other distributions,
such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate and the capital
inflow from the offshore parent, and may also subject the relevant PRC residents to penalties under PRC foreign exchange administration
regulations.



Delta has requested
its current PRC resident shareholders and/or beneficial owners to disclose whether they or their shareholders or beneficial owners
fall within the scope of the Circular 75 and urges PRC residents to register with the local SAFE branch as required under the Circular
75. Delta’s affiliates subject to the SAFE registration requirements, including Mr. Xin Chao, Mr. Hong Yan and Mr. Lei Shen,
have informed it that they have made their initial registrations with SAFE dated June 5, 2013. The failure of its PRC resident
shareholders and/or beneficial owners to timely amend their SAFE registrations pursuant to the Circular 75 or the failure of its
future shareholders and/or beneficial owners who are PRC residents to comply with the registration requirement set forth in the
Circular 75 may subject such shareholders, beneficial owners and/or its PRC subsidiaries to fines and legal sanctions. Any such
failure may also limit its ability to contribute additional capital into its PRC subsidiaries, limit its PRC subsidiaries’
ability to distribute dividends to it or otherwise adversely affect its business.



The PRC government could restrict access
in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents it from obtaining
sufficient foreign currency to satisfy its currency demands, Delta may not be able to pay certain expenses as they come due or
may restrict which limit the payment of dividends from the Company.



Delta’s results and financial
conditions are highly susceptible to changes in the PRC’s political, economic and social conditions as its revenue is currently
wholly derived from its operations in the PRC.



Since 1978, the PRC government has undertaken
various reforms of its economic systems. Such reforms have resulted in economic growth for the PRC in the last three decades. However,
many of the reforms are unprecedented or experimental, and are expected to be refined and modified from time to time. Other political,
economic and social factors may also lead to further readjustment of the reform measures. This refinement and adjustment process
may consequently have a material impact on its operations in the PRC or a material adverse impact on its financial performance.
Delta’s results and financial condition may be adversely affected by changes in the PRC’s political, economic and social
conditions and by changes in policies of the PRC government or changes in laws, regulations or the interpretation or implementation
thereof.



Dividends payable to Delta by its
PRC subsidiaries may be subject to PRC withholding taxes, dividends distributed to its non-PRC investors and gains realized by
its non-PRC shareholders from the transfer of its shares may be subject to PRC withholding taxes under the EIT Law.



16







The EIT Law imposes a 10% withholding income
tax on dividends generated on or after January 1, 2008 and distributed by a resident enterprise to its foreign investors, if such
foreign investors are considered as non-resident enterprises without any establishment or place of business within China or if
the received dividends have no connection with such foreign investors’ establishment or place of business within China, unless
such foreign investors’ jurisdiction of incorporation has a tax treaty with China that provides for a different withholding
arrangement. The British Virgin Islands, where Delta is incorporated, does not have such tax treaty with According to the Arrangement
between Mainland of China and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with respect to Taxes on Income in August 2006, dividends paid by a foreign invested enterprise, or FIE, to its
foreign investors in Hong Kong will be subject to withholding tax at a preferential rate of no more than 5% (if the foreign investor
owns directly at least 25% of the shares of the FIE). The State Administration of Taxation further promulgated a circular, or Circular
601, on October 27, 2009, which provides that tax treaty benefits will be denied to “conduit” or shell companies without
business substance and that a beneficial ownership analysis will be used based on a “substance-over-form” principle
to determine whether or not to grant the tax treaty benefits. Delta’s subsidiaries in China are directly invested in and
held by a Hong Kong registered entity. If Delta is regarded as a non-resident enterprise and its Hong Kong entity regarded as resident
enterprise, then its Hong Kong entity may be required to pay a 10% withholding tax on any dividends payable to it. If its Hong
Kong entity is regarded as non-resident enterprises, then its subsidiaries in China will be required to pay a 5% withholding tax
for any dividends payable to its Hong Kong entities provided that specific conditions are met. However, it is still unclear at
this stage whether Circular 601 applies to dividends from its PRC subsidiaries paid to its Hong Kong subsidiary and if its Hong
Kong subsidiary were not considered as “beneficial owners” of any dividends from its PRC subsidiaries, the dividends
payable to its Hong Kong subsidiary would be subject to withholding tax at a rate of 10%. In either case, the amount of funds available
to it, including the payment of dividends to its shareholders, could be materially reduced. In addition, because there remains
uncertainty regarding the concept of “the place of de facto management body,” if Delta is regarded as a resident enterprise,
under the EIT Law, any dividends to be distributed by it to its non-PRC shareholders will be subject to PRC withholding tax. Delta
also cannot guarantee that any gains realized by such non-PRC shareholders from the transfer of its shares will not be subject
to PRC withholding tax. If Delta is required under the EIT Law to withhold PRC income tax on its dividends payable to its non-PRC
shareholders or any gains realized by its non-PRC shareholders from transfer of its shares, their investment in its shares may
be materially and adversely affected.



Delta may be subject to a significant
withholding tax should equity transfers by its non-resident enterprises be determined to have been done without a reasonable business
purpose.



In December 2009, the State Administration
of Tax in China issued a circular on strengthening the management of proceeds from equity transfers by non-resident enterprises
and requires foreign entities to report indirect sales of resident enterprises. If the existence of the overseas intermediary holding
company is disregarded due to lack of reasonable business purpose or substance, gains on such sale are subject to PRC withholding
tax. Due to limited guidance and implementation history of the circular, significant judgment is required in determining the existence
of a reasonable business purpose by considering multiple factors, such as the form and substance of the arrangement, time of establishment
of the foreign entity, relationship between each step of the arrangement, relationship between each component of the arrangement,
implementation of the arrangement and the changes in the financial position of all parties involved in the transaction. Although
Delta believes that its transactions during all the periods presented would be determined to have reasonable business purposes,
should this not be the case, the Company would be subject to a significant withholding tax that could materially and adversely
impact its financial position, results of operations and cash flows.



Uncertainty in the interpretation
of PRC tax regulations may have a negative impact on Delta’s business operations, its acquisition or restructuring strategy
or the value of its investment in it.



Pursuant to the Notice on Strengthening
Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or SAT Circular 698, issued by the
State Administration of Taxation in December 2009, with retroactive effect from January 1, 2008, where a non-resident enterprise
transfers the equity interests of a PRC resident enterprise indirectly by disposition of the equity interests of an overseas non-public
holding company, or an Indirect Transfer, and such overseas holding company is located in a tax jurisdiction that: (i) has an effective
tax rate of less than 12.5% or (ii) does not impose income tax on foreign income of its residents, the non-resident enterprise,
being the transferor, must report to the competent tax authority of the PRC resident enterprise this Indirect Transfer. Using a
“substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company
if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As
a result, gains derived from such Indirect Transfer may be subject to PRC withholding tax at a rate of up to 10%. SAT Circular
698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its
related parties at a price lower than fair market value, the relevant tax authority has the power to make a reasonable adjustment
to the taxable income of the transaction.



17







On March 28, 2011, the State Administration
of Taxation released SAT Public Notice (2011) No. 24, or SAT Public Notice 24, to clarify several issues related to Circular 698.
SAT Public Notice 24 became effective on April 1, 2011. According to SAT Public Notice 24, the term “effective tax rate”
refers to the effective tax rate on the gain derived from disposition of the equity interests of an overseas holding company; and
the term “does not impose income tax” refers to the cases where the gain derived from disposition of the equity interests
of an overseas holding company is not subject to income tax in the country/region where the overseas holding company is a resident.



There is uncertainty as to the application
of SAT Circular 698. For example, while the term “Indirect Transfer” is not clearly defined, it is understood that
the relevant PRC tax authorities have jurisdiction regarding requests for information over a wide range of foreign entities having
no direct contact with China. Moreover, the relevant authority has not yet promulgated any formal provisions or made any formal
declaration as to the process and format for reporting an Indirect Transfer to the competent tax authority of the relevant PRC
resident enterprise. In addition, there are no formal declarations with regard to how to determine whether a foreign investor has
adopted an abusive arrangement in order to reduce, avoid or defer PRC tax. SAT Circular 698 may be determined by the tax authorities
to be applicable to previous investments by non-resident investors in its company, if any of such transactions were determined
by the tax authorities to lack reasonable commercial purpose. As a result, Delta and its existing non-resident investors may be
at risk of being taxed under SAT Circular 698 and may be required to expend valuable resources to comply with SAT Circular 698
or to establish that Delta should not be taxed under SAT Circular 698, which may have a material adverse effect on its financial
condition and results of operations or such non-resident investors’ investments in it. Delta have conducted and may conduct
transactions involving its corporate structure. Delta cannot assure you that the PRC tax authorities will not, at their discretion,
adjust any capital gains and impose tax return filing obligations on it or require it to provide assistance for the investigation
of PRC tax authorities with respect thereto. Any PRC tax imposed on a transfer of its shares or any adjustment of such gains would
cause it to incur additional costs and may have a negative impact on the value of your investment in it.



PRC regulation of loans and direct
investment by offshore holding companies to PRC entities may delay or prevent it from using the proceeds from the offerings of
any securities to make loans or additional capital contributions to its PRC operating subsidiaries.



As an offshore holding company, its ability
to make loans or additional capital contributions to its PRC operating subsidiaries is subject to PRC regulations and approvals.
These regulations and approvals may delay or prevent it from using the proceeds Delta received in the past or will receive in the
future from the offerings of securities to make loans or additional capital contributions to its PRC operating subsidiaries, and
impair its ability to fund and expand its business which may adversely affect its business, financial condition and result of operations.



For example, the SAFE promulgated the Circular
on the Relevant Operating Issues concerning Administration Improvement of Payment and Settlement of Foreign Currency Capital of
Foreign-Invested Enterprises, or Circular 142, on August 29, 2008. Under Circular 142, registered capital of a foreign-invested
company settled in RMB converted from foreign currencies may only be used within the business scope approved by the applicable
governmental authority and may not be used for equity investments in the PRC. In addition, foreign-invested companies may not change
how they use such capital without the SAFE’s approval, and may not in any case use such capital to repay RMB loans if they
have not used the proceeds of such loans. Furthermore, the SAFE promulgated a circular on November 9, 2010, or Circular 59, which
requires the authenticity of settlement of net proceeds from offshore offerings to be closely examined and the net proceeds to
be settled in the manner described in the offering documents. In addition, to strengthen Circular 142, on November 9, 2011, the
SAFE promulgated the Circular on Further Clarifying and Regulating Relevant Issues Concerning the Administration of Foreign Exchange
under Capital Account, or Circular 45, which prohibits a foreign invested company from converting its registered capital in foreign
exchange currency into RMB for the purpose of making domestic equity investments, granting entrusted loans, repaying inter-company
loans, and repaying bank loans that have been transferred to a third party. Circular 142, Circular 59 and Circular 45 may significantly
limit Delta’s ability to transfer the net proceeds from offerings of its securities or any future offering to its PRC subsidiaries
and convert the net proceeds into RMB, which may adversely affect its liquidity and its ability to fund and expand its business
in the PRC.



18







Currency fluctuations and restrictions
on currency exchange may adversely affect Delta’s business, including limiting its ability to convert RMB into foreign currencies
and, if RMB were to decline in value, reducing its revenues and profits in U.S. dollar terms.



Delta’s reporting currency is the
U.S. dollar and its operations in China use RMB as functional currencies. The majority of its revenues derived and expenses incurred
are in Chinese RMB with a relatively small amount in U.S. dollars. Delta is subject to the effects of exchange rate fluctuations
with respect to any of these currencies. For example, the value of the RMB depends to a large extent on Chinese government policies
and China’s domestic and international economic and political developments, as well as supply and demand in the local market.
Starting July 2005, the Chinese government changed its policy of pegging the value of the RMB to the U.S. dollar. Under the new
policy, the RMB has fluctuated within a narrow and managed band against a basket of certain foreign currencies. It is possible
that the Chinese government will adopt a more flexible currency policy, which could result in more significant fluctuations of
the RMB against the U.S. dollar.



The income statements of Delta’s
China operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S.
dollar strengthens against foreign currencies, the translation of these foreign currency-denominated transactions results in reduced
revenues, operating expenses and net income for its non-U.S. operations. Similarly, to the extent the U.S. dollar weakens against
foreign currencies, the translation of RMB denominated transactions results in increased revenues, operating expenses and net income
for its non-U.S. operations. Delta is also exposed to foreign exchange rate fluctuations as Delta converts the financial statements
of its non-U.S. subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion
of the non-U.S. subsidiaries’ financial statements into U.S. dollars will lead to a translation gain or loss which is recorded
as a component of other comprehensive income. Delta has not entered into agreements or purchased instruments to hedge its exchange
rate risks, although Delta may do so in the future. The availability and effectiveness of any hedging transaction may be limited
and Delta may not be able to successfully hedge its exchange rate risks.



Although Chinese governmental policies
were introduced in 1996 to allow the convertibility of RMB into foreign currency for current account items, conversion of RMB into
foreign exchange for most of the capital items, such as foreign direct investment, loans or securities, requires the approval of
the State Administration of Foreign Exchange, or SAFE. These approvals, however, do not guarantee the availability of foreign currency.
Delta cannot be sure that Delta will be able to obtain all required conversion approvals for its operations or that Chinese regulatory
authorities will not impose greater restrictions on the convertibility of RMB in the future. Because a significant amount of its
future revenues may be in the form of RMB, its inability to obtain the requisite approvals or any future restrictions on currency
exchanges could limit its ability to utilize revenue generated in RMB to fund its business activities outside China, or to repay
non-RMB-denominated obligations, including its debt obligations, which would have a material adverse effect on its financial condition
and results of operations.



Restrictions on paying dividends
or making other payments to Delta bind its subsidiaries in China.



Delta is a holding company and do not have
any assets or conduct any business operations in China other than its investments in its subsidiaries in China. As a result, if
its non-China operations require cash from China, Delta would depend on dividend payments from its subsidiaries in China. Delta
cannot make any assurance that it can continue to receive payments from its subsidiaries in China. In addition, under Chinese law,
its subsidiaries are only allowed to pay dividends to it out of their distributable earnings, if any, as determined in accordance
with Chinese accounting standards and regulations. Moreover, Delta’s Chinese subsidiaries are required to set aside at least
10% of their respective after-tax profit each year, if any, to fund certain mandated reserve funds, unless these reserves have
reached 50% of their registered capital. These reserve funds are not payable or distributable as cash dividends. For Chinese subsidiaries
with after-tax profits for the periods presented, the difference between after-tax profits as calculated under PRC accounting standards
and U.S. GAAP relates primarily to share-based compensation expenses and intangible assets amortization expenses, which are not
pushed down to its subsidiaries under PRC accounting standards. In addition, under the EIT Law and its implementing Rules, dividends
generated from its PRC subsidiaries after January 1, 2008 and payable to their immediate holding company incorporated in Hong Kong
generally will be subject to a withholding tax rate of 10% (unless the PRC tax authorities determine that its Hong Kong subsidiary
is a resident enterprise). If certain conditions and requirements under the Arrangement between the Mainland of China and the Hong
Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes
on Income entered into between Hong Kong and the PRC and other related PRC laws and regulations are met, the withholding rate could
be reduced to 5%.





19







The Chinese government also imposes controls
on the convertibility of RMB into foreign currencies and the remittance of currency out of China in certain cases. Delta has experienced
and may continue to experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency.
If Delta or any of its subsidiaries are unable to receive substantially all of the economic benefits from its operations through
these contractual or dividend arrangements, Delta may be unable to effectively finance its operations or pay dividends on its ordinary
shares.



PRC laws and regulations establish
more complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for
Delta to pursue growth through acquisitions in China.



A number of PRC laws and regulations, including
the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors adopted by six PRC regulatory agencies
in 2006, or the M&A Rules, the Antimonopoly Law, and the Rules of Ministry of Commerce on Implementation of Security Review
System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated by the Ministry of Commerce in August
2011, or the Security Review Rules, have established procedures and requirements that are expected to make merger and acquisition
activities in China by foreign investors more time consuming and complex. These include requirements in some instances that the
Ministry of Commerce be notified in advance of any change of control transaction in which a foreign investor takes control of a
PRC domestic enterprise, or that the approval from the Ministry of Commerce be obtained in circumstances where overseas companies
established or controlled by PRC enterprises or residents acquire affiliated domestic companies. PRC laws and regulations also
require certain merger and acquisition transactions to be subject to merger control review or security review.



The Security Review Rules were formulated
to implement the Notice of the General Office of the State Council on Establishing the Security Review System for Mergers and Acquisitions
of Domestic Enterprises by Foreign Investors, also known as Circular 6, which was promulgated in 2011. Under these rules, a security
review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns
and mergers and acquisitions by which foreign investors may acquire the “de facto control” of domestic enterprises
have “national security” concerns. In addition, when deciding whether a specific merger or acquisition of a domestic
enterprise by foreign investors is subject to the security review, the Ministry of Commerce will look into the substance and actual
impact of the transaction. The Security Review Rules further prohibits foreign investors from bypassing the security review requirement
by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements
or offshore transactions.



There is no requirement for foreign investors
in those mergers and acquisitions transactions already completed prior to the promulgation of Circular 6 to submit such transactions
to the Ministry of Commerce for security review. As Delta has already obtained the “de facto control” over its affiliated
PRC entities prior to the effectiveness of these rules, Delta does not believe Delta is required to submit its existing contractual
arrangements to the Ministry of Commerce for security review.



However, as these rules are relatively
new and there is a lack of clear statutory interpretation on the implementation of the same, there is no assurance that the Ministry
of Commerce will not apply these national security review-related rules to the acquisition of equity interest in its PRC subsidiaries.
If Delta is found to be in violation of the Security Review Rules and other PRC laws and regulations with respect to the merger
and acquisition activities in China, or fail to obtain any of the required approvals, the relevant regulatory authorities would
have broad discretion in dealing with such violation, including levying fines, confiscating its income, revoking its PRC subsidiaries’
business or operating licenses, requiring it to restructure or unwind the relevant ownership structure or operations. Any of these
actions could cause significant disruption to its business operations and may materially and adversely affect its business, financial
condition and results of operations. Further, if the business of any target company that Delta plans to acquire falls into the
ambit of security review, it may not be able to successfully acquire such company either by equity or asset acquisition, capital
contribution or through any contractual arrangement. Delta may grow its business in part by acquiring other companies operating
in its industry. Complying with the requirements of the relevant regulations to complete such transactions could be time consuming,
and any required approval processes, including approval from the Ministry of Commerce, may delay or inhibit its ability to complete
such transactions, which could affect its ability to expand its business or maintain its market share.



20







The PRC Labor Contract Law and its
implementing rules may adversely affect its business and results of operations.



The PRC Labor Contract Law became effective
and was implemented on January 1, 2008. The PRC Labor Contract Law has reinforced the protection for employees who, under the PRC
Labor Contract Law, have the right, among others, to have written labor contracts, to enter into labor contracts with no fixed
terms under certain circumstances, to receive overtime wages and to terminate or alter terms in labor contracts. Furthermore, the
PRC Labor Contract Law establishes additional restrictions and increases the costs involved with dismissing employees. As the PRC
Labor Contract Law is relatively new, there remains significant uncertainty as to its interpretation and application by the PRC
Government. In the event that Delta decides to significantly reduce its workforce, the PRC Labor Contract Law could adversely affect
its ability to do so in a timely and cost effective manner, and its results of operations could be adversely affected. In addition,
for employees whose contracts include non-competition terms, the Labor Contract Law requires it to pay monthly compensation after
such employment is terminated, which will increase its operating expenses.



Failure by Delta’s PRC shareholders
or beneficial owners to make required foreign exchange filings and registrations may prevent Delta from distributing dividends
and expose Delta to liabilities under the PRC laws.



The Circular on Relevant Issues concerning
Foreign Exchange Administration of Overseas Investment and Financing and Return Investments Conducted by Domestic Residents through
Overseas Special Purpose Vehicles (“SAFE Circular No. 37”), which was promulgated by SAFE and became
effective on July 14, 2014, requires a PRC individual resident (“PRC Resident”) to register with the
local SAFE branch before he or she contributes assets or equity interests in an overseas special purpose vehicle (“Offshore
SPV”) that is directly established or controlled by the PRC Resident for the purpose of conducting investment or financing.
Following the initial registration, the PRC Resident is also required to register with the local SAFE branch for any major change
in respect of the Offshore SPV, including, among other things, any major change of a PRC Resident shareholder, name or term of
operation of the Offshore SPV, or any increase or reduction of the Offshore SPV’s registered capital, share transfer or swap,
merger or division. Failure to comply with the registration procedures of SAFE Circular No. 37 may result in penalties and sanctions,
including the imposition of restrictions on the ability of the Offshore SPV’s PRC subsidiary to distribute dividends to its
overseas parent.



The existing shareholders and beneficial
owners of Delta currently are subject to the registration procedures under SAFE Circular No. 37. However, as SAFE Circular No.
37 was recently promulgated, it is unclear how this regulation and any future regulation concerning offshore or cross-border transactions
will be interpreted, amended or implemented by the relevant government authorities. It cannot be predicted that how these regulations
will affect Delta’s business operations or future strategies. Any failure by Delta’s PRC Resident shareholders or beneficial
owners to make the updates with SAFE may subject the relevant PRC Resident shareholders or beneficial owners to penalties, restrict
Delta’s overseas or cross-border investment activities, limit Delta PRC subsidiaries’ ability to make distributions
or pay dividends, or affect its ownership structure and capital inflow from its offshore subsidiaries. As such, Delta’s business,
financial condition, results of operations and liquidity as well as its ability to pay dividends or make other distributions to
its shareholders may be materially and adversely affected.



There are defects in Delta’s
titles of or rights to use its properties.



Delta has not received the record of completion
acceptance from the relevant authority for its facilities used in its production and storage (“Properties”). Delta
does not have valid title or right to the said Properties. Any dispute or claim in relation to the title to the Properties, including
any litigation involving allegations of illegal or unauthorized use of the Properties, may materially and adversely affect Delta’s
operations, financial condition, reputation and future growth. However, we are in the process of applying to relevant authority
to obtain the completion acceptance for the Properties.



21







Delta is manufacturing certain products
that are beyond its business scope.



Jiangsu Delta has been producing UPR, which
is beyond the business scope of Jiangsu Delta. As a result, Jiangsu Delta may be imposed penalty and the business license of Jiangsu
Delta may be revoked by relevant authority. However, Jiangsu Delta is applying to relevant authority to enlarge its business scope
to include production of UPR. In the event that such approval is not obtained, Jiangsu Delta will have to suspend production of
UPR, which might adversely affect the financial prospect and results of operation of Delta.



Delta is conducting certain business
that is beyond its approved production capacity.



Jiangsu Delta is producing 30,000 tons
of PCT/OCT series and downstream products per annum which are beyond the approved annual production capacity of 10,000 tons. As
a result, Jiangsu Delta might be imposed penalty of RMB 500,000 to RMB 1,000,000 by relevant authority. However, Jiangsu Delta
is applying to relevant authority to increase Jiangsu Delta’s annual approved production capacity to 30,000 tons. In the
event that such application is denied, Jiangsu Delta will have to reduce its actual production under the approved capacity. As
a result, Delta’s production might not keep up with the demand of its customers, which may adversely affect Delta’s
revenue and financial conditions.



Risks Relating to
CIS’ Securities



While CIS believes that it currently
has adequate internal control procedures in place, CIS is still exposed to potential risks from legislation requiring companies
to evaluate controls under Section 404 of the Sarbanes-Oxley Act of 2002.



Under the supervision and with the participation
of its management, CIS has evaluated its internal controls systems in order to allow management to report on  the system and process evaluation and testing required in an effort to comply with the management certification and
auditor attestation requirements of Section 404. As a result, CIS has incurred additional expenses and a diversion of management’s
time.



If CIS fails to maintain effective internal
control over financial reporting in the future, a material misstatement of its financial statements may not be prevented or detected
on a timely basis. In addition, CIS may not be able to conclude on an ongoing basis that CIS has effective internal control over
financial reporting in accordance with Section 404. This could in turn result in the loss of investor confidence in the reliability
of its financial statements and negatively impact the trading price of its shares. Furthermore, if CIS is not able to continue
to meet the requirements of Section 404 in a timely manner or with adequate compliance, Delta might be subject to sanctions or
investigation by regulatory authorities, such as the SEC or the NASDAQ. Any such action could adversely affect its financial results
and the market price of its ordinary shares.



As a foreign private issuer, CIS
has limited reporting requirements under the Securities Exchange Act of 1934, which makes it less transparent than a United States
issuer.



As a foreign private issuer, the rules
and regulations under the Exchange Act provide it with certain exemptions from the reporting obligations of United States issuers.
CIS is exempt from the rules prescribing the furnishing and content of proxy statements, and its officers, directors and principal
stockholders are exempt from the reporting and short-swing profit recovery provisions. Also, CIS is not required to publish financial
statements as frequently, as promptly or containing the same information as United States companies. The result is that CIS will
be less transparent than a U.S. issuer.



CIS may be classified as a passive
foreign investment company for United States federal income tax purposes, which could result in adverse United States federal income
tax consequences to U.S. Holders.



Based on the market price of its
ordinary shares, the value of its assets, and the composition of its assets and income, CIS  does not believe that it was a
passive foreign investment company (a “PFIC”) for United States federal income tax purposes for its taxable year
ended June 30, 2014 and CIS does not expect to be one for its taxable year ending June 30, 2015 or become one in the
foreseeable future. Nevertheless, the application of the PFIC rules is subject to ambiguity in several respects and, in
addition, CIS must make a separate determination each year as to whether CIS is a PFIC (after the close of each taxable
year). Accordingly, CIS cannot assure you that CIS will not be a PFIC for the current or any other taxable year.



22







A non-United States corporation, such as
its company, will be classified as a PFIC for United States federal income tax purposes for any taxable year, if either (1) 75%
or more of its gross income for such year consists of certain types of “passive” income, or (2) 50% or more of its
average quarterly assets as determined on the basis of fair market value during such year produce or are held for the production
of passive income. Because there are uncertainties in the application of the relevant rules and PFIC status is a fact-intensive
determination made on an annual basis, no assurance can be given with respect to its PFIC status for the current or any other taxable
year.



If CIS is characterized as a PFIC for any
year, a U.S. holder may incur significantly increased United States income tax on gain recognized on the sale or other disposition
of its ordinary shares and on the receipt of distributions on its notes or ordinary shares to the extent such gain or distribution
is treated as an “excess distribution” under the United States federal income tax rules.



CIS did not obtain a fairness opinion
from an independent investment banking firm as to the fair market value of Delta.



The fair market value of Delta was determined
by its board of directors based upon an analysis conducted by them (which may include an analysis of actual and potential sales,
earnings, cash flow and/or book value), and CIS did not obtain an opinion from an unaffiliated, independent investment banking
firm. CIS’s shareholders must, therefore, rely solely on the judgment of its board of directors with respect to the determination
of the fair market value of its initial acquisition transaction.



CIS has outstanding exercisable
securities that may dilute your holdings.



CIS’s outstanding exercisable securities may adversely affect the market price of its shares.



CIS currently has issued
and outstanding securities exercisable into 9,060,000 ordinary shares (warrants for the purchase of 8,500,000 shares and a
unit purchase option for 280,000 shares and warrants to purchase 280,000 shares). The sale or possibility of sale of the shares
underlying these securities could have an adverse effect on the market price for its securities or its ability to obtain
future financing. If and to the extent these securities are converted or exercised, you may experience dilution to
your holdings.



One ofCIS’sstockholders
holds a significant percentage of its outstanding voting securities.



Mr. Xin Chao, who is our Chief Executive
Officer and Chairman of the Board, directly or indirectly owns approximately 34.27% of our outstanding voting securities. As a
result, he possesses significant influence, giving him the ability, among other things, to elect a majority of its Board of Directors
and to authorize or prevent proposed significant corporate transactions. His ownership and control may also have the effect of
delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or
discourage a potential acquirer from making a tender offer, all of which may prevent it from implementing its business strategies.



Additional Risk factors to Consider



Rights of shareholders under British
Virgin Islands law differ from those under United States law, and, accordingly, CIS’s shareholders may have fewer protections.



CIS’s corporate affairs are governed
by its Memorandum and Articles of Association, the BVI Business Companies Act, 2004 (as amended, the “BVI Act”) and
the common law of the British Virgin Islands. The rights of shareholders to take legal action against its directors, actions by
minority shareholders and the fiduciary responsibilities of its directors under British Virgin Islands law are to a large extent
governed by the common law of the British Virgin Islands and by the BVI Act. The common law of the British Virgin Islands is derived
in part from comparatively limited judicial precedent in the British Virgin Islands as well as from English common law, which has
persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of its shareholders and the fiduciary
responsibilities of its directors under British Virgin Islands law are not as clearly established as they would be under statutes
or judicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed
body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially
interpreted bodies of corporate law. As a result of the foregoing, holders of its ordinary shares may have more difficulty in protecting
their interests through actions against its management, directors or major shareholders than they would as shareholders of a U.S.
company.



23







The laws of the British Virgin Islands
provide limited protection for minority shareholders, so minority shareholders will have limited or no recourse if they are dissatisfied
with the conduct of CIS’s affairs.



Under the laws of the British Virgin Islands,
there is limited statutory law for the protection of minority shareholders other than the provisions of the BVI Act dealing with
shareholder. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents
of a British Virgin Islands company and are entitled to have the affairs of the company conducted in accordance with the BVI Act
and the memorandum and articles of association of the company. As such, if those who control the company have persistently disregarded
the requirements of the BVI Act or the provisions of the company’s memorandum and articles of association, then the courts
will likely grant relief. Generally, the areas in which the courts will intervene are the following: (i) an act complained of which
is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (ii) acts that constitute
fraud on the minority where the wrongdoers control the company; (iii) acts that infringe on the personal rights of the shareholders,
such as the right to vote; and (iv) acts where the company has not complied with provisions requiring approval of a special or
extraordinary majority of shareholders, which are more limited than the rights afforded to minority shareholders under the laws
of many states in the United States.



It may be difficult to enforce judgments
against CIS or its executive officers and directors in jurisdictions outside the United States.



Under its Memorandum and Articles of Association,
CIS may indemnify and hold its directors harmless against all claims and suits brought against them, subject to limited exceptions.
Furthermore, to the extent allowed by law, the rights and obligations among or between it, any of its current or former directors,
officers and employees and any current or former shareholder will be governed exclusively by the laws of the British Virgin Islands
and subject to the jurisdiction of the British Virgin Islands courts, unless those rights or obligations do not relate to or arise
out of their capacities as such. Although there is doubt as to whether United States courts would enforce these provisions in an
action brought in the United States under United States securities laws, these provisions could make judgments obtained outside
of the British Virgin Islands more difficult to enforce against its assets in the British Virgin Islands or jurisdictions that
would apply British Virgin Islands law.



British Virgin Islands companies
may not be able to initiate shareholder derivative actions, thereby depriving shareholders of one avenue to protect their interests.



British Virgin Islands companies may not
have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any
such action may be brought, and the procedures and defenses that may be available in respect of any such action, may result in
the rights of shareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized
in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing
has occurred. The British Virgin Islands courts are also unlikely to recognize or enforce judgments of courts in the United States
based on certain liability provisions of United States securities law or to impose liabilities, in original actions brought in
the British Virgin Islands, based on certain liability provisions of the United States securities laws that are penal in nature.
There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts
of the British Virgin Islands will generally recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction
without retrial on the merits. This means that even if shareholders were to sue CIS successfully, they may not be able to recover
anything to make up for the losses suffered.



24







|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------



A. History and Development of the Company



CIS was formed on November 28,
2011, under the laws of the British Virgin Islands. We were formed to acquire, through a merger, stock exchange, asset
acquisition, stock purchase or similar acquisition transaction, one or more operating businesses. Although we were not
limited to a particular geographic region or industry, we intended to focus on operating businesses with primary operations
in Russia and Eastern Europe. We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act. On
December 21, 2012, our IPO of 4,000,000 units was consummated at a public offering price of $10.00 per unit, generating gross
proceeds of $40,000,000. Each unit consists of one callable Class A Share, par value $0.0001 per share, and one redeemable
warrant. Each redeemable warrant included in the units entitles the holder to purchase one ordinary share at a price of
$10.00. Immediately prior to the consummation of the IPO, we completed a private placement of 4,500,000 warrants at a price
of $0.75 per warrant, for an aggregate purchase price of $3,375,000, to our founding shareholders and their designees. We
sold to the underwriters of the IPO, as additional compensation, an aggregate of 136,000 Class A Shares for $2,720. A total
of $41,600,000, which includes a portion of the $3,375,000 of proceeds from the private placement of warrants to the founding
shareholders and their designees, has been placed in trust (the “Trust Account”) pending the completion of our
initial acquisition transaction. On March 18, 2012, the ordinary shares and warrants underlying the units sold in the IPO
began to trade separately.



On September 16, 2014, a Stock Purchase
Agreement (the “Purchase Agreement”) was entered into by and among CIS, Elite, Delta and the shareholders of Elite
(the “Elite Shareholders”).



Acquisition of Elite



Upon the closing of the transaction pursuant
to the Purchase Agreement, CIS acquired all of the shares held by the shareholders of Elite (the “Acquisition”). Pursuant
to the Purchase Agreement, all holders of shares of Elite exchanged their shares of Elite for shares of CIS as more fully described
below. As a result, following the Acquisition, the Delta Companies became wholly-owned subsidiaries of CIS.



Acquisition Consideration



The Elite Shareholders of all of the outstanding
shares of Elite (the “Elite Shares”) immediately prior to or at the time of closing sold, conveyed, transferred, assigned
each of their Elite Shares to CIS which issued to the Elite Shareholders an aggregate of 6,060,000 ordinary shares of CIS, par
value $0.0001 per share (“CIS Common Stock”) as payment for the Elite Shares (the “Purchase Price”). The
Purchase Price was paid as follows: (i) 4,560,000 shares of CIS Common Stock was issued at closing; plus (ii) an additional 1,500,000
shares of CIS Common Stock was issued and placed in escrow pursuant to an Escrow Agreement and shall be released based upon the
meeting of certain net income performance targets as specified in the Purchase Agreement and summarized below (the “Earnout
Payment Shares”).



The Earnout Payment Shares, if any, will
be issued as follows: (a) 500,000 shares shall be issued if the Company achieves Adjusted Net Income of at least $8 million for
the period starting July 1, 2014 and ending June 30, 2015; (b) 500,000 shares shall be issued if the Company achieves Adjusted
Net Income of at least $9.2 million for the period starting July 1, 2015 and ending June 30, 2016; (c) 500,000 shares shall be
issued if the Company achieves Adjusted Net Income of at least $10.6 million for the period starting July 1, 2016 and ending June
30, 2017 (collectively, the “Net Income Targets”). Further, during the thirteen (13) months post-closing, all material
acquisitions made by the Company must be accretive to Company earnings. A “material acquisition” is an acquisition
that would, when comparing the most recent annual financial statements of each company, result in a change of 5% or more to the
Company’s revenue, net income, total liabilities or total assets. To be “accretive”, an acquisition must be acquired
at a P/E ratio that is at a 20% discount to the P/E ratio at which the Company is trading (based on the last sales price) on the
day prior to the date that the definitive agreement for the acquisition is signed. The Net Income Targets are to be met on an all-or-nothing
basis, and there shall be no partial awards.



Concurrently with the Acquisition, CIS
issued 500,000 shares of CIS Common Stock to Kyle Shostak and CIS Acquisition Holding Co. Ltd. (collectively, the “CIS Sponsor”),
proportionally in accordance with their ownership in CIS.



25







Value Rachet



If the 10 trading day volume weighted average
price of the CIS Common Stock (the “VWAP”) is lower than $5.00 per share on the principal stock exchange on which such
stock is traded on the earlier to occur of (i) the 395th day after the closing and (ii) the 30th day after the SEC declares a registration
statement filed by CIS effective during the first 12 months after the closing,  then CIS will issue the CIS Sponsor, proportionally
in accordance with their respective share ownership in CIS, an additional number of shares of CIS Common Stock equal to  (i)
(a) $5.00 minus the VWAP, divided by the VWAP, multiplied by (ii) the lesser of (a) 1,500,000 and (b) the total number of shares
of CIS Common Stock owned by CIS Sponsor on such date. The total number of CIS Common Stock will be reduced by the number of shares
CIS Sponsor sells during 13 months post-closing.



Arrangement with Respect to Proceeds
of CIS’ Public Warrants and CIS Sponsor Warrants



CIS has agreed that in the event that there
is any exercise of CIS Public Warrants which were issued in CIS’ initial public offering or the warrants to purchase CIS
Common Stock issued to any CIS Sponsor, any proceeds of such exercise shall be paid to certain shareholders of Elite. CIS will
not retain any portion of the proceeds of such exercise.



Call Agreement



CIS and the CIS Sponsor agreed to enter
into a Call Agreement (the “Call Agreement”) mutually acceptable to CIS, Elite and the CIS Sponsor pursuant to which
CIS shall be permitted, between the 360th and 390th after the closing date, to require the CIS
Sponsor to sell to it, at a price of $5.00 per share, up to 1,500,000 shares of CIS Common Stock.



Amendment to CIS Placement Warrants



In connection with the Acquisition, the
CIS Sponsor amended the 4,500,000 CIS Placement Warrants owned by the CIS Sponsor to provide that such warrants may be redeemed
in the event CIS Common Stock trades at a price of $17.50 per share for a period of ten (10) consecutive trading days and that
such warrants may not be exercised on a cashless basis.



Representations; Covenants



Each of the parties to the Purchase Agreement
made customary representations to the other parties to the Purchase Agreement.



Conditions to Closing



The obligation of each party to complete
the Acquisition and the transactions contemplated by the Purchase Agreement were conditioned, among other things, upon the satisfaction
of the following conditions: (i) no provision of any applicable law, and no order shall have prohibited or imposed any condition
on the consummation of the Closing; (ii) there shall not have been pending any action brought by a third-party non-affiliate to
enjoin or otherwise restrict the consummation of the Closing; (iii) holders of not less than 12.5% of the IPO Shares (as defined
in CIS’s Amended and Restated Memorandum and Article of Association) shall have agreed to convert from Class A Shares to
Class C Shares (each as defined in CIS’s Amended and Restated Articles of Association) in connection with the Closing; (iv)
all authorizations, approvals and permits required to be obtained from or made with any authority in order to consummate the transactions
contemplated by the Purchase Agreement shall have been obtained or made; and (v) each party shall have entered into and delivered
a counterpart signature page of each additional agreement required under the Purchase Agreement.



The obligation of CIS to consummate the
Acquisition was conditioned, among other things, upon the satisfaction, or the waiver at CIS’s sole and absolute discretion,
of the following further conditions: (i) Delta having duly performed in all material respects all of its obligations under the
Purchase Agreement at or prior to the Closing Date; (ii) certain representations and warranties were true and correct in all respects;
and (iii) no material adverse effect shall have occurred since the date of the Purchase Agreement.



26







The obligations of Delta and Elite to consummate
the Acquisition were conditioned, among other things, upon the satisfaction, or the waiver at Delta and Elite’s sole and
absolute discretion, of the following further conditions: (i) CIS having duly performed in all material respects all of its obligations
under the Purchase Agreement at or prior to the Closing Date; (ii) the representations and warranties of CIS contained in the Purchase
Agreement and in any certificate or other writing delivered by CIS pursuant thereto, disregarding all qualifications and expectations
contained therein relating to materiality and material adverse effect shall have been true and correct in all material respects
at and as of the Closing Date; (iii) no material adverse effect shall have occurred since the date of the Purchase Agreement; (iv)
on the Closing Date, CIS shall have filed an application covering all shares of CIS Common Stock, including the Earnout Payment
Shares, to be issued to the Elite Shareholders to approve such shares on The NASDAQ Capital Market, and CIS not having received
any notice of delisting from the NASDAQ Capital Market; (v) CIS having at least $5,000,000 in cash at the Closing, after payment
of any and all expenses of CIS incurred prior to the Closing Date; and (vi) Delta having received approval of the transactions
contemplated by the Purchase Agreement and to the restructuring of certain debt owned by the previously existing private equity
firms.



Indemnification; Escrow of Closing Payment



If it shall have violated, misrepresented
or breached any of its representations, warranties, and covenants, Elite agreed to certain indemnification. For that purpose, of
the indemnification, an aggregate of 1,500,000 shares are being held in escrow for a period of 12 months following the Merger in
order to satisfy any indemnification obligations of Elite. These 1,500,000 shares are the shares that are being held in escrow
until CIS meets certain income thresholds. If it shall have violated, misrepresented or breached any of its representations, warranties,
and covenants, CIS agreed to indemnify the Elite stockholders up to $1,000,000. For purposes of the indemnification provisions
of the Agreement, each share included in the Closing Payment will be deemed to be worth $10.40. However, no party shall be entitled
to indemnification until the aggregate amount of Losses equals at least $100,000.



Board of Directors and Voting Agreement



Immediately after the Closing, the Board
of Directors of CIS consisted of five (5) directors, composed of four (4) nominees designated by Elite, of which at least two (2)
designees shall qualify as an independent director under the Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules of The NASDAQ Stock Market, if applicable, and one (1) nominee designated by CIS, who shall qualify as an independent
director under the Exchange Act, and the rules of The NASDAQ Stock Market, if applicable. The parties to the Purchase Agreement
entered into a mutually agreed upon voting agreement relating to nominees to the Board of Directors of CIS for a period of
thirteen (13) months following the closing (the “Voting Agreement”).



Registration Rights



CIS entered into a Registration Rights
Agreement with the CIS Sponsor and any other such parties with the rights to require CIS to register any securities of CIS held
by such parties under the Securities Act of 1933, as amended, to terminate such demand registration rights and grant such parties
piggyback registration rights.



No Tender Offer



Due to the short amount of time available
before September 21, 2014, CIS did not conduct a tender offer to redeem publicly traded shares. Instead, CIS will redeem all holders
of publicly traded shares that have not elected to convert their Series A Shares into Series C Shares promptly after September
21, 2014.



B. Business Overview



History of Delta



Founded in 2007, Delta is a Hong Kong based
manufacturer and distributer of organic compound including para-chlorotoluene (“PCT”), ortho-chlorotoluene (“OCT”),
PCT/OCT downstream products, unsaturated polyester resin (“UPR”), maleic acid (“MA”) and other by-product
chemicals. In its fiscal year ending June 30, 2014, Delta posted revenue of approximately $175.3 million and net income of approximately
$7.0 million. Including a foreign currency adjustment, Delta's comprehensive income was approximately $8.5 million in that period.
Delta has approximately 300 employees, 25% of whom are highly-qualified experts and technical personnel. Delta serves more than
380 clients in automotive, pharmaceutical, agrochemical, dye & pigments, aerospace, ceramics, coating-printing and food additives
industries.



27







History of Delta’s Subsidiaries



On June 15, 2007, Jiangsu Delta was established
by S&S International Investment Holding (HK) Limited (“S&S International”), a Hong Kong based investment holding
company, as a wholly foreign-owned enterprise (with an initial registered capital of US$42 million, which was later reduced to
US$ 28.8 million) located in Zhenjiang City, Jiangsu Province, the PRC.



Pursuant to a share transfer agreement
entered into on April 13, 2008, Mr. Xin Chao acquired the entire equity interest in Jiangsu Delta from S&S International through
Zhengxin International Investment Limited, a Hong Kong corporation (“Zhengxin International”) and became the controller
of Jiangsu Delta since then. On May 21, 2008, the acquisition of Jiangsu Delta by Zhengxin International was approved by the Jiangsu
Foreign Trade and Economic Cooperation Department in accordance with “The Approval of Alteration of Equities in and Amendment
of the Articles of Association of Jiangsu Yantze River Delta Fine Chemical Co, Ltd.” issued by the same authority.



Jiangsu Delta commenced its commercial
operations in 2009 with one productions line and approximately 150 employees. It was primarily engaged in the manufacturing and
production of fine chemicals such as OCT and PCT as well as their down-steam products with approximately 100 customers.



With a view to expanding its business and
catering for the demand of its customers, in 2010, Delta expanded Jiangsu Delta’s principal business scope to be producing
and selling a variety of fine chemicals such as (i) pharmaceutical, pesticide and dye intermediates (mainly including Cis-Anhydride,
P-(O) Chlorotoluene, (2, 4 Dichlorotoluene)), (ii) unsaturated polyester resin, (iii) maleic acid and (iv) other by-products chemicals,
all of which are mainly used in pharmaceutical and agriculture industries. In addition, during the same period, Delta installed
additional production facilities to substantially increase its production capacity from 7,000 tonnes to 25,000 tonnes per annum.



Due to the corporate restructuring effort
to consolidate the business of Jiangsu Delta under a pure investment holding entity, pursuant to a sale and purchase agreement
dated May 20, 2010 entered into between Zhengxin International and Delta Advanced Materials Limited, a Hong Kong corporation (“Delta”)
for a consideration of US$28.8 million. Delta, formerly known as China Deltachem Holdings Limited, which was incorporated on June
17, 2010 as a pure investment holding vehicle controlled by Mr. Yu Lan and had an initial issued and paid-up share capital of HK$10,000
comprising 10,000 shares of HK$1.00 each. The said shares were issued at a total subscription price of HK$68,640,000 (equivalent
to US$8,800,000) with a premium of HK$6,863 per share.



On August 30, 2010, the acquisition of
Jiangsu Delta by Delta was approved by the Jiangsu Foreign Trade and Economic Cooperation Department in accordance with “The
Approval of Share Transfer of and Amendment of the Articles of Association of Jiangsu Chang San Jiao Chemical Co., Ltd.”
issued by the same authority.



On April 29, 2011, Mr. Yu Lan transferred
to each of Mr. Shen Lei and Mr. Yan Hong 112 shares in Delta at a price of HK$1.00 per share. After the transfer, Delta was owned
as to 9,776 shares by Mr. Yu Lan (97.76%), 112 shares by Mr. Shen Lei (1.12%) and 112 shares by Mr. Hong Yan (1.12%).



On May 26, 2011, Delta carried out a bonus
share issue, whereby an additional 39,990,000 ordinary shares of Delta were allotted and issued as bonus shares at a price of HK$1.00
each to all the then shareholders of Delta at the ratio in proportion to their existing shareholding percentage, and credited as
fully paid up on a capitalization of the reserve of HK$39,990,000 from the capital reserve of Delta. Subsequent to the bonus issue,
Delta’s total issued and paid-up share capital increases to HK$40 million, comprising 40 million shares of HK$1.00 each.
After the bonus share issue, Delta was owned as to 39,104,000 shares by Mr. Yu Lan (97.76%), 448,000 shares by Mr. Shen Lei (1.12%)
and 448,000 shares by Mr. Hong Yan (1.12%). On December 12, 2011, Mr. Yu Lan transferred all of his 39,104,000 shares in Delta
to Mr. Xin Chao at a total consideration of HK$67,102,464.



28







Delta entered into a series of Securities
Purchase Agreements dated January 31, 2011, May 16, 2011 and June 30, 2011, respectively, with the funds managed by Korea Investment
Partners Co. Ltd. and Kleiner, Perkins, Caufield & Byers (the “Noteholders”), pursuant to which it has issued convertible
notes (“Convertible Notes”) for an aggregate principal amount of US$18 million. The Convertible Notes have a compound
interest rate of 6.00% per annum if converted into shares and a compound interest rate at maturity of 15.00% if redeemed or liquidated.
The principal and interests accrued on such Convertible Notes are convertible in whole or in part into the ordinary shares in Delta,
on such terms and subject to the conditions of the Securities Purchase Agreements. On September 13, 2014 each of Mr. Xin Chao,
Mr. Shen Lei and Mr. Hong Yan transferred all of their respective shareholdings in Delta to Elite. Elite became the sole shareholder
of Delta after the transfer.



On September 15, 2014, Delta entered into
a Settlement Deed with the Noteholders pursuant to which all of the outstanding obligations under Convertible Notes were settled.
Pursuant to the Settlement Deed, Delta agreed to (i) cause Elite to issue an aggregate of 10,605 Elite Shares in consideration
for the forgiveness of an aggregate of $3,400,000 of the Convertible Notes due to the Noteholders, and (ii) cause Master Kingdom
Holdings Ltd., a British Virgin Islands company (“Master Kingdom”), which is owned 100% by Mr. Xin Chao, the principal
shareholder of Elite, to enter into a Novation Deed with each of the Noteholders with respect to the repayment of the balance of
the Convertible Notes to the Noteholders. Accordingly, on September 18, 2014, Delta, Master Kingdom and the Noteholders entered
in a Novation Deed pursuant to which Master Kingdom agreed to assume and repay the remaining indebtedness due to the Noteholders
in the aggregate amount of $19,322,981.28. As a result of the foregoing, Delta has no more Convertible Notes outstanding.



On August 18, 2012, Zhengxin International
and Jiangsu Delta entered into a sale and purchase agreement, pursuant to which the entire equity interest of Jiangsu Zhengxin
New Material R&D Co., Limited (“Jiangsu Zhengxin R&D”) was acquired by Jiangsu Delta from Zhengxin International
at a consideration of RMB3.3 million. The acquisition of Jiangsu Zhengxin R&D was approved by the Danyang Bureau of Commerce
on September 18, 2012 in accordance with “The Approval and Transfer of and the Alteration of Nature of Zhengxin New Material
R&D Co., Limited”.



On December 17, 2013, Jiangsu Delta Logistics
Co., Ltd (“Jiangsu Logistics”) was established by Jiangsu Detla with an initial registered capital of RMB 10 million
located in Dantu District, Zhenjiang City, Jiangsu Province, PRC.



On June 8, 2013, Binhai Deda Chemical Co.,
Ltd (“Binhai Deda”) was established by Jiangsu Detla with an initial registered capital of RMB 5 million located in
Binhai County, Zhenjiang City, Jiangsu Province, PRC.



By June 30, 2014, Delta had established
a domestic sales network which covered Jiangsu Province, Anhui Province, Zhengjiang Province, Hubei Province, Guangdong Province
and Chongqing Metropolitan with the number of its customers increased to approximately 380. With the expansion in its operations,
Delta also increased its headcount to approximately 300 employees.



Elite Ride Limited



Elite owns 100% of the ordinary shares
of Delta and was formed solely in contemplation of the Acquisition. It has not commenced any operations, has only nominal assets
and has no liabilities or contingent liabilities, nor any outstanding commitments other than as set forth herein. Elite has not
incurred any obligations, engaged in any business activities or entered into any agreements or arrangements with any third parties
other than as set forth herein. Its principal executive offices are located at 16 Kaifa Avenue, Danyang, Zhenjiang, China,
and its telephone number is +86 511-8673-3102.



Business Overview



Headquartered in Zhenjiang City, Jiangsu
Province, Delta is a fast-growing fine and specialty chemical manufacturer, primarily engaged in manufacturing and selling of organic
compound including para-chlorotoluene (“PCT”), ortho-chlorotoluene (“OCT”), PCT/OCT downstream products,
unsaturated polyester resin (“UPR”), maleic acid (“MA”) and other by-product chemicals and distributing
fine and specialty chemicals to end application markets including Automotive, Pharmaceutical, Agrochemical, Dye & Pigments,
Aerospace, Ceramics, Coating-Printing, Clean Energy and Food Additives.



29







Delta collaborates with reputable universities,
such as the East China Normal University in order to secure its position as a market leader. Delta also closely monitors the market
for development, trends and technological innovations and solicit customer feedback so as to keep abreast with market demands and
industrial development.



As at the date of this report, Delta has
a diversified clientele with more than 380 customers based either in domestic or overseas market. Approximately 90% of its sales
are to its domestic customers based in Jiangsu Province, Anhui Province, Zhejiang Province, Hubei Province, Guangdong Province
and Chongqing Metropolitan, and the rest of its products are exported via distributors or trading companies to countries outside
the PRC which include but not limited to India, Brazil, Japan, European Union member countries and America.



Delta’s revenue for the fiscal years
ended June 30, 2012, 2013 and 2014 were approximately $95.6, $124.2 and $175.3 million, respectively, and its profit before tax
for the fiscal years ended June 30, 2012, 2013 and 2014 were $14.9, $15.8, and $9.4 million, respectively.



Products



Delta’s products can be broadly divided
into two major series, namely (i) PCT/OCT and (ii) UPR, which account for approximately 40% and 27% respectively of its total revenue
in the fiscal year 2014. PCT/OCT together with its downstream products can be widely used in pharmaceuticals, pesticides, dyes
and consumables manufacturing industries, whereas UPR is commonly used as (i) renovation materials for bathroom and kitchen, (ii)
manufacturing materials for trains, cars, aircrafts and vessels, and (iii) infrastructure materials such as anti-collusion pipes
and oil and gas pipelines. UPR is a light weight, relatively wear resistant and highly anti-corrosive material, and its unique
features make it a popular replacement material for plastic and steel. In the fiscal year 2013, Delta sold approximately 40% of
the PCT/OCT Delta produced and Delta consumed the balance as raw materials for the manufacturing of PCT/OCT downstream products
..



In addition, Delta manufactures MA, which
is an intermediate product in producing UPR. Delta consumes most of the MA it produces as a production intermediary. A by-product
of the production process of MA is heat energy, which Delta consumes efficiently for manufacturing its PCT/OCT products, where
large-scale heat energy is required.



Delta places great emphasis on the research
and development of its products to ensure Delta’s continued success. As of the date of this report, Delta has successfully
registered five patents in the PRC in relation to UPR production technologies, and PCT/OCT production technology, and environmental
protection equipment technology, and it is also in the process of applying for seven more patents in relation to PCT/OCT and MA
productions technologies and production of PCT/OCT environmental protection equipment.



Production Process



Delta primarily engages in manufacturing
and sale of organic compound including PCT, OCT, UPR, MA and other by-product chemicals. Please see below the production flow diagrams
for more details on how PCT/OCT, MA and UPR products are manufactured by it.



The business operations model begins with
the sourcing of raw materials, which are then delivered to Delta and stored in its warehouses until being processed in-house in
its factory:



30











Delta Supply Chain Management (SCM)



The following diagram illustrates our business
model with detailed service proposals in our Supply Chain Management business:







We started the servicing of third party
clients in raw material procurement and trading in 2012, with an objective to expand our operations beyond being a conventional
manufacturer. During the fiscal years ended June 30, 2012, 2013 and 2014 our revenue were approximately $135,000, $11 Million and
$49 Million and our gross profit (loss) was  $20,703, $(659,199) and $(330,982), respectively.



In 2013, Jiangsu Delta Logistics Ltd, a
wholly-owned subsidiary with business approval in handling dangerous and toxic chemicals was founded, marking our launch of logistics
and transportation services.



We have gathered from operating this new
business that we shall make good use of our knowledge and experiences in manufacturing, logistics and international trade in the
chemical business to act as a service provider in supply chain management for third-party clientele including manufacturers, distributors
and retailers of chemical products. We have recently added a business division handling Internet financing to deploy the opportunities
in supply chain financing.



31







Purchase of Raw Materials



The major raw materials which Delta purchases
include: Toluene, Chlorine, Benzene, Styrene and Phthalic Anhydride. Toluene and Chlorine are the two major raw materials for the
PCT/OCT production. Benzene is the major raw material for MA production. Styrene and Phthalic anhydride are the two major raw materials
for UPR production.



Delta sources its raw materials from a
spread of proximate suppliers, and uses its own PCT/OCT and MA production as raw materials for PCT/OCT downstream products and
UPR products. Most of its suppliers are located within the Yangtze River Delta region, and due to the hazardous nature of the raw
materials, Delta emphasises on the need for a short transportation time and the safety requirements.



PCT/OCT raw materials take about one week
for delivery on request, while MA raw materials take about three to five days, and UPR raw materials take about seven to ten days.



Delivery and Storage



About 90% of the raw materials Delta uses
are delivered to it by the suppliers (Delta picks up the other 10%), which buy insurance and bear all risks until goods are delivered
to its warehouses, and the remainder is picked up by its employees.



Delta has on-site warehousing capacity,
which allows it to store up to 6,000 tonnes of liquid or solid chemical materials.



The newly incorporated Jiangsu Logistics
own 6 chemical products and trucks for transporting chemicals and is planning to increase its capacity to 6,000 tons.



Manufacturing and Processing



Manufacturing and processing occurs at
Delta’s factory in Zhenjiang, which has an annual production capacity of 30,000 tons of PCT/OCT production and PCT/OCT downstream
production, 25,000 tons of MA production and 18,000 tons of UPR production. Please see below the production flow diagrams for the
various products for more details on how PCT/OCT, MA and UPR products are manufactured in its factory.



(a)          PCT/
OCT



PCT/OCT forms the basic or intermediate
products from which down-stream extended products can be further manufactured. Delta’s annual capacity for PCT/OCT series
are at 30,000 tons, and the factory operates at almost its maximum capacity presently. The simplified production process for the
PCT/OCT products is as follows:







Step 1: Chlorination Process



Chorine and Toluene, which form
the basic reactants for the production of PCT/OCT, are delivered into the Chlorination Tower for a controlled reaction to take
place in the presence of various catalysts. Depending on the temperature and the types of catalyst used, the reaction will produce
a mixture of crude products with a certain isomeric ratio of PCT/OCT.



32







The exhaust is delivered to the
Chlorination Tower, cooled and condensed before being treated for safe discharge. The crude product solution is then delivered
into the Distillation Tower where the products are isolated and purified.



Step 2: Fractional Distillation



Within the Distillation Tower,
the crude reactant product undergoes separation by way of fractional distillation and PCT and OCT are segregated based on their
different boiling points, and separately delivered to a PCT Tower and an OCT Tower for storage or packaging as necessary.



Step 3: Further Processing



The isolated, purified compounds
can then undergo further value-added treatment pursuant to customised treatments to manufacture down-stream derivative products.
Delta re-processes about 40% of the PCT/OCT products received through the manufacturing process into some 13 different downstream
chemical products such as:



(1) 2,4-Dichloro toluene (“2,4DCT”)
2,4

(2) 3,4-Dichloro toluene (“3,4DCT”)
3,4

(3) O-chlorobenzaldehyde

(4) p-chlorobenzaldehyde

(5) 2,4-Dichlorobenzaldehyde
2,4

(6) O-chlorobenzyl chloride

(7) Chlorobenzyl chloride

(8) 2,4-Dichloro-chloride 2,4

(9) O-chlorobenzoic acid

(10) O-Chloro benzonitrile

(11) Chlorobenzonitrile

(12) 2,4-Dichlorobenzonitrile
2,4

(13) 3,4-Dichlorobenzonitrile
3,4



(b)          UPR



Delta’s UPR products are
high-end resin products. Due to UPR’s combination of unique strengths such as its lightness, toughness, durability, strength
and anti-corrosive properties, it is widely used by various industries, like the construction industry, industrial equipment industry,
transport industry and the infrastructure industry. Delta’s production capacity for UPR was expanded from 9,000 tonnes in
May 2010, to 18,000 tonnes annually in December 2010, and the factory operates at almost its maximum capacity presently. The simplified
production process for the UPR products is as follows:







33







Step 1: Reaction



Di-ols and Di-acids, including
MA, are the basic reactants for the production of UPR, which is a form of polyester. The reactants are delivered from their storage
tanks into a stainless steel reactor for a controlled esterification process in the presence of various catalysts. Depending on
the temperature and the types of catalyst used, the reaction will produce a crude mixture of semi-finished product or resin. Delta
can customize the qualities and characteristics of the UPR by varying the temperature, ratio and types of chemical reactants or
catalysts, which will result in the production of polyesters of different structures.



Step 2: Dilution and Further
Procession



The semi-finished product or
resin is transported into the Dilution Tank where Styrene and other chemicals are added in a dilution process. The Dilution Tank
is linked to a cooling and condensation mechanism which will condense the vapours or exhaust from the Dilution Tank. In the Dilution
Tank, the resin can be further adjusted as to viscosity, reactivity and other characteristics through the addition of chemical
inhibitors or promoters.



Step 3: Packaging



The final product is then transferred
to the storage tanks or sent for packaging.



(c)          MA



MA accounts for 6% of Delta’s
total sales volume. Most of the MA produced, i.e. approximately 60%, is used for its own production of UPR, while about 40% will
be sold to customers. The oxidation process in the production of MA produces heat which is converted into steam for use in the
production of PCT/ OCT and other production areas where steam is needed.







Step 1: Oxidation



Benzene and air are catalysed
and oxidised through a fixed bed Oxidation Reactor to generate MA vapour. The MA vapour is condensed and cooled to form MA in liquid
form which is delivered to the Crude Anhydride Tank. The vapour is passed through the Absorption Tower for further extraction and
isolation.



Step 2: Distillation



The MA solution and vapour which
has been absorbed in the absorption tower shall be dissolved and distilled as part of the purification process to extract the finished
product. The MA can be delivered to the storage tanks and packaged for sale, or be utilised for further production and processing.



34







Delivery or Pick-up by the Customers



Delta delivers around 60% of the products
sold to the customer sites while customers pick up about 40% of the finished products directly from its warehouses. Delta usually
uses three transportation companies to truck the products to its customer sites. The newly incorporated Jiangsu Logistics will
be responsible for transporting the chemicals. Delivery typically takes up to one week, although actual time will vary depending
on the location of its customers.



Production Facilities, Capacity and
Utilization



Delta’s production facilities are
located in Zhenjiang City, Jiangsu Province, the PRC.



Delta has three main production lines centered
on its core products:



| | (a) | Delta’s PCT/OCT series production facility was designed by Tianjin University and built in 2008. It was first put into use in January 2009 and went through an expansion during 2011.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Delta’s MA production line was designed by the China Academy of Science started operation in late 2010. The current capacity of the MA Production line is at 12,500 tonnes per annum, which is fully utilized and went through an expansion during 2013.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Delta’s UPR production line had two phases of development in May and December 2010 respectively.
| | --- | ------------------------------------------------------------------------------------------------



Delta may from time to time look into further expansion of its
existing facilities to improve output capacity.



Quality Control



Delta is committed to providing its customers
with quality and reliable products. Through its corporate quality management system, Delta is committed to ensuring that the products
it produces are of high quality and are able to meet the expectations of its customers.



Delta’s quality assurance department
is currently comprised of 13 quality assurance personnel. They are responsible for overall quality control at every stage of its
production process and ensure that it is in accordance with its quality control guidelines.



Quality Assurance and Safety Processes



Delta conducts quality checks on all the
products manufactured and oversee the implementation of the quality controls at every stage of its production process in line with
its quality management system. The following quality control procedures have been implemented:



(a)          Establishment
of quality control standards



For manufacturing of chemical
systems and components and catalysts, Delta has set in place stringent quality control standards to implement strict measures for
quality control in the manufacturing. Such standards follow strictly in accordance with the national and industry standards as
well as the standards and guidance set in accordance with the ISO 9001 Quality System. Delta also takes into account customers’
specifications and requirements and quality feedback from its previous customers to supplement its quality control standards.



For its system design, Delta
ensures the design of every project is carried out in line with (i) the relevant PRC laws and regulations; (ii) the relevant technical
specifications and industry standards; and (iii) its customers’ requirements.



(b)          Quality
control during procurement



Direct materials are purchased
only from pre-selected suppliers after evaluation and testing by its procurement personnel, quality control personnel and production
personnel based on stringent selection criteria such as quality of their raw materials and services, material sources, pricing,
accreditations, track record, financial condition and market reputation.



35







Delta’s quality assurance
department will conduct random sample inspection upon receipt of the raw materials. Raw materials that do not meet its quality
requirements are returned to the suppliers for them to remedy the problems or defects or for exchange. Procurement plans from the
various suppliers are subject to review by its senior management on an annual basis .



(c)          Quality
control during manufacturing process



Quality guidelines are provided
to the relevant production workers at each production stage before production commences.



Before the production, incoming
direct materials are inspected by way of sampling by its quality control personnel to ensure that they are supplied by approved
suppliers, and that the quality, grade and quantity of such direct materials conform to its specifications and requirements as
well as its quality control standards. Direct materials which fail to comply with these specifications will be rejected.



Delta continuously monitors its
manufacturing process and carry out sample-testing at systematic intervals throughout the process to ensure consistency in the
quality of the chemical systems and components and catalysts. Delta’s quality control personnel and production personnel
conduct sample-testing and inspections at the various stages of production to ensure that defective semi-completed products do
not proceed to the next stage of the production.



(d)          Quality
control on finished products



Delta conducts overall inspections
and testing on finished products before they are despatched to customers. Delta has implemented a strict sample-based testing system,
which is carried out every batch of its finished products before they are arranged for packing. For OCT/PCT and MA products, the
main criterion to be examined is its degree of purity, whereas for UPR products, the focus is on its shock-resistance and chromaticity.
This final stage of inspection is carried out to ensure that the finished products that are packed and delivered conform to the
exact specifications of its customers. Delta also provides after sales servicing, and will attend to complaints, if any, regarding
defects in the products or the services.



To continually improve its quality management
system, Delta will take into account the feedbacks from its employees who are involved in each of the quality control processes
and feedbacks from these employees or its customers.



Certification and Awards



In recognition of its quality assurance
efforts, Delta was awarded certification of GB/T19001-2008 idt ISO9001:2008 (quality management systems) by China Federation of
Logistics Certification Center GB/T24001-2004/ISO14001:2004 (environmental management systems) by China Certification Centre Inc.



For the last three fiscal years and up
to the date of this report, Delta has not experienced any material claims from its customers for defective or poor quality products,
nor has Delta experienced any product liability claims from end users of its products. In addition, Delta has not experienced significant
amount of return cases for its products over the same period.



Research and Development



Delta places great emphasis on research
and development. Its research and development team is headed by its Chief Engineer Mr. Yuan Huaizhou and supported by about 36
research and development staff. Delta’s research team members are required to have at least five (5) years of experience
in the research of fine chemical industry as well as a bachelor degree in Chemistry or chemical engineering or other relevant
professional qualifications. All the employees under its research and development department are required to execute confidentiality
undertakings, which restrict them from revealing any trade secrets and/or know-how with regard to its products or technologies
involved in its production process to its competitors for at least three (3) years after termination of their employment.



36







In-house Research and development
activities



Delta’s in-house research and development
activities focus mainly on:



| | (a) | improving the quality of its end products so as to achieve certain special features, such as fire-resistance, shock-resistance, wear-resistance and anti-corrosive properties etc.;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | improving production techniques to cut down on production lead-time for efficiency and adopting automatic production process to reduce the chances of human mistakes and also make full use of the side products such as steam and heat energy to achieve the goal of zero waste;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | adopting environmentally production process to achieve zero-pollution; and
| | --- | --------------------------------------------------------------------------



| | (d) | developing and testing catalysts to increase production efficiency and purity.
| | --- | ------------------------------------------------------------------------------



Technology Collaborations



Delta collaborates with technology partners,
comprising renowned universities and in the manner as follows:



In 2012, Delta entered into discussions
for partnership arrangements with a group of professors from East China Normal University to development a joint research and development
centre. The joint research centre, under the name of “Delta Chemical Advanced Materials R&D Centre”, will be located
in our new 12-storey office building which was completed in April 2014.



Pursuant to the collaborative arrangement,
the university and Delta will each contribute around three (3) to five (5) research staff to carry out the research and development
operations of the joint research centre.



The joint research centre will be equipped
with world-class chemical research facilities and product testing equipment. Its research focus will be placed on development of
the following products:



| | (a) | new UPR products for (i) renovation of kitchen, bathroom and man-made marble counter, and (ii) manufacturing high pressure oil pipeline and high voltage electrical equipment;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | new PCT/OCT downstream products, such as pharmaceutical bulk drug; and
| | --- | ----------------------------------------------------------------------



| | (c) | directional catalyst to be used in PCT/OCT production process.
| | --- | --------------------------------------------------------------



Sales and Marketing



Delta’s sales and marketing department
is headed by its Deputy General Manager, Mr Shi Weiping, who has been involved in the chemical industry since 1989 and has experience
of approximately 23 years in the industry in relation to the sales and marketing of chemical products. Mr Shi is currently supported
by seven sales and marketing personnel who are in charge of the sales for different product categories such as PCT/OCT and MA products
and they are dedicated to sales and marketing activities in various areas, ranging from southern, northern and eastern China regions
as well as overseas market.



Delta’s sales and marketing department
is responsible for the sales and marketing functions of its Group, and its key roles and responsibilities include sourcing for
new customers, confirming and collating orders from customers, providing after-sales service, maintaining customer relationships,
and ensuring timely payments and delivery of goods/services.



37







Delta’s sales personnel keep in touch
with its customers by paying regular visits to them to understand their needs, business development and market policies and to
obtain their feedback and suggestions. Following the customer visits, its sales personnel will report to Mr Shi on a daily basis.



Delta’s sales and marketing department
is also tasked with formulating and planning its marketing strategies and activities which primarily include the following specific
marketing activities:



Direct sales and marketing



Direct sales and marketing activities involve
regular meetings with and frequent visits to new and existing customers. Through such interactions, Delta is able to promote its
products, obtain feedback on its products, and understand its customers’ demands based on the latest developments and trends
relating to its chemical industry. In addition, Delta may engage in discussions with its customers relating to new chemical products
in the market and to explore opportunities for business collaboration. This will allow it to better understand and serve its customers.



Further, Delta sales and marketing department
cooperates with other departments to put in place an effective and systematic procedure for direct sales, arrange promotional activities
and to collate customer data and feedback. Delta provides its sales and marketing employees with necessary training to familiarize
them with the sales and marketing practice in the industry and how to promote awareness for its brand. These employees are also
rewarded with incentive remuneration package linked to their sales performance.



Advertisements, Publications and
Participation in Industrial Conferences



Delta has a diversified customer base with
more than 380 customers in China and countries such as India, Brazil, Japan, European Union member countries and America. Due to
its diversified clientele, its sales and marketing efforts are conducted through a variety of channels, including but not limited
to websites, billboards and brochures. Delta also participated in various regional and international seminars and exhibitions to
showcase and promote its products, create and enhance market awareness of its brand and products, gain market updates and industry
knowledge, establish networks with customers and suppliers, keep abreast of the latest technology and identify latest trends. Delta
has annually, since its establishment, participated in related industrial conferences held in the PRC, such as China International
Pharmaceuticals Exhibition, China International Fine Chemicals Exhibition and China Import and Export Fair.



Awards and Certificates



As an endorsement of the quality of its
products and services, Delta has been conferred, inter alia , the following awards or certificates:



|Award/ Certification                                                    |  | Awarding Authority                                                                                                                                        |  | Year
|----------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                        |  |                                                                                                                                                           |  |     
|Municipal Key Project Completion Award                                  |  | Zhenjiang City Major Project Office                                                                                                                       |  | 2008
|                                                                        |  |                                                                                                                                                           |  |     
|Credit Rating AAA                                                       |  | Credit Rating Agency Recognised by the Nanjing Branch Office of The People’s Bank of China: Jiangsu Yuandong International Rating and Consulting Co., Ltd |  | 2010
|                                                                        |  |                                                                                                                                                           |  |     
|Advanced Enterprise of Utilizing Foreign Capitals                       |  | People’s Government of Gao Zi Town, Dantu Economic Development Zone                                                                                       |  | 2011
|                                                                        |  |                                                                                                                                                           |  |     
|Outstanding Unit                                                        |  | Transparent and Democratic Factory Operations Management Team of Zhenjiang City                                                                           |  | 2011
|                                                                        |  |                                                                                                                                                           |  |     
|Credit Rating Certificate of AAA                                        |  | United Credit Management Limited Company Jiangsu Branch                                                                                                   |  | 2011
|                                                                        |  |                                                                                                                                                           |  |     
|Certificate for Vice President Unit                                     |  | Precursor Chemicals Industry Association of Zhenjiang City                                                                                                |  | 2012
|                                                                        |  |                                                                                                                                                           |  |     
|GB/T19001-2008  ISO9001:2008                                            |  | China Federation of Logistics Certification Center                                                                                                        |  | 2012
|                                                                        |  |                                                                                                                                                           |  |     
|Outstanding Tax Contribution Unit                                       |  | CPC Working Committee of Gao Zi Sub-District & CPC Working Committee of Dantu Economic Development Zone                                                   |  | 2012
|                                                                        |  |                                                                                                                                                           |  |     
|GB/T24001-2004/ISO14001:2004Environmental Management System Certificate |  | Hua Xia Certification Centre Inc.                                                                                                                         |  | 2012
|                                                                        |  |                                                                                                                                                           |  |     
|Production Safety Standards: Level Three Enterprise                     |  | Administration of Work Safety of Zhenjiang City, Jiangsu Province                                                                                         |  | 2013



38







Intellectual Property



Patents



As at the Latest Practicable Date, the status of Delta’s
patents and the patent applications in the PRC is as follows:



Patents Granted



|Patent Number     |  | Description                                                                                 |  | Patentee      |  | Date ofApplication |  | Date of Grant     |  | Expiry Date      
|----------------- |  | ------------------------------------------------------------------------------------------- |  | ------------- |  | ------------------ |  | ----------------- |  | -----------------
|ZL2011 20123193.1 |  | Efficient resin heater for the purposes of improving UPR production process                 |  | Jiangsu Delta |  | April 18, 2011     |  | November 16, 2011 |  | April 18, 2021   
|                  |  |                                                                                             |  |               |  |                    |  |                   |  |                  
|ZL2011 20123195.0 |  | Recovery hot and cold container in one for the purposes of improving UPR production process |  | Jiangsu Delta |  | April 18, 2011     |  | November 30, 2011 |  | April 18, 2021   
|                  |  |                                                                                             |  |               |  |                    |  |                   |  |                  
|ZL2011 20316710.7 |  | Efficient resin stirrer for the purposes of improving UPR production process                |  | Jiangsu Delta |  | August 26, 2011    |  | June 13, 2012     |  | August 26, 2021  
|                  |  |                                                                                             |  |               |  |                    |  |                   |  |                  
|ZL201420088028.0  |  | A toluene chlorination tail gas gas-liquid separation tank                                  |  | Jiangsu Delta |  | February 28, 2014  |  | August 13, 2013   |  | February 28, 2024
|                  |  |                                                                                             |  |               |  |                    |  |                   |  |                  
|ZL201420091459.2  |  | A kind of industrial wastewater desalting flash tank device                                 |  | Jiangsu Delta |  | February 28, 2014  |  | August 13, 2013   |  | February 28, 2024



Patents Pending



|No. |  | ApplicationNumber |  | Description                                                                                                                        |  | PatentApplicant |  | Application Date  |  | Status 
|--- |  | ----------------- |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | --------------- |  | ----------------- |  | -------
|1   |  | 201110451557.3    |  | High pressure FRP pipe resin for oilfield                                                                                          |  | Jiangsu Delta   |  | December 29, 2011 |  | Pending
|    |  |                   |  |                                                                                                                                    |  |                 |  |                   |  |        
|2   |  | 201110451717.4    |  | New model of UPR for quartz tub                                                                                                    |  | Jiangsu Delta   |  | December 29, 2011 |  | Pending
|    |  |                   |  |                                                                                                                                    |  |                 |  |                   |  |        
|3   |  | 201210541517.2    |  | Waste water desalination technology to be used for wastewater disposal during the production process of  PCT/OCT, MA and UPR       |  | Jiangsu Delta   |  | December 14, 2012 |  | Pending
|    |  |                   |  |                                                                                                                                    |  |                 |  |                   |  |        
|4   |  | 201210541010.7    |  | Efficient utilization of excess heat energy generated from steam exhaust systems resulting from PCT/OCT and MA productions process |  | Jiangsu Delta   |  | December 14, 2012 |  | Pending



39







|No. |  | ApplicationNumber |  | Description                                                                                |  | PatentApplicant |  | Application Date  |  | Status 
|--- |  | ----------------- |  | ------------------------------------------------------------------------------------------ |  | --------------- |  | ----------------- |  | -------
|5   |  | 201210558267.3    |  | Chlorobenzyl chloride continuous distillation system in relation to OCT production process |  | Jiangsu Delta   |  | December 20, 2012 |  | Pending
|    |  |                   |  |                                                                                            |  |                 |  |                   |  |        
|6   |  | 201420292343.5    |  | A kind of maleic anhydride anhydride crude anhydride tank                                  |  | Jiangsu Delta   |  | June 3, 2014      |  | Pending
|    |  |                   |  |                                                                                            |  |                 |  |                   |  |        
|7   |  | 201420091625.9    |  | A kind of exhaust gas absorber that absorbs toluene chlorination                           |  |                 |  | February 28, 2014 |  | Pending



Trademarks



As of the date of this report, Delta does
not own any registered trademark. However, Delta has filed applications to the PRC Trademark Bureau in respect of the following
trademarks:



|Trademark |  | Class (1) |  | ApplicationNumber |  | Date ofApplication |  | Status  |  | Place ofRegistration
|--------- |  | --------- |  | ----------------- |  | ------------------ |  | ------- |  | --------------------
|          |  | 1         |  | 12218845          |  | March 5, 2013      |  | Pending |  | The PRC             
|          |  |           |  |                   |  |                    |  |         |  |                     
|          |  |           |  |                   |  |                    |  |         |  |                     
|          |  | 1         |  | 12218774          |  | March 5, 2013      |  | Pending |  | The PRC             





| | (1) | Class 1 refers to Chemicals used in industry, science
and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; manures;
fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning
substances; adhesives used in industry.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





Seasonality



Delta generally does not experience any
seasonality in its business. Delta only experiences a slight decrease in the number of orders for its products during festive seasons,
in particular, the Chinese New Year, as many of the factories of its customers may be closed.



Staff Training



Delta recognises that its employees are
an important resource and it thus aim to equip its staff with the relevant skills and knowledge which will enable them to perform
their jobs effectively. Delta has implemented comprehensive training policies and programmes aimed specifically at improving the
skill sets of its staff and increasing its competitiveness and productivity. Delta’s human resource department oversees its
staff training programmes.



Delta conducts training programs for all
levels of its staff, including those holding management and supervisory positions. In recognition of staff with potential, Delta
also conducts training programmes to upgrade their skills. Such upgrading programs are conducted on a periodic basis and tailored
in accordance with the specific requirements of each department. Delta’s internal training programs include:



40







| | (a) | General Training
| | --- | ----------------



Delta conducts orientation programs
for its new employees during which they are provided with information on it, including its history, enterprise culture, business
concept and employment rules. They are required to undergo operational training sessions so as to familiarise themselves with its
operational procedures, policies and practices.



Occasionally, Delta will invite
external professionals or instructors to conduct seminars and talks for employees and management of relevant departments in relation
to their respective scope of work.



| | (b) | Production and Manufacturing Staff
| | --- | ----------------------------------



Delta’s staff involved
in the manufacturing and production processes are required to undergo in-house operational training sessions so as to familiarize
themselves with its operational procedures, policies and practices. The production managers and engineers at its production facility
periodically update and educate its production staff on matters relating to its production techniques and processes, including
compliance with the assurance procedures required under GB/T19001-2008 idt ISO9001:2008 (quality management systems) and other
environmental management and quality assurance procedures such as the GB/T24001-2004/ISO14001:2004 requirements.



Upon completion of the various
training programs, Delta’s staff will sit for examinations which may be conducted orally or by written tests. For new employees,
upon passing the examinations and tests, they will undergo on-the-job training during which they will learn the specific skills
which are relevant for their respective positions. They will only commence work in their respective positions if they have been
assessed to be fit for deployment.



| | (c) | Sales and Marketing Staff
| | --- | -------------------------



Delta’s sales and marketing
staff were trained on information relating to its products, including, inter alia, its products’ qualities, characteristics
and their applications. They are also constantly updated on market information and market demand of its products.



Delta recognizes the importance of training
its staff and developing their skills, as its success is largely dependent on the quality and skills of its staff. It is its policy
to maintain a competent work force and Delta is committed to providing training to its staff, in order for it to remain competitive
and meet the increasing market demand for high quality products. As its staff training is mainly conducted in-house, its training
expenses in the last three fiscal years have not been significant.



Insurance



Delta has in place the following insurance
policies:



| | (a) | Social Insurance
| | --- | ----------------



Delta has in place social insurance
for employees of Jiangsu Delta, including fundamental pension insurance and fundamental medical insurance, unemployment insurance,
work-related insurance and maternity insurance in respect of which the insurance premium is borne by Delta and the employees in
a specific proportion governed by the relevant PRC regulations.



Jiangsu Delta has obtained the
Social Insurance Registration Certificate issued by the Social Labor Insurance Fund Management Centre of Dantu, Zhenjiang on June
23, 2010 with the effective labor period of 5 years. Jiangsu Delta has passed the annual inspection of 2011.



According to the relevant PRC laws
and local regulations in respect of social insurance contribution, Jiangsu Delta pays social insurance premiums for employees according
to the following rate:



41







|                              |  | Rate       |    
|----------------------------- |  | ---------- | ---
|Type                          |  | Enterprise |    
|                              |  |            |    
|Fundamental Medical Insurance |  |            | 9  
|Fundamental Pension Insurance |  |            | 21 
|Unemployment Insurance        |  |            | 2  
|Work-related Injury Insurance |  |            | 1.8
|Maternity Insurance           |  |            | 0.6



To its best knowledge, each of
Jiangsu Delta and Jiangsu Zhengxin R&D has since its establishment handled the fundamental medical insurance, fundamental pension
insurance, unemployment insurance, work-related Injury insurance and maternity insurance for employees according to relevant laws
and regulations in the PRC, and neither company has any overdue payment and had been in compliance with applicable PRC social insurance
laws and regulations as of the date of this report.



| | (b) | Property Insurance
| | --- | ------------------



Delta has all property all-risks
insurance for its machinery and equipment including machineries, and facilities against damage caused by certain accidents and
natural disasters such as fire.



| | (c) | Motor Vehicle Insurance
| | --- | -----------------------



Delta purchases and maintains compulsory
traffic accident liability insurance for all company-owned motor vehicles.



| | (d) | Insurance for employers’ liability.
| | --- | -----------------------------------



Delta also purchases insurance
for employer’s liability.



All insurance coverage is obtained at market
rates from independent insurance companies.



Major Suppliers



The key components and raw materials used
in Delta’s production and manufacturing processes are comprised mainly of Toluene, Chlorine, Benzene, Styrene and Phthalic
Anhydride, Maleic Anhydride, Propylene glycol and Ethylene diglycol which in the aggregate constituted approximately 85% of its
total cost of sales.



Delta’s suppliers are carefully selected
by its purchasing department, and are assessed on criteria such as the geographical location, quality of materials supplied, length
of business relationship with it, as well as their reputation, pricing, reliability, track record, service, punctuality and response
time. To facilitate timely purchases of materials, Delta keeps a list of qualified suppliers who have demonstrated reliability
in product quality and delivery time as well as pricing competiveness. This list is subject to review by its management on an annual
basis.



Delta’s raw materials are currently
sourced from within the PRC and therefore, all of its purchases are transacted in RMB. Accordingly, Delta is not subjected to any
significant risk in exchange rates fluctuation in the purchase of raw materials.



Except for Chemical Sales Eastern China
Branch of China Petroleum & Chemical Corporation, with whom a one year contract was entered into, Delta does not any have long-term
arrangements with its other major suppliers.



The major suppliers accounting for 5% or
more of Delta’s cost of sales for each the last three fiscal years ended June 30, 2012, 2013 and 2014 are as follows:



42







|Suppliers                                     |  | FY2014 |    |   | FY2013 |  |    | FY2012 | 
|--------------------------------------------- |  | ------ | -- | - | ------ |  | -- | ------ | 
|                                              |  |        |    |   |        |  |    |        | 
|Jiangsu Huihong International Group           |  |        | 13 | % |        |  | 0  | %      | 
|Emori (China) Trading Limited                 |  |        | 11 | % |        |  | 6  | %      | 
|Jiangsu Changhai Chemical Limited             |  |        | 10 | % |        |  | 8  | %      | 
|Southern Petrochemical Group                  |  |        | 8  | % |        |  | 20 | %      | 
|Nantong Chemical and Light Industry Co., Ltd. |  |        | 5  | % |        |  | 9  | %      | 



Most of materials are mass chemical products,
prices of which are quite transparent. However, due to limited purchase volume, Delta is not able to buy products directly through
major international chemical suppliers, such as SK Chemicals. Except for Sinopec, Delta procures its materials through chemical
wholesalers, such as Southern Petrochemical Group. Delta may switch its suppliers from one to another depending on the commercial
terms agreed upon. As a result, some suppliers in previous years did not further sell their products to it during recent years.
The percentage of purchase is also varied from year to year.



Delta’s business or profitability
is not materially dependent on any single supplier. Delta does not consider ourselves materially dependent on any single abovementioned
supplier as Delta believes that there are other qualified suppliers that it is able to work with should any of these suppliers
provide unacceptable or uncompetitive terms.



As of the date of this report, Delta is
not aware of any information or arrangement which would lead to a cessation or termination of its relationships with any of its
current major suppliers.



Major Customers



Delta’s customers are mainly from
the chemical industry in the PRC. As of the date of this report, Delta has a customer base of approximately 380 different customers
(of which certain customers belong to the same group of companies) across 11 provinces in the PRC.



The major customers accounting for 5% or
more of Delta’s total revenue for the last three fiscal years ended June 30, 2012, 2013, 2014 are as follows:



|Customer                                              |  | Type of Products                 |  | FY2014 |   |   | FY2013 |  |   | FY2012 | 
|----------------------------------------------------- |  | -------------------------------- |  | ------ | - | - | ------ |  | - | ------ | 
|Nantong Chemical and Light Industry Co., Ltd.         |  | Materials                        |  |        | 9 | % |        |  | 0 | %      | 
|Southern Petrochemical Group, Jiangsu Branch Company  |  | Materials                        |  |        | 6 | % |        |  | 1 | %      | 
|Shanghai Haohanshenying International Trading Limited |  | Materials                        |  |        | 5 | % |        |  | 0 | %      | 
|Jiangsu Huiteng Chemical Co., Ltd.                    |  | PCT, OCT and 2,4-Dichlorotoluene |  |        | 5 | % |        |  | 8 | %      | 



Except materials sales’ customers,
Delta’s customer base is diversified. For the past three fiscal years, Delta has generally reduced its reliance on each of
its major customers, whose purchases as a percentage of its total revenue has shown a declining trend. This is a result of increased
sales volume to a more diversified customer base and an increase in the number of products Delta produces.



As at the date of this report, Delta does
not have any long-term arrangement or arrangements with any of its major customers and its business or profitability is not materially
dependent on any single customer. As of the date of this report, Delta is not aware of any information or arrangement which would
lead to a cessation or termination of its relationships with any of its current major customers.



Competition



Although the barriers to entry in this
industry are relatively high in terms of capital investment and the manufacturing expertise required, Delta operates in a competitive
environment. Delta’s competitors are located in the Yangtze River Delta region of China, especially in the Jiangsu Province
where Delta is located.



43







Management of Delta believes that
the demand for its products is increasing, both within and outside the PRC. Management of Delta considers, amongst others,
the following to be its main competitors as Delta competes with them in at least one of the categories of the products sold
by it:



|Name                                 |  | Place of Origin                 
|------------------------------------ |  | --------------------------------
|                                     |  |                                 
|Danyang Zhongchao Chemical Co., Ltd. |  | Danyang City, Jiangsu Province  
|                                     |  |                                 
|Jiangsu Zhenfang Chemical Co., Ltd.  |  | Huai’An City, Jiangsu Province  
|                                     |  |                                 
|Jiangsu Lianhua Technology Co., Ltd. |  | Xiangshui City, Jiangsu Province
|                                     |  |                                 
|Changzhou Yabang Chemical Co., Ltd.  |  | Changzhou City, Jiangsu Province



Delta believes that improving its production
efficiency and seizing market opportunities will consolidate its market position and market share in the industry. Delta believes
that its record for quality products and reputation for good service have gained the confidence of its customers.



Environmental Protection and Corporate
Social Responsibilities



Delta has always been committed to adopting
an environmentally friendly business model.



Delta has obtained all of the environmental
permits and approvals necessary to conduct its business, including those for its production facilities, such as Dangerous Chemical
Operation Permit, Pollutant Discharge Permit, etc. In addition, Delta was granted an Environmental Management System Certificate
by China Certification Centre Inc. on July 6, 2012 which certifies that the environmental management system adopted by Jiangsu
Delta during its manufacturing process is in line with the standards of GB/T24001-2004/ISO 14001:2004.



Apart from complying with all the relevant
environmental laws and regulations, Delta has gone a step further in order to minimize its impact on the environment by undertaking
a wide range of self-initiated measures to build a greener future.



Delta’s manufacturing processes generate
noise, waste water, gaseous wastes and other industrial wastes. However, Delta has devoted efforts to reduce such wastes to acceptable
levels under applicable regulations. Delta has installed various types of anti-pollution equipment in its facilities to reduce,
treat, and where feasible, recycle the waste generated in its manufacturing process. Delta’s operations are subject to regulation
and periodic monitoring by local environmental protection authorities. Delta is currently in compliance with all applicable environmental
laws and have not breached any applicable environmental laws or regulations since its establishment.



Delta’s current water treatment system
has been awarded pioneer status with regard to the water treatment technology applied in its industry in the PRC. Delta’s
system allows it to recycle almost the entire portion of the waste water produced in its production, resulting in significant cost
savings in its utilities expenses and also improved its environmental friendliness through a reduction in waste water production
and disposal.



As a testimony to its continued efforts
to achieve zero-pollution, Delta have a dedicated team of in-house researchers engaging in research and development activities
focusing mainly on, inter alia, making full use of the by-products such as waste water generated during its production process
to attain the goal of zero waste generation.



In order to ensure that Delta comply with
the relevant PRC environmental laws and regulations, Delta has appointed specialized personnel to oversee environmental protection
related matters within the Company. As a responsible corporate entity, Delta has committed to ensure that Delta complies with all
the applicable PRC environmental laws and regulations in the future by (i) providing regular training upon the promulgation of
new environmental laws and regulations with respect to the latest PRC environmental laws and regulations and encouraging its team
staff to attend environmental protection training sessions organized by the local environmental protection authorities, (ii) conducting
on-site inspections regularly, (iii) providing relevant training to its employees regarding compliance with PRC environmental laws
and regulations in general, (iv) providing timely reports to the directors any incident or non-compliance with the relevant PRC
environmental laws and regulations and (v) providing timely reports to and coordinating with competent authorities in the case
that any incident or non-compliance arises.



44







Licenses, Permits and Government Regulations



PRC Laws and Regulations Relating
to Delta’s Business



Generally, the fine chemical industry is
subject to stringent environmental protection, health and safety laws and regulation in the PRC. Delta has identified the main
laws and regulations that affect its operations and the relevant regulatory bodies.



PRC Legal System



The PRC legal system is based on the PRC
Constitution and is made up of written laws, regulations and directives. Decided court cases do not constitute binding precedents.



The National People’s Congress of
the PRC (“NPC”) and the Standing Committee of the NPC are empowered by the PRC Constitution to exercise the legislative
power of the state. The NPC has the power to amend the PRC Constitution and to enact and amend primary laws governing the state
organs and civil and criminal matters. The Standing Committee of the NPC is empowered to interpret, enact and amend laws other
than those required to be enacted by the NPC.



The State Council of the PRC is the highest
organ of state administration and has the power to enact administrative rules and regulations. Ministries and commissions under
the State Council of the PRC are also vested with the power to issue orders, directives and regulations within the jurisdiction
of their respective departments. Administrative rules, regulations, directives and orders promulgated by the State Council and
its ministries and commissions must not be in conflict with the PRC Constitution or the national laws and, in the event that any
conflict arises, the Standing Committee of the NPC has the power to annul such administrative rules, regulations, directives and
orders.



At the regional level, the people’s
congresses of provinces and municipalities and their standing committees may enact local rules and regulations and the people’s
government may promulgate administrative rules and directives applicable to their own administrative area. These local laws and
regulations may not be in conflict with the PRC Constitution, any national laws or any administrative rules and regulations promulgated
by the State Council.



Rules, regulations or directives may be
enacted or issued at the provincial or municipal level or by the State Council of the PRC or its ministries and commissions in
the first instance for experimental purposes. After sufficient experience has been gained, the State Council may submit legislative
proposals to be considered by the NPC or the Standing Committee of the NPC for enactment at the national level.



The power to interpret laws is vested by
the PRC Constitution in the Standing Committee of the NPC. According to the Decision of the Standing Committee of the NPC Regarding
the Strengthening of Interpretation of Laws passed on 10 June 1981, the Supreme People’s Court has the power to give general
interpretation on application of laws in judicial proceedings apart from its power to issue specific interpretation in specific
cases. The State Council and its ministries and commissions are also vested with the power to give interpretation of the rules
and regulations which they promulgated. At the regional level, the power to give interpretation of regional laws is vested in the
regional legislative and administration organs which promulgate such laws. All such interpretations carry legal effect.



Judicial System



The People’s Courts are the judicial
organs of the PRC. Under the PRC Constitution and the Law of Organization of the People’s Courts of the PRC, the People’s
Courts comprise the Supreme People’s Court, the local people’s courts, military courts and other special people’s
courts. The local people’s courts are divided into three levels, namely, the basic people’s courts, intermediate people’s
courts and higher people’s courts. The basic people’s courts are divided into civil, criminal and administrative divisions.
The intermediate people’s courts have divisions similar to those of the basic people’s courts and, where the circumstances
so warrant, may have other special divisions (such as intellectual property divisions). The judicial functions of people’s
courts at lower levels are subject to supervision of people’s courts at higher levels. The people’s procuratorates
also have the right to exercise legal supervision over the proceedings of people’s courts of the same and lower levels. The
Supreme People’s Court is the highest judicial organ of the PRC. It supervises the administration of justice by the people’s
courts of all levels.



45







The people’s courts adopt a two-tier
final appeal system. A party may before the taking effect of a judgment or order appeal against the judgment or order of the first
instance of a local people’s court to the people’s court at the next higher level. Judgments or orders of the second
instance of the same level and at the next higher level are final and binding. Judgments or orders of the first instance of the
Supreme People’s Court are also final and binding if no appeals are made before they take effect. If, however, the Supreme
People’s Court or a people’s court at a higher level finds an error in a final and binding judgment which has taken
effect in any people’s court at a lower level, or the presiding judge of a people’s court finds an error in a final
and binding judgment which has taken effect in the court over which he presides, a retrial of the case may be conducted according
to the judicial supervision procedures.



The PRC civil procedures are governed by
the Civil Procedure Law of the People’s Republic of China (the “Civil Procedure Law”) adopted on 9 April 1991
and amended on 28 October 2007. and 31 August 2012 The Civil Procedure Law contains regulations on the institution of a civil action,
the jurisdiction of the people’s courts, the procedures in conducting a civil action, trial procedures and procedures for
the enforcement of a civil judgment or order. All parties to a civil action conducted within the territory of the PRC must comply
with the Civil Procedure Law. A civil case is generally heard by a court located in the defendant’s place of domicile. The
jurisdiction may also be selected by express agreement by the parties to a contract provided that the jurisdiction of the people’s
court selected has some actual connection with the dispute, that is to say, the plaintiff or the defendant is located or domiciled,
or the contract was executed or implemented in the jurisdiction selected, or the subject-matter of the proceedings is located in
the jurisdiction selected. A foreign national or foreign enterprise is accorded the same litigation rights and obligations as a
citizen or legal person of the PRC. If any party to a civil action refuses to comply with a judgment or order made by a people’s
court or an award made by an arbitration body in the PRC, the aggrieved party may apply to the people’s court to enforce
the judgment, order or award. The time limit on the right to apply for such enforcement is two years.



A party seeking to enforce a judgment or
order of a people’s court against a party who or whose property is not within the PRC may apply to a foreign court with jurisdiction
over the case for recognition and enforcement of such judgment or order. A foreign judgment or ruling may also be recognised and
enforced according to PRC enforcement procedures by the people’s courts in accordance with the principle of reciprocity or
if there exists an international or bilateral treaty with or acceded to by the foreign country that provides for such recognition
and enforcement, unless the people’s court considers that the recognition or enforcement of the judgment or ruling will violate
fundamental legal principles of the PRC or its sovereignty, security or social or public interest.



Arbitration and Enforcement of Arbitral
Awards



The Arbitration Law of the PRC (the “Arbitration
Law”) was promulgated by the Standing Committee of the NPC on 31 August 1994 and came into effect on 1 September 1995. It
is applicable to, among other matters, trade disputes involving foreign parties where the parties have entered into a written agreement
to refer the matter to arbitration before an arbitration committee constituted in accordance with the Arbitration Law. Under the
Arbitration Law, an arbitration committee may, before the promulgation by the PRC Arbitration Association of arbitration regulations,
formulate interim arbitration rules in accordance with the Arbitration Law and the PRC Civil Procedure Law. Where the parties have
by an agreement provided arbitration as a method for dispute resolution, the parties are not permitted to institute legal proceedings
in a people’s court.



Under the Arbitration Law, an arbitral
award is final and binding on the parties and if a party fails to comply with an award, the other party to the award may apply
to the people’s court for enforcement. A people’s court may refuse to enforce an arbitral award made by an arbitration
committee if there were mistakes, an absence of material evidence or irregularities over the arbitration proceedings, or the jurisdiction
or constitution of the arbitration committee.



46







A party seeking to enforce an arbitral
award of a foreign affairs arbitration body of the PRC against a party who or whose property is not within the PRC may apply to
a foreign court with jurisdiction over the case for enforcement. Similarly, an arbitral award made by a foreign arbitration body
may be recognised and enforced by the PRC courts in accordance with the principles of reciprocity or any international treaty concluded
or acceded to by the PRC.



In respect of contractual and non-contractual
commercial-law-related disputes which are recognised as such for the purposes of the PRC laws, the PRC has acceded to the Convention
on the Recognition and Enforcement of Foreign Arbitral Award (the “New York Convention”) adopted on 10 June 1958 pursuant
to a resolution of the Standing Committee of the NPC passed on 2 December 1986. The New York Convention provides that all arbitral
awards made by a state which is a party to the New York Convention shall be recognised and enforced by other parties to the New
York Convention subject to their right to refuse enforcement under certain circumstances including where the enforcement of the
arbitral award is against the public policy of the state to which the application for enforcement is made. It was declared by the
Standing Committee of the NPC at the time of the accession of the PRC that (1) the PRC would only recognise and enforce foreign
arbitral awards on the principle of reciprocity; and (2) the PRC would only apply the New York Convention in disputes considered
under PRC laws to be arising from contractual and non-contractual mercantile legal relations.



Foreign Exchange
Control



Prior to 31 December 1993, enterprises
in the PRC requiring foreign currency were required to obtain approval from the State Planning Committee and the Ministry of Foreign
Trade and Economic Cooperation before it could convert RMB into foreign currency, and such conversion had to be effected at the
official rate prescribed by the State Administration of Foreign Exchange (“SAFE”). RMB reserved by Foreign Investment
Enterprises (“FIEs”) could also be converted into foreign currency at swap centres with the prior examination and verification
by SAFE. The exchange rates used by swap centres were largely determined by the supply of and demand for foreign currencies and
RMB.



On December 28, 1993, the People’s
Bank of China (“PBOC”) announced that the dual exchange rate system for RMB against foreign currencies would be abolished
with effect from January 1, 1994 and be replaced by the unified exchange rate system. Under the new system, the PBOC publishes
the RMB exchange rate against the United States dollar daily. The daily exchange rate is set by reference to the RMB/US$ trading
price on the previous day on the “inter-bank foreign exchange market”.



On April 1, 1996, the Foreign Exchange
Control Regulations of the PRC (as amended on January 14, 1997) came into effect. On 20 June 1996, the Regulations on Sale and
Purchase of and Payment in Foreign Exchange were promulgated by the People’s Bank of China and came into effect on 1 July
1996.



On October 25, 1998, the PBOC and SAFE
issued a Joint Announcement on Abolishment of Foreign Exchange Swap Business which stated that from December 1, 1998, foreign exchange
transactions for FIEs may only be conducted at designated banks.



On October 21, 2005, SAFE promulgated the
Notice of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange Administration for Domestic
Residents to Engage in Financing and in Return Investment via Overseas Special Purpose Companies (“Notice 75”) which
came into effect on November 1, 2005. Under Notice 75, PRC residents, including PRC Companies and PRC resident individuals, have
to register their foreign investments with the local SAFE prior to incorporating or taking control of a special purpose vehicle
(the “SPV”). Where a PRC resident contributes the assets or stock rights of a domestic enterprise that it owns into
a SPV, or engages in capital financing abroad after contributing assets or stock rights into the SPV, it has to register such change.
Other than the abovementioned registration requirement, Notice 75 also requires PRC residents to register, modify or record with
the local foreign exchange authority within 30 days from the date of increase/decrease of capital, share transfer, mergers or division,
change in long term equity or debt investments and guarantees in or by the SPV. In addition, the proceeds from overseas listing
of the SPV shall, according to the repatriation plan submitted to the foreign exchange administration for record, be repatriated
according to current regulations for the administration of foreign exchange. In addition, the foreign exchange income from profits,
bonus and capital change obtained by the PRC residents from the SPV shall be repatriated within 180 days.



47







On August 12, 2007, SAFE promulgated the
Notice on the Retaining of Foreign Exchange Earnings by Domestic Entity, which provides that from August 12, 2007, domestic entity
may retain its recurrent foreign exchange earnings according to their needs for operation.



On August 1, 2008, the revised Foreign
Exchange Control Regulations of the PRC was adopted by the State Council and was promulgated for implementation on August 5, 2008.
In summary, taking into account the promulgation of the recent new regulations and to the extent the existing provisions stipulated
in previous regulations do not contradict these new regulations, the present position under the PRC law relating to foreign exchange
control are as follows:



(a)          The
previous dual exchange rate system for RMB was abolished and a managed floating exchange rate system based largely on supply and
demand with reference to a basket of currencies was introduced. The People’s Bank of China, will announce the closing price
of foreign currencies against the RMB in the inter-bank foreign exchange market after the closing of the market on each working
day, and will make it the central parity for trading against the RMB on the following working day.



(b)          Foreign
exchange earnings of domestic entities may be transferred to China or held abroad according to the regulations stipulated by SAFE.



(c)          FIEs
may have their own foreign currency accounts and are also permitted to retain their recurrent exchange earnings according to their
needs of operation and the sums retained may be deposited into foreign exchange bank accounts maintained with designated banks.



(d)          Reservation
or sale of capital account foreign exchange earnings to designated banks shall be approved by the foreign exchange control administration
unless stated otherwise. Foreign exchange funds from capital account shall only be used according to the purpose approved by the
foreign exchange control administration and the relevant competent authorities.



(e)          Where
a foreign enterprise makes a direct investment or carries out the issuance and/or business of securities or other derivatives within
the PRC, or where a domestic entity makes a direct investment or carries out the issuance and/or business of securities or other
derivatives outside the PRC, it shall go through the registration procedure according to the relevant regulations stipulated by
SAFE. A guarantee or a commercial loan provided to the entity outside the PRC by a domestic entity shall be subject to approval
and registration with relevant foreign exchange administration. The utilisation of foreign debts by an enterprise shall be in compliance
with relevant regulations and has to undergo foreign debt registration with the foreign exchange control administration.



(f)          FIEs
which require foreign exchange for their ordinary trading activities such as trade services and payment of interest on foreign
debts may purchase foreign exchange from designated foreign exchange banks if the application is supported by proper payment notices
or supporting documents.



(g)          FIEs
may require foreign exchange for the payment of dividends that are payable in foreign currencies under applicable regulations,
such as distributing profits to their foreign investors. They can withdraw funds from their foreign exchange bank accounts kept
with designated foreign exchange banks, subject to the due payment of tax on dividends. Where the amount of the funds in foreign
exchange is insufficient, the FIE may, upon the presentation of the resolutions of the directors on the profit distribution plan
and other relevant documents, purchase foreign exchange from designated foreign exchange banks.



(h)          FIEs
may apply to the Bank of China or other designated foreign exchange banks to remit profit out of the PRC to the foreign parties
if the requirements provided by the PRC laws, rules and regulations are met.



48







The Circular on Relevant Issues concerning
Foreign Exchange Administration of Overseas Investment and Financing and Return Investments Conducted by Domestic Residents through
Overseas Special Purpose Vehicles (“SAFE Circular No. 37”), which was promulgated by SAFE and became effective on July
14, 2014, requires a PRC individual resident (“PRC Resident”) to register with the local SAFE branch before he or she
contributes assets or equity interests in an overseas special purpose vehicle (“Offshore SPV”) that is directly established
or controlled by the PRC Resident for the purpose of conducting investment or financing. Following the initial registration, the
PRC Resident is also required to register with the local SAFE branch for any major change in respect of the Offshore SPV, including,
among other things, any major change of a PRC Resident shareholder, name or term of operation of the Offshore SPV, or any increase
or reduction of the Offshore SPV’s registered capital, share transfer or swap, merger or division. Failure to comply with
the registration procedures of SAFE Circular No. 37 may result in penalties and sanctions, including the imposition of restrictions
on the ability of the Offshore SPV’s PRC subsidiary to distribute dividends to its overseas parent.



In addition, according to the SAFE Circular
No. 37, a PRC Resident that participates in an employee share incentive plan of a non-listed Offshore SPV could, by submitting
required documents, apply for registration with the local SAFE branch before exercising stock options.



Strict supervision and control by foreign
exchange control administration has been imposed upon FIEs established in the manner of acquisitions of the PRC enterprises by
foreign enterprises with PRC residents as shareholders.



Taxation



Income Tax



The New Income Tax Law was promulgated
by NPC on March 16, 2007 and came into effect on January 1, 2008. The Chinese domestic enterprises and FIEs are treated equally
on the income tax rate, and the enterprise income tax rate shall be 25%. In accordance with the New Income Tax Law and its implementing
regulations, the non-resident enterprise which has not set up institutions or establishments in China, or has set up institutions
or establishments but the income has no relationship with such institutions or establishments, it shall pay enterprise income tax
on such income sourced from China, and the income tax rate shall be 20%, subject to reduction as provided by any applicable double
taxation treaty, unless the relevant income is specially exempted from tax under the applicable tax laws, regulations, notices
and decisions which relate to FIEs and their investors.



The enterprises that were approved and
established prior to the promulgation hereof and that, in accordance with the effective tax laws and administrative regulations,
enjoy a special lower tax rate shall, in accordance with the provisions of the State Council, progressively transit to the tax
rate specified herein within 5 years following the implementation hereof. Those enterprises that enjoy a fixed-term tax exemption
or tax reduction shall, in accordance with the provisions of the State Council, continue to enjoy such exemption or reduction after
the implementation hereof until the expiration of the term of such exemption or reduction. However, if an enterprise did not enjoy
such preferential treatment because it has not yet achieved profitability, the term of such preferential treatment shall be calculated
from 1 January 2008 until the expiration of the term of such exemption or reduction.



According to the Notice on Strengthening
Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprise (Circular Guoshuihan [2009] No. 698)
implemented on January 1, 2008, except for the purchase and sale of equity through a public securities market, where a foreign
corporate investor indirectly transfers the equity of a PRC resident enterprise by disposing the equity of an overseas holding
company (the “Indirect Transfer”) located in a tax jurisdiction that (i) has an effective tax rate of less than 12.5%,
or (ii) does not tax its residents on their foreign income, the foreign corporate investor shall report the Indirect Transfer to
the competent PRC tax authority within 30 days from the date when the equity transfer agreement was made. In this case, the PRC
tax authority will examine the true nature of the Indirect Transfer. Should it deem the foreign investor to have made the Indirect
Transfer without reasonable commercial purpose and in order to avoid the PRC tax, the PRC tax authority may disregard the existence
of the overseas holding company that is used for tax planning purpose and re-characterise the Indirect Transfer. As a result, gains
derived from such Indirect Transfer by the foreign investor may be subject to the EIT Law.



Value-added tax



Pursuant to the Provisional Regulations
on Value-added Tax of PRC, last amended on November 5, 2008 and took effect from January 1, 2009, and its implementation rules
which were revised on December 15, 2008 and took effect from January 1, 2009, all entities or individuals in PRC engaging in the
sale of goods, the provision of processing services, repairs and replacement services, and the import of goods are required to
pay value-added tax (“VAT”). The amount of VAT payable in the sale or import of goods except as otherwise provided
by paragraph (2) and paragraph (3) of Article 2 of the Provisional Regulations on Value-added Tax of PRC. The tax rate is also
17% for those providing processing services repairs and replacement services.



49







In November 2011, the Ministry of Finance
(“MOF”) and the State Administration of Tax (“SAT”) promulgated the Pilot Plan for Imposition of Value-Added
Tax to Replace Business Tax (the “Pilot Plan”). Since January 1, 2012, the PRC government has been implementing a pilot
program in certain provinces and municipalities, to levy a 6% VAT on revenue generated from certain kinds of services in lieu of
the 5% business tax. According to the Notice Regarding the Nationwide Implementation of B2V Transformation Pilot Program in respect
of Transportation and Certain Modern Service Industries jointly issued by the MOF and SAT effective from August 1, 2013 (the “B2V
Circular 37”), such policy has been implemented nationwide. In addition, the MOF and SAT released the Notice on Including
Railway Transportation and Postal Services Sectors into the Pilot Scheme on Switching from Business Tax to VAT on December 12,
2013, which further expanded the scope of taxable services for value-added tax and replaced the B2V Circular 37 as of January 1,
2014.



Business Tax



Pursuant to the Interim Regulation of the
People’s Republic of China on Business Tax (“Business Tax Regulation”) last amended on November 10, 2008 and
took effect from 1 January, 2009, business that provide services (including entertainment business), assign intangible assets or
sell immovable property became liable to business tax at a rate ranging from 3% to 20% of the charges of the services provided,
intangible assets assigned or immovable property sold, as the case may be.



Tax on Dividends from PRC Enterprise
with Foreign Investment



According to the New Income Tax Law and
the Implementation Rules, income such as dividends and profits distribution from the PRC derived from a foreign enterprise which
has no establishment in the PRC is subject to a 10% withholding tax, subject to reduction as provided by any applicable double
taxation treaty.



Stamp Duty



Under the PRC Interim Regulations on Stamp
Duty promulgated by the State Council on August 6, 1988 and amended in January 6, 2011, for building property transfer instruments,
including those in respect of property ownership transfer, the duty rate shall be 0.05% of the amount stated therein; for permits
and certificates relating to rights, including real estate title certificates and land use right certificates, stamp duty shall
be levied on an item basis at an annual rate of RMB5 per item.



Urban Maintenance Tax



Under the PRC Interim Regulations on Urban
Maintenance Tax promulgated by the State Council on February 8, 1985 and amended on January 8, 2011, any taxpayer, whether an individual
or otherwise, of product tax, value-added tax or business tax shall be required to pay urban maintenance tax. The tax rate shall
be 7% for a taxpayer whose domicile is in an urban area, 5% for a taxpayer whose domicile is in a county and a town, and 1% for
a taxpayer whose domicile is not in any urban area or county or town.



Education Surcharge



Under the Interim Provisions on Imposition
of Education Surcharge promulgated by the State Council on April 28, 1986 (last amended by the State Council on August 20, 2005),
any taxpayer, whether an individual or otherwise, of product tax, value-added tax or business tax shall pay an education surcharge,
unless such obliged taxpayer is instead required to pay a rural area education surcharge as provided by the Notice of the State
Council on Raising Funds for Schools in Rural Areas. Education surcharge shall be calculated and levied at a rate of 1% on the
actual amount of product tax, value-added tax and business tax paid by the taxpayer.



50







According to the Circular on Issues Concerning
Policies on Unifying Local Education Surtax promulgated by ministry of finance on November 17, 2010, the rate at which local education
surtax is levied should be 2% of the value-added tax, the business tax or the consumption tax actually paid by entities and individuals
(including foreign-invested enterprises, foreign enterprises and foreign individuals).



Wholly Foreign-Owned Enterprise



WFOE is governed by the Law of the People’s
Republic of China Concerning Enterprises with Sole Foreign Investments, which was promulgated on April 12, 1986 and was subsequently
amended on October 31, 2000, and its Implementation Regulations promulgated on December 12, 1990 and was subsequently amended on
April 12, 2001 (together the “Foreign Enterprises Law”).



Procedures for Establishment of a WFOE



The establishment of a WFOE will have to
be approved by Ministry of Commerce (or its delegated authorities) (the “MOC”). If two or more foreign investors jointly
apply for the establishment of a WFOE, a copy of the contract between the parties must also be submitted to MOC (or its delegated
authorities) for its record. A WFOE must also obtain a business licence from the State Administration of Industry and Commerce
(or its delegated authorities) before it can commence business.



Nature



A WFOE is a limited liability company under
the Foreign Enterprise Law. It is a legal entity which may independently assume civil obligations, enjoy civil rights and has the
right to own, use and dispose of property. It is required to have a registered capital contributed by the foreign investor(s).
The liability of the foreign investor(s) is limited to the amount of registered capital contributed. The foreign investor may make
its contributions by instalments and the registered capital must be contributed within the period as approved by the MOC (or its
delegated authorities) in accordance with relevant regulations.



Profit Distribution



The Foreign Enterprise Law provides that
after payment of taxes, a WFOE must make contributions to a reserve fund and at least 10% of the after-tax profits must be allocated
to the reserve fund. If the accumulative amount of allocated reserve funds reaches 50% of an enterprise’s registered capital,
the WFOE will not be required to make any additional contribution. The WFOE is prohibited from distributing dividends unless the
losses (if any) of previous years have been made up.



In accordance with the Notice of the Ministry
of Finance on the Issue of Handling Financial Issues by Relevant Enterprises after the Implementation of the Company Law promulgated
by the Ministry of Finance on March 15, 2006 and effective April 1, 2006, from January 1, 2006 on, enterprises established in accordance
with the Company Law shall distribute profits pursuant to Article 167 of the Company Law and shall no longer make contributions
to the reserve fund. After an enterprise ceases to make contributions to the reserve fund, it may continue to make contributions
to the employee bonus and welfare fund as decided by the board of directors if the purpose, use conditions, and procedures thereof
shall be made clear, and such funds shall be manage as debts.



Company Law



The establishment and operation of corporate
entities in China is governed by the PRC Company Law, which was promulgated by the Standing Committee of the NPC on December 29,
1993 and became effective on July 1, 1994 (“1993 PRC Company Law”). It was subsequently amended on December 25, 1999,
August 28, 2004, October 27, 2005 and December 28, 2013.



The PRC Company Law generally governs 2
types of companies — limited liability companies and joint stock limited companies. Both types of companies have the status
of legal persons, and the liability of a company to its debtors is limited to the value of assets owned by the company. Liabilities
of shareholders of a limited liability company are limited to the amount of registered capital they have contributed.



51







The amendments to the PRC Company Law adopted
in October 2005 seek to reform various aspects of the 1993 PRC Company Law and simplify the establishment and operation of companies
incorporated in China by lowering capitalisation requirements, increasing shareholder and creditor protection, improving corporate
governance, and relaxing rules regarding the establishment of subsidiaries. Further, the restriction relating to the total investment
of a company in other entities exceeding 50% of its net assets has been removed, the incorporation of one shareholder limited liability
companies in addition to wholly State-owned enterprises is permitted, and the Chinese Company Law shall apply to foreign invested
limited liability companies. Where laws on foreign investment have other stipulations, such stipulations shall apply.



The amendments to the PRC Company Law adopted
in December 2013 took effect on March 1, 2014. These amendments cover three aspects: (a) replacing the paid-up capital registration
system by subscribed capital registration system; (b) relaxing the requirements for registered capital registration; and (c) streamlining
the registration items and requirements for registration documents.



PRC Laws and Regulations Relating to
Foreign Investment



On October 31, 2007, the National Development
and Reform Commission (“NDRC”) and MOC, jointly promulgated the Catalogue of Industries for Guiding Foreign Investment
(as amended in 2007), which came into effect on December 1, 2007 (the “Catalogue”), as amended on December 24, 2011
and came into effect on January 30, 2012. The Catalogue lists out the industries and economic activities which are encouraged,
restricted or prohibited by the PRC government for foreign investment. The Catalogue does not specify which business activities
are in the permitted category. Instead, if the business activities are not listed in any of the encouraged, restricted or the prohibited
categories, they shall be construed as being in the permitted category. Pursuant to the Catalogue, the wholesale of refined oil
falls under the restricted category. None of our Group’s business activities are listed in the prohibited category.



Labor Law



Pursuant to the Labor Law of the PRC promulgated
by Standing Committee of the NPC on July 5, 1994 and was subsequently amended on August 27, 2009, the Labor Contract Law of the
PRC promulgated by Standing Committee of the NPC on June 29, 2007 and was subsequently amended on December 28, 2012 and the Labour
Contract Law Implementation Rules of the PRC promulgated by the State Council on September 18, 2008, companies must enter into
employment contracts with their employees, based on the principles of equality, consent and agreement through consultation. Companies
must establish and effectively implement system of ensuring occupational safety and health, educating employees on occupational
safety and health, preventing work-related accidents and reducing occupational hazards. Companies must also pay for their employees’
social insurance premium.



Social Insurance Law



Employers in China are required to contribute,
on behalf of their employees, to a number of social security funds, including funds for basic pension insurance, unemployment insurance,
basic medical insurance, work-related injury insurance, maternity insurance, and housing provident funds. These payments are made
to local administrative authorities and an employer who fails to contribute may be fined and be ordered to make-up for the missed
contributions. The various laws and regulations that govern the employers’ obligation to contribute to the social security
funds include PRC Social Insurance Law promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective
July 1, 2011; the Interim Regulations on the Collection and Payment of Social Security Funds, which were promulgated by the State
Council and became effective on January 22, 1999; the Interim Measures concerning the Maternity Insurance, which were promulgated
by the Ministry of Labour on December 14, 1994 and became effective on January 1, 1995; the Regulations on Occupational Injury
Insurance, which were promulgated by the State Council on April 27, 2003 and became effective on January 1, 2004 and was amended
on December 20, 2010; the Regulations on Management of the Housing Provident Fund, which were promulgated and became effective
on April 3, 1999 and was amended on March 24, 2002.



52







Where the enterprises fail to pay the full
amount of the social insurance premiums, the relevant department aforesaid has the authority to check and decide on the amount
of social insurance premiums that the enterprises should pay as the supplementary payment. If the enterprises does not pay for
the social insurance premiums after the relevant department has charged the full amount of the supplementary payment, the relevant
department is authorised to either inquire about the deposit account of such enterprises, or apply to the related department at
or above the county level for making the decision of the allocation of social insurance premiums. The relevant department can also
inform the bank or other financial institution to execute the allocation by written notice. If the amount of the deposit account
is smaller than the amount of social insurance premiums required to pay by the enterprises, the enterprises may provide a security
and delay the date to pay the social insurance premiums. If the amount of the deposit account is smaller than the amount of the
social insurance premiums needed to pay by the enterprises, and the enterprises fails to provide a security, the relevant department
shall apply to the court for the levying, sealing and auctioning of the property of such enterprises.



If the enterprises do not pay the full
amount of social insurance premiums as scheduled, the social insurance premium collection institution shall order them to make
the payment or make up the difference within a stipulated period and impose a daily fine equivalent to 0.05% of the overdue payment
from the date on which the payment is overdue. If payment is not made within the stipulated period, the relevant administration
department shall impose a fine from one to three times the amount of overdue payment.



Environmental Protection Regulations



In accordance with the Environmental Protection
Law of the PRC adopted by the Standing Committee of the NPC on December 26, 1989, which has been amended on April 24, 2014 and
will take effect on January 1, 2015, the Administration Supervisory Department of Environmental Protection of the State Council
sets the national guidelines for the discharge of pollutants. The provincial and municipal governments of provinces, autonomous
regions and municipalities may also set their own guidelines for the discharge of pollutants within their own provinces or districts
in the event that the national guidelines are inadequate.



A company or enterprise which causes environmental
pollution and discharges other polluting materials which endanger the public should implement environmental protection methods
and procedures into their business operations. This may be achieved by setting up a system of accountability within the company’s
business structure for environmental protection; adopting effective procedures to prevent environmental hazards such as waste gases,
water and residues, dust powder, radioactive materials and noise arising from production, construction and other activities from
polluting and endangering the environment. The environmental protection system and procedures should be implemented simultaneously
with the commencement of and during the operation of construction, production and other activities undertaken by the company. Any
company or enterprise which discharges environmental pollutants should report and register such discharge with the Administration
Supervisory Department of Environmental Protection and pay any fines imposed for the discharge. A fee may also be imposed on the
company for the cost of any work required to restore the environment to its original state. Companies which have cause severe pollution
to the environment are required to restore the environment or remedy the effects of the pollution within a prescribed time limit.



If a company fails to report and/or register
the environmental pollution caused by it, it will receive a warning or be penalized. Companies which fail to restore the environment
or remedy the effects of the pollution within the prescribed time will be penalized or have their business licences terminated.
Companies or enterprises which have polluted and endangered the environment must bear the responsibility for remedying the danger
and effects of the pollution, as well as to compensate the any losses or damages suffered as a result of such environmental pollution.



Governmental Regulations in Relation
to the Company’s Businesses



Pursuant to the Implementation Measures
for Work Safety Licenses of Enterprises Producing Hazardous Chemicals (“Measures of Producing Hazardous Chemicals”)
promulgated by State Administration of Work Safety on August 5, 2011 which took effect on December 1, 2011, where an enterprise
is established in accordance with relevant laws and has obtained the industrial and commercial business licenses or industrial
and commercial approval documents for engaging in the production of end products or intermediate products that are included in
the Catalogue of Hazardous Chemicals, the enterprise shall obtain the work safety licenses for hazardous chemicals in accordance
with the provisions of Measures of Producing Hazardous Chemicals. The enterprise that has not obtained the work safety licenses
shall not engage in the production activities of hazardous chemicals.



53







Save as otherwise disclosed, Delta is not
subject to any special legislation or regulatory controls in the PRC other than those generally applicable to companies and businesses
in the PRC, which will have a material effect on its business operations. Changes in the PRC governmental rules and regulations
will have a significant impact on its business, and Foreign exchange control and tax policies in the PRC may limit its ability
to utilize its revenue effectively and affect its ability to receive dividends and other payments from its subsidiary in the PRC.



Please also refer to the Section “Risk
Factors – Risks Relating to Doing Business in the PRC” of this report for details on the applicable PRC laws and regulations.



Licenses, Permits and Approvals



As of the date of this report, Delta has
obtained all material licenses, permits and approvals from the relevant government authorities for its business operations in the
PRC, and have complied with all relevant PRC environmental laws and regulations, and have not been fined under any related PRC
environmental laws or regulations. Please see the table below for the material licenses, permits and approvals that Delta received
as of the date of this report:



|Entity        |  | Licenses, Permits andCertificates                                              |  | Serial Number                                    |  | Valid Term/Renewal Period                |  | Authority                                                                  
|------------- |  | ------------------------------------------------------------------------------ |  | ------------------------------------------------ |  | ---------------------------------------- |  | ---------------------------------------------------------------------------
|Jiangsu Delta |  | Registration Certificate for Using Hazardous Chemicals                         |  | 321110234                                        |  | June 23, 2014 to June 22, 2017           |  | Jiangsu Province Administration of Work Safety Chemical Registration Centre
|Jiangsu Delta |  | Trading Licence for Hazardous Chemicals                                        |  | Su Zhen An Jing (Yi) Zi 2012001347               |  | January 5, 2012 to January 4, 2015       |  | Administration of Work Safety of Zhenjiang City                            
|Jiangsu Delta |  | Record Keeping Certificate of Non-Pharmaceutical Precursor Chemical Production |  | (Su) 3S32111200031                               |  | May 23, 2014 to April 27, 2017           |  | Administration of Work Safety of Zhenjiang City                            
|Jiangsu Delta |  | Record Keeping Certificate of Class 2 and Class 3 Precursor Chemical Purchase  |  | [2014] Certificate No. 102888                    |  | To November 28, 2014                     |  | Police Station of Jiangsu Zhenjiang, Dantu Bureau                          
|Jiangsu Delta |  | Approval of Purchasing Highly Toxic Chemical                                   |  | (Zhenjiang) Gong Ju Zhun Guo Zi [2014] No. 01962 |  | One-time approval and valid for 15 days. |  | Zhenjiang Police Station                                                   
|Jiangsu Delta |  | Pollutant Discharge Permit                                                     |  | Zhen Tu Huan No. 3211212012062                   |  | 20 October 2012 to October 19, 2015      |  | Environment Protection Agency of Dantu District, Zhenjiang City            
|Jiangsu Delta |  | Business License                                                               |  | 321100400012550                                  |  | June 15, 2007 to June 14, 2027           |  | Administration of Industry and Commerce of Zhenjiang, Jiangsu Province     
|Jiangsu Delta |  | Work Safety License                                                            |  | (Su) WH An Xu Zheng Zi [L00230]                  |  | April 28, 2014 to April 27, 2017         |  | Administration of Work Safety of Jiangsu Province                          
|Jiangsu Delta |  | Financial Registration Certificate for Foreign-invested Enterprises            |  | No.3211210203                                    |  | June 15, 2007 to June 14, 2027           |  | Local Financial Bureau of Dantu District, Zhenjiang City                   





54







|Entity               |  | Licenses, Permits andCertificates                                                                                                 |  | Serial Number                                   |  | Valid Term/Renewal Period                        |  | Authority                                                                                              
|-------------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- |  | ------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------
|Jiangsu Delta        |  | Organization Code Certificate                                                                                                     |  | No.66274328-4                                   |  | June 15, 2011 to June 14, 2015                   |  | Jiangsu Zhenjiang Administration of Quality Supervision, Inspection and Quarantine                     
|Jiangsu Delta        |  | Tax Registration Certificate                                                                                                      |  | Zhen Guo Shui Tu Deng Zi 321121662743284        |  | N.A.
        (Note: issued on 19 January 2009)   |  | National Tax Bureau of Zhenjiang, Jiangsu Province and Local Tax Bureau of Dantu, Zhenjiang            
|Jiangsu Delta        |  | Tax Registration Certificate                                                                                                      |  | Su Di Shui Zi No.321181796133836                |  | N.A.
        (Note: issued on 19 January 2009)   |  | National Tax Bureau of Danyang, Jiangsu Province and Local Tax Bureau of Danyang                       
|Jiangsu Delta        |  | Approval Certificate for Establishment of Enterprises with Investment of Taiwan, Hong Kong, Macao and Overseas Chinese in the PRC |  | Shang Wai Zi Su Fu Zi [2007] NO.73674           |  | N.A.
        (Note: issued on 6 June 2014)       |  | People’s Government of Jiangsu Province                                                                
|Jiangsu Delta        |  | Foreign Exchange Registration Card                                                                                                |  | No.00085568                                     |  | [N.A.]                                           |  | State Foreign Exchange Administration                                                                  
|Jiangsu Delta        |  | Bank Account Permit                                                                                                               |  | No. J3140002471102                              |  | N.A.
        (Note: issued on July 16, 2008)     |  | People’s Bank of China, Zhenjiang Branch                                                               
|Jiangsu Delta        |  | Social Insurance Registration Certificate                                                                                         |  | She Xian Su Zi No.32112115000942                |  | June 23, 2010 to June 22, 2015                   |  | Social Labour Insurance Fund Management Centre, Dantu District, Zhenjiang City                         
|Jiangsu Delta        |  | Environmental Management System Certificate                                                                                       |  | N.A.                                            |  | July 6, 2012 to July 5, 2015                     |  | China Certification Centre Inc.                                                                        
|Jiangsu Zhengxin R&D |  | Business License                                                                                                                  |  | 321181400006540                                 |  | April 20, 2010 to April 19, 2061                 |  | Administration of Industry and Commerce of Dayang, Zhenjiang                                           
|Jiangsu Zhengxin R&D |  | Organization Code Certificate                                                                                                     |  | No.57261313-6                                   |  | September 24, 2012 to September 23, 2016         |  | Zhenjiang Danyang Administration of Quality Supervision, Inspection and Quarantine                     
|Jiangsu Zhengxin R&D |  | Tax Registration Certificate                                                                                                      |  | Zhen Guo Shui Dan Deng Zi 321181572613136       |  | N.A.
        (Note: issued on December 7, 2012)  |  | State Tax Bureau of Danyang, Jiangsu Province and Local Tax Bureau of Danyang, Jiangsu Province        
|Jiangsu Zhengxin R&D |  | Financial Registration Certificate for Foreign-invested Enterprises                                                               |  | No.321181572613136                              |  | April 20, 2011 to April 18, 2061                 |  | Local Financial Bureau of Danyang City                                                                 
|Jiangsu Zhengxin R&D |  | Bank Account Permit                                                                                                               |  | No. J3141002596303                              |  | N.A.
        (Note: issued on December 25, 2012) |  | People’s Bank of China, Dayang Branch                                                                  
|Jiangsu Zhengxin R&D |  | Certificate of Statistic Registration                                                                                             |  | Dan Tong Deng Zi No. 32118120112278             |  | N.A.
        (Note: issued on December 19, 2012) |  | Danyang Statistic Bureau                                                                               
|Jiangsu Logistic     |  | Business License                                                                                                                  |  | 321121000087016                                 |  | December 17, 2013 to Long                        |  | Administration of Industry and Commerce of Dantu, Zhenjiang                                            
|Jiangsu Logistic     |  | Road transportation operation Certificate                                                                                         |  | Su Jiao Yun Guan Xu Ke Zhen Zi No. 321112303680 |  | May 21, 2014 to December 11, 2017                |  | Zhenjiang Administration of Transportation and Management                                              
|Jiangsu Logistic     |  | Organization Code Certificate                                                                                                     |  | No. 08692663-9                                  |  | December 17, 2013 to December 16, 2017           |  | Zhenjiang Dantu  Administration of Quality Supervision, Inspection and Quarantine                      
|Jiangsu Logistic     |  | Tax Registration Certificate                                                                                                      |  | Zhen Guo Shui Deng Zi 321121086926639           |  | N.A.
        (Note: issued on June 12, 2014)     |  | State Tax Bureau of Dantu, Zhenjiang city, Jiangsu Province and Local Tax Bureau of Dan, Zhenjiang city



55







|Entity      |  | Licenses, Permits andCertificates       |  | Serial Number                    |  | Valid Term/Renewal Period                    |  | Authority                                                                         
|----------- |  | --------------------------------------- |  | -------------------------------- |  | -------------------------------------------- |  | ----------------------------------------------------------------------------------
|Binhai Deda |  | Business license                        |  | 320922000222858                  |  | June 8, 2013 to June 7, 2043                 |  | Administration of Industry and Commerce of Binhai, Yanhai                         
|Binhai Deda |  | Trading Licence for Hazardous Chemicals |  | Su (Yan) An Jing Zi (Bin) 000011 |  | June 7, 2013 to June 6, 2016                 |  | Administration of Work Safety of Binhai                                           
|Binhai Deda |  | Bank Account Permit                     |  | No. J3112001078201               |  | N.A.
        (Note: issued on June 19, 2013) |  | People’s Bank of China, Binhai Branch                                             
|Binhai Deda |  | Organization Code Certificate           |  | No. 07101823-2                   |  | June 8, 2013 to June 7, 2017                 |  | Yancheng  Binhai  Administration of Quality Supervision, Inspection and Quarantine



Properties



Delta currently owns the following land
use rights in the PRC:



|Owner                |  | Location                                                    |  | Certificate ofState-owned Land UseRightNo. |  | Tenure                               |  | ApproximateGross FloorArea(sqm) |  | Use ofProperty
|-------------------- |  | ----------------------------------------------------------- |  | ------------------------------------------ |  | ------------------------------------ |  | ------------------------------- |  | --------------
|Jiangsu Delta        |  | Chenfeng Village, Gaozi Town, Dantu District, Zhenjiang     |  | Zhen Tu Guo Yong (2008) No.199 (1)         |  | October 19, 2008 to  July 29, 2058   |  | 53,369                          |  | Industrial    
|Jiangsu Delta        |  | Chenfeng Village, Gaozi Town, Dantu District, Zhenjiang     |  | Zhen Tu Guo Yong (2011) No.1037 (2)        |  | August 1, 2011 to  August 31, 2060   |  | 26,023                          |  | Industrial    
|Jiangsu Zhengxin R&D |  | North of Development Zone Road, South of Hu Ning Expressway |  | Dan Guo Yong (2013) No. 00598 (3)          |  | January 16, 2013 to  January 7, 2053 |  | 9,934.5                         |  | Commercial    



Notes:



| | (1) | This land use right has been mortgaged to the Industrial and Commercial Bank of China, Zhenjiang Branch. The period of the mortgage is two years commencing from November 24, 2008 and ending on December 31, 2010. During the term of the mortgage, Delta’s rights to transfer, lease, mortgage or otherwise dispose of this land use right shall be subject to the prior written approval of the relevant bank. Jiangsu Delta has duly paid off the loan in time.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The land use right has been mortgaged to the Construction Bank of China, Zhenjiang Branch. The period of the mortgage is three years commencing from April 16, 2012 and ending on April 16, 2015. During the term of the mortgage, its rights to transfer, lease, mortgage or otherwise dispose of this land use right shall be subject to the prior written approval of the relevant bank.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | There are no mortgages or outstanding encumbrances
        on the land use right.
| | --- | ---------------------------------------------------------------------------------



56







Delta currently owns and possesses the
Building Ownership Certificates for the following buildings in the PRC:



|Location                                                                                             |  | Certificate of RealEstate Ownership No.       |  | Approximate GrossFloor Area(sq m) |  | Use of Property         
|---------------------------------------------------------------------------------------------------- |  | --------------------------------------------- |  | --------------------------------- |  | ------------------------
|Building 3 No. 1 Fine Chemical Park Gaozi Zhen Dantu Ecnomic and Development Zone Zhenjiang City (1) |  | Zhen Fang Quan Zheng Zi No. 1201007277100110  |  | 1,140.9                           |  | Industrial              
|North of Development Zone Road, South of Hu Ning Expressway                                          |  | Dan Fang Quan Zheng Kai Fa Qu Zi No. 02032188 |  | 12,119.44                         |  | Research and Development



Note:



(1) This property has
been mortgaged to the Industrial and Commercial Bank of China, Zhenjiang Branch. The period of the mortgage is one year commencing
from June 20, 2014 and ending on June 19, 2015. During the term of the mortgage, Delta’s rights to transfer, lease, mortgage
or otherwise dispose of this property shall be subject to the prior written approval of the relevant bank.



As of the date of this report, Delta does
not lease any properties.



Delta believes there are no regulatory
requirements or environmental issues that may materially affect its utilization of the above properties and fixed assets, all of
which are located in the PRC.



C. Organizational Structure



The chart below presents our corporate structure as of the date
of this report.











D. Property, Plants and Equipment



Information regarding our property, plants
and equipment is described “Item 4. A.- Information on the Company.”



|ITEM 4A. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------



Not required.



57







|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------



MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DELTA



Forward-Looking Statements



The information in this report contains
forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In
particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking
statements. These forward-looking statements can be identified by the use of words such as "believes," "estimates,"
"could," "possibly," "probably," anticipates," "projects," "expects," "may,"
"will," or "should" or other variations or similar words. No assurances can be given that the future results
anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management's current expectations
and are inherently uncertain. Our actual results may differ significantly from management's expectations.



The following discussion and analysis should
be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that
the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily
be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.



Overview



Delta is a fine and specialty chemical
manufacturer, primarily engaged in manufacturing and selling of organic compound including para-chlorotoluene (“PCT”),
ortho-chlorotoluene (“OCT”), PCT/OCT downstream products, unsaturated polyester resin (“UPR”), maleic acid
(“MA”) and other by-product chemicals.



Delta collaborates with reputable universities,
such as the East China Normal University in order to secure its position as a market leader. Delta also closely monitors the market
for development, trends and technological innovations and solicit customer feedback so as to keep abreast with market demands and
industrial development.



As at the date of this report, Delta has
a diversified clientele with more than 380 customers based either in domestic or overseas market. Approximately 90% of its sales
are to its domestic customers based in Jiangsu Province, Anhui Province, Zhejiang Province, Hubei Province, Guangdong Province
and Chongqing Metropolitan, and the rest of its products are exported via agents or trading companies to countries outside the
PRC which include but not limited to India, Brazil, Japan, European Union member countries and America.



This discussion and analysis focuses on the business results, comparing results
of operations for the fiscal year ended June 30, 2014, 2013 and 2012, respectively.



The fiscal year ended June 30, 2013 and
June 30, 2012



Results of Operations



In the fiscal year ended June 30, 2013,
Delta’s revenue and net income had an increase as compared with the fiscal year ended June 30, 2012.



The following table summarizes the results
of Delta’s operations during the fiscal year ended June 30, 2013 and 2012, respectively, and provides information regarding the dollar
and percentage increase (or decrease) from the fiscal year ended June 30, 2013 and 2012.



58







|                                          |  | The Fiscal Year Ended June 30, |             |   |      |  
|----------------------------------------- |  | ------------------------------ | ----------- | - | ---- | -
|                                          |  | 2013                           |             |   | 2012 |  
|Revenue                                   |  | $                              | 124,218,213 |   |      | $
|Cost of Sales                             |  | $                              | 99,733,216  |   |      | $
|Gross Profit                              |  | $                              | 24,484,997  |   |      | $
|Gross Margin                              |  |                                | 19.71       | % |      |  
|Operating Expenses                        |  | $                              | 6,642,383   |   |      | $
|Operating Income                          |  | $                              | 17,842,614  |   |      | $
|Operating Margin                          |  |                                | 14.36       | % |      |  
|Change in fair value of convertible bonds |  | $                              | (37,000     | ) |      | $
|Net Income                                |  | $                              | 11,705,736  |   |      | $
|Net Profit Margin                         |  |                                | 9.42        | % |      |  



Revenue



Revenue for the fiscal year ended
June 30, 2013, was $124,218,213, an increase of 29.90% as compared with revenues of $95,627,051 for the fiscal year ended
June 30, 2012. In the fiscal year ended June 30, 2013, we sold 21,486 tons of unsaturated polyester resin
(“UPR”), an increase of 8.82% as compared with 19,745 tons of UPR in the fiscal year ended June 30, 2012. In the
fiscal year ended June 30, 2013, we sold 37,501 tons of p(o)-chlorotoluene (“PCT/OCT”), an increase of 4.34% as
compared with 35,941 tons in the fiscal year ended June 30, 2012. The increase was due primarily to a rise in demand. We
launched Supply Chain Management (“SCM”) business in the fiscal year ended June 30, 2012.



The following table is a breakdown
of the revenue based on different segments/products.





|                  |  | The Fiscal Year Ended June 30, |            
|----------------- |  | ------------------------------ | -----------
|                  |  | 2013                           |            
|                  |  | sales                          |            
|UPR               |  |                                | 40,428,366 
|PCT/OCT           |  |                                | 72,398,974 
|Delta SCM         |  |                                | 11,390,873 
|Total net revenue |  | $                              | 124,218,213



Gross Profit



Gross profit decreased by 5.61% to
$24,484,997 for the fiscal year ended June 30, 2013, as compared with $25,940,441 for the fiscal year ended June 30, 2012.
The gross margin decreased by 7.42% from 27.13% for the fiscal year ended June 30, 2012 to 19.71% for the same period
of 2013, mainly due to the loss from sales in the SCM.



The table below presents information about
our gross profit for the periods indicated:



|             |  | The Fiscal Year Ended June 30, |           
|------------ |  | ------------------------------ | ----------
|             |  | 2013                           |           
|             |  | US$                            |           
|Gross Profit |  | $                              | 24,484,997



59







Operating Income



Operating income was $17,842,614
for the fiscal year ended June 30, 2013, representing a 6.53% decrease as compared with $19,088,375 for the fiscal year
ended June 30, 2012. The operating margin decreased by 5.60% from 19.96% for the fiscal year ended June 30, 2012 to 14.36%
for the fiscal year ended June 30, 2013. In particular, the SCM gross loss margin was 5.53% for the fiscal year ended June
30, 2013. The decrease in operating margin mainly was due to a sale volume increase of 8,183% in the SCM for the fiscal year
ended June 30, 2013 as compared with the fiscal year ended June 30, 2012.



Cost of Sales



Cost of sales was $99,733,216 for the fiscal
year ended June 30, 2013, representing a 43.12% increase as compared with $69,686,610 for the same period of 2012. The increase
in cost of sales was due to sales growth.



The table below presents information about
our cost of sales for the periods indicated:



|              |  | The Fiscal Year Ended June 30, |            |  |      |  
|------------- |  | ------------------------------ | ---------- |  | ---- | -
|              |  | 2013                           |            |  | 2012 |  
|Cost of sales |  | $                              | 99,733,216 |  |      | $



Operating Expenses





Operating expenses were $6,642,383 for
the fiscal year ended June 30, 2013, representing a 3.06% decrease as compared with $6,852,066 for the fiscal year ended June 30,
2012. The decreased was primarily due to two factors: (i) a decrease in selling expenses of 2.79% to $2,374,609 for the fiscal
year ended June 30, 2013 from $2,442,753 for the fiscal year ended June 30, 2012 because of reduced sales promotional efforts while
market demand was naturally strong, and (ii) a decrease in general and administration expenses of 3.21% to $4,267,774 for the fiscal
year ended June 30, 2013 from $4,409,313 for the fiscal year ended June 30, 2012, mainly due to the decrease in entertainment expenses
to $195,314 for the fiscal year ended June 30, 2013 from $338,560 for the fiscal
year ended June 30, 2012.



The table below presents information about
our operating expenses for the periods indicated:



|                                  |  | The Fiscal Year Ended June 30, |           |  |      |  
|--------------------------------- |  | ------------------------------ | --------- |  | ---- | -
|                                  |  | 2013                           |           |  | 2012 |  
|Selling expenses                  |  | $                              | 2,374,609 |  |      | $
|General & Administrative expenses |  | $                              | 4,267,774 |  |      | $
|Total operating expenses          |  | $                              | 6,642,383 |  |      | $



Change in fair value of convertible bonds





Change in fair value of convertible bonds
was $37,000 for the fiscal year ended June 30, 2013. This is recorded as a non-cash loss, which resulted from the change in fair
value of convertible bonds issued pursuant to a series of securities purchase agreements dated January 31, 2011, May 16, 2011 and
June 30, 2011 with certain investment funds, pursuant to which Delta has issued certain bonds for an aggregate principal amount
of $18,000,000.



Net Income





Net income was $11,705,736 for the fiscal
year ended June 30, 2013, an increase of 11.79% as compared with $10,471,574 for the fiscal year ended June 30, 2012. The increase
in net income for the fiscal year ended June 30, 2013 was mainly due to increase in revenue and decrease in operating expenses
as compared with the fiscal year ended June 30, 2012.



The net profit margin decreased by 1.53%
from 10.95% for the fiscal year ended June 30, 2012 to 9.42% for the fiscal year ended June 30, 2013. In particular, the SCM segment
had a gross loss margin of 5.79% for the fiscal year ended June 30, 2013 which partially offset the other products’ gross
margin.



60







Earnings per Share





Basic and diluted loss per share for the
fiscal year ended June 30, 2013 were $0.29 and $0.20 compared with loss per share of $0.26 and $0.22 for the same period of 2012.
The weighted average number of shares outstanding to calculate basic earnings per share (“EPS”) was 40,000,000 and
40,000,000 for the fiscal year ended June 30, 2013 and 2012, respectively. The weighted average number of shares outstanding to
calculate diluted EPS was 58,191,973 and 58,191,973 for the fiscal year ended June 30, 2013 and 2012.



Liquidity and Capital Resources



We have historically financed our operations
and capital expenditures principally through private placements of debt and equity offerings and cash provided by operations.



The table below presents information about our cash flow for
the periods indicated:

|                                                                    |  | The fiscal year ended June 30, |             |   |      |  
|------------------------------------------------------------------- |  | ------------------------------ | ----------- | - | ---- | -
|                                                                    |  | 2013                           |             |   | 2012 |  
|Net cash provided by (used in) operating activities                 |  | $                              | (23,824,136 | ) |      | $
|Net cash provided by (used in) investing activities                 |  | $                              | (20,535,030 | ) |      | $
|Net cash provided by (used in) financing activities                 |  | $                              | 41,358,173  |   |      | $
|Effect of foreign currency translation on cash and cash equivalents |  | $                              | (107,099    | ) |      | $
|Beginning cash and cash equivalent                                  |  | $                              | 7,054,228   |   |      | $
|Ending cash and cash equivalent                                     |  | $                              | 3,946,136   |   |      | $



Operating Activities



For the fiscal year ended June 30, 2013,
net cash used in operating activities was $23,824,136. This was primarily attributable to our net income of $11,705,736, adjusted
by an add-back of non-cash charges mainly consisting of depreciation, amortization, change in fair value of convertible bonds,
written off of goodwill and allowance for doubtful accounts of $4,055,295, $39,927, $37,000, $71,638 and $411,211, respectively,
and non-cash gain from deferred income taxes accounts of $94,179, offset by a $40,050,764 decrease in working capital. Specifically,
the decrease in working capital was primarily due to: (i) a $20,408,647 trade and other receivables increase driven by customers
payment; (ii) a $3,953,649 increase in inventories, principally of finished goods; partially offset by a $16,707,725 decrease
in trade and other payables, a $947,128 increase advance from customers deposit, and a $72,129 increase in income tax payables.



Investing Activities



For the fiscal year ended June 30, 2013,
net cash used in investing activities was $20,535,030. This was primarily attributable to: (i) a $17,225,856 capital expenditure
for purchase of new plant and equipment, (ii) a $2,784,957 capital expenditure for purchase of new land use rights, and a $524,217
capital expenditure for purchase of a new company, Jiangsu Zhengxin New Material Research and Development Co., Ltd.



Financing Activities



For the fiscal year ended June 30,
2013, net cash provided by financing activities were $41,358,173, primarily attributable to: (i) a $74,017,122 short-term
bank loan borrowing, (ii) a $49,884,676 repayment of bank borrowings, and a $17,225,727 change in restricted cash.



61







The fiscal year ended June 30, 2014 and
June 30, 2013



Results of Operations





In the fiscal year ended June 30, 2014,
revenue and net income had an increase as compared with the fiscal year ended June 30, 2013. Delta’s net profit margin was driven down
by 5.53% by the rapid growth of sale in the SCM which has the lowest margin among the products for the fiscal year ended June 30,
2014.



The following table summarizes the results
of our operations during the fiscal year ended June 30, 2014 and 2013, respectively, and provides information regarding the dollar
and percentage increase (or decrease) from the fiscal year ended June 30, 2014 and 2013.





|                                          |  | The Fiscal Year Ended June 30, |             |   |      |  
|----------------------------------------- |  | ------------------------------ | ----------- | - | ---- | -
|                                          |  | 2014                           |             |   | 2013 |  
|Net Revenue                               |  | $                              | 175,327,717 |   |      | $
|Cost of Sales                             |  | $                              | 157,904,729 |   |      | $
|Gross Profit                              |  | $                              | 17,422,988  |   |      | $
|Gross Margin                              |  |                                | 9.94        | % |      |  
|Operating Expenses                        |  | $                              | 5,788,048   |   |      | $
|Operating Income                          |  | $                              | 11,634,940  |   |      | $
|Operating Margin                          |  |                                | 6.64        | % |      |  
|Change in fair value of convertible bonds |  | $                              | (156,199    | ) |      | $
|Net Income                                |  | $                              | 6,828,308   |   |      | $
|Net Profit Margin                         |  |                                | 3.89        | % |      |  



Revenue





Revenue for the fiscal year ended June
30, 2014 was $175,327,717, an increase of 41.14% as compared with revenue of $124,218,213 for the fiscal year ended June 30, 2013.
In the fiscal year ended June 30, 2014, we sold 30,014 tons of UPR, an increase of 39.69% as compared with 21,486 tons of UPR in
the fiscal year ended June 30, 2013. In the fiscal year ended June 30, 2014, we sold 38,285 tons of PCT/OCT, an increase of 2.09%
as compared with 37,501 tons in the fiscal year ended June 30, 2013. The increase was due primarily to increased demand in our
products that is satisfied by outsourcing. In the fiscal year ended June 30, 2014, Delta sold 39,736 tons of chemicals in the SCM
segment, an increase of 385.99% as compared with 8,176 tons in the fiscal year ended June 30, 2013. The increase in the sales in
SCM segment was due primarily to the adjustment in operating strategy to enter the logistics business.



The following table breaks down application categories as percentage
of total net revenue:



|              |  | The Fiscal Year Ended June 30, |            
|------------- |  | ------------------------------ | -----------
|              |  | 2014                           |            
|              |  | sales                          |            
|UPR           |  |                                | 56,230,919 
|PCT/OCT       |  |                                | 67,634,632 
|SCM           |  |                                | 51,462,166 
|Total revenue |  | $                              | 175,327,717



62







Gross Profit





Gross profit decreased 28.84% to $17,422,988
for the fiscal year ended June 30, 2014, as compared with $24,484,997 for the fiscal year ended June 30, 2013. The gross margin
decreased by 9.77% from 19.71% for the fiscal year ended June 30, 2013 to 9.94% for the same period of 2014, mainly because the
SCM had a gross loss margin of 1.17% in the fiscal year ended June 30, 2014.



The table below presents information about
our gross profit for the periods indicated:



|             |  | The Fiscal Year Ended June 30, |           
|------------ |  | ------------------------------ | ----------
|             |  | 2014                           |           
|             |  | US$                            |           
|Gross Profit |  | $                              | 17,422,988



Operating Income





Operating income was $11,634,940 for the
fiscal year ended June 30, 2014, representing a 34.79% decrease as compared with $17,842,614 for the fiscal year ended June 30,
2013. The operating margin decreased by 7.73% from 14.36% for the fiscal year ended June 30, 2013 to 6.64% for the fiscal year
ended June 30, 2014. The decrease in gross margin mainly due to a sale volume increase of 321.58% in SCM which had a gross loss
margin of 5.79% for the fiscal year ended June 30, 2014 as compared with the fiscal year ended June 30, 2013.



Cost of Sales



Cost of sales was $157,904,729 for the
fiscal year ended June 30, 2014, representing a 58.33% increase as compared with $99,733,216 for the same period of 2013. The increase
in cost of sales was due to sales growth.



The table below presents information about
our cost of sales for the periods indicated:



|              |  | The Fiscal Year Ended June 30, |             |  |      |  
|------------- |  | ------------------------------ | ----------- |  | ---- | -
|              |  | 2014                           |             |  | 2013 |  
|Cost of sales |  | $                              | 157,904,729 |  |      | $



Operating Expenses





Operating expenses were $5,788,048 for
the fiscal year ended June 30, 2014, representing a 12.86% decrease as compared with $6,642,383 for the fiscal year ended June
30, 2013. The decrease was primarily due to two factors: (i) a decrease in selling expenses of 2.89% to $2,306,021 for the fiscal
year ended June 30, 2014 from $2,374,609 for the fiscal year ended June 30, 2013 because of reduced sales promotional efforts while
market demand was naturally strong, and (ii) a decrease in general and administration expenses of 18.41% to $3,482,027 for the
fiscal year ended June 30, 2014 from $4,267,774 for the fiscal year ended June 30, 2013, mainly due to the decrease in entertainment
expenses to $147,897 for the fiscal year ended June 30, 2014 from $195,341 for the
fiscal year ended June 30, 2013.



The table below presents information about
our operating expenses for the periods indicated:



|                                  |  | The Fiscal Year Ended June 30, |           |  |      |  
|--------------------------------- |  | ------------------------------ | --------- |  | ---- | -
|                                  |  | 2014                           |           |  | 2013 |  
|Selling expenses                  |  | $                              | 2,306,021 |  |      | $
|General & Administrative expenses |  | $                              | 3,482,027 |  |      | $
|Total operating expenses          |  | $                              | 5,788,048 |  |      | $



63







Change in fair value of convertible bonds



Change in fair value of convertible
bonds was $156,199 for the fiscal year ended June 30, 2014. This is recorded as a non-cash loss, which resulted from the
change in fair value of convertible bonds issued pursuant to a series of securities purchase agreements dated January 31,
2011, May 16, 2011 and June 30, 2011 with certain investment funds, pursuant to which Delta has issued certain bonds for an
aggregate principal amount of $18,000,000.



Net Income



Net income was $6,828,308 for the
fiscal year ended June 30, 2014, a decrease of 40.52% as compared with $11,705,736 for the fiscal year ended June 30, 2013.
The decrease in net income in the fiscal year ended June 30, 2014 was mainly due to a substantial increase in cost
of sales as compared with the fiscal year ended June 30, 2013.



The net profit margin down 5.53% from 9.42%
for the fiscal year ended June 30, 2013 to 3.89% for the fiscal year ended June 30, 2014. Specifically, the UPR and PCT/OCT’s
gross profit margin offset by the raw material gross loss margin account of 5.79% for the fiscal year ended June 30, 2014. The
decrease in gross margin mainly due to a sales increase of 321.58% in raw material for the fiscal year ended June 30, 2014 as compare
with the fiscal year ended June 30, 2013.



Earnings per Share



Basic and diluted loss per share for the
fiscal year ended June 30, 2014 were $0.17 and $0.12 compared with loss per share $0.29 and $0.20 for the same period of 2013.
The weighted average number of shares outstanding to calculate basic EPS was 40,000,000 and 40,000,000 for the fiscal year ended
June 30, 2014 and 2013, respectively. The weighted average number of shares outstanding to calculate diluted EPS was 58,191,973
and 58,191,973 for the fiscal year ended June 30, 2014 and 2013.



Liquidity and Capital Resources



We have historically financed our operations
and capital expenditures principally through debt and equity offerings and cash provided by operations.



The table below presents information about
our cash flow for the periods indicated:



|                                                                    |  | The fiscal year ended June 30, |             |   |      |  
|------------------------------------------------------------------- |  | ------------------------------ | ----------- | - | ---- | -
|                                                                    |  | 2014                           |             |   | 2013 |  
|Net cash provided by (used in) operating activities                 |  | $                              | 3,865,600   |   |      | $
|Net cash provided by (used in) investing activities                 |  | $                              | (24,076,576 | ) |      | $
|Net cash provided by (used in) financing activities                 |  | $                              | 25,303,850  |   |      | $
|Effect of foreign currency translation on cash and cash equivalents |  | $                              | 6,941       |   |      | $
|Beginning cash and cash equivalent                                  |  | $                              | 3,946,135   |   |      | $
|Ending cash and cash equivalent                                     |  | $                              | 9,045,950   |   |      | $



Operating Activities



For the fiscal year ended June 30, 2014,
net cash provided by operating activities was $3,865,600. This was primarily attributable to our net income of $6,828,308, adjusted
by an add-back of non-cash charges mainly consisting of depreciation, amortization, change in fair value of convertible bonds,
deferred income taxes and allowance for doubtful accounts of $4,816,403, $41,600, $156,199, $822,200 and $177,179, respectively,
and non-cash gain from disposals of property accounts of $113,953, offset by a $88,623,336 decrease in working capital. Specifically,
the decrease in working capital was primarily due to: (i) a $16,343,386 trade and other receivables increase driven by customers
payment; (ii) a $191,049 increase in inventories, principally of raw material; partially offset by a $8,428,337 increase in
trade and other payables, a $665,038 decrease advance from customers deposit, and a $91,200 decrease in income tax payables.



64







Investing Activities



For the fiscal year ended June 30,
2014, net cash used in investing activities was $24,076,576. This was primarily attributable to: (i) a $23,957,404 capital
expenditure for purchase of new plant and equipment, (ii) a $478,184 capital expenditure for purchase of new land use rights,
and (iii) a $359,012 gain for disposals of property and equipment.



Financing Activities



For the fiscal year ended June 30,
2014, net cash provided by financing activities were $25,303,850, primarily attributable to: (i) a $129,232,006 short-term
bank loan borrowing, (ii) a $108,797,261 repayment of bank borrowings, (iii) a $2,011,673 change in restricted cash, and (iv)
a $2,857,432 due to a shareholder.



Cash and Cash Equivalents





Our cash and cash equivalents as at July
1, 2013, were $3,946,135 and increased to $9,045,950 by June 30, 2014. The increase was mainly due to increase in net cash provided
by operating activities and financing activities.



In future periods, we believe that
our existing cash, cash equivalents and cash flows from operations, combined with cash availability under our revolving
credit facility, will be insufficient to meet our presently anticipated future cash needs for at least the next year. We may,
however, require additional cash resources due to changed business conditions or other future developments, including any
investments or acquisitions we may decide to pursue.



Trade Receivables, net



Trade receivables, net were $53,318,673
as of June 30, 2014, representing a 4.05% increase as compared with $51,242,793 as of June 30, 2013. This increase in trade receivables
was primarily attributable to increase in sales.



Inventory



Inventory consists of raw materials,
finished goods. As of June 30, 2014, the recorded value of our inventory increased 1.88% to $14,062,567 from $13,803,489 as
of June 30, 2013. This increase is mainly due to an increase of 34.44% in raw material from $6,202,218 as of June 30, 2013 to
$8,338,302 as of June 30, 2014 partially offset by a decrease of 24.69% in finished goods from $7,601,271 as of June 30, 2013
to $5,724,265 as of June 30, 2014. The increase in raw material was primarily to meet
the production demand.



The following table presents information
about our inventory for the periods indicated:



|                |  | June 30,2014 |            |  | June 30,2013 |   |            | Change | 
|--------------- |  | ------------ | ---------- |  | ------------ | - | ---------- | ------ | 
|Raw material    |  | $            | 8,338,302  |  |              | $ | 6,202,218  |        | 
|Finished goods  |  | $            | 5,724,265  |  |              | $ | 7,601,271  |        | 
|Total inventory |  | $            | 14,062,567 |  |              | $ | 13,803,489 |        | 



Accounts payable



Accounts payable were $1,760,310 as
of June 30, 2014, an increase of 2.46 % from $1,718,125 as of June 30, 2013. The increase was primarily attributable to a
larger purchase volume.





65







Obligations under Material Contracts



There was no material contractual obligation
as of June 30, 2014.



Critical Accounting Policies



The consolidated financial statements have
been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial
statements include the financial statements of the Company, and its wholly-owned subsidiaries. All intercompany accounts, transactions,
and profits have been eliminated upon consolidation.



Use of Estimates



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could materially differ from those estimates.



Segment Reporting



The Company operates in one business and
geographical segment of manufacturing and sales of organic compounds in the PRC. ASC 280, Segment Reporting, establishes standards
for reporting information about operating segments. Given the economic characteristics of the similar nature of the products sold,
the type of customer and the method of distribution, the Company operates as one reportable segment as defined by ASC 280, Segment
Reporting.



Foreign Currency Translation



The Company’s financial statements
are presented in the U.S. dollar ($), which is the Company’s reporting currency and functional currency. The Company’s
subsidiaries in the PRC use Renminbi (“RMB”) as their functional currencies. Transactions in foreign currencies are
initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded
amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements
of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange
ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation
in the statements of income.



In accordance with ASC 830, Foreign Currency
Matters, the Company translated the assets and liabilities into US $ using the rate of exchange prevailing at the applicable balance
sheet date and the statements of income and cash flows are translated at an average rate during the reporting period. Adjustments
resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.



Revenue Recognition



Revenue principally represents organic
compound sale revenue. Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the
ordinary course of the Company’s activities and is recorded net of value added tax (“VAT”). Consistent with the
criteria of ASC 605 “Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following
four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services
have been provided, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured.



Revenue from the sale of goods is recognized
upon delivery when the significant risks and rewards of ownership of goods have transferred t the buyer, continuing managerial
involvement usually associated with ownership and effective control have ceased and the coasts incurred or to be incurred in respect
of the transaction can be measured reliably.



Interest income is recognized on a time-proportion
basis using the effective interest method.



66







Borrowing Costs



Borrowing costs are recognised in profit
or loss using the effective interest method except for those costs that are directly attributable to assets under construction.
Borrowing costs on general borrowings are capitalised by applying a capitalization rate to construction or expenditures that are
financed by general borrowings. Borrowing costs on general financing during the years ended June 30, 2014, 2013 and 2012 were capitalized
at a rate of 7.11%, 7.17% and 7.63% respectively.



Leases



The Company accounts for its leases under
the provisions of ASC 840, Leases. Certain of the Company’s operating leases provide for minimum annual payments that change
over the life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease
term. The Company recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual
lease payments and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent
expense. Rent holidays and tenant improvement allowances for store remodels are amortized on the straight-line basis over the initial
term of the lease and any option period that is reasonably assured of being exercised.



Restricted Cash



Restricted cash are cash deposited in fixed
deposit accounts maintained in the PRC and Hong Kong for the purpose of securing bank borrowings.



Trade Receivables



Trade receivables are recorded at the invoiced
amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates
the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is
established and determined based on managements’ assessment of known requirements, aging of receivables, payment history,
the customer’s current credit worthiness and the economic environment.



We did not have any off-balance sheet arrangements
as of June 30, 2014.



MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF CIS



Forward Looking Statements



All statements other than statements of
historical fact included in this Form 20-F including, without limitation, statements under “ Management’s Discussion
and Analysis of Financial Condition and Results of Operations ” regarding our financial position, business strategy and
the plans and objectives of management for future operations, are forward looking statements. When used in this Form 20-F, words
such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and
similar expressions, as they relate to us or our management, identify forward looking statements. Such forward looking statements
are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management.
Actual results could differ materially from those contemplated by the forward looking statements as a result of the risk factors
and other factors detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in
Part I, Item 3, of our Form 20-F for the year ended October 31, 2013 filed with the SEC on March 17, 2014. All subsequent written
or oral forward looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.



You should also read the following management
discussion and analysis (“MD&A”) in conjunction with the unaudited financial statements and related footnotes thereto
included in this report and in conjunction with the MD&A and the audited financial statements and related footnotes thereto
included in our annual report on Form 20-F for the year ended October 31, 2013 filed with the SEC on March 17, 2014. All capitalized
terms in this MD&A that are not defined shall have the meaning ascribed to them in the Notes to the Financial Statements included
herewith.



67







Overview



We were formed on November 28, 2011 under
the laws of the British Virgin Islands as an innovated public acquisition company (“IPAC”). The Company was formed
to acquire, through a merger, share exchange, asset acquisition, share purchase, reorganization, exchangeable share transaction
or other similar business transaction, one or more operating businesses or assets (“Acquisition Transaction”). An IPAC
is a blank check company that permits the Company to return funds from a trust account to redeeming shareholders after the completion
of an Acquisition Transaction. To date, our efforts have been limited to organizational activities and a search for suitable businesses
or assets to acquire Status as Emerging Growth Company.



As of April 30,
2014, the Company had not yet commenced operations. All activity through April 30, 2014 relates to the Company’s formation,
initial public offering of its securities and the identification and investigation of a suitable operating business or assets with
which to complete an Acquisition Transaction.



On June 16, 2014, a Stock Purchase Agreement
(the “Red Rock Agreement”) was entered into by and among CIS, Red Rock Holdings Group, LLC, a Delaware Limited Liability
company (“Red Rock” or the “Target”), and Foster Jennings, Inc., Red Rock’s sole member (the “Member”).
Since the Company entered into the Agreement on June 16, 2014, and filed with the SEC a tender offer on June 23, 2014, the time
period for closing the Acquisition Transaction was automatically extended to September 21, 2014. Red Rock defaulted on its obligation
under the Red Rock Agreement. On September 16, 2014, CIS terminated the Red Rock Agreement as it did not provide audited financial
statements.



On September 16, 2014, a Stock Purchase
Agreement (the “Agreement”) was entered into by and among CIS, Delta Advanced Materials Limited, a Hong Kong company
(“Delta”) and Elite Ride Limited, a British Virgin Islands company (“Delta’s Parent”) and the Elite
Ride Limited Shareholders (“Elite Shareholders”).



Critical Accounting Policies



Fair Value



The carrying amounts of cash, cash equivalents,
restricted cash, and accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these
instruments.



Fair value is defined as an exit price,
representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction
between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants
would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair
value as follows:



|Level 1. | Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                               
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 2. | Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
|Level 3. | Significant unobservable inputs that cannot be corroborated by market data.                                                                                                                                                        



Derivative Warrant Liabilities



The Company accounts for the 4,000,000
public warrants and 4,500,000 placement warrants in accordance with the guidance contained in ASC 815-40-15-7D whereby under that
provision they do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies
the warrant instrument as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date
until exercise, redemption or expiration, and any change in fair value is recognized in the Company’s statements of operations.



68







Ordinary Shares Subject to Possible
Conversion



The ordinary public
shares contain a redemption feature. In accordance with ASC 480, “Distinguishing Liabilities from Equity” (“ASC
480”), redemption provisions not solely within the control of the Company require the security to be classified outside of
permanent equity.



Accordingly, 3,500,000
of the 4,000,000 public shares were classified outside of permanent equity at redemption value because the redemption rights are
subject to the occurrence of certain events that are outside of the Company’s control. The redemption value at October 31,
2013 was equal to approximately the pro rata share of the aggregate amount then on deposit in the Trust Account ($10.40 per share
at October 31, 2013).



Status as Emerging Growth Company



We are an emerging growth company as defined
in the JOBS Act. As an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that
have different effective dates for public and private companies until those standards apply to private companies. As such, our
financial statements may not be comparable to companies that comply with public company effective dates.



Results of Operations



Six Months Ended April 30, 2014 and
2013



Our entire activity from inception up to
the closing of our initial public offering on December 21, 2012 was in preparation for that event. Since the offering, our activity
has been limited to the evaluation of business combination candidates, and we will not be generating any operating revenues until
the closing and completion of our initial business combination. We expect to generate small amounts of non-operating income in
the form of interest income on cash and cash equivalents.



We incurred net losses of $265,132 and
$4,068,131, for the six months ended April 30, 2014 and April 30, 2013, respectively. Our net losses for the six months ended April
30, 2014 and April 30, 2013 included (i) legal and professional fees of $234,406 and $23,332, respectively, which were incurred
principally in connection with our formation, the pursuit of our Acquisition Transaction and to comply with our public company
reporting obligations, (ii) amounts paid to CIS Acquisition Holding Co. Ltd. for office space, administrative services and secretarial
support of $45,000 and $30,000, (iii) general and administrative expenses of $38,506 and $26,780 and (iv) a benefit (charge) of
$45,000 and ($3,995,000) to record the change in fair value and initial fair value, of the warrant derivative liability for public
warrants and the placement warrants (See discussion below).



While preparing its balance sheet as of
April 30, 2013, the Company identified and corrected an error related to the accounting for the Company’s outstanding warrants.
The amount of the error was approximately $3,570,000 as of December 21, 2012. The Company determined that its outstanding warrants
should have been accounted as a liability recorded at fair value and that this liability should be re-measured at each reporting
period with changes in fair value being reflected in the statement of operations. The determination of this accounting methodology
was made as a result of potential adjustments to the exercise price of the warrants in certain circumstances as described in the
warrant agreements which do not meet the criteria for equity treatment described in ASC 815-45-7D.



In accordance with Securities and Exchange
Commission ("SEC") Staff Accounting Bulletin Nos. 99 and 108 (“SAB 99” and “SAB 108”), the Company
has evaluated these errors, based on an analysis of quantitative and qualitative factors, as to whether they were material to each
of the prior reporting periods affected and if amendments of previously filed Reports of Foreign Private Issuer on Form 6-K with
the SEC are required. The Company has determined that though quantitatively and qualitatively material to the previously furnished
balance sheet dated December 21, 2012 on Form 6-K filed with the SEC on December 28, 2012, the Company believes the recording of
the warrants as liability instruments would not have influenced an investor’s decision making process and has determined
to record the liability as of April 30, 2013, as opposed to a restatement and reissuance of the previously furnished balance sheet.
For the six months ended April 30, 2013, the charge of $3,995,000 for the fair value of the warrant liability represents the effect
of the fair value upon issuance of $3,570,000, plus the adjustment to fair value of $425,000 through April 30, 2013.



69







Year ended October 31, 2013 Compared
to the Period November 28, 2011(inception) through October 31, 2012



Our entire activity from inception up to
the closing of our initial public offering on December 21, 2012 was in preparation for that event. Since the offering, our activity
has been limited to the evaluation of business combination candidates, and we will not be generating any operating revenues until
the closing and completion of our initial business combination. We expect to generate small amounts of non-operating income in
the form of interest income on cash and cash equivalents.



We incurred net losses of $3,429,198, $4,873
and $3,434,071 for the year ended October 31, 2013, for the period November 28, 2011 (inception) through October 31, 2012 and for
the period from November 28, 2011 (inception) through October 31, 2013, respectively. Our net losses for the year ended October
31, 2013, for the period November 28, 2011 (inception) through October 31, 2012 and for the period from November 28, 2011 (inception)
through October 31, 2013 included (i) legal and professional fees of $95,252, $4,873 and $100,125 which were incurred principally
in connection with our formation, the pursuit of an Acquisition Transaction and to comply with our public company reporting obligations,
(ii) amounts paid to CIS Acquisition Holding Co. Ltd. for office space, administrative services and secretarial support of $75,000,
$0 and $75,000, (iii) general and administrative expenses of $43,567, $0 and $43,567, which included a charge of $5,000 for a theft
loss in connection with an unrecovered loss from an unauthorized bank transaction and (iv) a charge of $3,230,000, $0 and $3,230,000
to record the fair value of the warrant derivative liability for public warrants and the placement warrants (See discussion below).



As discussed above, while preparing its
balance sheet as of April 30, 2013, the Company identified and corrected an error related to the accounting for the Company’s
outstanding warrants. The amount of the error was approximately $3,570,000 as of December 21, 2012.



In accordance with SEC SAB 99 and SAB 108,
the Company has evaluated these errors, based on an analysis of quantitative and qualitative factors, as to whether they were material
to each of the prior reporting periods affected and if amendments of previously filed Reports of Foreign Private Issuer on Form
6-K with the SEC are required. The Company has determined that though quantitatively and qualitatively material to the previously
furnished balance sheet dated December 21, 2012 on Form 6-K filed with the SEC on December 28, 2012 , the Company believes the
recording of the warrants as liability instruments would not have influenced an investor’s decision making process and has
determined to record the liability in the year ended October 31, 2013, as opposed to a restatement and reissuance of the previously
furnished balance sheet. The charge of $3,230,000 to record the fair value of the warrant liability represents the effect of the
fair value upon issuance of $3,570,000, net of the adjustment to fair value of $340,000 through October 31, 2013.



Financial Condition and Liquidity



The net proceeds from our IPO and Private
Placement, after deducting offering expenses of $718,809 and underwriting discounts of $720,000, were $41,938,911. Of this amount,
$41,600,000 was placed in the trust account. The remaining $338,191 of net proceeds not in trust have been and will continue to
be used for working capital purposes.



We intend to use the net proceeds
of our initial public offering and private placement sale of warrants, including the funds held in the trust account, to acquire
a target business and to pay our expenses relating thereto. To the extent that our capital stock is used in whole or in part as
consideration to effect a business combination, the remaining proceeds held in the trust account as well as any other net proceeds
not expended will be used as working capital to finance the operations of the target business. Such working capital funds could
be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions
and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating
expenses or finders’ fees, which we had incurred prior to the completion of our business combination if the funds available
to us outside of the trust account were insufficient to cover such expenses.



Generally, the proceeds held in the trust
account will not be released to us until the earlier of our completion of an initial business combination and our redemption of
100% of the outstanding public shares upon our failure to consummate a business combination within the required time period. Notwithstanding
the foregoing, there can be released to us from the trust account (1) any interest earned on the funds in the trust account that
we need to pay our income or other tax obligations and (2) any remaining interest earned on the funds in the trust account that
we need for our working capital requirements.



70







As of April 30, 2014, we had $12,648 in
our operating bank accounts and $41,622,401 in restricted cash and equivalents held in trust to be used for an initial business
combination. As of April 30, 2014, we have not withdrawn from the trust account any interest income for our working capital and
tax obligations. As of April 30, 2014, $22,401 of the amount on deposit in the trust account represents interest income, which
was available to be withdrawn by us as described above. As of September 16, 2014, all of our funds are held in cash.



Until consummation of our initial business
combination, we will be using the funds not held in the trust account, plus the interest earned on the trust account balance that
may be released to us to fund our working capital requirements, for identifying and evaluating prospective acquisition candidates,
performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations
of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting
the target business to acquire and structuring, negotiating and consummating the business combination. We believe the funds not
held in trust, plus the interest earned on the trust account balance that may be released to us, plus the remaining borrowing capacity
under our loan agreement with CIS Acquisition Holding Co. Ltd., will be sufficient to fund our operations through at least September
21, 2014, assuming we have not consummated a business combination during that period of time.



If our estimates of the costs of undertaking
in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the
amount of interest available to us from the trust account is less than we expect as a result of the current interest rate environment,
we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need
to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a
significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional
securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we
would only consummate such financing simultaneously with the consummation of our initial business combination. In the current economic
environment, it has become especially difficult to obtain acquisition financing. Following our initial business combination, if
cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.



We anticipate that we will need to use
all of the remaining funds in cash as well as entering into contingent fee arrangements with our vendors in order to meet the
expenditures required for operating our business until we consummate our initial business combination. We may need to raise additional
capital through loans or additional investments from our sponsors, officers, directors or third parties. Our sponsors, officers
and directors are not obligated to loan us funds as may be required. If we consummate our initial business combination, we would
repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the remaining
proceeds held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for
such repayment. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital,
we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to,
curtailing operations, suspending the pursuit of our business plan, and controlling overhead expenses. We cannot provide any assurance
that new financing will be available to us on commercially acceptable terms, if at all.





Commencing on December 18, 2012 and ending
upon the consummation of a business combination or our liquidation, we have agreed to pay to CIS Acquisition Holding Co. Ltd. a
total of $7,500 per month for office space, administrative services and secretarial support for a period commencing on the date
of the IPO and ending on the earlier of our consummation of an acquisition transaction or our liquidation. Such fees have been
paid as incurred only out of interest earned on the trust account or assets not held in trust, if any. If there are insufficient
funds from interest earned on the trust account or from assets not held in trust, then the obligation to CIS Acquisition Holding
Co. Ltd. will be accrued and not paid. During the six months ended April 30, 2014 and April 30, 2013, the Company has incurred
$45,000 and $30,000, respectively, for these office space expenses to CIS Acquisition Holding Co., Ltd.



71







On March 24, 2014, we entered into an agreement
with CIS Acquisition Holding Co. Ltd., under which for one year we may borrow up to $300,000 with no interest. All amounts borrowed
under this agreement are due March 23, 2015. On March 25, 2014 and June 11, 2014, we borrowed $30,000 and
$120,000 under this borrowing arrangement. As of April 30, 2014 and September 16, 2014, a balance of $30,000 and $150,000, respectively,
was outstanding under this loan.



Off-Balance Sheet Arrangements



We did not have any off-balance sheet arrangements as of April
30, 2014.



|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- | ------------------------------------------



A. Directors and Senior Management



Our directors and executive officers immediately
following the consummation of the Business Combination are described in this report under the heading “Directors and Executive
Officers”.



B. Compensation



Delta



Director Compensation



Delta currently
does not pay any compensation to members of its board of directors. Future compensation to be paid to its directors, if any, will
be determined in the future.



Executive Compensation



Overview of Executive Compensation



Delta pays annual
base salaries to each of Xin Chao, Changguang Wu, Jianmin Xia, Ming Chao, and Hong Yan of approximately RMB367,967, RMB238,907,
RMB170,292, RMB29,443, and HK$480,000, respectively, in 2013. We pay annual base salaries to each of Xin Chao, Changguang Wu, Jianmin
Xia, Ming Chao, and Hong Yan of RMB368,889 RMB239,829, RMB57,040, RMB117,624, and HK$480,000, respectively, in 2012.



Grants of Plan Based Awards



None
of the named executives of Delta currently participates in or have account balances in any plan based award programs. Future bonus
plans will be adopted by the board of directors.



Employment Agreements



On June 15, 2007,
Delta entered into an employment agreement with Xin Chao pursuant to which Xin Chao agreed to act as its chairman and Chief Executive
Officer. The employment agreement does not have a definite term. The employment agreement provides for a base salary of RMB462,000
a year, with performance based bonus.



On June 15, 2007,
Delta entered into an employment agreement with Changguang Wu pursuant to which Changguang Wu agreed to act as its general manager.
The employment agreement does not have a definite term. The employment agreement provides for a base salary of RMB289,920 a year,
with performance based bonus.



On September 1,
2012, Delta entered into an employment agreement with Jianmin Xia pursuant to which Jianmin Xia agreed to act as its general manager.
The employment agreement has a term beginning September 1, 2012 and ending December 31, 2017. The employment agreement provides
for a base salary of RMB180,000 a year, with performance based bonus.



72







On October 1,
2012, Delta entered into an employment agreement with Ming Chao pursuant to which Ming Chao agreed to act as its general financial
manager. The employment agreement has a term of three years. The employment agreement provides for a base salary of RMB156,000
a year, with performance based bonus.



On May 1, 2012,
Delta entered into an employment agreement with Hong Yan pursuant to which Hong Yan agreed to act as its Chief Financial Officer.
The employment agreement has a term of three years. The employment agreement provides for a base salary of RMB$480,000 a year,
with performance based bonus.



Outstanding
Equity Awards at Fiscal Year-End; Option Exercises and Stock Vested



As of the date
hereof, none of the named executives of Delta have held compensation based options to purchase interests in Delta or other awards
with values based on the value of Delta.



Pension
Benefits



None of the named
executives of Delta currently participates in or has account balances in qualified or nonqualified defined benefit plans sponsored
by Delta.



Nonqualified
Deferred Compensation



None of the named
executives currently participates in or has account balances in nonqualified defined contribution plans or other deferred compensation
plans maintained by Delta.



CIS



None of our directors or officers have
received any cash compensation for services rendered to us. Our founders own an aggregate of 1,000,000 Class A Shares, which they
acquired for an aggregate purchase price of $25,000. In addition, we issued our founders and their assignees, in a private placement
occurring immediately prior to the consummation of the IPO, 4,500,000 warrants for aggregate consideration of $3,375,000. We believe
that because our officers and directors own such shares and warrants, no compensation (other than reimbursement of out-of-pocket
expenses) is necessary, and such persons have agreed to serve in their respective role without compensation.



We have agreed to pay to CIS Acquisition
Holding Co. Ltd. a total of $7,500 per month for office space, administrative services and secretarial support for a period commencing
on the date of the IPO and ending on the earlier of our consummation of an acquisition transaction or dissolution and liquidation
of the trust account in the event we do not consummate an acquisition transaction within the relevant time period. Such fees have
been paid as incurred only out of interest earned on the trust account or assets not held in trust, if any. If there are insufficient
funds from interest earned on the trust account or from assets not held in trust, then the obligation to CIS Acquisition Holding
Co. Ltd. will be accrued and not paid. CIS Acquisition Holding Co. Ltd. is an affiliate of Anatoly Danilitskiy, our Chairman and
Chief Executive Officer, and Taras Vazhnov, our director. This arrangement was agreed to by the board of directors for our benefit
and is not intended to provide Messrs. Danilitskiy or Vazhnov compensation.



Other than this $7,500 per month fee, no
compensation of any kind, including finder’s and consulting fees, will be paid to our officers, directors or any of their
respective affiliates for services rendered prior to or in connection with an acquisition transaction. However, our officers, directors
and their respective affiliates will receive reimbursement for any reasonable out-of-pocket expenses incurred by them in connection
with identifying, investigating and consummating a potential acquisition transaction with one or more target businesses. There
are no limitations on the amount of expenses for which they can seek reimbursement, provided such expenses were incurred for our
benefit. There will be no review of the reasonableness of the expenses by anyone other than our board of directors, which includes
persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged. To the extent such
out-of-pocket expenses exceed the available proceeds not deposited in the trust account, such out-of-pocket expenses would not
be reimbursed by us unless we consummate our initial acquisition transaction.



73







Although we currently anticipate that some
members of our management team will remain with us post-acquisition transaction, some or all of our current executive officers
and directors may or may not remain with us following our initial acquisition transaction, depending on the type of business acquired
and the industry in which the target business operates. After the acquisition transaction, our directors and officers who remain
with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed
to shareholders, to the extent then known, in the prospectus/proxy solicitation or tender offer materials furnished to our shareholders.
It is unlikely that the amount of such compensation will be known at the time of an acquisition transaction, as it will be up to
the directors of the post-transaction business to determine executive and director compensation. We cannot assure you that our
current executive officers and directors will be retained in any significant role, or at all, and have no ability to determine
what remuneration, if any, will be paid to them if they are retained following our initial acquisition transaction.



We have not set aside any amount of assets
for pension or retirement benefits.



Any compensation to be paid to our chief
executive officer and other officers will be determined, or recommended to the board of directors for determination, either by
a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board
of directors.



Employment Agreements



On January 10, 2012, we entered into an
agreement with Kyle Shostak and CIS Acquisition Holding Co. Ltd., our majority shareholder, pursuant to which we and CIS Acquisition
Holding Co. Ltd. agreed that Mr. Shostak shall serve as our Chief Financial Officer, Secretary and a director until the closing
of an initial acquisition transaction. We also agreed to sell to Mr. Shostak 110,250 placement warrants immediately prior to the
consummation of this offering on the same terms as are offered to CIS Acquisition Holding Co. Ltd. In the event that the over-allotment
option granted to the underwriters in this offering is not exercised in full, Mr. Shostak agreed to return for cancellation a pro-rata
portion of the Class C Shares he holds immediately prior to the consummation of this offering. Mr. Shostak does not receive any
other compensation for services rendered to us, other than reimbursements for business-related expenses incurred in the course
of his duties as our officer.



Other than as disclosed above, we have
not entered into any employment agreements with our executive officers, and have not made any agreements to provide benefits upon
termination of employment.



C. Board Practices



Board Committees



Our Board of Directors has established
an audit committee, a compensation committee and a governance and nominating committee.



Audit Committee.  Immediately
following the transaction contemplated by the Purchase Agreement, the audit committee consists of David Chi-Ping Chow, Richard
Liu and George Kaufman. David Chi-Ping Chow is the chair of the audit committee, and our Board of Directors believes that Mr. Chow
qualify as “audit committee financial experts”, as such term is defined in the rules of the Securities and Exchange
Commission. David Chi-Ping Chow serves as Chair of the Audit Committee.



The Board of Directors has adopted an audit
committee charter, providing for the following responsibilities of the audit committee:



| | • | appointing and replacing our independent auditors and pre-approving all auditing and permitted non-auditing services to be performed by the independent auditors;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | reviewing and discussing the annual audited financial statements with management and the independent auditors;
| | - | --------------------------------------------------------------------------------------------------------------



| | • | annually reviewing and reassessing the adequacy of our audit committee charter;
| | - | -------------------------------------------------------------------------------



74







| | • | such other matters that are specifically delegated to our audit committee by our Board of Directors from time to time;
| | - | ----------------------------------------------------------------------------------------------------------------------



| | • | meeting separately and periodically with management, the internal auditors and the independent auditors; and
| | - | ------------------------------------------------------------------------------------------------------------



| | • | reporting regularly to the Board of Directors.
| | - | ----------------------------------------------



Compensation Committee.  Immediately
following the transaction contemplated by the Purchase Agreement, our compensation committee consists of David Chi-Ping Chow, Richard
Liu and George Kaufman. The members of the compensation committee do not have any direct or indirect material relationship with
us other than as a director. George Kaufman serves as Chair of the Compensation Committee.



Our Board of Directors adopted a compensation
committee charter, providing for the following responsibilities of the compensation committee:



| | • | reviewing and making recommendations to the board regarding our compensation policies and forms of compensation provided to our directors and officers;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | reviewing and making recommendations to the board regarding bonuses for our officers and other employees;
| | - | ---------------------------------------------------------------------------------------------------------



| | • | administering our incentive-compensation plans for our directors and officers;
| | - | ------------------------------------------------------------------------------



| | • | reviewing and assessing the adequacy of the charter annually;
| | - | -------------------------------------------------------------



| | • | administering our share option plans, if they are established in the future, in accordance with the terms thereof; and
| | - | ----------------------------------------------------------------------------------------------------------------------



| | • | such other matters that are specifically delegated to the compensation committee by our Board of Directors from time to time.
| | - | -----------------------------------------------------------------------------------------------------------------------------



Governance and Nominating Committee.  Immediately
following the transaction contemplated by the Purchase Agreement, our governance and nominating committee consists of David Chi-Ping
Chow, Richard Liu and George Kaufman. The members of the governance and nominating committee do not have any direct or indirect
material relationship with us other than as a director. Richard Liu serves as Chair of the Governance and Nominating Committee.



Our Board of Directors adopted a governance
and nominating committee charter, providing for the following responsibilities of the governance and nominating committee:



| | • | overseeing the process by which individuals may be nominated to our Board of Directors;
| | - | ---------------------------------------------------------------------------------------



| | • | identifying potential directors and making recommendations as to the size, functions and composition of our Board of Directors and its committees;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



| | • | reviewing candidates proposed by our stockholders;
| | - | --------------------------------------------------



| | • | developing the criteria and qualifications for the selection of potential directors; and
| | - | ----------------------------------------------------------------------------------------



| | • | making recommendations to the Board of Directors on new candidates for board membership.
| | - | ----------------------------------------------------------------------------------------



In making nominations, the governance and
nominating committee is required to submit candidates who have the highest personal and professional integrity, who have demonstrated
exceptional ability and judgment and who shall be most effective, in conjunction with the other nominees to the board, in collectively
serving the long-term interests of the stockholders. In evaluating nominees, the governance and nominating committee is required
to take into consideration the following attributes, which are desirable for a member of the board: leadership, independence, interpersonal
skills, financial acumen, business experiences, industry knowledge, and diversity of viewpoints.



75







Code of Ethics



On March 19, 2012, our Board of Directors
adopted a code of ethics that applies to our directors, officers and employees.



Director Independence



Our Board of Directors has determined that
David Chi-Ping Chow, Richard Liu and George Kaufman qualify as independent directors under the rules of the Nasdaq Marketplace
Rules because they are not currently employed by us, and do not fall into any of the enumerated categories of people who cannot
be considered independent in the Nasdaq Marketplace Rules.



D. Employees



As of the closing of the Business Combination,
Delta has a total of 309 full-time employees, all of whom are located in Zhenjiang, Jiangsu Province, the PRC. Delta does not experience
any significant seasonal fluctuations in its number of employees. The number of temporary employees employed by it during the periods
under review was insignificant.



None of Delta’s employees are represented
by a union. Delta believes that its relationship with its employees has historically been good and this is expected to continue.



The functional distribution of Delta’s
full-time employees as of the date of this report is as follows:



|Function                            |  | Number |    
|----------------------------------- |  | ------ | ---
|Management                          |  |        | 6  
|Sales and marketing                 |  |        | 8  
|Research and Development            |  |        | 28 
|Safety and environmental protection |  |        | 19 
|Production                          |  |        | 24 
|Procurement                         |  |        | 5  
|New Material                        |  |        | 49 
|Logistics                           |  |        | 20 
|Quality control                     |  |        | 13 
|Administration                      |  |        | 35 
|Production workers                  |  |        | 102
|Total                               |  |        | 309



E. Share Ownership



The following table sets forth information
regarding the beneficial ownership of our ordinary shares as of September 23, 2014, giving effect to the transactions contemplated
by the Purchase Agreement:



| | · | each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;
| | - | ------------------------------------------------------------------------------------------------------
| | · | each of our executive officers and directors; and                                                     
| | · | all our executive officers and directors as a group.                                                  



76







Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially
owned by them. The following table does not include securities underlying warrants or options that are not exercisable within 60
days of September 23, 2014. All shares have identical voting rights.



|Name and Address of Beneficial Owner(1)                         |  | Amount of Beneficial Ownership |           |  | ApproximatePercentage ofOutstandingOrdinaryShares(2) | 
|--------------------------------------------------------------- |  | ------------------------------ | --------- |  | ---------------------------------------------------- | 
|Directors and Executive Officers:                               |  |                                |           |  |                                                      | 
|Xin Chao, CEO and Chairman (3)                                  |  |                                | 2,410,200 |  |                                                      | 
|Richard Yan, CFO                                                |  |                                | 27,600    |  |                                                      | 
|David Chi-Ping Chow, Director                                   |  |                                | 0         |  |                                                      | 
|Richard Liu, Director                                           |  |                                | 0         |  |                                                      | 
|Changguang Wu, Director                                         |  |                                | 0         |  |                                                      | 
|George Kaufman, Director                                        |  |                                | 0         |  |                                                      | 
|All directors and executive officers as a group (6 individuals) |  |                                | 2,437,800 |  |                                                      | 
|Five Percent Holders:                                           |  |                                |           |  |                                                      | 
|CIS Acquisition Holding Ltd. (4)                                |  |                                | 1,463,250 |  |                                                      | 
|Master Kingdom Holdings Ltd. (3)                                |  |                                | 2,410,200 |  |                                                      | 
|KIP Growth Capital Fund No. 17 (5)                              |  |                                | 967,900   |  |                                                      | 
|KPCB China Fund, L.P. (6)                                       |  |                                | 992,200   |  |                                                      | 



*Less than one percent



| | (1) | Unless otherwise noted, the business address for each of our beneficial owners is c/o CIS Acquisition Ltd., 16 Kaifada Road, Danyang, Jiangsu, China.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Based on 7,033,059 ordinary shares
    outstanding (excluding 3,500,000 Class A shares subject to redemption and 1,500,000 Class C shares subject to certain
    net     income performance targets). Does     not     include
    ordinary     shares     underlying the     warrants underlying the units sold in the IPO and the     placement     warrants
    which     will not     become     exercisable     within the next 60     days.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Held through Master Kingdom Holdings Ltd. (“Master Kingdom”). Mr. Xin Chao is the owner of Master Kingdom and as such, is deemed to hold voting and dispositive power of the securities held by Master Kingdom.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Messrs. Danilitskiy and Vazhnov share voting and dispositive power over the founders’ shares owned by CIS Acquisition Holding Co. Ltd. CIS Acquisition Holding Co. Ltd. is owned by Zelda Finance Ltd. and SPAC Investments Ltd. Anatoly Danilitskiy controls Zelda Finance Ltd. and Taras Vazhnov controls SPAC Investments Ltd. The business address of Zelda Finance Ltd. is Withfield Tower, 3rd floor, 4792 Coney Drive, Belize City, Belize. The mailing address of SPAC Investments Ltd. is FH Chambers, P.O. Box 4649, Road Town, Tortola, British Virgin Islands.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Korean Investment Partners Co., Ltd.
        (“KIP”), as the general investor of KIP Growth Capital Fund No. 17 (“KIPGCF”), has voting and
        investment power over securities held by KIPGCF. The address of KIPGCF is 2bfl., Gangnam Finance Center 737 Yeoksam-dong,
        Gangnam-gu, Seoul, Korea.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | KPCB China Associates, Ltd. is the
    general manager of KPCB China Fund, L.P. (“KPCB”) and holds voting and dispositive power of the securities held
    by KPCB. The address for KPCB is P.O. Box 309, GT Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman Islands.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------- | -------------------------------------------------



A. Major Shareholders



Please refer to Item 6 “Directors,
Senior Management and Employees—E. Share Ownership.”



77







B. Related Party Transactions



As of June 30, 2014, 2013 and 2012, Delta
had short-term borrowings from banks which were repayable within one year and charged at interest rates ranging from 3.9% to 8.7%,
from 2.5% to 9.0% and from 2.5% to 10.4% per annum, respectively. Such borrowings primarily consist of loans denominated in Renminbi,
and U.S. dollars. Bank borrowings are secured over certain bank deposits, certain trade receivables, certain plant and machinery,
and certain land use rights. The bank borrowings are guaranteed by a number of unrelated parties, as well as Mr. Changguang Wu
for the year ended June 30, 2014 and Mr. Xin Chao, the immediate and ultimate controlling party of Delta for the years ended June
30, 2014, 2013 and 2012.



C. Interests of Experts and Counsel



Not applicable.



|ITEM 8. | FINANCIAL INFORMATION
|------- | ---------------------



A. Consolidated Statements and Other
Financial Information



Financial Statements



We have appended consolidated financial
statements filed as part of this report. See Item 18 “Financial Statements.”



Legal Proceedings



We are not involved in any other legal
proceedings. We have no knowledge of any proceedings pending or threatened against any of our subsidiaries or any facts likely
to give rise to any litigation, claims or proceedings which might have a material effect on its financial position or profitability.



B. Significant Changes



None.





|ITEM 9. | THE OFFER AND LISTING
|------- | ---------------------



A. Offer and Listing Details



Our units, shares and warrants have been
listed on the NASDAQ Capital Market under the symbols CISAU, CISAA and CISAW, since December 19, 2012. The following tables set
forth, for the calendar quarters indicated and through September 23, 2014, the high and low sale prices for our units, shares and
warrants, as reported on NASDAQ for the periods presented.



78







|                                                                 |  | Units (CISAU) |       |  | Shares (CISAA) (1) |   |       | Warrants(CISAW) (1) | 
|---------------------------------------------------------------- |  | ------------- | ----- |  | ------------------ | - | ----- | ------------------- | 
|                                                                 |  | High          |       |  | Low                |   |       | High                | 
|Annual Highs and Lows                                            |  |               |       |  |                    |   |       |                     | 
|Fiscal Year Ended October 31, 2012                               |  | $             | -     |  |                    | $ | -     |                     | 
|Fiscal Year Ended October 31, 2013 (1)                           |  | $             | 10.44 |  |                    | $ | 10.01 |                     | 
|Quarterly Highs and Lows                                         |  |               |       |  |                    |   |       |                     | 
|2012                                                             |  |               |       |  |                    |   |       |                     | 
|Fourth Quarter (Fiscal quarter ended October 31, 2012)           |  | $             | -     |  |                    | $ | -     |                     | 
|2013                                                             |  |               |       |  |                    |   |       |                     | 
|First Quarter (Fiscal quarter ended January 31, 2013)            |  | $             | 10.25 |  |                    | $ | 10.00 |                     | 
|Second Quarter (Fiscal quarter ended April 30, 2013) (1)         |  | $             | 10.25 |  |                    | $ | 10.04 |                     | 
|Third Quarter (Fiscal quarter ended July 31, 2013)               |  | $             | 10.29 |  |                    | $ | 10.07 |                     | 
|Fourth Quarter (Fiscal quarter ended October 31, 2013)           |  | $             | 10.44 |  |                    | $ | 10.20 |                     | 
|2014                                                             |  |               |       |  |                    |   |       |                     | 
|First Quarter (Fiscal quarter ended January 31, 2014)            |  | $             | 11.05 |  |                    | $ | 10.25 |                     | 
|Second Quarter (Fiscal quarter ended April 30, 2014)             |  | $             | 10.51 |  |                    | $ | 10.27 |                     | 
|Third Quarter (Fiscal quarter ended quarter ended July 30, 2014) |  | $             | 10.67 |  |                    | $ | 10.30 |                     | 
|Fourth Quarter (Through September 23, 2014)                      |  | $             | 10.65 |  |                    | $ | 10.19 |                     | 
|                                                                 |  |               |       |  |                    |   |       |                     | 
|Monthly Highs and Lows                                           |  |               |       |  |                    |   |       |                     | 
|November 2013                                                    |  | $             | 10.43 |  |                    | $ | 10.35 |                     | 
|December 2013                                                    |  | $             | 10.39 |  |                    | $ | 10.25 |                     | 
|January 2014                                                     |  | $             | 11.05 |  |                    | $ | 10.32 |                     | 
|February 2014                                                    |  | $             | 10.51 |  |                    | $ | 10.27 |                     | 
|March 2014                                                       |  | $             | 10.65 |  |                    | $ | 10.33 |                     | 
|April 2014                                                       |  | $             | 10.58 |  |                    | $ | 10.35 |                     | 
|May 2014                                                         |  | $             | 10.55 |  |                    | $ | 10.35 |                     | 
|June 2014                                                        |  | $             | 10.67 |  |                    | $ | 10.38 |                     | 
|July 2014                                                        |  | $             | 10.52 |  |                    | $ | 10.30 |                     | 
|August 2014                                                      |  | $             | 10.33 |  |                    | $ | 10.19 |                     | 
|September 2014 (through September 23, 2014)                      |  | $             | 10.65 |  |                    | $ | 10.28 |                     | 



(1) Such shares and warrants were eligible to begin separately
trading on March 18, 2012.



B. Plan of Distribution



Not applicable.



C. Markets



See our disclosures above under “A. Offer and Listing
Details.”



D. Selling Shareholders



Not applicable.



79







E. Dilution



Not applicable.



F. Expenses of the Issue



Not applicable.



|ITEM 10. | ADDITIONAL INFORMATION
|-------- | ----------------------



A. Share Capital



Our Amended and Restated Memorandum and
Articles of Association authorizes the issuance of up to 150,000,000 shares into: (i) 25,000,000 Class A Shares; (ii) 25,000,000
Class B shares; (iii) 25,000,000 Class C shares; (iv) 75,000,000 ordinary shares each par value $0.0001 per share, and 5,000,000
shares of preferred shares, par value $0.0001 per share.





As of October 31, 2013, there were
5,136,000 ordinary shares outstanding (including 3,500,000 ordinary shares subject to redemption). As of September 23, 2014, there were
7,033,059 ordinary shares outstanding (excluding 1,500,000 Class C Shares in escrow that are subject to certain net income
targets and after giving effect to the redemption of 3,500,000 Class A Shares).



As of October 31, 2013 and September
23, 2014, we had 4,000,000 public warrants and 4,500,000 CIS Placement Warrants outstanding, as well as a unit purchase
option (“UPO”) for the purchase of 280,000 units. Each public warrant entitles the holder to purchase one share
of common stock at a price of $10.00. In connection with the Acquisition, the CIS Sponsor amended the 4,500,000 CIS
Placement Warrants owned by the CIS Sponsor to provide that such warrants may be redeemed in the event CIS Common Stock
trades at a price of $17.50 per share for a period of ten (10) consecutive trading days and that such warrants may not be
exercised on a cashless basis. The holder of the UPO is entitled to purchase each unit at a price of $12.00 per unit. Each
unit is comprised of one ordinary share and one warrant.



B. Memorandum and Articles of Association



The following represents a summary of
certain key provisions of our articles of incorporation and bylaws. The summary does not purport to be a summary of all of the
provisions of our articles of incorporation and bylaws. For more complete information you should read our amended and restated
articles of incorporation and bylaws, each listed as an exhibit to this report.



Summary



Registered Office. Under our Amended and
Restated Memorandum of Association, the address of our registered office is FH Chambers, P.O. Box 4649, Road Town, Tortola, British
Virgin Islands.



Objects and Purposes. Under Clause 4(1)
of our Amended and Restated Memorandum of Association, we have the capacity to carry on or undertake any business or activity.



Directors. Under Article 74 of our Articles
of Association, no contract or transaction between us and one or more of our Directors (an “Interested Director”) or
officers, or between us and any of their affiliates (an “Interested Transaction”), will be void or voidable solely
for this reason, or solely because the director or officer is present at or participates in the meeting of our board or committee
which authorizes the contract or transaction, or solely because any such director’s or officer’s votes are counted
for such purpose, if:



| | (a) | The material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the our Board of Directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or
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| | (b) | The material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to our shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of our shareholders; or
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| | (c) | The contract or transaction is fair as to us as of the time it is authorized, approved or ratified, by the board, a committee or the Shareholders.
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A majority of independent directors must
vote in favor of any Interested Transaction and determine that the terms of the Interested Transaction are no less favorable to
us than those that would be available to us with respect to such a transaction from unaffiliated third parties.



Our board shall review and approve all
payments made to the founders, officers, directors, special advisors, consultants and their respective affiliates, other than the
payment of an aggregate of $7,500 per month to CIS Acquisition Holding Co. Ltd., an affiliate of Anatoly Danilitskiy, our former
Chairman and Chief Executive Officer, and Taras Vazhnov, our former director, for office space, administrative services and secretarial
support, and any Interested Director shall abstain from such review and approval. Such fees have been paid as incurred only out
of interest earned on the trust account or assets not held in trust, if any. If there are insufficient funds from interest earned
on the trust account or from assets not held in trust, then the obligation to CIS Acquisition Holding Co. Ltd. will be accrued
and not paid.



Rights, Preferences and Restrictions Attaching
to Our Ordinary Shares. We are authorized to issue 155,000,000 shares divided into: (i) 25,000,000 Class A Shares; (ii) 25,000,000
Class B Shares; (iii) 25,000,000 Class C shares; (iv) 75,000,000 ordinary shares; and (v) 5,000,000 preferred shares, each par
value $0.0001 per share. As of September 23, 2014,7,033,059 ordinary shares were outstanding (excluding 1,500,000 Class C Shares
in escrow that are subject to certain net income targets and after giving effect to the redemption of 3,500,000 Class A Shares).
Each share, regardless if it is part of a class of ordinary shares, has the right to one vote at a meeting of shareholders or
on any resolution of shareholders, the right to an equal share in any dividend paid by us, and the right to an equal share in
the distribution of surplus assets. We may by a resolution of the Board of Directors redeem our shares for such consideration
as the Board of Directors determines.



Alteration of Rights. If, at any time,
our authorized number of shares is divided into different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) may, whether or not we are being wound-up, be varied with the consent
in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by a
majority of the votes cast at a separate meeting of the holders of the shares of the class at which meeting the necessary quorum
shall be two persons at least holding or representing by proxy one-third of the issued shares of the class.



Meetings. At least 10 days’ (exclusive
of the date that notice is given and the date on which event for which notice is given is to take effect) notice of a meeting shall
be given to each shareholder entitled to attend and vote thereat, stating the date, place, and time at which the meeting is to
be held, and if different, the record date for determining shareholders entitled to attend and vote at the meeting, and the general
nature of the business to be conducted at the meeting. A meeting shall, notwithstanding the fact that it is called on shorter notice
than otherwise required, be deemed to have been properly called if it is attended, or such notice is waived, by 90% of the shareholders
entitled to attend and vote thereat. The inadvertent failure to give notice of a meeting to, or the non-receipt of a notice of
a meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.



Limitations on the Right to Own Securities.
There are no limitations on the rights to own our securities, or limitations on the rights of non-resident or foreign shareholders
to hold or exercise voting rights on our securities, contained in our Amended and Restated Memorandum and Articles of Association
(or under British Virgin Islands law).



Provisions relating to the acquisition transaction



Our Amended and Restated Memorandum and
Articles of Association sets forth certain requirements and restrictions relating to the IPO that apply to us until the consummation
of our initial acquisition transaction or post-acquisition tender offer, as the case may be. Specifically, our Amended and Restated
Memorandum and Articles of Association provide that:



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| | · | if we have entered into a letter of intent, agreement in principle or definitive agreement with respect to an acquisition transaction on or before June 21, 2014 and an initial filing with the SEC of a tender offer, proxy, or registration statement is made by such date, then the date before which we must complete our initial acquisition transaction will automatically be extended to September 21, 2014;
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| | · | we may consummate our initial acquisition transaction only if public shareholders owning no more than 87.5% of the ordinary shares sold in the IPO exercise, or may exercise, their redemption rights;
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| | · | if we have not completed an initial acquisition transaction within 18 months (or 21 months pursuant to the automatic period extension, as described above), we will dissolve and liquidate the trust account and distribute to public shareholders a pro rata share of the trust account determined by dividing the total amount in the trust account by the number of shares sold in the IPO (initially $10.40 per share), plus any remaining net assets;
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| | · | our management will take all actions necessary to liquidate our trust account to our public shareholders as part of our plan of dissolution if an acquisition transaction is not consummated within the time periods specified in this report;
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| | · | our public shareholders’ rights to receive a portion of the trust account is limited to the extent that they may receive only a portion of the trust account and only upon liquidation of our trust account in the event we do not consummate an acquisition transaction within 18 months (or 21 months pursuant to the automatic period extension, as described above) following the consummation of the IPO or upon the exercise of their redemption rights in connection with the consummation of an acquisition transaction;
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| | · | our initial acquisition transaction must be with one or more operating businesses whose fair market value, either individually or collectively, is equal to at least 80% of the amount in the trust account (excluding taxes payable) at the time of such acquisition transaction;
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| | · | following the IPO and prior to the time that we liquidate the trust account, we will not issue any securities that participate in the proceeds of our initial public offering that are held in the trust account or that have a vote in connection with any matter related to our initial acquisition transaction;
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| | · | the Board of Directors shall review and approve all payments made to our founders, officers, directors, special advisors, consultants, and their respective affiliates with any interested director abstaining from such review and approval, other than the payment of an aggregate of $7,500 per month to CIS Acquisition Holding Co. Ltd. for office space, administrative services and secretarial support. Such fees have been paid as incurred only out of interest earned on the trust account or assets not held in trust, if any. If there are insufficient funds from interest earned on the trust account or from assets not held in trust, then the obligation to CIS Acquisition Holding Co. Ltd. will be accrued and not paid.
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| | · | we may not to enter into any transaction with any of our officers, directors or any of our or their respective affiliates without the prior approval by a majority of our disinterested directors, and unless our disinterested directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties; and
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| | · | we may not (i) consummate an acquisition transaction with a target business that is a portfolio company of, or has otherwise received a financial investment from, our founders or their affiliates, or that is affiliated with our founders or our directors or officers, or (ii) consummate an acquisition transaction with any underwriter, or underwriting selling group member, or any of their affiliates, unless in each case we obtain an opinion from an unaffiliated, independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, that an acquisition transaction with such target business is fair to our shareholders from a financial point of view.
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Pursuant to our Amended and Restated Memorandum
and Articles of Association, the foregoing provisions may be amended by at least 80% of the voting power of the total number of
ordinary shares that were issued in the IPO. In addition, the relevant portions of the agreement governing the trust account can
only be amended with the consent of 80% of the voting power of the callable Class A Shares or the callable Class B Shares. The
agreement governing the trust account does not require consent of 100% of the voting power of the callable Class A Shares or the
callable Class B Shares because we believe that it is in the best interest of our shareholders to allow a substantial majority
of our public shareholders to amend the terms of the agreement if they so desire. Except for the shares issued immediately prior
to the IPO and the callable Class A Shares underlying the units issued in connection with the IPO, we will not issue securities
with voting rights to vote on any proposals to amend our Amended and Restated Memorandum and Articles of Association prior to the
time that we liquidate the trust account. These provisions could also be eliminated by our completing a very small acquisition
with minimal assets and operations. If any of these provisions are amended or eliminated, our shareholders:



| | · | may not have all of the rights they previously had;
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| | · | might not receive the amount anticipated in connection with a redemption or liquidation; and
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| | · | might not receive amounts from the trust account in the time frames specified in this report.
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In addition, our Amended and Restated Memorandum
and Articles of Association provide shareholders with redemption rights only in connection with an acquisition transaction. In
the event that a vote is called not in connection with an acquisition transaction to consider other amendments to our Amended and
Restated Memorandum and Articles of Association no redemption rights will be granted.



C. Material Contracts



Information concerning our material contracts
governing the business of the Company is included elsewhere in this report or in the information incorporated by reference herein.



See the description of the Voting Agreement,
the Registration Rights Agreement and the Call Agreement under Item 4. A.



D. Exchange Controls



BVI Exchange Controls



There are no material exchange controls
restrictions on payment of dividends, interest or other payments to the holders of our ordinary shares or on the conduct of our
operations in the BVI. There are no material BVI laws that impose any material exchange controls on us or that affect the payment
of dividends, interest or other payments to nonresident holders of Delta ordinary shares. BVI law and Delta’s memorandum
and articles of association do not impose any material limitations on the right of non-residents or foreign owners to hold or vote
its ordinary shares.



PRC Exchange Controls



Under the Foreign Currency Administration
Rules promulgated in 1996 and revised in 1997, and various regulations issued by SAFE and other relevant PRC government authorities,
RMB is convertible into other currencies without prior approval from SAFE only to the extent of current account items, such as
trade related receipts and payments, interest and dividends and after complying with certain procedural requirements. The conversion
of RMB into other currencies and remittance of the converted foreign currency outside PRC for the purpose of capital account items,
such as direct equity investments, loans and repatriation of investment, requires the prior approval from SAFE or its local office.
Payments for transactions that take place within China must be made in RMB. Unless otherwise approved, PRC companies must repatriate
foreign currency payments received from abroad. Foreign-invested enterprises may retain foreign exchange in accounts with designated
foreign exchange banks subject to a cap set by SAFE or its local office.  Unless otherwise approved, domestic enterprises
must convert all of their foreign currency proceeds into RMB.



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On October 21, 2005, SAFE issued the Notice
on Issues Relating to the Administration of Foreign Exchange in Fund-raising and Reverse Investment Activities of Domestic Residents
Conducted via Offshore Special Purpose Companies, which became effective as of November 1, 2005. According to the notice, a special
purpose company, or SPV, refers to an offshore company established or indirectly controlled by PRC residents for the special purpose
of carrying out financing of their assets or equity interest in PRC domestic enterprises. Prior to establishing or assuming control
of an SPV, each PRC resident, whether a natural or legal person, must complete the overseas investment foreign exchange registration
procedures with the relevant local SAFE branch. The notice applies retroactively. As a result, PRC residents who have established
or acquired control of these SPVs that previously made onshore investments in China were required to complete the relevant overseas
investment foreign exchange registration procedures by March 31, 2006. These PRC residents must also amend the registration with
the relevant SAFE branch in the following circumstances: (i) the PRC residents have completed the injection of equity investment
or assets of a domestic company into the SPV; (ii) the overseas funding of the SPV has been completed; (iii) there is a material
change in the capital of the SPV. Under the rules, failure to comply with the foreign exchange registration procedures may result
in restrictions being imposed on the foreign exchange activities of the violator, including restrictions on the payment of dividends
and other distributions to its offshore parent company, and may also subject the violators to penalties under the PRC foreign exchange
administration regulations.



On August 29, 2008, SAFE promulgated Notice
142 which regulates the conversion by a foreign-funded enterprise of foreign currency into RMB by restricting how the converted
RMB may be used. Notice 142 requires that RMB funds converted from the foreign currency capital of a foreign-funded enterprise
may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used for
equity investments within the PRC unless specifically provided for otherwise. In addition, SAFE strengthened its supervision over
the flow and use of RMB funds converted from the foreign currency capital of a foreign-funded enterprise. The use of such RMB capital
may not be changed without SAFE’s approval, and may not, in any case, be used to repay or prepay RMB loans if such loans
are outstanding. Violations of Notice 142 will result in severe penalties, such as heavy fines as set out in the relevant foreign
exchange control regulations.



E. Taxation



British Virgin Islands Taxation



Under the law of the British Virgin Islands
as currently in effect, a holder of our shares who is not a resident of the British Virgin Islands is not liable for British Virgin
Islands income tax on dividends paid with respect to our shares, and all holders of our securities are not liable to the British
Virgin Islands for income tax on gains realized on the sale or disposal of such securities. The British Virgin Islands does not
impose a withholding tax on dividends paid by a company incorporated or re-registered under the BVI Act.



There are no capital gains, gift or inheritance
taxes levied by the British Virgin Islands on companies incorporated or re-registered under the BVI Act. In addition, securities
of companies incorporated or re-registered under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.



There is no income tax treaty or convention
currently in effect between the United States and the British Virgin Islands, although a Tax Information Exchange Agreement is
in force.



U.S. Federal Income Taxation



General



The following are the material U.S. federal
income tax consequences to an investor of the acquisition, ownership and disposition of our securities.



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Because the components of a unit are separable
at the option of the holder, the holder of a unit should be treated, for U.S. federal income tax purposes, as the owner of the
underlying callable Class A Share and redeemable warrant components of the unit. As a result, the discussion below of the U.S.
federal income tax consequences with respect to actual holders of callable Class A Shares and redeemable warrants should also apply
to holders of units (as the deemed owners of the callable Class A Shares and redeemable warrants underlying the units).



The discussion below of the U.S. federal
income tax consequences to “U.S. Holders” will apply to a beneficial owner of our securities that is treated for U.S.
federal income tax purposes as:



·an
individual citizen or resident of the United States;



·a
corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or
under the laws of the United States, any state thereof or the District of Columbia;



·an
estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or



·a
trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are
authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a U.S. person.



If a beneficial owner of our securities
is not described as a U.S. Holder and is not an entity treated as a partnership or other pass-through entity for U.S. federal income
tax purposes, such an owner will be considered a “Non-U.S. Holder.” The material U.S. federal income tax consequences
of the acquisition, ownership and disposition of our securities applicable specifically to Non-U.S. Holders are described below
under the heading “Non-U.S. Holders.”



This discussion is based on the Internal
Revenue Code of 1986, as amended (the “Code”), its legislative history, Treasury regulations promulgated thereunder,
published rulings and court decisions, all as currently in effect. These authorities are subject to change or differing interpretations,
possibly on a retroactive basis.



This discussion does not address all aspects
of U.S. federal income taxation that may be relevant to any particular holder of our securities based on such holder’s individual
circumstances. In particular, this discussion considers only holders that own and hold our securities as capital assets within
the meaning of Section 1221 of the Code, and does not address the alternative minimum tax. In addition, this discussion does not
address the U.S. federal income tax consequences to holders that are subject to special rules, including:



|· | financial institutions or financial services entities;
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|· | broker-dealers;
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|· | persons that are subject to the mark-to-market accounting rules under Section 475 of the Code;
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|· | tax-exempt entities;
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|· | governments or agencies or instrumentalities thereof;
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|· | insurance companies;
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|· | regulated investment companies;
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|· | real estate investment trusts;
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|· | certain expatriates or former long-term residents of the United States;
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·persons
that actually or constructively own 5% or more of our public shares (including persons that elect to convert our callable Class
A Shares into Class C Shares);



·persons
that acquired our securities pursuant to the exercise of employee options, in connection with employee incentive plans or otherwise
as compensation;



·persons
that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated transaction;



|· | persons whose functional currency is not the U.S. dollar;
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|· | controlled foreign corporations; or
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|· | passive foreign investment companies.
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This discussion does not address any aspect
of U.S. federal non-income tax laws, such as gift or estate tax laws, state, local or non-U.S. tax laws or, except as discussed
herein, any tax reporting obligations applicable to a holder of our securities. Additionally, this discussion does not consider
the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a
partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our securities,
the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the
activities of the partnership. This discussion also assumes that any distributions made (or deemed made) by us on our securities
and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our securities
will be in U.S. dollars.



We have not sought, and will not seek a
ruling from the Internal Revenue Service (“IRS”) or an opinion of counsel as to any U.S. federal income tax consequence
described herein. The IRS may disagree with the description herein, and its determination may be upheld by a court. Moreover, there
can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the
accuracy of the statements in this discussion.



THIS DISCUSSION OF THE MATERIAL U.S. FEDERAL
INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES IS NOT TAX ADVICE. EACH HOLDER OF OUR SECURITIES
IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE ACQUISITION, OWNERSHIP
AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS
U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX TREATIES.



Allocation of Purchase Price and Characterization
of a Unit and its Components



While not free from doubt, each unit should
be treated for U.S. federal income tax purposes as an investment unit consisting of one callable Class A Share and one redeemable
warrant to acquire one ordinary share. For U.S. federal income tax purposes, each holder of a unit generally must allocate the
purchase price of a unit between the callable Class A Share and the redeemable warrant that comprise the unit based on the relative
fair market value of each at the time of acquisition. The price allocated to each callable Class A Share and the redeemable warrant
generally will be the holder’s tax basis in such share or redeemable warrant, as the case may be. While uncertain, the IRS,
by analogy to the rules relating to the allocation of the purchase price to components of a unit consisting of debt and equity,
may take the position that any allocation of the purchase price that we may make will be binding on a holder of a unit, unless
the holder explicitly discloses in a statement attached to the holder’s timely filed U.S. federal income tax return for the
taxable year that includes the acquisition date of the unit that the holder’s allocation of the purchase price between the
callable Class A Share and the redeemable warrant that comprise the unit is different from our allocation. Any such allocation
is not, however, binding on the IRS.



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Although we intend to take a contrary position,
if our callable Class A Shares or callable Class B Shares, as the case may be, are not viewed as participating in our corporate
growth (i.e., our future earnings or increases in our net asset value) to any significant extent (other than by reason of any “conversion”
feature), due to our limited potential for corporate growth prior to an acquisition transaction or due to an automatic trust liquidation
and distribution if a post-acquisition tender offer is not commenced or completed within the allotted time, there is a risk that
a holder’s entitlement to receive payments upon the exercise of the holder’s redemption right or upon our liquidation
in excess of the holder’s tax initial basis in its callable Class A Shares or callable Class B Shares, as the case may be,
will result in constructive income to the holder. This could affect the timing and character of income recognition and result in
U.S. federal income tax liability to the holder without the holder’s receipt of cash from us.



Each holder is advised to consult its own
tax advisor with respect to the risks associated with an investment in a unit (including alternative characterizations of a unit
or the components thereof) and regarding the risks associated with an allocation of the purchase price between the callable Class
A Share and the redeemable warrant that comprise a unit that is inconsistent with any allocation of the purchase price that we
may make. The balance of this discussion assumes that the characterization of the units (and the components thereof) and any allocation
of the purchase price as described above are respected for U.S. federal income tax purposes.



U.S. Holders



Taxation of Cash Distributions



Subject to the passive foreign investment
company (“PFIC”) rules discussed below, a U.S. Holder generally will be required to include in gross income as ordinary
income the amount of any cash dividend paid on our shares. A cash distribution on such shares generally will be treated as a dividend
for U.S. federal income tax purposes to the extent paid out of our current or accumulated earnings and profits (as determined under
U.S. federal income tax principles). Such dividend generally will not be eligible for the dividends-received deduction generally
allowed to domestic corporations in respect of dividends received from other domestic corporations. The portion of such distribution,
if any, in excess of such earnings and profits generally will constitute a return of capital that will be applied against and reduce
(but not below zero) the U.S. Holder’s adjusted tax basis in such shares. Any remaining excess will be treated as gain from
the sale or other taxable disposition of such shares and will be treated as described under “— Taxation on
the Disposition of Securities” below.



With respect to non-corporate U.S. Holders,
dividends on our shares may be subject to U.S. federal income tax at the lower applicable long-term capital gains tax rate (see
“—Taxation on the Disposition of Securities” below) provided that (1) such shares are readily tradable
on an established securities market in the United States, (2) we are not a PFIC, as discussed below, for either the taxable year
in which the dividend was paid or the preceding taxable year, and (3) certain holding period requirements are met. It is not entirely
clear, however, whether a U.S. Holder’s holding period for such shares would be suspended for purposes of clause (3) above
for the period that such holder had a right to have such shares redeemed by us. Under published IRS authority, our shares are considered
for purposes of clause (1) above to be readily tradable on an established securities market in the United States only if they are
listed on certain exchanges, which presently include the NASDAQ Capital Market. Although our callable Class A Shares are currently
listed and traded on the NASDAQ Capital Market, we cannot guarantee that our shares will continue to be listed on the NASDAQ Capital
Market. U.S. Holders should consult their own tax advisors regarding the availability of the lower rate for any cash dividends
paid with respect to our shares.



Possible Constructive Distributions
with Respect to Redeemable Warrants



The terms of each redeemable warrant provide
for an adjustment to the number of ordinary shares for which the redeemable warrant may be exercised in certain events. An adjustment
that has the effect of preventing dilution generally is not taxable. However, the U.S. Holders of the redeemable warrants would
be treated as receiving a constructive distribution from us if, for example, the adjustment increases the redeemable warrant holders’
proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of ordinary shares that would
be obtained upon exercise) as a result of a distribution of cash to the holders of our shares, which is taxable to the U.S. Holders
of such shares as described under “— Taxation of Cash Distributions,” above. Such constructive distribution would
be subject to tax as described under that section in the same manner as if the U.S. Holders of the redeemable warrants received
a cash distribution from us equal to the fair market value of such increased interest.



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Taxation on the Disposition of Securities



Upon a sale or other taxable disposition
of our securities (which, in general, would include a distribution in connection with our liquidation or a redemption of our callable
Class A Shares or callable Class B Shares, as described in “— Taxation on the Redemption of Callable Class A Shares
or Callable Class B Shares” below, or a redemption of redeemable warrants, including those underlying units), and subject
to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference
between the amount realized and the U.S. Holder’s adjusted tax basis in the securities. See “— Exercise or Lapse
of Redeemable Warrants” below for a discussion regarding a U.S. Holder’s basis in the ordinary share acquired pursuant
to the exercise of a warrant.



The regular U.S. federal income tax rate
on capital gains recognized by U.S. Holders generally is the same as the regular U.S. federal income tax rate on ordinary income,
except that long-term capital gains recognized by non-corporate U.S. Holders generally are subject to U.S. federal income tax at
a maximum regular rate of 20%. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder’s holding
period for the securities exceeds one year. The deductibility of capital losses is subject to various limitations.



Additional Taxes



U.S. Holders that are individuals, estates
or trusts and whose income exceeds certain thresholds generally will be subject to a 3.8% Medicare contribution tax on unearned
income, including, without limitation, dividends on, and gains from the sale or other taxable disposition of, our securities, subject
to certain limitations and exceptions. Under recently issued regulations, in the absence of a special election, such unearned income
generally would not include income inclusions under the qualified electing fund, or QEF rules discussed below under “— Passive
Foreign Investment Company Rules,” but would include distributions of earnings and profits from a QEF. U.S. Holders should
consult their own tax advisors regarding the effect, if any, of such tax on their ownership and disposition of our securities.



Taxation on the Redemption of Callable
Class A Shares or Callable Class B Shares



In the event that a U.S. Holder (i) elects
to tender its callable Class A Shares or callable Class B Shares to us in connection with a tender offer, or (ii) has its callable
Class B Shares automatically converted into a right to receive a pro rata portion of the trust account in the case of an automatic
trust liquidation triggered by the failure to commence or complete a post-acquisition tender offer within the allotted time, the
amount received on any such transfer or deemed transfer of shares generally will be treated for U.S. federal income tax purposes
as a payment in consideration for the sale of our callable Class A Shares or callable Class B Shares, as the case may be, rather
than as a distribution. Such amounts, however, will be treated as a distribution and taxed as described in “— Taxation
of Cash Distributions,” above, if (i) the redemption is “essentially equivalent to a dividend” (meaning that
the U.S. Holder’s percentage ownership in us (including shares the U.S. Holder is deemed to own under certain constructive
ownership rules) after the redemption is not meaningfully reduced from what its percentage ownership in us (including constructive
ownership) was prior to the redemption), (ii) the redemption is not “substantially disproportionate” as to that U.S.
Holder (“substantially disproportionate” meaning, among other requirements, that the percentage of our outstanding
voting shares owned (including constructive ownership) by such holder immediately following the redemption is less than 80% of
that percentage owned (including constructive ownership) by such holder immediately before the redemption), and (iii) the redemption
does not result in a “complete termination” of the U.S. Holder’s interest in us (taking into account certain
constructive ownership rules). If the U.S. Holder had a relatively minimal interest in our shares and its percentage ownership
in us (including constructive ownership and taking into account the effect of redemptions by other holders) is reduced as a result
of the redemption, such holder generally should be regarded as having a meaningful reduction in interest. For example, the IRS
has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in
a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.”
A U.S. Holder should consult with its own tax advisors as to the U.S. federal income tax consequences to it of any redemption of
its callable Class A Shares or callable Class B Shares.



88







Exercise or Lapse of Redeemable Warrants



Subject to the PFIC rules discussed below,
a U.S. Holder generally will not recognize gain or loss upon the acquisition of ordinary shares on the exercise of redeemable warrants
for cash. Ordinary shares acquired pursuant to the exercise of redeemable warrants for cash will have a tax basis equal to the
U.S. Holder’s tax basis in the redeemable warrants, increased by the amount paid to exercise the redeemable warrants. The
holding period of such ordinary shares should begin on the day after the date of exercise of the redeemable warrants. If redeemable
warrants are allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s adjusted
tax basis in the redeemable warrants.



The tax consequences of a cashless exercise
of redeemable warrants are not clear under current tax law. A cashless exercise may be tax-free, either because it is not a realization
event (i.e., not a transaction in which gain or loss is realized) or because the transaction is treated as a recapitalization for
U.S. federal income tax purposes. In either tax-free situation, a U.S. Holder’s tax basis in the ordinary shares received
would equal the U.S. Holder’s basis in the redeemable warrants. If the cashless exercise were treated as not being a realization
event, the U.S. Holder’s holding period in the ordinary shares could be treated as commencing on the date following the date
of exercise of the redeemable warrants. If the cashless exercise were treated as a recapitalization, the holding period of the
ordinary shares received would include the holding period of the redeemable warrants.



It is also possible that a cashless exercise
could be treated as a taxable exchange in which gain or loss is recognized. In such event, a U.S. Holder could be deemed to have
surrendered a number of redeemable warrants with a fair market value equal to the exercise price for the number of redeemable warrants
deemed exercised. For this purpose, the number of redeemable warrants deemed exercised would be equal to the number of ordinary
shares issued pursuant to the cashless exercise of the redeemable warrants. In this situation, the U.S. Holder would recognize
capital gain or loss in an amount equal to the difference between the fair market value of the redeemable warrants deemed surrendered
to pay the exercise price and the U.S. Holder’s tax basis in such redeemable warrants deemed surrendered. Such gain or loss
would be long-term or short-term depending on the U.S. Holder’s holding period in the redeemable warrants. In this case,
a U.S. Holder’s tax basis in the ordinary shares received would equal the sum of the fair market value of the redeemable
warrants deemed surrendered to pay the exercise price and the U.S. Holder’s tax basis in the redeemable warrants deemed exercised,
and a U.S. Holder’s holding period for the ordinary shares should commence on the date following the date of exercise of
the redeemable warrants. There also may be alternative characterizations of any such taxable exchange that would result in similar
tax consequences, except that a U.S. Holder’s gain or loss would be short-term.



Due to the absence of authority on the
U.S. federal income tax treatment of a cashless exercise of redeemable warrants it is unclear which, if any, of the alternative
tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should
consult their tax advisors regarding the tax consequences of a cashless exercise of redeemable warrants.



Passive Foreign Investment Company
Rules



A foreign (i.e., non-U.S.) corporation
will be a PFIC if at least 75% of its gross income in a taxable year of the foreign corporation, including its pro rata share of
the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income. Alternatively,
a foreign corporation will be a PFIC if at least 50% of its assets in a taxable year of the foreign corporation, ordinarily determined
based on fair market value and averaged quarterly over the year, including its pro rata share of the assets of any corporation
in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income.
Passive income generally includes dividends, interest, rents and royalties (other than certain rents or royalties derived from
the active conduct of a trade or business) and gains from the disposition of passive assets.



89







Because we are a blank check company, with
no current active business, we believe that it is likely that we will meet the PFIC asset or income test for our taxable year ended
October 31, 2013. However, pursuant to a start-up exception, a corporation will not be a PFIC for the first taxable year the corporation
has gross income (the “start-up year”), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies
the IRS that it will not be a PFIC for either of the first two taxable years following the start-up year; and (3) the corporation
is not in fact a PFIC for either of those years. The applicability of the start-up exception to us is uncertain. After the acquisition
of a company or assets in an acquisition transaction, we may still meet one of the PFIC tests depending on the timing of the acquisition
and the amount of our passive income and assets as well as the passive income and assets of the acquired business. Our actual PFIC
status for our 2013 or any subsequent taxable year, however, will not be determinable until after the end of such taxable year
(or after the end of the start-up period, if later). We also do not plan to make annual determinations or otherwise notify U.S.
Holders of our PFIC status. Accordingly, there can be no assurance with respect to our status as a PFIC for our 2013 taxable year
or any future taxable year.



If we are determined to be a PFIC for any
taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our shares or redeemable warrants
and, in the case of our shares, the U.S. Holder did not make either a timely qualified electing fund (“QEF”) election
for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) such shares, a QEF election along with
a purging election, or a mark-to-market election, each as described below, such holder generally will be subject to special rules
for regular U.S. federal income tax purposes with respect to:



·any
gain recognized by the U.S. Holder on the sale or other disposition of its shares or redeemable warrants; and



·any
“excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year
of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the
shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for
the shares).



Under these rules,



·the
U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares
or redeemable warrants;



·the
amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution,
or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we are a PFIC,
will be taxed as ordinary income;



·the
amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed
at the highest tax rate in effect for that year and applicable to the U.S. Holder; and



·the
interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other
taxable year of the U.S. Holder.



In general, if we are determined to be
a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above in respect to our shares by making a timely QEF election
(or a QEF election along with a purging election). Pursuant to the QEF election, a U.S. Holder will be required to include in income
its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on
a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable
year ends. A U.S. Holder may make a separate election to defer the payment of taxes on undistributed income inclusions under the
QEF rules, but if deferred, any such taxes will be subject to an interest charge.



A U.S. Holder may not make a QEF election
with respect to its redeemable warrants. As a result, if a U.S. Holder sells or otherwise disposes of a redeemable warrant (other
than upon exercise of the redeemable warrant), any gain recognized generally will be subject to the special tax and interest charge
rules treating the gain as an excess distribution, as described above, if we were a PFIC at any time during the period the U.S.
Holder held the redeemable warrants. If a U.S. Holder that exercises such redeemable warrants properly makes a QEF election with
respect to the newly acquired ordinary shares (or has previously made a QEF election with respect to our shares), the QEF election
will apply to the newly acquired ordinary shares, but the adverse tax consequences relating to PFIC shares, adjusted to take into
account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired
ordinary shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period
the U.S. Holder held the redeemable warrants), unless the U.S. Holder makes a purging election with respect to such shares. The
purging election creates a deemed sale of such shares at their fair market value. The gain recognized by the purging election will
be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result
of the purging election, the U.S. Holder will increase the adjusted tax basis in its ordinary shares acquired upon the exercise
of the redeemable warrants by the gain recognized and will also have a new holding period in such ordinary shares for purposes
of the PFIC rules.



90







The QEF election is made on a shareholder-by-shareholder
basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching
a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund),
including the information provided in a PFIC annual information statement, to a timely filed U.S. federal income tax return for
the taxable year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement
with such return and if certain other conditions are met or with the consent of the IRS.



In order to comply with the requirements
of a QEF election, a U.S. Holder must receive certain information from us. Upon request from a U.S. Holder, we will endeavor to
provide to the U.S. Holder no later than 90 days after the request such information as the IRS may require, including a PFIC annual
information statement, in order to enable the U.S. Holder to make and maintain a QEF election. However, there is no assurance that
we will have timely knowledge of our status as a PFIC in the future or of the required information to be provided.



If a U.S. Holder has made a QEF election
with respect to our shares and the special tax and interest charge rules do not apply to such shares (because of a timely QEF election
for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a QEF election, along
with a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale or other taxable
disposition of our shares generally will be taxable as capital gain and no interest charge will be imposed. As discussed above,
for regular U.S. federal income tax purposes, U.S. Holders of a QEF are currently taxed on their pro rata shares of the QEF’s
earnings and profits, whether or not distributed. In such case, a subsequent distribution of such earnings and profits that were
previously included in income generally should not be taxable as a dividend to such U.S. Holders. The adjusted tax basis of a U.S.
Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but
not taxed as dividends, under the above rules. Similar basis adjustments apply to property if by reason of holding such property
the U.S. Holder is treated under the applicable attribution rules as owning shares in a QEF.



Although a determination as to our PFIC
status will be made annually, the initial determination that we are a PFIC generally will apply for subsequent years to a U.S.
Holder who held shares or redeemable warrants while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent
years. A U.S. Holder who makes the QEF election discussed above for our first taxable year as a PFIC in which the U.S. Holder holds
(or is deemed to hold) our shares, however, will not be subject to the PFIC tax and interest charge rules discussed above in respect
to such shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime with respect to such shares for any
of our taxable years that end within or with a taxable year of the U.S. Holder and in which we are not a PFIC. On the other hand,
if the QEF election is not effective for each of our taxable years in which we are a PFIC and during which the U.S. Holder holds
(or is deemed to hold) our shares, the PFIC rules discussed above will continue to apply to such shares unless the holder files
on a timely filed U.S. income tax return (including extensions) a QEF election and a purging election to recognize under the rules
of Section 1291 of the Code any gain that the U.S. Holder would otherwise recognize if the U.S. Holder had sold our shares for
their fair market value on the “qualification date.” The qualification date is the first day of our tax year in which
we qualify as a QEF with respect to such U.S. Holder. The purging election can only be made if such U.S. Holder held our ordinary
shares on the qualification date. The gain recognized by the purging election will be subject to the special tax and interest charge
rules treating the gain as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will
increase the adjusted tax basis in its ordinary shares by the amount of the gain recognized and will also have a new holding period
in the shares for purposes of the PFIC rules.



91







Alternatively, if a U.S. Holder, at the
close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make a mark-to-market
election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election for the first
taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) our shares and for which we are determined
to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect to its shares. Instead, in
general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at
the end of its taxable year over the adjusted tax basis in its shares. The U.S. Holder also will be allowed to take an ordinary
loss in respect of the excess, if any, of the adjusted tax basis of its shares over the fair market value of its shares at the
end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market
election). The U.S. Holder’s adjusted tax basis in its shares will be adjusted to reflect any such income or loss amounts,
and any further gain recognized on a sale or other taxable disposition of the shares will be treated as ordinary income. Currently,
a mark-to-market election may not be made with respect to our redeemable warrants.



The mark-to-market election is available
only for stock that is regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission,
including the NASDAQ Capital Market, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure
that the market price represents a legitimate and sound fair market value. Although our callable Class A Shares are listed and
traded on the NASDAQ Capital Market, we cannot guarantee that our shares will continue to be listed and traded on the NASDAQ Capital
Market. U.S. Holders should consult their own tax advisors regarding the availability and tax consequences of a mark-to-market
election in respect to our shares under their particular circumstances.



If we are a PFIC and, at any time, have
a foreign subsidiary that is classified as a PFIC, a U.S. Holder generally would be deemed to own a portion of the shares of such
lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution
from, or dispose of all or part of our interest in, or the U.S. Holder otherwise were deemed to have disposed of an interest in,
the lower-tier PFIC. Upon request, we will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder no later than 90 days
after the request the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC.
However, there is no assurance that we will have timely knowledge of the status of any such lower-tier PFIC, and we do not plan
to make annual determinations or otherwise notify U.S. Holders of the PFIC status of any such lower-tier PFIC. There also is no
assurance that we will be able to cause the lower-tier PFIC to provide the required information. U.S. Holders are urged to consult
their own tax advisors regarding the tax issues raised by lower-tier PFICs.



A U.S. Holder that owns (or is deemed to
own) shares in a PFIC during any taxable year of the U.S. Holder may have to file an IRS Form 8621 (whether or not a QEF election
or mark-to-market election is or has been made) with such U.S. Holder’s U.S. federal income tax return and provide such other
information as may be required by the U.S. Treasury Department.



The rules dealing with PFICs and with the
QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly,
U.S. Holders of our shares and redeemable warrants should consult their own tax advisors concerning the application of the PFIC
rules to our shares and redeemable warrants under their particular circumstances.



Conversions and Consolidations



The callable Class A Shares will be automatically
consolidated into ordinary shares upon the consummation of our initial acquisition transaction, unless we grant our public shareholders
their redemption rights by means of a post-acquisition tender offer. In connection with a post-acquisition tender offer, each callable
Class A Share outstanding immediately following the consummation of the initial acquisition transaction will be automatically converted
into a callable Class B Share. Such callable Class B Shares will be automatically consolidated into one class of ordinary shares
upon consummation of such post-acquisition tender offer.



Subject to the PFIC rules, a U.S. Holder
should not recognize gain or loss on such a conversion or consolidation. A U.S. Holder’s adjusted tax basis in the callable
Class B Shares or ordinary shares, as the case may be, that such holder received upon such a conversion or consolidation should
be equal to the holder’s adjusted tax basis in the callable Class A Shares or callable Class B Shares, as the case may be,
that such holder surrendered. In addition, a U.S. Holder’s holding period in the callable Class B Shares or ordinary shares,
as the case may be, that such holder received upon such a conversion or consolidation should include such holder’s holding
period in the callable Class A Shares or callable Class B Shares, as the case may be, that such holder surrendered.



92







If a U.S. Holder of our shares is treated
as owning shares in a PFIC such that the special tax and interest charge rules as described above under “— Passive
Foreign Investment Company Rules” apply to the shares, and the shares received on a conversion or consolidation are determined
not to be interests in a PFIC subject to such rules, such holder may recognize gain equal to the difference between the fair market
value of the shares received and the holder’s adjusted tax basis in the shares surrendered, and if any such gain is recognized,
then such gain may be subject to the special tax and interest charge rules described above. In such a case, a U.S. Holder’s
adjusted tax basis in such shares received should be equal to their fair market value, and such holder should have a new holding
period in such shares for purposes of the PFIC rules. If the U.S. Holder made a QEF election with respect to the shares surrendered,
such election should continue to apply to the shares received upon a conversion or consolidation.



Non-U.S. Holders



Dividends (including constructive dividends)
paid or deemed paid to a Non-U.S. Holder in respect to our securities generally will not be subject to U.S. federal income tax,
unless the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United
States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such
holder maintains or maintained in the United States).



In addition, a Non-U.S. Holder generally
will not be subject to U.S. federal income tax on any gain attributable to a sale or other taxable disposition of our securities
unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains or maintained
in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable
year of sale or other disposition and certain other conditions are met (in which case, such gain from U.S. sources generally is
subject to U.S. federal income tax at a 30% rate or a lower applicable tax treaty rate).



Dividends and gains that are effectively
connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable
income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains or maintained in the
United States) generally will be subject to regular U.S. federal income tax at the same regular U.S. federal income tax rates applicable
to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes, may
also be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.



The U.S. federal income tax treatment of
a Non-U.S. Holder’s exercise of redeemable warrants, or the lapse of redeemable warrants held by a Non-U.S. Holder, generally
will correspond to the U.S. federal income tax treatment of the exercise or lapse of redeemable warrants by a U.S. Holder, as described
under “U.S. Holders — Exercise or Lapse of Redeemable Warrants,” above. The U.S. federal income tax treatment
of the automatic conversion of the callable Class A Shares into callable Class B Shares in connection with a post-acquisition tender
offer or the automatic consolidation of the callable Class A Shares into ordinary shares or callable Class B Shares into ordinary
shares, as the case may be, to a Non-U.S. Holder generally should correspond to the U.S. federal income tax treatment of such a
conversion or consolidation to a U.S. Holder, as described under “U.S. Holders — Conversions and Consolidations,”
except that Non-U.S. Holders are not subject to the PFIC rules.



Backup Withholding and Information Reporting



In general, information reporting for U.S.
federal income tax purposes should apply to distributions made on our securities within the United States to a U.S. Holder (other
than an exempt recipient) and to the proceeds from sales and other dispositions of our securities by a U.S. Holder (other than
an exempt recipient) to or through a U.S. office of a broker. Payments made (and sales and other dispositions effected at an office)
outside the United States will be subject to information reporting in limited circumstances. In addition, certain information concerning
a U.S. Holder’s adjusted tax basis in its securities and adjustments to that tax basis and whether any gain or loss with
respect to such securities is long-term or short-term also may be required to be reported to the IRS, and certain holders may be
required to file an IRS Form 8938 (Statement of Specified Foreign Financial Assets) to report their interest in our securities.



93







Moreover, backup withholding of U.S. federal
income tax at a rate of 28% generally will apply to dividends paid on our securities to a U.S. Holder (other than an exempt recipient)
and the proceeds from sales and other dispositions of shares or warrants by a U.S. Holder (other than an exempt recipient), in
each case who



|· | fails to provide an accurate taxpayer identification number;
|- | ------------------------------------------------------------



|· | is notified by the IRS that backup withholding is required; or
|- | --------------------------------------------------------------



|· | in certain circumstances, fails to comply with applicable certification requirements.
|- | -------------------------------------------------------------------------------------



A Non-U.S. Holder generally may eliminate
the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties
of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.



Backup withholding is not an additional
tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a Non-U.S. Holder’s
U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely
furnished to the IRS. Holders are urged to consult their own tax advisors regarding the application of backup withholding and the
availability of and procedures for obtaining an exemption from backup withholding in their particular circumstances.



F. Dividends and Paying Agents



Changes in the PRC governmental rules and
regulations will have a significant impact on our business, and Foreign exchange control and tax policies in the PRC may limit
our ability to utilize our revenue effectively and affect our ability to receive dividends and other payments from our subsidiaries
in the PRC.



The Foreign Enterprise Law provides that
after payment of taxes, a wholly foreign-owned enterprise (“WFOE”) must make contributions to a reserve fund and at
least 10% of the after-tax profits must be allocated to the reserve fund. If the accumulative amount of allocated reserve funds
reaches 50% of an enterprise’s registered capital, the WFOE will not be required to make any additional contribution. The
WFOE is prohibited from distributing dividends unless the losses (if any) of previous years have been made up.



In accordance with the Notice of the Ministry
of Finance on the Issue of Handling Financial Issues by Relevant Enterprises after the Implementation of the Company Law promulgated
by the Ministry of Finance on March 15, 2006 and effective April 1, 2006, from January 1, 2006 on, enterprises established in accordance
with the Company Law shall distribute profits pursuant to Article 167 of the Company Law and shall no longer make contributions
to the reserve fund. After an enterprise ceases to make contributions to the reserve fund, it may continue to make contributions
to the employee bonus and welfare fund as decided by the Board of Directors if the purpose, use conditions, and procedures thereof
shall be made clear, and such funds shall be managed as debts.



G. Statement by Experts



Not applicable.



H. Documents on Display



We have filed this report on Form 20-F
with the SEC under the Exchange Act. Statements made in this report as to the contents of any document referred to are not necessarily
complete. With respect to each such document filed as an exhibit to this report, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.



We are subject to the informational requirements
of the Exchange Act as a foreign private issuer and file reports and other information with the SEC. Reports and other information
filed by us with the SEC, including this report, may be inspected and copied at the public reference room of the SEC at 100 F Street,
N.E., Washington D.C. 20549. You can also obtain copies of this report by mail from the Public Reference Section of the SEC, 100
F. Street, N.E., Washington D.C. 20549, at prescribed rates. Additionally, copies of this material may be obtained from the SEC’s
Internet site at http://www.sec.gov. The SEC’s telephone number is 1-800-SEC-0330.



94







As a foreign private issuer, we are exempt
from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers,
directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section
16 of the Exchange Act.



I. Subsidiary Information



Not applicable.



|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------



Interest Rate Risk



We deposit surplus funds with Chinese banks
earning daily interest. We do not invest in any instruments for trading purposes. Most of our outstanding debt instruments carry
fixed rates of interest. Our operations generally are not directly sensitive to fluctuations in interest rates and we currently
do not have any long-term debt outstanding. Management monitors the banks’ prime rates in conjunction with our cash requirements
to determine the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions
in an effort to reduce our exposure to interest rate risk.



Foreign Exchange Risk



While our reporting currency is the U.S.
dollar, substantially all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. Substantially
all of our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations
may be affected by fluctuations in the exchange rate between the U.S. dollar and the RMB. If the RMB depreciates against the U.S.
dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. Assets
and liabilities are translated at exchange rates at the balance sheet dates and revenue and expenses are translated at the average
exchange rates and equity is translated at historical exchange rates. Any resulting translation adjustments are not included in
determining net income but are included in determining other comprehensive income, a component of equity. An average appreciation
(depreciation) of the RMB against the U.S. dollar of 5% would increase (decrease) our comprehensive income by $4.7 million based
on our outstanding revenues, costs and expenses, assets and liabilities denominated in RMB as of December 31, 2013. As of December
31, 2013, our accumulated other comprehensive income was $4.6 million. We have not entered into any hedging transactions in an
effort to reduce our exposure to foreign exchange risk.



The value of RMB against the U.S. dollar
and other currencies is affected by, among other things, changes in China’s political and economic conditions. Since July
2005, RMB has not been pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign
exchange market to prevent significant short-term fluctuations in the exchange rate, RMB may appreciate or depreciate significantly
in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future, PRC authorities may lift
restrictions on fluctuations in RMB exchange rate and lessen intervention in the foreign exchange market.



Inflation



Inflationary factors such as increases
in the cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation
has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses
as a percentage of net revenues if the selling prices of our products do not increase with these increased costs.



|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- | ------------------------------------------------------



Not applicable.



95







PART II



Not Required.

PART III



|ITEM 17. | FINANCIAL STATEMENTS
|-------- | --------------------



Not applicable.



|ITEM 18. | FINANCIAL STATEMENTS
|-------- | --------------------



The financial statements are filed as part
of this report beginning on page F-1.



|ITEM 19. | EXHIBITS
|-------- | --------



The list of exhibits in the Exhibit Index to this report is
incorporated herein by reference.



96







SIGNATURE



The registrant hereby
certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this report on its behalf.



|Date: September 25, 2014 | CIS ACQUISITION LTD.                
|------------------------ | ------------------------------------
|                         |                                     
|                         | /s/ Xin Chao                        
|                         | Xin Chao                            
|                         | Chief Executive Officer and Chairman



97











CIS Acqusition Ltd.

Index to Financial Statements



|                                                                                                                                                                                                                   | Page No.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------
|CIS Acquisition Ltd. for the Year Ended October 31, 2013                                                                                                                                                           |         
|Report of Independent Registered Public Accounting Firm                                                                                                                                                            | F-1     
|Balance Sheets as of October 31, 2013 and 2012                                                                                                                                                                     | F-2     
|Statements of Operations for the Year Ended October 31, 2013  and for the Period November 28, 2011 (Inception) Through October 31, 2012  and for the Period November 28, 2011 (Inception) Through October 31, 2013 | F-3     
|Statement of Changes in Shareholders’ Equity for the Period from November 28, 2011 (Inception) through October 31, 2013                                                                                            | F-4     
|Statements of Cash Flows for the Year Ended October 31, 2013  and for the Period November 28, 2011 (Inception) Through October 31, 2012  and for the Period November 28, 2011 (Inception) Through October 31, 2013 | F-5     
|Notes to Financial Statements                                                                                                                                                                                      | F-6     
|                                                                                                                                                                                                                   |         
|CIS Acquisition Ltd. for the Six Months Ended April 30, 2014 (Unaudited)                                                                                                                                           |         
|Balance Sheet as of April 30, 2014                                                                                                                                                                                 | F-18    
|Statements of Operations for the Six Months Ended April 30, 2014 and 2013                                                                                                                                          | F-19    
|Statement of Changes in Shareholders’ Equity for the Six Months Ended April 30, 2014                                                                                                                               | F-20    
|Statements of Cash Flows for the Six Months Ended April 30, 2014 and 2013                                                                                                                                          | F-21    
|Notes to Financial Statements                                                                                                                                                                                      | F-22    

















REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Board of Directors and Shareholders

of CIS Acquisition Ltd.



We have audited the accompanying balance
sheets of CIS Acquisition Ltd. (a company in the development stage) (the “Company”) as of October 31, 2013 and
2012, and the related statements of operations, changes in shareholders’ equity and cash flows for the year ended
October 31, 2013, for the period from November 28, 2011 (inception) through October 31, 2012 and for the period from November 28,
2011 (inception) through October 31, 2013.  These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.



In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of CIS Acquisition Ltd. (a company in the development
stage), as of October 31, 2013 and 2012, and the results of its operations and its cash flows for the year ended October 31, 2013,
for the period from November 28, 2011 (inception) through October 31, 2012 and for the period from November 28, 2011 (inception)
through October 31, 2013, in conformity with accounting principles generally accepted in the United States of America.



The accompanying consolidated financial
statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1, the Company
has no present revenue and the Company’s cash and working capital as of October 31, 2013, are not sufficient to complete
its planned activities through June 21, 2014, the date the Company is required to liquidate if it is unable to complete an acquisition
transaction, which date may be extended to September 21, 2014 in certain circumstances.  These conditions raise substantial
doubt about the Company’s ability to continue as a going concern.  Management’s plans regarding these matters
are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result
from the outcome of this uncertainty.



/s/ Marcum LLP



Marcum LLP

New York, NY

March 17, 2014



F-1









CIS Acquisition Ltd.

(A Company in the Development Stage)

BALANCE SHEETS





|                                                                                                                                                                                                                                             |  | As of October 31, |           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------
|                                                                                                                                                                                                                                             |  | 2013              |           
|ASSETS                                                                                                                                                                                                                                       |  |                   |           
|Current Assets:                                                                                                                                                                                                                              |  |                   |           
|Cash and cash equivalents                                                                                                                                                                                                                    |  | $                 | 135,659   
|Prepaid expenses and other current assets                                                                                                                                                                                                    |  |                   | 69,000    
|Total current assets                                                                                                                                                                                                                         |  |                   | 204,659   
|                                                                                                                                                                                                                                             |  |                   |           
|Deferred offering costs                                                                                                                                                                                                                      |  |                   | -         
|Restricted investments and cash equivalents held in Trust Account                                                                                                                                                                            |  |                   | 41,614,621
|Total assets                                                                                                                                                                                                                                 |  | $                 | 41,819,280
|                                                                                                                                                                                                                                             |  |                   |           
|LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                      |  |                   |           
|Current liabilities:                                                                                                                                                                                                                         |  |                   |           
|Notes payable to shareholder                                                                                                                                                                                                                 |  | $                 | -         
|Accrued offering costs                                                                                                                                                                                                                       |  |                   | -         
|Accrued expenses                                                                                                                                                                                                                             |  |                   | 59,440    
|Total current liabilities                                                                                                                                                                                                                    |  |                   | 59,440    
|                                                                                                                                                                                                                                             |  |                   |           
|Warrant liability                                                                                                                                                                                                                            |  |                   | 3,230,000 
|Total liabilities                                                                                                                                                                                                                            |  |                   | 3,289,440 
|                                                                                                                                                                                                                                             |  |                   |           
|Commitments and contingencies:                                                                                                                                                                                                               |  |                   |           
|                                                                                                                                                                                                                                             |  |                   |           
|Class A shares, subject to possible redemption or tender, 3,500,000 and 0 shares at redemption value                                                                                                                                         |  |                   | 36,400,000
|                                                                                                                                                                                                                                             |  |                   |           
|Shareholders’ Equity                                                                                                                                                                                                                         |  |                   |           
|Preferred shares, $0.0001 par value, 5,000,000 shares authorized; none issued or outstanding                                                                                                                                                 |  |                   | -         
|Class A shares, $0.0001 par value, 25,000,000 shares authorized; 1,636,000 and 0shares issued and outstanding (excluding 3,500,000 and 0 Class A shares subject to possible redemption or tender) at October 31, 2013 and 2012, respectively |  |                   | 164       
|Class B shares, $0.0001 par value, 25,000,000 shares authorized; none issued or outstanding                                                                                                                                                  |  |                   | -         
|Class C shares, $0.0001 par value, 25,000,000 shares authorized; none issued or outstanding                                                                                                                                                  |  |                   | -         
|Ordinary shares $0.0001 per share; 75,000,000 shares authorized; 0 and 1,090,000  shares issued and outstanding at October 31, 2013 and 2012, respectively (1)(2)                                                                            |  |                   | -         
|Additional paid in capital                                                                                                                                                                                                                   |  |                   | 5,563,747 
|Deficit accumulated during the development stage                                                                                                                                                                                             |  |                   | (3,434,071
|Total shareholders’ equity                                                                                                                                                                                                                   |  |                   | 2,129,840 
|                                                                                                                                                                                                                                             |  |                   |           
|Total liabilities, redeemable common share and shareholders’ equity                                                                                                                                                                          |  | $                 | 41,819,280





(1) At October 31, 2012, ordinary shares outstanding
included an aggregate of 90,000 ordinary shares held by the founders that were subject to redemption if the underwriters’ over-allotment
option was not exercised in full. Such 90,000 ordinary shares became Class A shares upon the closing of the Public Offering and
were redeemed for no consideration on March 18, 2013 because the underwriters over-allotment option expired unexercised on that
date.



(2) Share amounts have been retroactively restated
to reflect the effect of the contribution of an aggregate of 75,000 ordinary shares to the Company’s capital at no cost to the
Company and the subsequent cancellation of such shares on November 30, 2012 and the contribution of an aggregate of 272,500 ordinary
shares to the Company’s capital at no cost to the Company and the subsequent cancellation of such shares on December 14, 2012.



The accompanying notes are an integral part of these financial statements.



F-2







CIS Acquisition Ltd.

(A Company in the Development Stage)

STATEMENTS OF OPERATIONS



|                                                              |  | For the Year Ended October 31, 2013 |            |   | For the Period November 28, 2011 (Inception) Through October 31, 2012 |   |           | For the Period November 28, 2011 (Inception)  Through  October 31, 2013 | 
|------------------------------------------------------------- |  | ----------------------------------- | ---------- | - | --------------------------------------------------------------------- | - | --------- | ----------------------------------------------------------------------- | 
|                                                              |  |                                     |            |   |                                                                       |   |           |                                                                         | 
|Formation and operating costs                                 |  |                                     |            |   |                                                                       |   |           |                                                                         | 
|Legal and professional fees                                   |  | $                                   | 95,252     |   |                                                                       | $ | 4,873     |                                                                         | 
|Office expense – related party                                |  |                                     | 75,000     |   |                                                                       |   | -         |                                                                         | 
|General and administrative expenses                           |  |                                     | 43,567     |   |                                                                       |   | -         |                                                                         | 
|                                                              |  |                                     |            |   |                                                                       |   |           |                                                                         | 
|Loss from operations                                          |  |                                     | (213,819   | ) |                                                                       |   | (4,873    | )                                                                       | 
|                                                              |  |                                     |            |   |                                                                       |   |           |                                                                         | 
|Change in fair value of warrants                              |  |                                     | (3,230,000 | ) |                                                                       |   | -         |                                                                         | 
|Interest income                                               |  |                                     | 14,621     |   |                                                                       |   | -         |                                                                         | 
|Net loss                                                      |  | $                                   | (3,429,198 | ) |                                                                       | $ | (4,873    | )                                                                       | 
|                                                              |  |                                     |            |   |                                                                       |   |           |                                                                         | 
|Weighted average shares outstanding, basic and diluted (1)(2) |  |                                     | 1,548,877  |   |                                                                       |   | 1,000,000 |                                                                         | 
|Basic and diluted net loss per common share                   |  | $                                   | (2.21      | ) |                                                                       | $ | (0.00     | )                                                                       | 



(1) Excludes an aggregate of 90,000 ordinary shares held by
the founders that were subject to redemption to the extent the underwriters’ over-allotment option was not exercised in full. Such
shares became Class A Shares upon closing of the Public Offering and were redeemed for no consideration on March 18, 2013.



(2) Share amounts have been retroactively restated to reflect
the effect of the contribution of an aggregate of 75,000 ordinary shares to the Company’s capital at no cost to the Company and
the subsequent cancellation of such shares on November 30, 2012 and the contribution of an aggregate of 272,500 ordinary shares
to the Company’s capital at no cost to the Company and the subsequent cancellation of such shares on December 14, 2012.



The accompanying notes are an integral part of these financial statements.



F-3







CIS Acquisition Ltd.

(A Company in the Development Stage)

STATEMENT OF CHANGES IN SHAREHOLDERS’
EQUITY

For the Period from November 28, 2011
(Inception) through October 31, 2013





|                                                                                                                                                |  | Ordinary Shares |            |   | Class A Shares |   |      | Additional  Paid-in |  |  | Deficit  Accumulated
     During the  Development |   |  | Total  Shareholders’ |     
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ---------- | - | -------------- | - | ---- | ------------------- |  |  | ------------------------------------------------- | - |  | -------------------- | ----
|                                                                                                                                                |  | Shares          |            |   | Amount         |   |      | Shares              |  |  | Amount                                            |   |  | Capital              |     
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Balance, November 28, 2011 (inception)                                                                                                          |  |                 | -          |   |                | $ | -    |                     |  |  | -                                                 |   |  | $                    | -   
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Sale of ordinary shares on November 28, 2011, at $0.0001
    per share                                                                          |  |                 | 38         |   |                |   | -    |                     |  |  | -                                                 |   |  |                      | -   
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Sale of ordinary shares on February 13, 2012, at approximately
    $0.0087 per share                                                            |  |                 | 1,089,962  |   |                |   | 109  |                     |  |  | -                                                 |   |  |                      | -   
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Net loss for the period from November 28, 2011
    (inception) through October 31, 2012                                                         |  |                 | -          |   |                |   | -    |                     |  |  | -                                                 |   |  |                      | -   
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Balance, October 31, 2012                                                                                                                       |  |                 | 1,090,000  |   |                | $ | 109  |                     |  |  | -                                                 |   |  | $                    | -   
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Exchange of founders’ Ordinary Shares for Class A shares                                                                                        |  |                 | (1,090,000 | ) |                |   | (109 | )                   |  |  | 1,090,000                                         |   |  |                      | 109 
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Sale of 4,000,000 units on December
    21,     2012 at $10.00 per unit,     net of underwriters’ discount and offering costs                   |  |                 | -          |   |                |   | -    |                     |  |  | 4,000,000                                         |   |  |                      | 400 
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Sale of 4,500,000 warrants on December 21, 2012
    at $0.75 per warrant in a private placement                                                 |  |                 | -          |   |                |   | -    |                     |  |  | -                                                 |   |  |                      | -   
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Sale of 136,000 Class A shares on December 21,
    2012 at approximately $0.02 per share, to the underwriters                                   |  |                 | -          |   |                |   | -    |                     |  |  | 136,000                                           |   |  |                      | 14  
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Forfeiture of Founders’
    Shares in connection with the option underwriters’ election to not exercise their over-allotment  on March 18, 2013 |  |                 | -          |   |                |   | -    |                     |  |  | (90,000                                           | ) |  |                      | (9  
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Net proceeds subject to possible redemption of
    3,500,000 shares at redemption value (1)                                                     |  |                 | -          |   |                |   | -    |                     |  |  | (3,500,000                                        | ) |  |                      | (350
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Net loss for the year ended October 31, 2013                                                                                                    |  |                 | -          |   |                |   | -    |                     |  |  | -                                                 |   |  |                      | -   
|                                                                                                                                                |  |                 |            |   |                |   |      |                     |  |  |                                                   |   |  |                      |     
|Balance, October 31, 2013                                                                                                                       |  |                 | -          |   |                | $ | -    |                     |  |  | 1,636,000                                         |   |  | $                    | 164 









(1) A total of 3,500,000 shares of Class A Shares were subject
to redemption or tender at October 31, 2013.





The accompanying notes are an integral part of these financial
statements.





F-4







CIS Acquisition Ltd.

(A Company in the Development Stage)

STATEMENTS OF CASH FLOWS





|                                                                                            |  | For the Year Ended
 October 31,2013 |             |   | For the Period
    November 28, 2011  (Inception) Through  October 31, 2012 |   |          | For the Period
    November 28, 2011
 (Inception) Through
 October 31, 2013 | 
|------------------------------------------------------------------------------------------- |  | ----------------------------------- | ----------- | - | --------------------------------------------------------------------------- | - | -------- | --------------------------------------------------------------------------- | 
|Cash flows from operating activities:                                                       |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Net Loss                                                                                    |  | $                                   | (3,429,198  | ) |                                                                             | $ | (4,873   | )                                                                           | 
|Adjustments to reconcile net loss to net cash used in operating activities:                 |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Accretion of discount on investments held in trust                                          |  |                                     | (14,621     | ) |                                                                             |   | -        |                                                                             | 
|Change in fair value of warrant liability                                                   |  |                                     | 3,230,000   |   |                                                                             |   |          |                                                                             | 
|Changes in operating assets and liabilities:                                                |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Prepaid expenses and other current assets                                                   |  |                                     | (69,000     | ) |                                                                             |   | -        |                                                                             | 
|Accrued liabilities                                                                         |  |                                     | 59,440      |   |                                                                             |   | -        |                                                                             | 
|Net cash used in operating activities                                                       |  |                                     | (223,379    | ) |                                                                             |   | (4,873   | )                                                                           | 
|                                                                                            |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Cash flows from investing activities:                                                       |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Purchases of restricted investments and cash equivalents held in Trust Account              |  |                                     | (83,211,600 | ) |                                                                             |   | -        |                                                                             | 
|Proceeds from maturity of restricted investments and cash equivalents held in Trust Account |  |                                     | 41,611,600  |   |                                                                             |   | -        |                                                                             | 
|Net cash used in investing activities                                                       |  |                                     | (41,600,000 | ) |                                                                             |   | -        |                                                                             | 
|                                                                                            |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Cash flows from financing activities:                                                       |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Proceeds from sale of shares to intial shareholders                                         |  |                                     | -           |   |                                                                             |   | 25,000   |                                                                             | 
|Proceeds from Public Offering, net of offering costs                                        |  |                                     | 39,016,600  |   |                                                                             |   | -        |                                                                             | 
|Proceeds from note payable to an affiliate                                                  |  |                                     | (322,155    | ) |                                                                             |   | 322,155  |                                                                             | 
|Payment of deferred offering costs                                                          |  |                                     | (145,565    | ) |                                                                             |   | (309,844 | )                                                                           | 
|Proceeds from Warrant Offering                                                              |  |                                     | 3,375,000   |   |                                                                             |   | -        |                                                                             | 
|Proceeds from Sale of Class A Shares to Underwriter                                         |  |                                     | 2,720       |   |                                                                             |   | -        |                                                                             | 
|Net cash provided by financing activities                                                   |  |                                     | 41,926,600  |   |                                                                             |   | 37,311   |                                                                             | 
|                                                                                            |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Net (decrease) increase in cash and cash equivalents                                        |  |                                     | 103,221     |   |                                                                             |   | 32,438   |                                                                             | 
|Cash and cash equivalents - beginning                                                       |  |                                     | 32,438      |   |                                                                             |   | -        |                                                                             | 
|Cash and cash equivalents - ending                                                          |  | $                                   | 135,659     |   |                                                                             | $ | 32,438   |                                                                             | 
|                                                                                            |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Supplemental Disclosure of Non-cash Financing Activities:                                   |  |                                     |             |   |                                                                             |   |          |                                                                             | 
|Accrual of deferred offering costs                                                          |  | $                                   | -           |   |                                                                             | $ | 32,500   |                                                                             | 





The accompanying notes are an integral part of these financial statements.



F-5







CIS Acquisition Ltd.
(A Development Stage Company)

Notes to Financial
Statements



| | 1. | Organization, Plan of Business Operations, Liquidity
and Going Concern
| | -- | ----------------------------------------------------------------------





Organization and Plan of Business Operations







CIS Acquisition
Ltd. (a corporation in the development stage) (the “Company”) was formed on November 28, 2011 under the laws of the
British Virgin Islands as an innovated public acquisition company (“IPAC”). The Company was formed to acquire, through
a merger, share exchange, asset acquisition, share purchase, reorganization, exchangeable share transaction or other similar business
transaction, one or more operating businesses or assets that the Company has not yet identified (“Acquisition Transaction”).
An IPAC is a blank check company that permits the Company to return funds from a trust account to redeeming shareholders after
the completion of an Acquisition Transaction. Although the Company is not limited to a particular geographic region or industry,
it intends to focus on operating businesses with primary operations in Russia and Eastern Europe. As of October 31, 2013, the Company
had not yet commenced operations. All activity through October 31, 2013 relates to the Company’s formation, initial public
offering of its securities and search for a suitable operating business or assets with which to complete an Acquisition Transaction.
The Company is considered to be in the development stage as defined in Financial Accounting Standards Board (“FASB”)
Accounting Standard Codification, or ASC 915, “Development Stage Entities,” and is subject to risks associated with
activities of development stage companies.



The accompanying
financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted
in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules of the Securities and
Exchange Commission (“SEC”). The Company has evaluated events through the issuance of this Form 20-F.



The Company was required to determine if
it was a foreign private issuer (“FPI”) under Rule 3b4(d) of the Exchange Act, as of a date within 30 days of the filing
of the Registration Statement with the SEC for the Public Offering. The Company determined it was an FPI prior to the filing of
the Registration Statement. As an FPI, the Company will be required to comply with the tender offer rules in connection with its
initial Acquisition Transaction. The Company is required to determine its status as an FPI on an ongoing basis for all subsequent
fiscal years as of the last day of its most recently completed second fiscal quarter. Accordingly, as of the last day of its most
recently completed second quarter (April 30, 2013), the Company determined that it was an FPI. If the Company were to no longer
qualify as an FPI (as set forth in Rule 3b4 of the Exchange Act), the Company would then become subject to the US domestic issuer
rules as of the first day of its fiscal year following the determination date.



The registration statement for the Company’s
initial public offering (“Public Offering”) was declared effective on December 18, 2012. On December 21, 2012, the
Company consummated the Public Offering and received proceeds (net of underwriter’s discount of $720,000 and offering costs
of $718,809) of $38,561,191. The Company also received $3,375,000 from the issuance of 4,500,000 warrants (“Placement Warrants”)
in a private placement (the “Private Placement”) and $2,720 from the issuance of 136,000 of its callable Class A Shares
in a private placement (the “Underwriter Placement”).



The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Public Offering, the Private Placement and the Underwriter
Placement, although substantially all of the net proceeds are intended to be applied generally toward consummating an Acquisition
Transaction. There is no assurance that the Company will be able to affect an Acquisition Transaction successfully. Upon the closing
of the Public Offering, $41,600,000 ($10.40 per share sold in the Public Offering), including the proceeds of the Private Placement
and the Underwriter Placement, was placed in and continues to be held in a trust account (the “Trust Account”) and
is invested in U.S. government treasury bills having a maturity of 180 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, that invest solely in U.S. Treasuries until the
earlier of the consummation of the Company’s initial Acquisition Transaction and the Company’s failure to consummate
an Acquisition Transaction within the prescribed time.



F-6







CIS Acquisition Ltd.
(A Development Stage Company)

Notes to Financial
Statements





| | 1. | Organization, Plan of Business Operations, Liquidity
and Going Concern, continued
| | -- | ---------------------------------------------------------------------------------



Organization and Plan of Business Operations,
continued







Placing funds in the Trust Account may not
protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers,
prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in
or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. If the Company
is unable to complete an Acquisition Transaction and is forced to dissolve and liquidate, our founders, by agreement, will jointly
and severally indemnify the Company for all claims of contracted parties, to the extent the Company fails to obtain valid and enforceable
waivers from such parties. Under these circumstances, the Company’s board of directors would have a fiduciary obligation
to the Company’s shareholders to bring a claim against our founders to enforce their indemnification obligations. The Company
has questioned our founders on their financial net worth and reviewed their financial information and believes they will be able
to satisfy any indemnification obligations that may arise, although there can be no assurance of this. Our founders are under no
obligation to us to preserve their assets or provide the Company with information regarding changes in their ability to satisfy
these obligations.



The Company’s units are listed on
the Nasdaq Capital Markets (“Nasdaq”). Pursuant to the Nasdaq listing rules, the target business or businesses that
the Company acquires must collectively have a fair market value equal to at least 80% of the balance of the funds in the Trust
Account (less taxes payable) at the time of the execution of a definitive agreement for its initial Acquisition Transaction, although
the Company may acquire a target business whose fair value significantly exceeds 80% of the Trust Account balance.



The Company, after signing a definitive
agreement for the acquisition of a target business, is required to provide shareholders who acquired shares in the Public Offering
(“Public Shareholders”) with the opportunity to redeem their public shares for a pro rata share of the Trust Account
by means of a tender offer (or it may have the option of conducting redemptions in conjunction with a proxy solicitation pursuant
to the proxy rules if the Company is no longer an FPI). Each Public Stockholder will be entitled to receive a full pro rata portion
of the amount then in the Trust Account ($10.40 per share, plus any pro rata interest earned on the funds held in the Trust Account
and not previously released to the Company or necessary to pay its taxes). The Company will consummate an initial Acquisition Transaction
only if holders of no more than 87.5% of the public shares elect to convert (in case of a shareholder meeting) or sell their shares
to the Company (in the case of a tender offer) and, solely if the Company seeks shareholder approval, a majority of the outstanding
shares of a common shares voted are voted in favor of the Acquisition Transaction.



The Company is not required to obtain shareholder
approval for the Acquisition Transaction, unless the nature of the acquisition would require such approval under applicable British
Virgin Islands law. Public Shareholders will be entitled to redeem or will have their shares automatically redeemed for cash equal
to the pro rata portion of the Trust Account in connection with the Acquisition Transaction, regardless of how it is structured.
The manner in which Public Shareholders may redeem their shares or will have their shares automatically redeemed will depend on
one of the following structures of the transaction:



Pre-acquisition tender offer: Prior to the
consummation of an Acquisition Transaction, a tender offer would be initiated for all outstanding callable Class A Shares at a
price equal to a pro rata share of the Trust Account. Public Shareholders will be entitled to tender all or a portion of their
callable Class A Shares. However, the Company’s founders would not be eligible to tender any shares they own in such tender
offer.



F-7







CIS Acquisition Ltd.
(A Development Stage Company)

Notes to Financial
Statements





| | 1. | Organization,
Plan of Business Operations, Liquidity and Going Concern, continued
| | -- | ---------------------------------------------------------------------------------



Organization and Plan of Business Operations, continued





Post-acquisition tender offer: A Report
of Foreign Private Issuer would be filed on Form 6-K with the SEC disclosing that the Company has entered into a definitive acquisition
transaction agreement and intends to consummate the Acquisition Transaction without shareholder vote or a pre-acquisition tender
offer. Prior to the consummation of the Acquisition Transaction, the Company shall seek to have certain Class A shareholders (accredited
investors who own 5% or more of shares) elect to convert all of their callable Class A Shares into Class C Shares on a one-for-one
basis, with any remaining callable Class A Shares automatically converting to callable Class B Shares immediately following consummation
of the Acquisition Transaction. After filing, the Acquisition Transaction will be completed upon satisfaction of all closing conditions
and, within 30 days of the closing, the Company will commence a tender offer for all outstanding callable Class B Shares. Public
Shareholders will be entitled to tender all or a portion of their callable Class B Shares. The Class C Shares are not eligible
to participate in any post-acquisition tender offer. In case of (i) failure to commence the issuer tender offer within 30 days
of consummation of the Acquisition Transaction, (ii) failure to complete the issuer tender offer within 6 months, or (iii) failure
to complete the issuer tender offer within 21 months of the consummation of the Public Offering, then within 5 business days thereafter,
the Company will automatically liquidate the Trust Account and release a pro rata portion of the Trust Account to Public Shareholders
of Class B Shares. If the Company is no longer an FPI and shareholder approval of the transaction is required by British Virgin
Islands law or the NASDAQ Capital Market or the Company decides to obtain shareholder approval for business reasons, the Company
will:



| | · | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | file proxy materials with the SEC.
| | - | ----------------------------------



The Company will consummate an Acquisition
Transaction only if holders of no more than 87.5% of the shares sold in the Proposed Offering exercise their redemption rights.



The Company has until June 21, 2014 to complete
the Acquisition Transaction. If the Company has an executed letter of intent, agreement in principal or definitive agreement with
respect to an Acquisition Transaction prior to June 21, 2014, the time period will be automatically extended to September 21, 2014
if an initial filing with the SEC of a tender offer, proxy, or registration statement is made, but the Acquisition Transaction
is not completed by June 21, 2014.



If the Company is unable to complete an
Acquisition Transaction within the allotted time, the Company will automatically dissolve and as promptly as practicable liquidate
the Trust Account and release only to Public Shareholders a pro rata share of the Trust Account (initially $10.40 per share), plus
any remaining net assets. If the Company elects to effect a post-acquisition tender offer and complete an Acquisition Transaction
prior to such time period, but has not completed a post-acquisition tender offer within the stated period, the Company will not
be required to liquidate and wind up its affairs; however, the release of the funds in the case of a post-acquisition tender offer
will be conditioned upon completion of such tender offer. The founders and holders of Underwriter Shares (defined below) have agreed
to waive the right to participate in any distribution from the Trust Account, but not with respect to any units or callable Class
A Shares they acquired in the Public Offering or acquire in the aftermarket.



F-8







CIS Acquisition Ltd.
(A Development Stage Company)

Notes to Financial
Statements



| | 1. | Organization, Plan of Business Operations, Liquidity
and Going Concern, continued
| | -- | ---------------------------------------------------------------------------------





Liquidity
and Going Concern



The Company anticipates that in order to
fund its working capital requirements, the Company will need to use all of the remaining funds not held in trust, the interest
earned on the funds held in the trust account, as well as enter into contingent fee arrangements with its vendors. The Company
may need to raise additional capital through additional loans or additional investments from its founders, officers, directors,
or third parties. None of the founders, officers or directors is under any obligation to advance funds to, or to invest in, the
Company. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional
capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited
to, curtailing operations, suspending the pursuit of its business plan, and controlling overhead expenses. The Company cannot provide
any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial
doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments
that might result from the outcome of these uncertainties.



| | 2. | Public Offering and Private Placement
| | -- | -------------------------------------



In connection with the Public Offering,
on December 21, 2012, the Company sold 4,000,000 Units at $10.00 per unit (“Units”) generating gross proceeds of $40,000,000.
Each Unit consists of one callable Class A Share, $0.0001 par value, and one redeemable warrant (each a “Warrant”)
to purchase one ordinary share of the Company. Each Warrant entitles the holder to purchase from the Company one ordinary share
at an exercise price of $10.00 commencing on the later of (a) December 18, 2013 and (b) the consolidation of each series of the
Company’s ordinary shares into one class of ordinary shares, and will expire on the earlier of December 18, 2017 and the
date of the Company’s dissolution and liquidation of the Trust Account, unless such Warrants are earlier redeemed.



The Warrants may be redeemed by the Company
at a price of $0.01 per Warrant in whole but not in part upon 30 days prior written notice after the Warrants become exercisable,
only in the event that the last sale price of the ordinary shares is at least $15.00 per share for any 20 trading days within a
30 trading day period ending on the third business day prior to the date on which notice of redemption is given. In the event that
there is no effective registration statement or prospectus covering the ordinary shares issuable upon exercise of the Warrants,
holders of Warrants may elect to exercise them on a cashless basis by paying the exercise price by surrendering their Warrants
for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of shares underlying
the redeemable warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value”
(defined below) by (y) the fair market value. The “fair market value” means the average reported last sale price of
our ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the Warrant notice is sent
to the warrant agent. The Company would not receive additional proceeds to the extent the redeemable warrants are exercised on
a cashless basis.



The callable Class A Shares and Warrants
began separate trading on March 18, 2013. The callable Class A Shares will continue to trade until the Acquisition Transaction
has been completed, at which time they will either: (i) automatically be consolidated with all ordinary shares into one series,
if redemption rights were granted prior to, or concurrently with, the completion of the Acquisition Transaction; or (ii) automatically
separate from the units and convert to callable Class B Shares, if the Acquisition Transaction is completed prior to a post-acquisition
tender offer. After the post-acquisition tender offer, the callable Class B Shares will be consolidated with other outstanding
ordinary shares. Upon consummation of the Public Offering, the ordinary shares purchased by the founders were exchanged for Class
A Shares (Note 6). Such shares will not be redeemable, will be placed in escrow and will not be released until December 18, 2014.





F-9











CIS Acquisition Ltd.

(A Development Stage Company)

Notes to Financial Statements





| | 2. | Public Offering and Private Placement, continued
| | -- | ------------------------------------------------



The Company sold to Chardan Capital Markets,
LLC and its designees (the “Underwriter”), for an aggregate of $100, an option to purchase 280,000 units at an exercise
price of $12.00 per unit, which is comprised of 280,000 ordinary shares and warrants to purchase 280,000 ordinary shares. The Underwriter’s
unit purchase option will be exercisable at any time, in whole or in part, from the later of (i) the consolidation of each series
of the Company’s ordinary shares into one class of ordinary shares, or (ii) June 18, 2013, and expire on the earlier of December
18, 2017 and the day immediately prior to the day on which the Company has been dissolved. The Company has accounted for the fair
value of the unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the Public Offering resulting
in a charge directly to shareholders’ equity. The Company estimated that the fair value of this unit purchase option was
approximately $968,876 (or $3.46 per unit) using a Black-Scholes option-pricing model. The fair value of the unit purchase option
granted to the underwriter was estimated as of the date of grant using the following assumptions: (1) expected volatility of 46%,
(2) risk-free interest rate of 0.76% and (3) expected life of five years. The Company has no obligation to net cash settle the
exercise of the unit purchase option or underlying Warrants.



In connection with the Underwriter Placement,
on December 21, 2012, the Company sold to the underwriters of the Public Offering, including Maxim Group LLC, the qualified independent
underwriter, for an aggregate of $2,720, an aggregate of 136,000 Class A Shares (the “Underwriter Shares”). Such shares
are not redeemable, have been placed in escrow and will not be released until December 18, 2014. Additionally, the underwriters
have agreed to waive their rights to participate in any distribution from the Trust Account. The Company accounted for the fair
value of the Underwriter Shares, inclusive of the receipt of $2,720 cash payment, as an expense of the Public Offering resulting
in a charge directly to shareholders’ equity. The Company estimates that the fair value of these shares was approximately
$1,360,000 ($10.00 per share).



In connection with the Private Placement,
on December 21, 2012, the founders and certain of their designees purchased 4,500,000 warrants (the “Placement Warrants”)
at a price of $0.75 per warrant for an aggregate purchase price of $3,375,000. The proceeds from the sale of the Placement Warrants
are held in the Trust Account pending completion of the Acquisition Transaction. The Placement Warrants are identical to the Warrants,
except that the Placement Warrants are (i) subject to certain transfer restrictions described below, (ii) cannot be redeemed by
the Company, and (iii) may be exercised during the applicable exercise period, on a for cash or cashless basis, at any time after
the consolidation of each series of the Company’s ordinary shares into one class of ordinary shares after consummation of
an Acquisition Transaction or post-acquisition tender offer, as the case may be, even if there is not an effective registration
statement relating to the shares underlying the Placement Warrants, so long as such warrants are held by the founders, their designees,
or their affiliates. Notwithstanding the foregoing, if the Placement Warrants are held by holders other than the founders or their
permitted transferees, the Placement Warrants will only be exercisable by the holders on the same basis as the Warrants included
in the units being sold in the Public Offering.



The founders have agreed, subject to certain
exceptions below, not to sell, assign or otherwise transfer any of their Placement Warrants until the consummation of the Acquisition
Transaction or the completion of a post-acquisition tender offer, as the case may be. Prior to the consummation of an Acquisition
Transaction or the completion of a post-acquisition tender offer, as the case may be, the Placement Warrants may only be transferred
(i) by gift to an affiliate or a member of the holder’s immediate family (or a member of the immediate family of its officers
or directors) or to a trust or other entity, the beneficiary of which is the holder (or one of its officers or directors or a member
of their respective immediate families), (ii) by virtue of the laws of descent and distribution upon death of any holder, or (iii)
pursuant to a qualified domestic relations order; provided, however, that as relates to the Placement Warrants, any such transfers
may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of the
insider letter agreement executed by the transferring holder.



| | 3. | Summary of Significant Accounting Policies
| | -- | ------------------------------------------



Use of Estimates



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the balance sheet and the reported amounts of revenues and expenses during the period. Actual results could differ
from those estimates. Significant estimates include the value of the warrants and the option sold to the Underwriter.



F-10







CIS Acquisition Ltd.
(A Development Stage Company)

Notes to Financial
Statements



| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Loss Per Share



Basic loss per share is computed by dividing
net loss by the weighted-average number of ordinary or Class A shares, as applicable, outstanding during the period. Class A shares
subject to possible redemption of 3,500,000 and 0 shares as of October 31, 2013 and 2012 , respectively, have been excluded from
the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the trust earnings.
Weighted average shares for the year ended October 31, 2013 and for the period November 28, 2011 (inception) through October 31,
2012 were reduced for the effect of an aggregate 90,000 Class A shares that were forfeited on March 18, 2013, the date upon which
the underwriters’ over-allotment option expired. Loss per share assuming dilution would give effect to the dilutive underwriter’s
purchase option, warrants, and other potential ordinary shares outstanding during the period. The Company has not considered the
effect of warrants to purchase 8,500,000 ordinary shares and the underwriter’s option to purchase 280,000 Units in the calculation
of diluted loss per share, since the exercise of the warrants and the option is contingent upon the occurrence of future events.



Cash and Cash Equivalents



Cash: The Company maintains its cash with
high credit quality financial institutions. At times, the Company’s cash and cash equivalents may be uninsured or in deposit
accounts that exceed insured amounts. Accordingly, the Company is subject to the risk of failure of the financial institutions
where it maintains its cash deposits. In September, 2013, approximately $55,000 was wired from the Company’s former operating
bank account pursuant to unauthorized wire instructions. As of October 31, 2013, the company was seeking recovery of the stolen
funds from the banking institution. On March 4, 2014, the Company received $50,000 as a settlement from the bank in connection
with the unauthorized wire theft.



Cash Equivalents: The Company considers
all short-term investments with a maturity of three months or less when purchased to be cash equivalents.



Restricted Investments and Cash Equivalents Held in Trust
Account



The amounts held in the Trust Account represent
substantially all of the proceeds of the Public Offering, the Private Placement and the Underwriter Placement and are classified
as restricted assets since such amounts can only be used by the Company in connection with the consummation of an Acquisition Transaction.



As of October 31, 2013, investment securities
held in the Trust Account consisted of $41,614,296 in a United States Treasury Bill, which matures on February 6, 2014 and $325
of cash equivalents. The Company classifies its United States Treasury securities as held-to-maturity in accordance with ASC 320
“Investments – Debt and Equity Securities”. Held-to-maturity securities are those securities which the Company
has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying
balance sheet and are adjusted for the accretion of discounts.



A decline in the market value of held-to-maturity
securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such
securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine
whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment
until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence
to the contrary.



Premiums and discounts are amortized or
accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method.
Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest
income is recognized when earned.



F-11







CIS Acquisition Ltd.
(A Development Stage Company)

Notes to Financial
Statements

| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Restricted Investments and Cash Equivalents Held in Trust
Account, continued



The carrying amount, gross unrealized holding
gains and the fair value of held-to-maturity securities at October 31, 2013 are as follows:



|                    |  | Carrying Amount |            |  | Gross Unrealized Holding Loss |   |     | Fair Value | 
|------------------- |  | --------------- | ---------- |  | ----------------------------- | - | --- | ---------- | 
|Held-to-maturity:   |  |                 |            |  |                               |   |     |            | 
|U.S. Treasury Bills |  | $               | 41,614,621 |  |                               | $ | 190 |            | 



Income Tax



The Company complies with FASB ASC 740,
“Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes.
Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets
and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 also establishes recognition requirements for the
accounting for uncertainty in income taxes. The Company has identified the British Virgin Islands as its only major tax jurisdiction.
There were no unrecognized tax benefits as of October 31, 2013. Since the Company was incorporated on November 28, 2011, the evaluation
was performed for the tax years ended October 31, 2013 and 2012, which will be the only periods subject to examination. The section
prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at October31, 2013. The Company
is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from
its position.



Fair Value Measurements



The carrying amounts of cash, cash equivalents,
restricted cash, and accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these
instruments.



Fair value is defined as an exit price,
representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction
between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants
would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair
value as follows:





|Level 1. | Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                               
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 2. | Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
|Level 3. | Significant unobservable inputs that cannot be corroborated by market data.                                                                                                                                                        







F-12









CIS Acquisition Ltd.

(A Development Stage Company)

Notes to Financial Statements



| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Fair Value Measurements, continued



The assets or liability’s fair value
measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.
The following table provides a summary of the assets that are measured at fair value on a recurring basis.



|                        |  | Consolidated Balance Sheet |           |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |   |   | Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) |  |   | Significant Unobservable Inputs (Level 3) | 
|----------------------- |  | -------------------------- | --------- |  | ----------------------------------------------------------------------------- | - | - | --------------------------------------------------------------------------- |  | - | ----------------------------------------- | 
|Derivative Liabilities: |  |                            |           |  |                                                                               |   |   |                                                                             |  |   |                                           | 
|October 31, 2013        |  | $                          | 3,230,000 |  |                                                                               | $ | - |                                                                             |  | $ | -                                         | 





The following table sets forth a summary
of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring
basis:



|                                                                                                                                                                      |  | For the Years Ended October 31, |          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------
|                                                                                                                                                                      |  | 2013                            |          
|Beginning balance                                                                                                                                                     |  | $                               | -        
|Aggregate fair value of warrant liability upon issuance                                                                                                               |  |                                 | -        
|Change in fair value of warrant liability – recorded after the balance sheet dated December 21, 2012, but during the year ended October 31, 2013 (as explained below) |  |                                 | 3,230,000
|Ending balance                                                                                                                                                        |  | $                               | 3,230,000



Revised
Prior Period Amounts



While
preparing its balance sheet as of April 30, 2013, the Company identified and corrected an error related to the accounting for the
Company’s outstanding warrants. The amount of the error was approximately $3,570,000 as of December 21, 2012. The Company
determined that its outstanding warrants should have been accounted as a liability recorded at fair value and that this liability
should be re-measured at each reporting period with changes in fair value being reflected in the statement of operations. The determination
of this accounting methodology was made as a result of potential adjustments to the exercise price of the warrants in certain circumstances
as described in the warrant agreements which do not meet the criteria for equity treatment described in ASC 815-45-7D.





In accordance with
Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin Nos. 99 and 108 (“SAB 99” and “SAB
108”), the Company has evaluated these errors, based on an analysis of quantitative and qualitative factors, as to whether
they were material to each of the prior reporting periods affected and if amendments of previously filed Reports of Foreign Private
Issuer on Form 6-K with the SEC are required. The Company has determined that though quantitatively and qualitatively material
to the previously furnished balance sheet dated December 21, 2012 on Form 6-K filed with the SEC on December 28, 2012, the Company
believes the recording of the warrants as liability instruments would not have influenced an investor’s decision making process
and has determined to record the liability in the year ended October 31, 2013, as opposed to a restatement and reissuance of the
previously furnished balance sheet.





F-13







CIS Acquisition Ltd.

(A Development Stage Company)

Notes to Financial Statements



| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Fair Value Measurements, continued



Level 3 financial liabilities consist of
the derivative liabilities for which there is no current market such that the determination of fair value requires significant
judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed
each period based on changes in estimates or assumptions and recorded as appropriate.



Level 3 liabilities are valued using unobservable
inputs to the valuation methodology that are significant to the measurement of the fair value of the derivate liabilities. For
fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Chief Financial Officer determines
its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements
and fair value calculations are the responsibility of the Company’s Chief Financial Officer with support from the Company’s
consultants.



The Company accounts for the
4,000,000 warrants issued in connection with the Public Offering, and the 4,500,000 warrants issued in connection with the Private
Placement in accordance with the guidance contained in ASC 815-40-15-7D whereby under that provision they do not meet the criteria
for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the warrant instrument as a liability
at its fair value. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair
value is recognized in the Company’s statement of operations.



The fair value
of the warrant liability was determined by the Company using the Binomial Lattice pricing model.  This model is dependent
upon several variables such as the instrument’s expected term, expected strike price, expected risk-free interest rate over the
expected instrument term, the expected dividend yield rate over the expected instrument term expected volatility of the
Company’s share price over the expected term, expected time to complete an acquisition and estimated probability of completing
a successful acquisition.  The expected term represents the period of time that the instruments granted are expected
to be outstanding.  The expected strike price is based upon a weighted average probability analysis of the strike price
changes expected during the term as a result of the down round protection.  The risk-free rates are based on U.S. Treasury
securities with similar maturities as the expected terms of the options at the date of valuation.  Expected dividend
yield is based on historical trends.  The Company measures volatility using a blended weighted average of the volatility
rates for a number of similar publicly-traded companies along with the Company’s historical volatility.



A significant decrease in the volatility
or a significant decrease in the Company’s share price, in isolation, would result in a significantly lower fair value measurement.
Changes in the values of the derivative liabilities are recorded in change in fair value of derivative liabilities within other
expense (income) on the Company’s statements of operations.



As of October 31, 2013, there were no transfers
in or out of Level 3 from other levels in the fair value hierarchy.



The
inputs to the model were as follows:



|                                             |  | December 21, 2013 |                 |   | October 31, 2013 | 
|-------------------------------------------- |  | ----------------- | --------------- | - | ---------------- | 
|Dividend yield (per share)                   |  |                   | 0               | % |                  | 
|Risk-free interest rate:                     |  |                   | 0.74            | % |                  | 
|Expected term                                |  |                   | 5.0 yrs.        |   |                  | 
|Expected volatility rate                     |  |                   | 21.41           | % |                  | 
|Assumed acquisition date                     |  |                   | August 18, 2014 |   |                  | 
|Estimated probability of acquisition success |  |                   | 61.3            | % |                  | 



F-14







CIS Acquisition Ltd.

(A Development Stage Company)

Notes to Financial Statements



| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Concentration of Credit Risk



Financial instruments that potentially subject the Company to
concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed insured amounts.
Accordingly, the Company is subject to the risk of failure of the financial institutions where it maintains its cash deposits.
See discussion under Cash and Cash Equivalents regarding a theft against one of the Company’s former bank accounts.



Ordinary Shares Subject to Possible Conversion



The ordinary shares
as part of the Units (the “Units”) issued in the Public Offering, contained a conversion feature which is subject to
redemption. In accordance with ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), redemption
provisions not solely within the control of the Company require the security to be classified outside of permanent equity.



Accordingly, 3,500,000
of the 4,000,000 public shares were classified outside of permanent equity at redemption value because the redemption rights are
subject to the occurrence of certain events that are outside of the Company’s control. The redemption value at October 31,
2013 was equal to approximately the pro rata share of the aggregate amount then on deposit in the Trust Account ($10.40 per share
at October 31, 2013).



Recent Accounting Pronouncements



The Company does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial
statements.



| | 4. | Commitments
| | -- | -----------



The Company entered into an agreement with
the underwriters (the “Underwriting Agreement”). Pursuant to the Underwriting Agreement, the Company paid an underwriting
discount of 1.8% of the gross proceeds of the Public Offering, or $720,000 on December 21, 2012.



The holders of the founders’ shares,
as well as the holders of the Placement Warrants (and underlying securities) and Underwriter Shares, are entitled to registration
rights pursuant to a registration rights agreement signed on December 18, 2012. The holders of the majority of these securities
are entitled to make up to two demands that the Company register such securities. The holders of the majority of the founders’
shares and Underwriter Shares can elect to exercise these registration rights at any time commencing three months prior to the
date on which the founders’ shares are to be released from escrow. The holders of a majority of the Placement Warrants (or
underlying securities) can elect to exercise these registration rights at any time after the Company consummates an Acquisition
Transaction or completes a post-acquisition tender offer, as the case may be. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the consummation of an Acquisition Transaction
or post-acquisition tender offer. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.



F-15







CIS Acquisition Ltd.

(A Development Stage Company)

Notes to Financial Statements



| | 5. | Related Party Transactions
| | -- | --------------------------



The Company issued an $180,155 unsecured
promissory note to Intercarbo AG on February 13, 2012. Additional unsecured promissory notes in the amounts of $52,000 and $170,000
were issued on April 30, 2012 and July 16, 2012, respectively. The notes were non-interest bearing and pursuant to their terms
were to be repaid promptly after the consummation of the Public Offering. On December 24, 2012, the Company repaid $387,155 representing
the aggregate balance outstanding. Intercarbo AG is an affiliate of Mr. Taras Vazhnov, a director of the Company.



The Company agreed to pay to CIS Acquisition
Holding Co. Ltd., an affiliate of Anatoly Danilitskiy, our Chairman and Chief Executive Officer, and Taras Vazhnov, our director,
a total of $7,500 per month for office space, administrative services and secretarial support for a period commencing on December
18, 2012 and ending on the earlier of the consummation of an Acquisition Transaction or the Company’s liquidation. Such fees
have been paid as incurred only out of interest earned on the trust account or assets not held in trust, if any. If there are insufficient
funds from interest earned on the trust account or from assets not held in trust, then the obligation to CIS Acquisition Holding
Co. Ltd. will be accrued and not paid. During the year ending October 31, 2013, for the period February 24, 2011(inception) through
October 31, 2012 and for the period February 24, 2011(inception) through October 31, 2013, the Company has incurred $75,000, $0
and $75,000, respectively, for these office space expenses to CIS Acquisition Holding Co. Ltd.



| | 6. | Shareholders’ Equity
| | -- | --------------------



Preferred Shares:



The Company’s Amended and Restated Memorandum of Association
authorizes the issuance of up to 5,000,000 preferred shares each with such designation, rights and preferences as may be determined
by the board of directors. No preferred shares are currently issued or outstanding.



Ordinary Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 75,000,000 ordinary shares. No ordinary shares are currently issued
or outstanding.



Class A Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 25,000,000 Class A shares. As of April 30, 2013, 1,636,000 Class A shares
were issued and outstanding, excluding 3,500,000 Class A shares subject to possible redemption or tender.



Class B Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 25,000,000 Class B Shares. No Class B shares are currently issued or
outstanding.



F-16







CIS Acquisition Ltd.

(A Development Stage Company)

Notes to Financial Statements



| | 6. | Shareholders’ Equity, continued
| | -- | -------------------------------



Ordinary Shares, continued



Class C Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 25,000,000 Class C Shares. No Class C shares are currently issued or
outstanding.



On November 28,
2011, the Company issued 100 ordinary shares to Kyle Shostak, the Company’s initial shareholder and founder, for a consideration
of $0.01. On February 13, 2012, the Company issued 2,804,562 ordinary shares to CIS Acquisition Holding Co. Ltd. and 70,338 ordinary
shares to Mr. Shostak for an aggregate consideration of $24,999.99, or approximately $0.0087 per share. On October 18, 2012, the
founders contributed an aggregate of 1,437,500 shares of the Company’s ordinary shares to the Company’s capital at
no cost to the Company and the Company subsequently cancelled such shares. On November 30, 2012, the founders contributed an aggregate
of 75,000 shares of the Company’s ordinary shares to the Company’s capital at no cost to the Company and the Company
subsequently cancelled such shares. On December 14, 2012, our founders contributed an aggregate of 272,500 shares to the Company’s
capital at no cost to the Company and the Company subsequently cancelled such shares. Immediately prior to the consummation of
the Public Offering, the founders exchanged all 1,090,000 ordinary shares for their respective portion of 1,090,000 newly-issued
Class A Shares. The Company redeemed 90,000 of the founders’ Class A shares for no consideration because the underwriter’s
over-allotment option expired unexercised on March 18, 2013 so that the Company’s founders own 20% of the issued and outstanding
Class A shares (not including the Underwriter Shares) after the Public Offering. Additionally, the founders and the underwriters
agreed not to redeem or tender the Class A Shares that they hold. The founders’ shares and the Underwriter Shares will automatically
convert to Class C Shares or ordinary shares, as applicable, upon consummation of the Acquisition Transaction.



| | 7. | Subsequent Events
| | -- | -----------------





The Company evaluated events that have occurred
after the balance sheet date of October 31, 2013 through the date which the financials were available to be issued. Based upon
this review, other than as already disclosed within these financial statements in Note 3 – Summary of Significant Accounting
Policies, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or
disclosure in the financial statements.





F-17







CIS Acquisition Ltd.

BALANCE SHEETS





|                                                                                                                                                                                         |  | April 30, 2014 |            |   | October 31, 2013 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ---------------- | -
|                                                                                                                                                                                         |  | (unaudited)    |            |   |                  |  
|ASSETS                                                                                                                                                                                   |  |                |            |   |                  |  
|Current Assets:                                                                                                                                                                          |  |                |            |   |                  |  
|Cash and cash equivalents                                                                                                                                                                |  | $              | 12,648     |   |                  | $
|Prepaid expenses and other current assets                                                                                                                                                |  |                | 36,333     |   |                  |  
|Total current assets                                                                                                                                                                     |  |                | 48,981     |   |                  |  
|                                                                                                                                                                                         |  |                |            |   |                  |  
|Restricted investments and cash equivalents held in Trust Account                                                                                                                        |  |                | 41,622,401 |   |                  |  
|Total assets                                                                                                                                                                             |  | $              | 41,671,382 |   |                  | $
|                                                                                                                                                                                         |  |                |            |   |                  |  
|LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS’ EQUITY                                                                                                                                  |  |                |            |   |                  |  
|Current liabilities:                                                                                                                                                                     |  |                |            |   |                  |  
|Accrued expenses                                                                                                                                                                         |  | $              | 191,674    |   |                  | $
|Loan payable - related party                                                                                                                                                             |  |                | 30,000     |   |                  |  
|Total current liabilities                                                                                                                                                                |  |                | 221,674    |   |                  |  
|                                                                                                                                                                                         |  |                |            |   |                  |  
|Warrant liability                                                                                                                                                                        |  |                | 3,185,000  |   |                  |  
|Total liabilities                                                                                                                                                                        |  |                | 3,406,674  |   |                  |  
|                                                                                                                                                                                         |  |                |            |   |                  |  
|Commitments and contingencies                                                                                                                                                            |  |                |            |   |                  |  
|                                                                                                                                                                                         |  |                |            |   |                  |  
|Class A shares, subject to possible redemption or tender, 3,500,000 shares at redemption value                                                                                           |  |                | 36,400,000 |   |                  |  
|                                                                                                                                                                                         |  |                |            |   |                  |  
|Shareholders’ Equity                                                                                                                                                                     |  |                |            |   |                  |  
|Preferred shares, $0.0001 par value, 5,000,000 shares authorized; none issued or outstanding                                                                                             |  |                |            |   |                  |  
|Class A shares, $0.0001 par value, 25,000,000 shares authorized; 1,636,000 shares issued and   outstanding (excluding 3,500,000 Class A shares subject to possible redemption or tender) |  |                | 164        |   |                  |  
|Class B shares, $0.0001 par value, 25,000,000 shares authorized; none issued or outstanding                                                                                              |  |                | -          |   |                  |  
|Class C shares, $0.0001 par value, 25,000,000 shares authorized; none issued or outstanding                                                                                              |  |                | -          |   |                  |  
|Ordinary shares $0.0001 per share; 75,000,000 shares authorized; none issued or outstanding                                                                                              |  |                | -          |   |                  |  
|Additional paid in capital                                                                                                                                                               |  |                | 5,563,747  |   |                  |  
|Accumulated deficit                                                                                                                                                                      |  |                | (3,699,203 | ) |                  |  
|Total shareholders’ equity                                                                                                                                                               |  |                | 1,864,708  |   |                  |  
|                                                                                                                                                                                         |  |                |            |   |                  |  
|Total liabilities, redeemable common shares and shareholders’ equity                                                                                                                     |  | $              | 41,671,382 |   |                  | $



The accompanying notes are an integral part
of these financial statements.



F-18







CIS Acquisition Ltd.

STATEMENTS OF OPERATIONS

(unaudited)



|                                                           |  | For the Six Months Ended April 30, |          
|---------------------------------------------------------- |  | ---------------------------------- | ---------
|                                                           |  | 2014                               |          
|                                                           |  |                                    |          
|Operating Expenses:                                        |  |                                    |          
|Legal and professional fees                                |  | $                                  | 234,406  
|Office expense - related party                             |  |                                    | 45,000   
|General and administrative expenses                        |  |                                    | 38,506   
|Loss from operations                                       |  |                                    | (317,912 
|                                                           |  |                                    |          
|Other Income (Expense):                                    |  |                                    |          
|Change in fair value of warrants                           |  |                                    | 45,000   
|Interest income                                            |  |                                    | 7,780    
|Net loss                                                   |  | $                                  | (265,132 
|                                                           |  |                                    |          
|Weighted average shares outstanding, basic and diluted (1) |  |                                    | 1,636,000
|Basic and diluted net loss per common share                |  | $                                  | (0.16    





(1) Excludes an aggregate of 90,000 ordinary shares held by
the founders that were subject to redemption to the extent the underwriters’ over-allotment option was not exercised in full. Such
shares became Class A Shares upon closing of the Public Offering and were redeemed for no consideration on March 18, 2013.



The accompanying notes are an integral part
of these financial statements.



F-19







CIS Acquisition Ltd.

STATEMENT OF CHANGES IN SHAREHOLDERS’
EQUITY

For the Six Months Ended April 30, 2014





|                                                 |  | Class A Shares |           |  | Additional Paid-in |   |     | Accumulated |  |   | Total  Shareholders’ | 
|------------------------------------------------ |  | -------------- | --------- |  | ------------------ | - | --- | ----------- |  | - | -------------------- | 
|                                                 |  | Shares         |           |  | Amount             |   |     | Capital     |  |   | Deficit              | 
|                                                 |  |                |           |  |                    |   |     |             |  |   |                      | 
|Balance, November 1, 2013                        |  |                | 1,636,000 |  |                    | $ | 164 |             |  | $ | 5,563,747            | 
|                                                 |  |                |           |  |                    |   |     |             |  |   |                      | 
|Net loss for the six months ended April 30, 2014 |  |                | -         |  |                    |   | -   |             |  |   | -                    | 
|                                                 |  |                |           |  |                    |   |     |             |  |   |                      | 
|Balance, April 30, 2014 (unaudited)(1)           |  |                | 1,636,000 |  |                    | $ | 164 |             |  | $ | 5,563,747            | 







(1) A total of 3,500,000 shares of Class A Shares were subject
to redemption or tender at October 31, 2014.



The accompanying notes are an integral part
of these financial statements.



F-20









CIS Acquisition Ltd.

STATEMENTS OF CASH FLOWS

(unaudited)





|                                                                                            |  | For the Six Months Ended April 30, |            
|------------------------------------------------------------------------------------------- |  | ---------------------------------- | -----------
|                                                                                            |  | 2014                               |            
|Cash flows from operating activities:                                                       |  |                                    |            
|Net Loss                                                                                    |  | $                                  | (265,132   
|Adjustments to reconcile net loss to net cash used in operating activities:                 |  |                                    |            
|Change in fair value of warrant liability                                                   |  |                                    | (45,000    
|Accrued interest                                                                            |  |                                    | (7,781     
|Changes in operating assets and liabilities:                                                |  |                                    |            
|Prepaid expenses and other current assets                                                   |  |                                    | 32,667     
|Accrued expenses                                                                            |  |                                    | 132,235    
|Net cash used in operating activities                                                       |  |                                    | (153,011   
|                                                                                            |  |                                    |            
|Cash flows from investing activities:                                                       |  |                                    |            
|Investment in cash and cash equivalent held in Trust Account                                |  |                                    | -          
|Purchase of restricted investments and cash equivalents held in Trust Account               |  |                                    | (41,617,100
|Proceeds from maturity of restricted investments and cash equivalents held in Trust Account |  |                                    | 41,617,100 
|Net cash used in investing activities                                                       |  |                                    | -          
|                                                                                            |  |                                    |            
|Cash flows from financing activities:                                                       |  |                                    |            
|Proceeds from Public Offering, net of offering costs                                        |  |                                    | -          
|Proceeds from note payable to an affiliate                                                  |  |                                    | 30,000     
|Repayment of note payable                                                                   |  |                                    | -          
|Payment of deferred offering costs                                                          |  |                                    | -          
|Proceeds from Warrant Offering                                                              |  |                                    | -          
|Proceeds from Sale of Class A Shares to Underwriter                                         |  |                                    | -          
|Net cash provided by financing activities                                                   |  |                                    | 30,000     
|                                                                                            |  |                                    |            
|Net (decrease) increase in cash and cash equivalents                                        |  |                                    | (123,011   
|Cash and cash equivalents - beginning                                                       |  |                                    | 135,659    
|Cash and cash equivalents - ending                                                          |  | $                                  | 12,648     



The accompanying notes are an integral part
of these financial statements.



F-21







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 1. | Organization, Plan of Business Operations, Liquidity
and Going Concern
| | -- | ----------------------------------------------------------------------



Organization and Plan of Business
Operations



CIS Acquisition Ltd. (“CIS”
or the “Company”) was formed on November 28, 2011 under the laws of the British Virgin Islands as an innovated public
acquisition company (“IPAC”). The Company was formed to acquire, through a merger, share exchange, asset acquisition,
share purchase, reorganization, exchangeable share transaction or other similar business transaction, one or more operating businesses
or assets (“Acquisition Transaction”). An IPAC is a blank check company that permits the Company to return funds from
a trust account to redeeming shareholders after the completion of an Acquisition Transaction. Although the Company is not limited
to a particular geographic region or industry, it intends to focus on operating businesses with primary operations in Russia and
Eastern Europe.



As of April 30, 2014, the Company had not
yet commenced operations. All activity through April 30, 2014 relates to the Company’s formation, initial public offering
of its securities and the identification and investigation of a suitable operating business or assets with which to complete an
Acquisition Transaction.



On June 16, 2014, a Stock Purchase Agreement
(the “Red Rock Agreement”) was entered into by and among CIS, Red Rock Holdings Group, LLC, a Delaware Limited Liability
company (“Red Rock” or the “Target”), and Foster Jennings, Inc., Red Rock’s sole member (the “Member”).
Since the Company entered into the Agreement on June 16, 2014, and filed with the SEC a tender offer on June 23, 2014, the time
period for closing the Acquisition Transaction was automatically extended to September 21, 2014. Red Rock defaulted on its obligation
under the Red Rock Agreement. On September 16, 2014, CIS terminated the Red Rock Agreement as it did not provide audited
financial statements.



On September 16,
2014, a Stock Purchase Agreement (the “Agreement”) was entered into by and among CIS, Delta Advanced Materials Limited,
a Hong Kong company (“Delta”) and Elite Ride Limited, a British Virgin Islands company (“Delta’s Parent”)
and the Elite Ride Limited Shareholders (“Elite Shareholders”) (See Note 7 – Stock Purchase Agreement).



The accompanying
unaudited financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.
GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for
a fair presentation have been included. Operating results for the six months ended April 30, 2014 are not necessarily indicative
of the results that may be expected for the year ended October 31, 2014. For further information refer to the financial statements
and footnotes thereto included in the Company’s Annual Report on Form 20-F for the year ended October 31, 2013, filed with
Securities and Exchange Commission on March 17, 2014.



The Company was
required to determine if it was a foreign private issuer (“FPI”) under Rule 3b4(d) of the Exchange Act, as of a date
within 30 days of the filing of the Registration Statement with the SEC for the Public Offering. The Company determined it was
an FPI prior to the filing of the Registration Statement. As an FPI, the Company will be required to comply with the tender offer
rules in connection with its initial Acquisition Transaction. The Company is required to determine its status as an FPI on an ongoing
basis for all subsequent fiscal years as of the last day of its most recently completed second fiscal quarter. Accordingly, for
the year ended October 31, 2013, as of the last day of that period’s most recently completed second quarter (April 30, 2013),
the Company determined that it was an FPI. If the Company were to no longer qualify as an FPI (as set forth in Rule 3b4 of the
Exchange Act), the Company would then become subject to the US domestic issuer rules as of the first day of its fiscal year following
the determination date.



The registration statement for the Company’s
initial public offering (“Public Offering”) was declared effective on December 18, 2012. On December 21, 2012, the
Company consummated the Public Offering and received proceeds (net of underwriter’s discount of $720,000 and offering costs
of $718,809) of $38,561,191. The Company also received $3,375,000 from the issuance of 4,500,000 warrants (“Placement Warrants”)
in a private placement (the “Private Placement”) and $2,720 from the issuance of 136,000 of its callable Class A Shares
in a private placement (the “Underwriter Placement”).



F-22







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 1. | Organization, Plan of Business Operations, Liquidity
and Going Concern, continued
| | -- | ---------------------------------------------------------------------------------



Organization and Plan of Business
Operations, continued



The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Public Offering, the Private Placement and the Underwriter
Placement, although substantially all of the net proceeds are intended to be applied generally toward consummating an Acquisition
Transaction. There is no assurance that the Company will be able to affect an Acquisition Transaction successfully. Upon the closing
of the Public Offering, $41,600,000 ($10.40 per share sold in the Public Offering), including the proceeds of the Private Placement
and the Underwriter Placement, was placed in and continues to be held in a trust account (the “Trust Account”) and
is invested in U.S. government treasury bills having a maturity of 180 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, that invest solely in U.S. Treasuries until the
earlier of the consummation of the Company’s initial Acquisition Transaction and the Company’s failure to consummate
an Acquisition Transaction within the prescribed time.



Placing funds in the Trust Account may not
protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers,
prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in
or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. If the Company
is unable to complete an Acquisition Transaction and is forced to dissolve and liquidate, our founders, by agreement, will jointly
and severally indemnify the Company for all claims of contracted parties, to the extent the Company fails to obtain valid and enforceable
waivers from such parties. Under these circumstances, the Company’s board of directors would have a fiduciary obligation
to the Company’s shareholders to bring a claim against our founders to enforce their indemnification obligations. The Company
has questioned our founders on their financial net worth and reviewed their financial information and believes they will be able
to satisfy any indemnification obligations that may arise, although there can be no assurance of this. Our founders are under no
obligation to us to preserve their assets or provide the Company with information regarding changes in their ability to satisfy
these obligations.



The Company’s units are listed on
the Nasdaq Capital Markets (“Nasdaq”). Pursuant to the Nasdaq listing rules, the target business or businesses that
the Company acquires must collectively have a fair market value equal to at least 80% of the balance of the funds in the Trust
Account (less taxes payable) at the time of the execution of a definitive agreement for its initial Acquisition Transaction, although
the Company may acquire a target business whose fair value significantly exceeds 80% of the Trust Account balance.



If an acquisition is not completed by September
21, 2014, CIS will be required to automatically liquidate the trust account and distribute a pro rata portion of the trust account
($10.40 per share) to each holder of Callable Class B Ordinary Shares, and the Callable Class B Ordinary Shares will be canceled.



The Company is required to provide shareholders
who acquired shares in the Public Offering that did not agree to convert their Series A ordinary shares into Series B ordinary
shares (“Public Shareholders”) with the opportunity to redeem their public shares for a pro rata share of the Trust
Account in connection with an Acquisition Transaction or, if an Acquisition Transaction is completed and a tender offer is not
completed by September 21, 2014, liquidate the trust account to Series B shareholders on a pro rata basis. Each Public Shareholder
will be entitled to receive a full pro rata portion of the amount then in the Trust Account ($10.40 per share, plus any pro rata
interest earned on the funds held in the Trust Account and not previously released to the Company or necessary to pay its taxes).



The Company is not required to obtain shareholder
approval for the Acquisition Transaction, unless the nature of the acquisition would require such approval under applicable British
Virgin Islands law. Public Shareholders will be entitled to redeem or will have their shares automatically redeemed for cash equal
to the pro rata portion of the Trust Account in connection with the Acquisition Transaction, regardless of how it is structured.
The manner in which Public Shareholders may redeem their shares or will have their shares automatically redeemed will depend on
one of the following structures of the transaction:



Pre-acquisition tender offer: Prior to the
consummation of an Acquisition Transaction, a tender offer would be initiated for all outstanding callable Class A Shares at a
price equal to a pro rata share of the Trust Account. Public Shareholders will be entitled to tender all or a portion of their
callable Class A Shares. However, the Company’s founders would not be eligible to tender any shares they own in such tender
offer. Given the time remaining before the Company will be required to dissolve, the Company will not be able to close an Acquisition
Transaction making use of a pre-acquisition tender offer.



F-23







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 1. | Organization, Plan of Business Operations, Liquidity
and Going Concern, continued
| | -- | ---------------------------------------------------------------------------------



Organization and Plan of Business
Operations, continued



Post-acquisition tender offer: A Report
of Foreign Private Issuer would be filed on Form 6-K with the SEC disclosing that the Company has entered into a definitive acquisition
transaction agreement and intends to consummate the Acquisition Transaction without shareholder vote or a pre-acquisition tender
offer. Prior to the consummation of the Acquisition Transaction, the Company shall seek to have certain Class A shareholders (accredited
investors who own 5% or more of shares) elect to convert all of their callable Class A Shares into Class C Shares on a one-for-one
basis, with any remaining callable Class A Shares automatically converting to callable Class B Shares immediately following consummation
of the Acquisition Transaction.



The Company will consummate an Acquisition
Transaction only if holders of no more than 87.5% of the Public Shareholders are eligible to receive a pro-rata portion of the
Trust Account post Acquisition Transaction. As the Company does not have sufficient time to complete a tender offer post Acquisition
Transaction if an Acquisition Transaction is completed, the Trust Account will be liquidated on September 21, 2014.



The founders and holders of Underwriter
Shares (defined below) have agreed to waive the right to participate in any distribution from the Trust Account, but not with respect
to any units or callable Class A Shares they acquired in the Public Offering or acquire in the aftermarket.



Liquidity
and Going Concern



The Company anticipates that in order to
fund its working capital requirements, the Company will need to use all of the remaining funds not held in trust, the interest
earned on the funds held in the trust account, as well as enter into contingent fee arrangements with its vendors. The Company
may need to raise additional capital through additional loans or additional investments from its founders, officers, directors,
or third parties. None of the founders, officers or directors is under any obligation to advance funds to, or to invest in, the
Company. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional
capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited
to, curtailing operations, suspending the pursuit of its business plan, and controlling overhead expenses. The Company cannot provide
any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial
doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments
that might result from the outcome of these uncertainties.



| | 2. | Public Offering and Private Placement
| | -- | -------------------------------------



In connection with the Public Offering,
on December 21, 2012, the Company sold 4,000,000 Units at $10.00 per unit (“Units”) generating gross proceeds of $40,000,000.
Each Unit consists of one callable Class A Share, $0.0001 par value, and one redeemable warrant (each a “Warrant”)
to purchase one ordinary share of the Company. Each Warrant entitles the holder to purchase from the Company one ordinary share
at an exercise price of $10.00 commencing on the later of (a) December 18, 2013 and (b) the consolidation of each series of the
Company’s ordinary shares into one class of ordinary shares, and will expire on the earlier of December 18, 2017 and the
date of the Company’s dissolution and liquidation of the Trust Account, unless such Warrants are earlier redeemed.



The Warrants may be redeemed by the Company
at a price of $0.01 per Warrant in whole but not in part upon 30 days prior written notice after the Warrants become exercisable,
only in the event that the last sale price of the ordinary shares is at least $15.00 per share for any 20 trading days within a
30 trading day period ending on the third business day prior to the date on which notice of redemption is given. In the event that
there is no effective registration statement or prospectus covering the ordinary shares issuable upon exercise of the Warrants,
holders of Warrants may elect to exercise them on a cashless basis by paying the exercise price by surrendering their Warrants
for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of shares underlying
the redeemable warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value”
(defined below) by (y) the fair market value. The “fair market value” means the average reported last sale price of
our ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the Warrant notice is sent
to the warrant agent. The Company would not receive additional proceeds to the extent the redeemable warrants are exercised on
a cashless basis.



F-24







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 2. | Public Offering and Private Placement, continued
| | -- | ------------------------------------------------



The callable Class A Shares and Warrants
began separate trading on March 18, 2013. The callable Class A Shares will continue to trade until the Acquisition Transaction
has been completed, at which time they will either: (i) automatically be consolidated with all ordinary shares into one series,
if redemption rights were granted prior to, or concurrently with, the completion of the Acquisition Transaction; or (ii) automatically
separate from the units and convert to callable Class B Shares, if the Acquisition Transaction is completed prior to a post-acquisition
tender offer. After the post-acquisition tender offer, the callable Class B Shares will be consolidated with other outstanding
ordinary shares. Upon consummation of the Public Offering, the ordinary shares purchased by the founders were exchanged for Class
A Shares (Note 7). Such shares will not be redeemable, will be placed in escrow and will not be released until December 18, 2014.



The Company sold to Chardan Capital Markets,
LLC and its designees (the “Underwriter”), for an aggregate of $100, an option to purchase 280,000 units at an exercise
price of $12.00 per unit, which is comprised of 280,000 ordinary shares and warrants to purchase 280,000 ordinary shares. The Underwriter’s
unit purchase option will be exercisable at any time, in whole or in part, from the later of (i) the consolidation of each series
of the Company’s ordinary shares into one class of ordinary shares, or (ii) June 18, 2013, and expire on the earlier of December
18, 2017 and the day immediately prior to the day on which the Company has been dissolved. The Company has accounted for the fair
value of the unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the Public Offering resulting
in a charge directly to shareholders’ equity. The Company estimated that the fair value of this unit purchase option was
approximately $968,876 (or $3.46 per unit) using a Black-Scholes option-pricing model. The fair value of the unit purchase option
granted to the underwriter was estimated as of the date of grant using the following assumptions: (1) expected volatility of 46%,
(2) risk-free interest rate of 0.76% and (3) expected life of five years. The Company has no obligation to net cash settle the
exercise of the unit purchase option or underlying Warrants.



In connection with the Underwriter Placement,
on December 21, 2012, the Company sold to the underwriters of the Public Offering, including Maxim Group LLC, the qualified independent
underwriter, for an aggregate of $2,720, an aggregate of 136,000 Class A Shares (the “Underwriter Shares”). Such shares
are not redeemable, have been placed in escrow and will not be released until December 18, 2014. Additionally, the underwriters
have agreed to waive their rights to participate in any distribution from the Trust Account. The Company accounted for the fair
value of the Underwriter Shares, inclusive of the receipt of $2,720 cash payment, as an expense of the Public Offering resulting
in a charge directly to shareholders’ equity. The Company estimated that the fair value of these shares was approximately
$1,360,000 ($10.00 per share).



In connection with the Private Placement,
on December 21, 2012, the founders and certain of their designees purchased 4,500,000 warrants (the “Placement Warrants”)
at a price of $0.75 per warrant for an aggregate purchase price of $3,375,000. The proceeds from the sale of the Placement Warrants
are held in the Trust Account pending completion of the Acquisition Transaction. The Placement Warrants are identical to the Warrants,
except that the Placement Warrants are (i) subject to certain transfer restrictions described below, (ii) cannot be redeemed by
the Company, and (iii) may be exercised during the applicable exercise period, on a for cash or cashless basis, at any time after
the consolidation of each series of the Company’s ordinary shares into one class of ordinary shares after consummation of
an Acquisition Transaction or post-acquisition tender offer, as the case may be, even if there is not an effective registration
statement relating to the shares underlying the Placement Warrants, so long as such warrants are held by the founders, their designees,
or their affiliates. Notwithstanding the foregoing, if the Placement Warrants are held by holders other than the founders or their
permitted transferees, the Placement Warrants will only be exercisable by the holders on the same basis as the Warrants included
in the units being sold in the Public Offering.



The founders have agreed, subject to certain
exceptions below, not to sell, assign or otherwise transfer any of their Placement Warrants until the consummation of the Acquisition
Transaction or the completion of a post-acquisition tender offer, as the case may be. Prior to the consummation of an Acquisition
Transaction or the completion of a post-acquisition tender offer, as the case may be, the Placement Warrants may only be transferred
(i) by gift to an affiliate or a member of the holder’s immediate family (or a member of the immediate family of its officers
or directors) or to a trust or other entity, the beneficiary of which is the holder (or one of its officers or directors or a member
of their respective immediate families), (ii) by virtue of the laws of descent and distribution upon death of any holder, or (iii)
pursuant to a qualified domestic relations order; provided, however, that as relates to the Placement Warrants, any such transfers
may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of the
insider letter agreement executed by the transferring holder.



F-25







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 3. | Summary of Significant Accounting Policies
| | -- | ------------------------------------------



Use of Estimates



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the balance sheet and the reported amounts of revenues and expenses during the period. Actual results could differ
from those estimates. The significant estimate is for the value of the warrants.



Loss Per Share



Basic loss per share is computed by dividing
net loss by the weighted-average number of ordinary or Class A shares, as applicable, outstanding during the period. Class A shares
subject to possible redemption of 3,500,000 shares as of April 30, 2014 and 2013 have been excluded from the calculation of basic
loss per share since such shares, if redeemed, only participate in their pro rata share of the trust earnings. Loss per share assuming
dilution would give effect to the dilutive underwriter’s purchase option, warrants, and other potential ordinary shares outstanding
during the period. The Company has not considered the effect of warrants to purchase 8,500,000 ordinary shares and the underwriter’s
option to purchase 280,000 Units in the calculation of diluted loss per share, since the exercise of the warrants and the option
is contingent upon the occurrence of future events.



Cash and Cash Equivalents



Cash: The Company maintains its cash with
high credit quality financial institutions. At times, the Company’s cash and cash equivalents may be uninsured or in deposit
accounts that exceed insured amounts. Accordingly, the Company is subject to the risk of failure of the financial institutions
where it maintains its cash deposits. In September, 2013, approximately $55,000 was wired from the Company’s former operating
bank account pursuant to unauthorized wire instructions. On March 4, 2014, the Company received $50,000 as a settlement from the
bank in connection with the unauthorized wire theft.



Cash Equivalents: The Company considers
all short-term investments with a maturity of three months or less when purchased to be cash equivalents.



Restricted Investments and Cash Equivalents
Held in Trust Account



The amounts held in the Trust Account represent
substantially all of the proceeds of the Public Offering, the Private Placement and the Underwriter Placement and are classified
as restricted assets since such amounts can only be used by the Company in connection with the consummation of an Acquisition Transaction.



As of April 30, 2014, investment securities
held in the Trust Account consisted of $41,599,206 in a United States Treasury Bill, which matured on May 15, 2014 and $22,401
of cash equivalents. The Company classifies its United States Treasury securities as held-to-maturity in accordance with ASC 320
“Investments – Debt and Equity Securities”. Held-to-maturity securities are those securities which the Company
has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying
balance sheet and are adjusted for the accretion of discounts.



A decline in the market value of held-to-maturity
securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such
securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine
whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment
until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence
to the contrary.



Premiums and discounts are amortized or
accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method.
Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest
income is recognized when earned.



F-26







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Restricted Investments and Cash Equivalents
Held in Trust Account, continued



The carrying amount, gross unrealized holding
gains and the fair value of held-to-maturity securities as of April 30, 2014 are as follows:



|                    |  | Carrying Amount |            |  | Gross Unrealized Holding Gain |   |     | Fair Value | 
|------------------- |  | --------------- | ---------- |  | ----------------------------- | - | --- | ---------- | 
|Held-to-maturity:   |  |                 |            |  |                               |   |     |            | 
|                    |  |                 |            |  |                               |   |     |            | 
|U.S. Treasury Bills |  | $               | 41,599,206 |  |                               | $ | 794 |            | 



On May 15, 2014, the Company realized proceeds
from the maturity of its U.S. Treasury Bills of $41,600,000. The proceeds from the maturity remain held in the Trust Account as
restricted cash and cash equivalents.



Income Tax



The Company complies with FASB ASC 740,
“Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes.
Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets
and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 also establishes recognition requirements for the
accounting for uncertainty in income taxes. The Company has identified the British Virgin Islands as its only major tax jurisdiction.
There were no unrecognized tax benefits as of April 30, 2014. Since the Company was incorporated on November 28, 2011, the evaluation
was performed for the tax years ended October 31, 2013 and 2012, which are the only periods subject to examination. The section
prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at April 30, 2014. The Company
is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from
its position.



Fair Value Measurements



The carrying amounts of cash, cash equivalents,
restricted cash, and accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these
instruments.



Fair value is defined as an exit price,
representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction
between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants
would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair
value as follows:



|Level 1. | Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                               
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 2. | Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
|Level 3. | Significant unobservable inputs that cannot be corroborated by market data.                                                                                                                                                        



F-27







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Fair Value
Measurements, continued



The assets or liability’s fair
value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair
value measurement. The following table provides a summary of the liabilities that are measured at fair value on a
recurring basis.



|                        |  | Consolidated Balance Sheet |           |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |   |   | Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) |  |   | Significant Unobservable Inputs (Level 3) | 
|----------------------- |  | -------------------------- | --------- |  | ----------------------------------------------------------------------------- | - | - | --------------------------------------------------------------------------- |  | - | ----------------------------------------- | 
|Derivative Liabilities: |  |                            |           |  |                                                                               |   |   |                                                                             |  |   |                                           | 
|October 31, 2013        |  | $                          | 3,230,000 |  |                                                                               | $ | - |                                                                             |  | $ | -                                         | 
|April 30, 2014          |  | $                          | 3,185,000 |  |                                                                               | $ | - |                                                                             |  | $ | -                                         | 



The following table sets forth a summary
of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring
basis:



|                                          |  | For the Six Months Ended April 30, |          
|----------------------------------------- |  | ---------------------------------- | ---------
|                                          |  | 2014                               |          
|Beginning balance                         |  | $                                  | 3,230,000
|Change in fair value of warrant liability |  |                                    | (45,000  
|Ending balance                            |  | $                                  | 3,185,000



Level 3 financial liabilities consist of
the derivative liabilities for which there is no current market such that the determination of fair value requires significant
judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed
each period based on changes in estimates or assumptions and recorded as appropriate.



Level 3 liabilities are valued using unobservable
inputs to the valuation methodology that are significant to the measurement of the fair value of the derivate liabilities. For
fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Chief Financial Officer determines
its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements
and fair value calculations are the responsibility of the Company’s Chief Financial Officer with support from the Company’s
consultants.



The Company accounts for the 4,000,000 warrants issued in connection
with the Public Offering, and the 4,500,000 warrants issued in connection with the Private Placement in accordance with the guidance
contained in ASC 815-40-15-7D whereby under that provision they do not meet the criteria for equity treatment and must be recorded
as a liability. Accordingly, the Company classifies the warrant instrument as a liability at its fair value. This liability is
subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s
statement of operations.



The fair value
of the warrant liability was determined by the Company using the Binomial Lattice pricing model.  This model is dependent
upon several variables such as the instrument’s expected term, expected strike price, expected risk-free interest rate over the
expected instrument term, the expected dividend yield rate over the expected instrument term expected volatility of the
Company’s share price over the expected term, expected time to complete an acquisition and estimated probability of completing
a successful acquisition.  The expected term represents the period of time that the instruments granted are expected
to be outstanding.  The expected strike price is based upon a weighted average probability analysis of the strike price
changes expected during the term as a result of the down round protection.  The risk-free rates are based on U.S. Treasury
securities with similar maturities as the expected terms of the options at the date of valuation. Expected dividend
yield is based on historical trends.  The Company measures volatility using a blended weighted average of the volatility
rates for a number of similar publicly-traded companies along with the Company’s historical volatility.



F-28







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 3. | Summary of Significant Accounting Policies, continued
| | -- | -----------------------------------------------------



Fair Value Measurements, continued



A significant decrease
in the volatility or a significant decrease in the Company’s share price, in isolation, would result in a significantly lower
fair value measurement. Changes in the values of the derivative liabilities are recorded in change in fair value of derivative
liabilities within other expense (income) on the Company’s statements of operations.



As of April 30,
2014, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy.

The inputs to
the model were as follows:



|                                             |  | April 30, 2014 |                 |   | October 31, 2013 | 
|-------------------------------------------- |  | -------------- | --------------- | - | ---------------- | 
|Dividend yield (per share)                   |  |                | 0               | % |                  | 
|Risk-free interest rate:                     |  |                | 0.87            | % |                  | 
|Expected term                                |  |                | 3.6 years       |   |                  | 
|Expected volatility rate                     |  |                | 16.57           | % |                  | 
|Assumed acquisition date                     |  |                | August 18, 2014 |   |                  | 
|Estimated probability of acquisition success |  |                | 61.6            | % |                  | 



In connection with
the fair value of the derivative liabilities as of April 30, 2014, the Company considered the impact on the fair value as reported,
as if the assumed acquisition date had been September 19, 2014, and concluded that any changes to the fair value of the derivative
liabilities would be immaterial.





Concentration of Credit Risk



Financial instruments
that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which
at times, may exceed insured amounts. Accordingly, the Company is subject to the risk of failure of the financial institutions
where it maintains its cash deposits. See discussion under Cash and Cash Equivalents regarding a theft against one of the Company’s
former bank accounts.



Ordinary Shares Subject to Possible Conversion



The ordinary shares
as part of the Units (the “Units”) issued in the Public Offering, contained a conversion feature which is subject to
redemption. In accordance with ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), redemption
provisions not solely within the control of the Company require the security to be classified outside of permanent equity.



Accordingly, 3,500,000
of the 4,000,000 public shares were classified outside of permanent equity at redemption value because the redemption rights are
subject to the occurrence of certain events that are outside of the Company’s control. The redemption value at April 30,
2014 was equal to approximately the pro rata share of the aggregate amount then on deposit in the Trust Account ($10.40 per share
at April 30, 2014).



Recent Accounting Pronouncements



In June 2014, the Financial Accounting Standards Board (“FASB”)
issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination
of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.”
This ASU removes the definition of a development stage entity from the ASC, thereby removing the financial reporting distinction
between development stage entities and other reporting entities from GAAP. In addition, the ASU eliminates the requirements for
development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and stockholders’
equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development
stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development
stage entity that in prior years it had been in the development stage. This ASU is effective for annual reporting periods beginning
after December 15, 2014, and interim periods therein. Early adoption is permitted. The Company has elected to early adopt this
ASU effective with this Quarterly Report on Form 10-Q and its adoption resulted in the removal of previously required development
stage disclosures.





In August 2014, the
FASB issued a new accounting standard which requires management to evaluate whether there is substantial doubt about an entity’s
ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure
is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016.
Early adoption is permitted. The Company expects to adopt this new standard for the fiscal year ending February 3, 2018 and the
Company will continue to assess the impact on its consolidated financial statements.



| | 4. | Commitments
| | -- | -----------



The Company entered into an agreement with
the underwriters (the “Underwriting Agreement”). Pursuant to the Underwriting Agreement, the Company paid an underwriting
discount of 1.8% of the gross proceeds of the Public Offering, or $720,000 on December 21, 2012.



F-29







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 4. | Commitments, continued
| | -- | ----------------------



The holders of the founders’ shares,
as well as the holders of the Placement Warrants (and underlying securities) and Underwriter Shares, are entitled to registration
rights pursuant to a registration rights agreement signed on December 18, 2012. The holders of the majority of these securities
are entitled to make up to two demands that the Company register such securities. The holders of the majority of the founders’
shares and Underwriter Shares can elect to exercise these registration rights at any time commencing three months prior to the
date on which the founders’ shares are to be released from escrow. The holders of a majority of the Placement Warrants (or
underlying securities) can elect to exercise these registration rights at any time after the Company consummates an Acquisition
Transaction or completes a post-acquisition tender offer, as the case may be. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the consummation of an Acquisition Transaction
or post-acquisition tender offer. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.



| | 5. | Related Party Transactions
| | -- | --------------------------



The Company agreed to pay to CIS Acquisition
Holding Co. Ltd. (“CIS Acq Holding”), an affiliate of Anatoly Danilitskiy, our Chairman and Chief Executive Officer,
and Taras Vazhnov, our director, a total of $7,500 per month for office space, administrative services and secretarial support
for a period commencing on December 18, 2012 and ending on the earlier of the consummation of an Acquisition Transaction or the
Company’s liquidation. Such fees have been paid as incurred only out of interest earned on the trust account or assets not
held in trust, if any. If there are insufficient funds from interest earned on the trust account or from assets not held in trust,
then the obligation to CIS Acquisition Holding Co. Ltd. will be accrued and not paid. During the six months ended April 30, 2014
and 2013, the Company has incurred $45,000 and $30,000, respectively, for these office space expenses to CIS Acquisition Holding
Co. Ltd.



On March 24, 2014, the Company entered
into an agreement with CIS Acq Holding, under which for one year the Company may borrow up to $300,000 with no interest. All
amounts borrowed under this agreement are due March 23, 2015. On March 25, 2014 and June 11, 2014, the Company borrowed
$30,000 and $120,000 under this borrowing arrangement. As of April 30, 2014, a balance of $30,000 was outstanding under this
loan.



| | 6. | Shareholders’ Equity
| | -- | --------------------



Preferred Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 5,000,000 preferred shares each with such designation, rights and preferences
as may be determined by the board of directors. No preferred shares are currently issued or outstanding.



Ordinary Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 75,000,000 ordinary shares. No ordinary shares are currently issued
or outstanding.



Class A Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 25,000,000 Class A shares. As of April 30, 2014 and October 31, 2013,
1,636,000 Class A shares were issued and outstanding, excluding 3,500,000 Class A shares subject to possible redemption or tender.



Class B Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 25,000,000 Class B Shares. No Class B shares are currently issued or
outstanding.



Class C Shares:



The Company’s Amended and Restated
Memorandum of Association authorizes the issuance of up to 25,000,000 Class C Shares. No Class C shares are currently issued or
outstanding.



F-30







CIS Acquisition Ltd.
Notes to Unaudited Interim Financial Statements
For the Six Months Ended April 30, 2014



| | 7. | Stock Purchase Agreement
| | -- | ------------------------



On September 19, 2014, the Delta Agreement
was entered into by and among CIS, Delta and Delta’s Parent and the Elite Shareholders. Pursuant to the Agreement, the Company
will acquire 100% of the issued and outstanding equity interests in Delta from Delta’s Parent and Elite Shareholders in
exchange for the transaction consideration consisting of 6,060,000 Ordinary Shares (the “Acquisition”). The Agreement
also provides additional shares to be issued to Delta’s Parent and Elite Shareholders.



| | 8. | Subsequent Events
| | -- | -----------------



The Company evaluated events that have occurred
after the balance sheet date of April 30, 2014 through the date which the financials were available to be issued. Based upon this
review, other than as already disclosed within these financial statements in Notes 1, 3 and 7, the Company did not identify any
recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.



F-31











Delta
Advanced Materials Limited

Index to Financial Statements



|                                                                                                                    | Page
    No.
|------------------------------------------------------------------------------------------------------------------- | ------------
|Delta Advanced
    Materials Limited for the Year Ended June 30, 2014                                               |             
|Report
    of Independent Registered Public Accounting Firm                                                         | F-1         
|Consolidated
    Balance Sheets as of the Years Ended June 30, 2014, 2013 and 2012                                  | F-2         
|Consolidated Statements of Operations and Comprehensive
    Income for the Years Ended June 30, 2014, 2013 and 2012 | F-3         
|Consolidated
    Statements of Changes in Equity for the Years Ended June 30, 2014, 2013 and 2012                   | F-4         
|Consolidated
    Statements of Cash Flows for the Years Ended June 30, 2014, 2013 and 2012                          | F-5         
|Notes
    to Consolidated Financial Statements                                                                      | F-6         















Report of Independent Registered
Public Accounting Firm



|To: | The Board of Directors and
    Shareholders of
|--- | ----------------------------------------------
|    | Delta Advanced Materials Limited              



We have audited the accompanying consolidated balance sheets
of Delta Advanced Materials Limited and its subsidiaries (collectively, the “Company”) as of June 30, 2014, 2013 and
2012, and the related consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows for
each of the years ended June 30, 2014, 2013 and 2012. These consolidated financial statements and schedule are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our
audit.



We conducted our audits in accordance with standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2014, 2013
and 2012, and the results of its operations and comprehensive income, and its cash flows for each of the years ended June 30,
2014, 2013 and 2012 in conformity with accounting principles generally accepted in the United States of America.



/s/ Dominic K.F. Chan & Co



Dominic K.F. Chan & Co

Certified Public Accountants

Hong Kong, September 12, 2014



F-1









Delta Advanced Materials
Limited

Consolidated Balance
Sheets

as at June 30, 2014,
2013 and 2012



|                                        |  | 2014 |             |  | 2013 |   |             | 2012 | 
|--------------------------------------- |  | ---- | ----------- |  | ---- | - | ----------- | ---- | 
|ASSETS                                  |  |      |             |  |      |   |             |      | 
|Current assets                          |  |      |             |  |      |   |             |      | 
|Cash and cash equivalents               |  | $    | 9,045,950   |  |      | $ | 3,946,136   |      | 
|Restricted cash                         |  |      | 22,855,107  |  |      |   | 24,740,635  |      | 
|Trade and other receivables             |  |      | 77,745,875  |  |      |   | 61,460,604  |      | 
|Inventories                             |  |      | 14,062,567  |  |      |   | 13,803,489  |      | 
|                                        |  |      | 123,709,499 |  |      |   | 103,950,864 |      | 
|Non-current assets                      |  |      |             |  |      |   |             |      | 
|Property, plant and equipment           |  |      | 76,439,788  |  |      |   | 57,293,878  |      | 
|Land use rights                         |  |      | 5,724,636   |  |      |   | 5,262,766   |      | 
|Deferred tax assets                     |  |      | 657,377     |  |      |   | 531,492     |      | 
|                                        |  |      | 82,821,801  |  |      |   | 63,088,136  |      | 
|                                        |  |      |             |  |      |   |             |      | 
|Total assets                            |  | $    | 206,531,300 |  |      | $ | 167,039,000 |      | 
|                                        |  |      |             |  |      |   |             |      | 
|LIABILITIES                             |  |      |             |  |      |   |             |      | 
|Current liabilities                     |  |      |             |  |      |   |             |      | 
|Trade and other payables                |  | $    | 35,850,810  |  |      | $ | 27,336,609  |      | 
|Advances from customers                 |  |      | 1,776,624   |  |      |   | 2,428,443   |      | 
|Due to a shareholder                    |  |      | 2,857,432   |  |      |   | -           |      | 
|Bank borrowings                         |  |      | 81,377,050  |  |      |   | 60,764,176  |      | 
|Income tax payables                     |  |      | 814,051     |  |      |   | 900,627     |      | 
|Deferred tax liabilities                |  |      | 1,020,209   |  |      |   | 74,967      |      | 
|Convertible bonds - current portion     |  |      | 27,375,750  |  |      |   | 27,219,551  |      | 
|                                        |  |      | 151,071,926 |  |      |   | 118,724,373 |      | 
|Non-current liabilities                 |  |      |             |  |      |   |             |      | 
|Convertible bonds - non-current portion |  |      | -           |  |      |   | -           |      | 
|                                        |  |      |             |  |      |   |             |      | 
|Total liabilities                       |  | $    | 151,071,926 |  |      | $ | 118,724,373 |      | 
|                                        |  |      |             |  |      |   |             |      | 
|Commitments and contingencies           |  |      | -           |  |      |   | -           |      | 
|                                        |  |      |             |  |      |   |             |      | 
|Capital and reserves                    |  |      |             |  |      |   |             |      | 
|Share capital                           |  | $    | 8,852,713   |  |      | $ | 5,134,788   |      | 
|Additional paid-in capital              |  |      | -           |  |      |   | 3,717,925   |      | 
|Statutory reserves                      |  |      | 6,196,949   |  |      |   | 3,219,995   |      | 
|Retained earnings                       |  |      | 34,370,050  |  |      |   | 30,518,696  |      | 
|Accumulated other comprehensive income  |  |      | 6,039,662   |  |      |   | 5,723,223   |      | 
|Total equity                            |  |      | 55,459,374  |  |      |   | 48,314,627  |      | 
|                                        |  |      |             |  |      |   |             |      | 
|Total liabilities and equity            |  | $    | 206,531,300 |  |      | $ | 167,039,000 |      | 



See notes to consolidated financial statements.



F-2







Delta Advanced Materials
Limited

Consolidated Statements
of Operations and Comprehensive Income

For the years ended
June 30, 2014, 2013 and 2012



|                                            |  | 2014 |              |   | 2013 |   |             | 2012 | 
|------------------------------------------- |  | ---- | ------------ | - | ---- | - | ----------- | ---- | 
|                                            |  |      |              |   |      |   |             |      | 
|Revenue                                     |  | $    | 175,327,717  |   |      | $ | 124,218,213 |      | 
|Cost of sales                               |  |      | (157,904,729 | ) |      |   | (99,733,216 | )    | 
|Gross profit                                |  |      | 17,422,988   |   |      |   | 24,484,997  |      | 
|                                            |  |      |              |   |      |   |             |      | 
|Operating expenses:                         |  |      |              |   |      |   |             |      | 
|Selling expenses                            |  |      | (2,306,021   | ) |      |   | (2,374,609  | )    | 
|General and administrative expenses         |  |      | (3,482,027   | ) |      |   | (4,267,774  | )    | 
|Total operating expenses                    |  |      | (5,788,048   | ) |      |   | (6,642,383  | )    | 
|                                            |  |      |              |   |      |   |             |      | 
|Other income (expenses):                    |  |      |              |   |      |   |             |      | 
|Interest expenses                           |  |      | (4,000,626   | ) |      |   | (2,806,338  | )    | 
|Interest income                             |  |      | 1,948,743    |   |      |   | 923,298     |      | 
|Change in fair value of convertible bonds   |  |      | (156,199     | ) |      |   | (37,000     | )    | 
|Other gains (loss) - net                    |  |      | 7,929        |   |      |   | (60,197     | )    | 
|Total other income (expenses)               |  |      | (2,200,153   | ) |      |   | (1,980,237  | )    | 
|                                            |  |      |              |   |      |   |             |      | 
|Income before income taxes                  |  |      | 9,434,787    |   |      |   | 15,862,377  |      | 
|                                            |  |      |              |   |      |   |             |      | 
|Income taxes                                |  |      | (2,606,479   | ) |      |   | (4,156,641  | )    | 
|                                            |  |      |              |   |      |   |             |      | 
|Net income                                  |  | $    | 6,828,308    |   |      | $ | 11,705,736  |      | 
|                                            |  |      |              |   |      |   |             |      | 
|Other comprehensive income                  |  |      |              |   |      |   |             |      | 
|Foreign currency translation adjustments    |  |      | 316,439      |   |      |   | 1,609,880   |      | 
|Total other comprehensive income            |  |      | 316,439      |   |      |   | 1,609,880   |      | 
|                                            |  |      |              |   |      |   |             |      | 
|Comprehensive income                        |  | $    | 7,144,747    |   |      | $ | 13,315,616  |      | 
|                                            |  |      |              |   |      |   |             |      | 
|Earnings per share attributable to          |  |      |              |   |      |   |             |      | 
|equity holders of the Company               |  |      |              |   |      |   |             |      | 
|- Basic                                     |  | $    | 0.17         |   |      | $ | 0.29        |      | 
|- Diluted                                   |  | $    | 0.12         |   |      | $ | 0.20        |      | 
|                                            |  |      |              |   |      |   |             |      | 
|Weighted average shares used in calculating |  |      |              |   |      |   |             |      | 
|earnings per ordinary share                 |  |      |              |   |      |   |             |      | 
|- Basic                                     |  |      | 40,000,000   |   |      |   | 40,000,000  |      | 
|- Diluted                                   |  |      | 58,191,973   |   |      |   | 58,191,973  |      | 



See notes to consolidated financial statements.



F-3







Delta Advanced Materials
Limited

Consolidated Statements
of Shareholders’ Equity

For the years ended
June 30, 2014, 2013 and 2012



|                                        |  |                |            |  |         |   |           |            |  |   |            |   |  |               |           |  | Accumulated |   |            |       | 
|--------------------------------------- |  | -------------- | ---------- |  | ------- | - | --------- | ---------- |  | - | ---------- | - |  | ------------- | --------- |  | ----------- | - | ---------- | ----- | 
|                                        |  |                |            |  |         |   |           | Additional |  |   |            |   |  |               |           |  | other       |   |            |       | 
|                                        |  | Share capital  |            |  | paid-in |   |           | Statutory  |  |   | Retained   |   |  | comprehensive |           |  |             |  
|                                        |  | Ordinary share |            |  | Amount  |   |           | capital    |  |   | reserves   |   |  | earnings      |           |  | income      |   |            | Total | 
|                                        |  |                |            |  |         |   |           |            |  |   |            |   |  |               |           |  |             |   |            |       | 
|Balance as of July 1, 2011              |  |                | 10,000     |  |         | $ | 1,283     |            |  | $ | 8,851,430  |   |  | $             | 1,203,999 |  |             | $ | 10,357,382 |       | 
|Foreign currency translation adjustment |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | -         |  |             |   | -          |       | 
|Issue of bonus shares                   |  |                | 39,990,000 |  |         |   | 5,133,505 |            |  |   | (5,133,505 | ) |  |               | -         |  |             |   | -          |       | 
|Net income for the year                 |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | -         |  |             |   | 10,471,574 |       | 
|Appropriation to statutory reserves     |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | 1,297,594 |  |             |   | (1,297,594 | )     | 
|                                        |  |                |            |  |         |   |           |            |  |   |            |   |  |               |           |  |             |   |            |       | 
|Balance as of June 30, 2012             |  |                | 40,000,000 |  |         | $ | 5,134,788 |            |  | $ | 3,717,925  |   |  | $             | 2,501,593 |  |             | $ | 19,531,362 |       | 
|                                        |  |                |            |  |         |   |           |            |  |   |            |   |  |               |           |  |             |   |            |       | 
|Balance as of July 1, 2012              |  |                | 40,000,000 |  |         | $ | 5,134,788 |            |  | $ | 3,717,925  |   |  | $             | 2,501,593 |  |             | $ | 19,531,362 |       | 
|Foreign currency translation adjustment |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | -         |  |             |   | -          |       | 
|Net income for the year                 |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | -         |  |             |   | 11,705,736 |       | 
|Appropriation to statutory reserves     |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | 718,402   |  |             |   | (718,402   | )     | 
|                                        |  |                |            |  |         |   |           |            |  |   |            |   |  |               |           |  |             |   |            |       | 
|Balance as of June 30, 2013             |  |                | 40,000,000 |  |         | $ | 5,134,788 |            |  | $ | 3,717,925  |   |  | $             | 3,219,995 |  |             | $ | 30,518,696 |       | 
|                                        |  |                |            |  |         |   |           |            |  |   |            |   |  |               |           |  |             |   |            |       | 
|Balance as of July 1, 2013              |  |                | 40,000,000 |  |         | $ | 5,134,788 |            |  | $ | 3,717,925  |   |  | $             | 3,219,995 |  |             | $ | 30,518,696 |       | 
|Foreign currency translation adjustment |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | -         |  |             |   | -          |       | 
|Transition to no par value regime       |  |                | -          |  |         |   | 3,717,925 |            |  |   | (3,717,925 | ) |  |               | -         |  |             |   | -          |       | 
|Net income for the year                 |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | -         |  |             |   | 6,828,308  |       | 
|Appropriation to statutory reserves     |  |                | -          |  |         |   | -         |            |  |   | -          |   |  |               | 2,976,954 |  |             |   | (2,976,954 | )     | 
|                                        |  |                |            |  |         |   |           |            |  |   |            |   |  |               |           |  |             |   |            |       | 
|Balance as of June 30, 2014             |  |                | 40,000,000 |  |         | $ | 8,852,713 |            |  | $ | -          |   |  | $             | 6,196,949 |  |             | $ | 34,370,050 |       | 



See notes to consolidated financial statements.



F-4







Delta Advanced Materials
Limited

Consolidated Statements
of Cash Flows

For the years ended
June 30, 2014, 2013 and 2012



|                                                                                  |  | 2014 |              |   | 2013 |   |             | 2012 | 
|--------------------------------------------------------------------------------- |  | ---- | ------------ | - | ---- | - | ----------- | ---- | 
|Cash flows from operating activities:                                             |  |      |              |   |      |   |             |      | 
|Net income                                                                        |  | $    | 6,828,308    |   |      | $ | 11,705,736  |      | 
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |              |   |      |   |             |      | 
|Change in fair value of convertible bonds                                         |  |      | 156,199      |   |      |   | 37,000      |      | 
|Depreciation of property, plant and equipment                                     |  |      | 4,816,403    |   |      |   | 4,055,295   |      | 
|Amortization of land use rights                                                   |  |      | 41,600       |   |      |   | 39,927      |      | 
|Written off of goodwill                                                           |  |      | -            |   |      |   | 71,638      |      | 
|Gain on disposals of property, plant and equipment                                |  |      | (113,953     | ) |      |   | -           |      | 
|Deferred income taxes                                                             |  |      | 822,200      |   |      |   | (94,179     | )    | 
|Allowance for doubtful accounts                                                   |  |      | 177,179      |   |      |   | 411,211     |      | 
|Changes in assets and liabilities, net of effects of acquisitions:                |  |      |              |   |      |   |             |      | 
|Trade and other receivables                                                       |  |      | (16,343,386  | ) |      |   | (20,408,647 | )    | 
|Inventories                                                                       |  |      | (191,049     | ) |      |   | (3,953,649  | )    | 
|Trade and other payables                                                          |  |      | 8,428,337    |   |      |   | (16,707,725 | )    | 
|Advances from customers                                                           |  |      | (665,038     | ) |      |   | 947,128     |      | 
|Income tax payables                                                               |  |      | (91,200      | ) |      |   | 72,129      |      | 
|Net cash provided by (used in) operating activities                               |  |      | 3,865,600    |   |      |   | (23,824,136 | )    | 
|                                                                                  |  |      |              |   |      |   |             |      | 
|Cash flows from investing activities:                                             |  |      |              |   |      |   |             |      | 
|Acquisitions of                                                                   |  |      |              |   |      |   |             |      | 
|- Land use rights                                                                 |  |      | (478,184     | ) |      |   | (2,784,957  | )    | 
|- Property, plant and equipment                                                   |  |      | (23,957,404  | ) |      |   | (17,225,856 | )    | 
|Disposals of property and equipment                                               |  |      | 359,012      |   |      |   | -           |      | 
|Cash paid for business combinations, net of cash acquired                         |  |      | -            |   |      |   | (524,217    | )    | 
|Net cash (used in) investing activities                                           |  |      | (24,076,576  | ) |      |   | (20,535,030 | )    | 
|                                                                                  |  |      |              |   |      |   |             |      | 
|Cash flows from financing activities:                                             |  |      |              |   |      |   |             |      | 
|Proceeds from bank borrowings                                                     |  |      | 129,232,006  |   |      |   | 74,017,122  |      | 
|Repayment of bank borrowings                                                      |  |      | (108,797,261 | ) |      |   | (49,884,676 | )    | 
|Proceeds from convertible bonds                                                   |  |      | -            |   |      |   | -           |      | 
|Due to a shareholder                                                              |  |      | 2,857,432    |   |      |   | -           |      | 
|Change in restricted cash                                                         |  |      | 2,011,673    |   |      |   | 17,225,727  |      | 
|Net cash provided by (used in) financing activities                               |  |      | 25,303,850   |   |      |   | 41,358,173  |      | 
|                                                                                  |  |      |              |   |      |   |             |      | 
|Effect of exchange rate changes on cash                                           |  |      | 6,941        |   |      |   | (107,099    | )    | 
|                                                                                  |  |      |              |   |      |   |             |      | 
|Increase (decrease) in cash and cash equivalents                                  |  |      | 5,099,815    |   |      |   | (3,108,092  | )    | 
|                                                                                  |  |      |              |   |      |   |             |      | 
|Cash and cash equivalents at beginning of year                                    |  |      | 3,946,135    |   |      |   | 7,054,228   |      | 
|                                                                                  |  |      |              |   |      |   |             |      | 
|Cash and cash equivalents at end of year                                          |  | $    | 9,045,950    |   |      | $ | 3,946,136   |      | 
|                                                                                  |  |      |              |   |      |   |             |      | 
|Supplemental disclosures of cash flow information:                                |  |      |              |   |      |   |             |      | 
|Interest paid                                                                     |  | $    | 4,000,626    |   |      | $ | 2,806,338   |      | 
|Tax paid                                                                          |  | $    | 2,693,055    |   |      | $ | 4,066,210   |      | 



See notes to consolidated financial statements.



F-5







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 1 - Organization and Business Operations



Delta Advanced Materials Limited (formerly known as China
Deltachem Holdings Limited) (the “Company” or “Delta Advanced”) was incorporated in Hong Kong on June
17, 2010. The address of its registered office is Suite D, 19th Floor, Ritz Plaza, 122 Austin Road, Hong Kong. The reporting currency of the Company is the United States
Dollar (“$”).



The principal activity of the Company is investment holding.
The Company currently operates through itself, and four wholly-owned subsidiaries in the People’s Republic of China (“PRC”):
Jiangsu Yangtze Delta Fine Chemical Co., Ltd (“Jiangsu Delta”), Jiangsu Zhengxin New Material Research and Development
Co., Ltd (“Jiangsu Zhengxin R&D”), Jiangsu Delta Logistics Co., Ltd (“Jiangsu Logistics”), and Binhai
Deda Chemical Co., Ltd (“Binhai Deda”). Jiangsu Delta is the principal operating subsidiary of the Company.



The Company and its subsidiaries (hereinafter, collectively
referred to as the “Company”) are engaged in the sale of organic compound in the PRC.



On June 15, 2007, Jiangsu Delta was established by S&S
International Investment Holding (HK) Limited (“S&S International”), a Hong Kong based investment holding company,
as a wholly foreign-owned enterprise (with an initial registered capital of US$42 million, which was later reduced to US$ 28.8
million) located in Zhenjiang City, Jiangsu Province, the PRC.



Pursuant to a share transfer agreement entered into on April
13, 2008, Mr. Xin Chao acquired the entire equity interest in Jiangsu Delta from S&S International through Zhengxin International
Investment Limited, a Hong Kong corporation (“Zhengxin International”) and became the controller of Jiangsu Delta
since then. On May 21, 2008, the acquisition of Jiangsu Delta by Zhengxin International was approved by the Jiangsu Foreign Trade
and Economic Cooperation Department in accordance with “The Approval of Alteration of Equities in and Amendment of the Articles
of Association of Jiangsu Yantze River Delta Fine Chemical Co, Ltd.” issued by the same authority.



Due to the corporate restructuring effort to consolidate the
business of Jiangsu Delta under a pure investment holding entity, pursuant to a sale and purchase agreement dated May 20, 2010,
Delta Advanced for a consideration of US$28.8 million. Delta Advanced, formerly known as China Deltachem Holdings Limited, as
a pure investment holding vehicle controlled by Mr. Chao and had an initial issued and paid-up share capital of HK$10,000 comprising
10,000 shares of HK$1.00 each. The said shares were issued at a total subscription price of HK$68,640,000 (equivalent to $8,800,000)
with a premium of HK$6,863 per share.



On August 30, 2010, the acquisition of Jiangsu Delta by Delta
Advanced was approved by the Jiangsu Foreign Trade and Economic Cooperation Department in accordance with “The Approval
of Share Transfer of and Amendment of the Articles of Association of Jiangsu Chang San Jiao Chemical Co., Ltd.” issued by
the same authority.



On May 26, 2011, Delta Advanced carried out a bonus share issue,
whereby an additional 39,990,000 ordinary shares of Delta Advanced were allotted and issued as bonus shares at a price of HK$1.00
each to all the then shareholders of Delta Advanced at the ratio in proportion to their existing shareholding percentage, and
credited as fully paid up on a capitalization of the reserve of HK$39,990,000 from the capital reserve of Delta Advanced. Subsequent
to the bonus issue, Delta Advanced’s total issued and paid-up share capital increases to HK$40 million, comprising 40 million
shares of HK$1.00 each.



Delta Advanced entered into a series of Securities Purchase
Agreements dated January 31, 2011, May 16, 2011 and June 30, 2011, respectively, with the funds managed by Korea Investment Partners
Co. Ltd. And Kleiner, Perkins, Caufield & Byers (the “Bondholders”), pursuant to which it has issued convertible
bonds (“Convertible Bonds”) for an aggregate principal amount of US$18 million. The Convertible Bonds have an interest
rate of 6.00% per annum and a guaranteed interest rate at maturity of 15.00%. The principal and interests accrued on such Convertible
Notes are convertible in whole or in part into the ordinary shares in Delta Advanced, on such terms and subject to the conditions
of the Securities Purchase Agreements.



Note 2 - Summary of Significant Accounting Policies



Principles of Consolidation and Presentation



The consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).  The consolidated financial
statements include the financial statements of the Company, and its wholly-owned subsidiaries.  All intercompany accounts,
transactions, and profits have been eliminated upon consolidation.



F-6







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 2 - Summary of Significant Accounting Policies (Continued)



Use of Estimates



The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially
differ from those estimates.



Segment Reporting



The Company operates in one business and geographical segment
of manufacturing and sales of organic compounds in the PRC.  ASC 280, Segment Reporting, establishes standards for reporting
information about operating segments. Given the economic characteristics of the similar nature of the products sold, the type
of customer and the method of distribution, the Company operates as one reportable segment as defined by ASC 280, Segment Reporting.



Foreign Currency
Translation



The Company’s financial statements are presented in the
U.S. dollar ($), which is the Company’s reporting currency and functional currency. The Company’s subsidiaries in
the PRC use Renminbi (“RMB”) as their functional currencies. Transactions in foreign currencies are initially recorded
at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the
settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary
assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the
balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements
of income.



In accordance with ASC 830, Foreign Currency Matters, the Company
translated the assets and liabilities into US $  using the rate of exchange prevailing at the applicable balance sheet
date and the statements of income and cash flows are translated at an average rate during the reporting period.  Adjustments
resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.



Revenue Recognition



Revenue principally represents organic compound sale revenue.
Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the
Company’s activities and is recorded net of value added tax (“VAT”). Consistent with the criteria of ASC 605
“Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following four revenue recognition
criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided,
(iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured.



Revenue from the sale of goods is recognized upon delivery
when the significant risks and rewards of ownership of goods have transferred t the buyer, continuing managerial involvement usually
associated with ownership and effective control have ceased and the coasts incurred or to be incurred in respect of the transaction
can be measured reliably.



Interest income is recognized on a time-proportion basis using
the effective interest method.



Borrowing Costs



Borrowing costs are recognised in profit or loss using the
effective interest method except for those costs that are directly attributable to assets under construction. Borrowing costs
on general borrowings are capitalised by applying a capitalization rate to construction or expenditures that are financed by general
borrowings. Borrowing costs on general financing during the years ended June 30, 2014, 2013 and 2012 were capitalized at a rate
of 7.11%, 7.17% and 7.63% respectively.



F-7







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 2 - Summary of Significant Accounting Policies (Continued)



Leases



The Company accounts for its leases under the provisions of
ASC 840, Leases. Certain of the Company’s operating leases provide for minimum annual payments that change over the life
of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease term. The Company
recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual lease payments
and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent expense. Rent
holidays and tenant improvement allowances for store remodels are amortized on the straight-line basis over the initial term of
the lease and any option period that is reasonably assured of being exercised.



Restricted Cash



Restricted cash are cash deposited in fixed deposit accounts
maintained in the PRC and Hong Kong for the purpose of securing bank borrowings.



Trade Receivables



Trade receivables are recorded at the
invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of
business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance
for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of
receivables, payment history, the customer’s current credit worthiness and the economic environment.



Inventories



Inventories are carried at the lower of cost and net realizable
value. Cost is determined using the monthly average cost method, except for materials-in-transit. The cost of finished goods comprises
raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity) but excludes
costs of idle plant and abnormal waste. Net realizable value is the estimated selling price in the ordinary course of business,
less the applicable variable selling expenses.



Property, Plant and Equipment



Property, plant and equipment are recorded at cost. The cost
of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable
to bringing the asset to the location and condition necessary for it to be capable of operating the manner intended by management.
Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to
expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows:



|Buildings           |  | 10 or 20
    years
|------------------- |  | ------------------
|Machinery           |  | 10 or 20 years    
|Vehicles            |  | 4 years           
|Plant and equipment |  | 3 to 5 years      
|Software            |  | 5 years           



Construction in progress represents buildings and related premises
under construction, which is stated at actual construction cost less any impairment loss. Construction in progress is transferred
to the respective category of property and equipment when completed and ready for its intended use.



Costs of repairs and maintenance are expensed as incurred and
asset improvements are capitalized. The cost and related accumulated depreciation and amortization of assets disposed of or retired
are removed from the accounts, and any resulting gain or loss is reflected in the consolidated income statements.



Land Use Rights



According to the laws of the PRC, the government owns all the
land in the PRC.  Companies or individuals are authorized to possess and use the land only through the land use rights
granted by the government. The land use rights represent cost of the rights to use the land in respect of properties located
in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the period of rights of 50 to 52 years.



F-8







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 2 - Summary of Significant Accounting Policies (Continued)



Long-lived Assets



The Company reviews long-lived assets for impairment annually
or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.



Long-lived assets are reviewed for recoverability at the lowest
level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not
considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the
asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount
by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation
techniques, as defined in ASC 360, Property, Plant, and Equipment.



The Company determined the sum of the undiscounted cash flows
expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration
for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future
operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions,
operating performance and economic conditions.



The Company’s evaluation resulted in no long-lived asset
impairment charges during the years ended June 30, 2014, 2013 and 2012.



Goodwill



The Company allocates goodwill to reporting units based
on the reporting unit expected to benefit from the business combination. The Company evaluates their reporting units on an
annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for
impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change
that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or
circumstances could include a significant change in the business climate, legal factors, operating performance indicators,
competition, or sale or disposition of a significant portion of a reporting unit.



Application of the goodwill impairment test requires judgment,
including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill
to reporting units, and determination of the fair value of each reporting unit. The Company first assesses qualitative factors
to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, we perform
a quantitative impairment test. The Company’s evaluation resulted in goodwill impairment charges of nil, $71,638 and nil
respectively during the years ended June 30, 2014, 2013 and 2012.



Accrual and Disclosure of Loss Contingencies



We determine whether to disclose or accrue for loss contingencies
based on an assessment of whether the risk of loss is remote, reasonably possible or probable, and whether it can be reasonably
estimated. We analyze, if any, our litigation and regulatory matters based on available information to assess the potential liabilities.
Our assessment is developed based on an analysis of possible outcomes under various strategies. We accrue for loss contingencies
when such amounts are probable and reasonably estimable. If a contingent liability is only reasonably possible, we will disclose
the potential range of the loss, if estimable. We record losses related to contingencies in cost of operations or selling, general
and administrative expenses, depending on the nature of the underlying transaction leading to the loss contingency.



Convertible bonds



Convertible bonds are presented as current liabilities unless
the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they
are presented as non-current liabilities. On issuance of convertible foreign currency bonds, the proceeds from convertible bonds
issued are allocated to the liability component presented on the balance sheet. The liability component including the conversion
option is recognised initially at its fair value, determined using the Binomial Valuation Model. It is subsequently carried at
its fair value with fair value changes recognised in profit or loss. When the conversion option is exercised, the carrying amount
of the liability component is derecognised with a corresponding recognition of share capital.



F-9







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 2 - Summary of Significant Accounting Policies (Continued)



Retirement Benefit Plans



Full time employees of the Company in the PRC participate in
a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund
and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the
government for these benefits based on certain percentages of the employees’ salaries. The Company accounts the mandated
defined contribution plan under the vested benefit obligations approach based on the guidance of ASC 715, Compensation—Retirement
Benefits.



Retained Earnings - Appropriated



The income of the Company’s PRC subsidiaries is distributable
to their shareholder after transfer to reserves as required by relevant PRC laws and regulations and the subsidiary’s Articles
of Association.  As stipulated by the relevant laws and regulations in the PRC, these PRC subsidiaries are required
to maintain reserves which are non-distributable to shareholders. Appropriations to the reserves are approved by the respective
boards of directors.



Reserves include statutory reserves and discretionary reserves.  Statutory
reserves can be used to make good previous years’ losses, if any, and may be converted into capital in proportion to the
existing equity interests of shareholders, provided that the balance after such conversion is not less than 25% of the registered
capital.  The appropriation to the statutory reserves must not be less than 10% of net profit after taxation.  Such
appropriation may cease to apply if the balance of the fund is equal to 50% of the entity’s registered capital.



Research and Development Costs



Research and development costs are expensed as incurred. The
research and development costs were not material for the years ended June 30, 2014, 2013 and 2012.



Advertising Expenses



Advertising expenses are expensed as incurred. The advertising
expenses were not material for the years ended June 30, 2014, 2013 and 2012.



Income Taxes



The Company follows ASC 740, Income Taxes, which requires the
recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included
in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in
future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period
end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to
be realized.



The Company adopted ASC 740-10-25, which provides criteria
for the recognition, measurement, presentation and disclosure of uncertain tax position.  The Company must recognize
the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination
by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements
from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate
resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation
of ASC 740-10-25.



Cash and Cash Equivalents



The Company considers all short-term highly liquid investments
that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.



F-10















Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 2 - Summary of Significant Accounting Policies (Continued)



Share Based Payment



The Group operates an equity-settled, share based compensation
plan. The value of the brokerage services received by Red Horse Capital Inc. in exchange for grant of warrants is recognised as
an expense with a corresponding increase in the additional paid-in capital of approximately $7,943 during the year ended June 30,
2011.



Goods and services received or acquired in an equity-settled
share based payment transaction, which do not qualify for recognition as assets, are recognised as expenses with a corresponding
increase in equity. The Company measures the goods and services received at fair value of the goods and services received, unless
that fair value cannot be estimated reliably.



Comprehensive Income



The Company has adopted FASB Accounting Standard Codification
Topic 220 (“ASC 220”) “Comprehensive income” (formerly known as SFAS No. 130, “Reporting Comprehensive
Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances.
Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments of the Company.



Fair Value Measurements



ASC 820 defines fair value as the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value,
the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market
participants would use when pricing the asset or liability.



ASC 820 establishes a fair value hierarchy that requires an
entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial
instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to
the fair value measurement.  ASC 820 establishes three levels of inputs that may be used to measure fair value:



| | · | Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the
Company holds. An active market for the asset or liability is a market in which transactions for the asset or liability occur with
sufficient frequency and volume to provide pricing information on an ongoing basis.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level 2 – Valuation based on quoted prices in markets that are not active for which all significant inputs are observable,
either directly or indirectly.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
| | - | -----------------------------------------------------------------------------------------------------------------



The Company adopted ASC 820, Fair Value Measurements and Disclosures,
on January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or
disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). ASC 820 defines fair
value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company has
also adopted ASC 820, on January 1, 2009 for non financial assets and non financial liabilities, as these items are not recognized
at fair value on a recurring basis. The adoption of ASC 820 for all financial assets and liabilities and non-financial assets and
non-financial liabilities did not have any impact on the Company’s consolidated financial statements.



Financial instruments include cash, accounts receivable, prepayments
and other receivables, short-term borrowings from banks, accounts payable and accrued expenses and other payables. The carrying
amounts of cash, accounts receivable, prepayments and other receivables, short-term loans, accounts payable and accrued expenses
approximate their fair value due to the short term maturities of these instruments. See footnote 10 regarding the fair value of
the Company’s warrants, which are classified as Level 3 liabilities in the fair value hierarchy.



The fair values of the convertible bonds are determined using
Binomial Valuation Model.



The fair values of current financial assets and liabilities
carried at amortized cost approximate their carrying amounts.



F-11







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 2 - Summary of Significant Accounting Policies (Continued)



Recently Issued Accounting Guidance



The FASB has
issued Accounting Standards Update (ASU) No. 2014-06, Technical Corrections and Improvements Related to Glossary Terms. The amendments
in this ASU relate to glossary terms and cover a wide range of Topics in the FASB’s Accounting Standards CodificationTM
(Codification). These amendments are presented in four sections:



1. Deletion of Master Glossary Terms (Section
A) arising because of terms that were carried forward from source literature (e.g., FASB Statements, EITF Issues, and so forth)
to the Codification but were not utilized in the Codification.



2. Addition of Master Glossary Term Links
(Section B) arising from Master Glossary terms whose links did not carry forward to the Codification.



3. Duplicate Master Glossary Terms (Section
C) arising from Master Glossary terms that appear multiple times in the Master Glossary with similar, but not identical, definitions.



4. Other Technical Corrections Related
to Glossary Terms (Section D) arising from miscellaneous changes to update Master Glossary terms.



The amendments do not have transition guidance
and are effective upon issuance for both public entities and nonpublic entities.



The FASB has issued Accounting Standards Update (ASU) No. 2014-08,
Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations
and Disclosures of Disposals of Components of an Entity. The amendments in the ASU change the criteria for reporting discontinued
operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related
to financial reporting of discontinued operations guidance in U.S. GAAP.



Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations.
Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include
a disposal of a major geographic area, a major line of business, or a major equity method investment.



In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement
users with more information about the assets, liabilities, income, and expenses of discontinued operations.



The new guidance also requires disclosure of the pre-tax income
attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting.
This disclosure will provide users with information about the ongoing trends in a reporting organization’s results from continuing
operations.



The amendments in this ASU enhance convergence between U.S.
GAAP and International Financial Reporting Standards (IFRS). Part of the new definition of discontinued operation is based on
elements of the definition of discontinued operations in IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations.



The amendments in the ASU are effective in the first quarter
of 2015 for public organizations with calendar year ends. For most nonpublic organizations, it is effective for annual financial
statements with fiscal years beginning on or after December 15, 2014. Early adoption is permitted.



The Company has considered all new accounting pronouncements
and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition,
or cash flows, based on current information.



F-12







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 3 - Concentration of Credit Risk



The Company maintains cash in bank deposit accounts in PRC and
Hong Kong. The Company performs ongoing evaluations of this institution to limit its concentration risk exposure.



The Company sells organic compound principally in the PRC.
Because of this, the Company is subject to regional risks, such as the economy, regional financial conditions and unemployment,
weather conditions, power outages, and other natural disasters specific to the region in which the Company operates.



Details of major customers accounting for 10% or more of the
Group’s sales or trade receivables are as follows:



|           |  | Sales |     |   | Trade receivables | 
|---------- |  | ----- | --- | - | ----------------- | 
|           |  | 2014  |     |   | 2013              | 
|Customer A |  |       | 5.4 | % |                   | 
|Customer B |  |       | 3.6 | % |                   | 



Details of suppliers accounting for 10% or more of the Group’s
purchases or trade payables are as follows:



|           |  | Purchases |      |   | Trade payables | 
|---------- |  | --------- | ---- | - | -------------- | 
|           |  | 2014      |      |   | 2013           | 
|Supplier A |  |           | 13.0 | % |                | 
|Supplier B |  |           | 10.7 | % |                | 
|Supplier C |  |           | 9.8  | % |                | 
|Supplier D |  |           | 7.6  | % |                | 
|Supplier E |  |           | 4.8  | % |                | 



Note 4 - Trade and other receivables

|                                      |  | 2014 |            |   | 2013 |   |            | 2012 | 
|------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- | 
|Notes receivable                      |  | $    | 780,736    |   |      | $ | 2,097,577  |      | 
|                                      |  |      |            |   |      |   |            |      | 
|Trade receivables                     |  |      | 54,742,846 |   |      |   | 52,483,956 |      | 
|Less: Allowance for doubtful accounts |  |      | (1,424,173 | ) |      |   | (1,241,163 | )    | 
|Trade receivables - net               |  |      | 53,318,673 |   |      |   | 51,242,793 |      | 
|                                      |  |      |            |   |      |   |            |      | 
|Other receivables                     |  |      | 11,112,406 |   |      |   | 2,944,667  |      | 
|Prepayments and deposits              |  |      | 12,534,060 |   |      |   | 5,175,567  |      | 
|                                      |  |      |            |   |      |   |            |      | 
|                                      |  | $    | 77,745,875 |   |      | $ | 61,460,604 |      | 



Bank borrowings are secured on trade receivables of the Group
with carrying amounts of $6,983,127, nil and nil for the years ended June 30, 2014, 2013 and 2012 respectively.



Age analysis of trade and other receivables:

|                       |  | 2014 |            |  | 2013 |   |            | 2012 | 
|---------------------- |  | ---- | ---------- |  | ---- | - | ---------- | ---- | 
|Within 3 months        |  | $    | 34,040,404 |  |      | $ | 33,894,770 |      | 
|From 3 to 6 months     |  |      | 8,767,953  |  |      |   | 13,757,760 |      | 
|Past due over 6 months |  |      | 23,046,895 |  |      |   | 7,776,093  |      | 
|                       |  |      |            |  |      |   |            |      | 
|                       |  | $    | 65,855,252 |  |      | $ | 55,428,623 |      | 



F-13







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 5 - Inventories

|               |  | 2014 |            |  | 2013 |   |            | 2012 | 
|-------------- |  | ---- | ---------- |  | ---- | - | ---------- | ---- | 
|Finished goods |  | $    | 8,338,302  |  |      | $ | 6,202,218  |      | 
|Raw materials  |  |      | 5,724,265  |  |      |   | 7,601,271  |      | 
|               |  |      |            |  |      |   |            |      | 
|               |  | $    | 14,062,567 |  |      | $ | 13,803,489 |      | 



The cost of inventories recognized as an expense and included
in cost of sales amounts to $116,976,856, $76,638,808 and $57,788,591 for the years ended June 30, 2014, 2013 and 2012 respectively.



Note 6 - Property, plant and equipment

|                               |  | 2014 |             |   | 2013 |   |            | 2012 | 
|------------------------------ |  | ---- | ----------- | - | ---- | - | ---------- | ---- | 
|Buildings                      |  | $    | 14,197,999  |   |      | $ | 11,870,184 |      | 
|Machinery                      |  |      | 51,900,300  |   |      |   | 36,604,659 |      | 
|Vehicles                       |  |      | 1,803,008   |   |      |   | 1,076,025  |      | 
|Plant and equipment            |  |      | 4,823,706   |   |      |   | 2,469,522  |      | 
|Software                       |  |      | 43,858      |   |      |   | 83,606     |      | 
|Construction in progress       |  |      | 18,397,073  |   |      |   | 15,059,369 |      | 
|                               |  |      | 91,165,944  |   |      |   | 67,163,365 |      | 
|Less: Accumulated depreciation |  |      | (14,726,156 | ) |      |   | (9,869,487 | )    | 
|                               |  |      |             |   |      |   |            |      | 
|Net book value                 |  | $    | 76,439,788  |   |      | $ | 57,293,878 |      | 



Borrowing costs capitalized during the years ended June 30,
2014, 2013 and 2012 were $824,669, $243,362 and $28,578, respectively.



Buildings with net book value of approximately $313,286, $328,618
and nil were used as collateral of short term bank borrowings for the years ended June 30, 2014, 2013 and 2012, respectively.



The depreciation expenses for the years ended June 30, 2014,
2013 and 2012 were $4,816,403, $4,055,295 and $3,202,477, respectively.



F-14







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 7 - Land Use Rights

|                               |  | 2014 |           |   | 2013 |   |           | 2012 | 
|------------------------------ |  | ---- | --------- | - | ---- | - | --------- | ---- | 
|Land use rights                |  | $    | 5,982,880 |   |      | $ | 5,478,417 |      | 
|Less: Accumulated amortization |  |      | (258,244  | ) |      |   | (215,651  | )    | 
|                               |  |      |           |   |      |   |           |      | 
|Land use rights - net          |  | $    | 5,724,636 |   |      | $ | 5,262,766 |      | 



Land use rights with net book value of approximately $2,394,716,
$2,435,879 and $1,917,523 were used as collateral of short term bank borrowings for the years ended June 30, 2014, 2013 and 2012,
respectively.



The amortization expenses for the years ended June 30, 2014,
2013 and 2012 were $41,600, $39,927 and $31,803, respectively.



|Years ending June 30, |  |  |   |          
|--------------------- |  |  | - | ---------
|2015                  |  |  | $ | 41,600   
|2016                  |  |  |   | 41,600   
|2017                  |  |  |   | 41,600   
|2018                  |  |  |   | 41,600   
|2019                  |  |  |   | 41,600   
|Thereafter            |  |  |   | 5,516,636
|                      |  |  |   |          
|Total                 |  |  | $ | 5,724,636



Note 8 - Trade and other payables

|                    |  | 2014 |            |  | 2013 |   |            | 2012 | 
|------------------- |  | ---- | ---------- |  | ---- | - | ---------- | ---- | 
|                    |  |      |            |  |      |   |            |      | 
|Notes payable       |  | $    | 13,073,063 |  |      | $ | 969,587    |      | 
|Trade payables      |  |      | 19,658,604 |  |      |   | 19,188,011 |      | 
|Accruals            |  |      | 408,406    |  |      |   | 390,259    |      | 
|Other taxes payable |  |      | 853,681    |  |      |   | 477,006    |      | 
|Other payables      |  |      | 1,857,056  |  |      |   | 6,311,746  |      | 
|                    |  |      |            |  |      |   |            |      | 
|                    |  | $    | 35,850,810 |  |      | $ | 27,336,609 |      | 



Note 9 - Due to a Shareholder



The amount due to a shareholder is unsecured, interest free
and has no fixed repayment date.



Note 10 - Bank Borrowings



As of June 30, 2014, 2013 and 2012, the Company had short-term
borrowings from banks which were repayable within one year and charged at interest rates ranging from 3.9% to 8.7%, from 2.5% to
9.0% and from 2.5% to 10.4% per annum, respectively. Such borrowings primarily consist of loans denominated in Renminbi, and U.S.
dollars. Bank borrowings are secured over certain bank deposits, certain trade receivables, certain plant and machinery, and certain
land use rights. The bank borrowings are guaranteed by a number of unrelated parties, key management of the Company and the ultimate
controlling party of the Company.



F-15







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 11 - Convertible Bonds



The Company has entered into a series of securities
purchase agreements dated January 31, 2011, May 16, 2011 and June 30, 2011 with certain investment funds, pursuant to which
it has issued certain bonds for an aggregate principal amount of $18,000,000. Details of the convertible bonds issuance are
as follows:

|                                                                             | First batch                                                                                                                                                                                                                                                                                                                             | Second batch                    | Third batch                    
|---------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -------------------------------
|Issue date                                                                   | January
    31, 2011                                                                                                                                                                                                                                                                                                                    | May 16,
    2011                | June 30, 2011                  
|Principal amount                                                             | $ 4 million                                                                                                                                                                                                                                                                                                                             | $ 10 million                    | $ 4 million                    
|Interest rate                                                                | 6% per annum                                                                                                                                                                                                                                                                                                                            | 6% per annum                    | 6% per annum                   
|Type                                                                         | Unsecured convertible bond                                                                                                                                                                                                                                                                                                              | Unsecured convertible bond      | Unsecured convertible bond     
|Conversion Date                                                              | Within 3 years after issue date                                                                                                                                                                                                                                                                                                         | Within 3 years after issue date | Within 3 years after issue date
|Underlying share                                                             | Ordinary Share                                                                                                                                                                                                                                                                                                                          | Ordinary Share                  | Ordinary Share                 
|Guaranteed interest rate at maturity                                         | 15% per annum                                                                                                                                                                                                                                                                                                                           | 15% per annum                   | 15%per annum                   
|Conversion price                                                             | $ 0.8625 per share1                                                                                                                                                                                                                                                                                                                     | $ 1.04
    per share1           | $ 1.04 per share1              
|Adjustments to conversion price                                              | In the event of a share split, share dividends, reverse share split or similar transaction, the Conversion Price shall be automatically adjusted proportionately.                                                                                                                                                                      
|                                                                             |                                                                                                                                                                                                                                                                                                                                        
|                                                                             | Upon the issuance of new share or other equity-linked instruments at a price lower than the then existing Conversion price or on terms more favourable, the Conversion price shall be automatically adjusted downward to the same prices as that of the new equity.                                                                    
|Number of shares convertible                                                 | Number of shares convertible = (Principle + 6% conversion interest compounded annually) / Conversion price If an IPO occurs on or before the eighteen (18) month anniversary of the closing date of the initial closing, no conversion interest shall be payable for the first 18 months period.                                       
|Payment condition when conversion right is not exercised until maturity date | On the maturity date the Company shall pay Guaranteed interest, calculated from initial issue date and compounded annually, on the then outstanding and unconverted principal amount.                                                                                                                                                  
|Put option                                                                   | In the event that an IPO has not been consummated on or prior to the two-year anniversary of the original issue date, the holder of note shall have the right exercisable for a thirty (30) day period following the two-year anniversary of the original issue date to require the Company to redeem with 15% interest rate per annum.

1The conversion price is adjusted by the bonus shares

|                    |  | 2014 |            |  | 2013 |   |            | 2012 | 
|------------------- |  | ---- | ---------- |  | ---- | - | ---------- | ---- | 
|Current portion     |  | $    | 27,375,750 |  |      | $ | 27,219,551 |      | 
|Non-current portion |  |      | -          |  |      |   | -          |      | 
|                    |  |      |            |  |      |   |            |      | 
|                    |  | $    | 27,375,750 |  |      | $ | 27,219,551 |      | 



The carrying amount of the convertible bonds at the balance
sheet date is derived as follows:

|Face value of convertible bonds         |  | $ | 18,000,000 |  |  | $ | 18,000,000 |  |  | $ | 18,000,000 | 
|--------------------------------------- |  | - | ---------- |  |  | - | ---------- |  |  | - | ---------- | 
|Loss on valuation of convertible bonds  |  |   | 9,375,750  |  |  |   | 9,219,551  |  |  |   | 9,182,551  | 
|                                        |  |   |            |  |  |   |            |  |  |   |            | 
|                                        |  | $ | 27,375,750 |  |  | $ | 27,219,551 |  |  | $ | 27,182,551 | 
|Loss on valuation of convertible bonds: |  |   |            |  |  |   |            |  |  |   |            | 
|At beginning of year                    |  | $ | 9,219,551  |  |  | $ | 9,182,551  |  |  | $ | 6,742,268  | 
|Provided for the year                   |  |   | 156,199    |  |  |   | 37,000     |  |  |   | 2,440,283  | 
|                                        |  |   |            |  |  |   |            |  |  |   |            | 
|At end of year                          |  | $ | 9,375,750  |  |  | $ | 9,219,551  |  |  | $ | 9,182,551  | 



F-16







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 12 - Share Capital



All issued ordinary shares are fully paid. On May 26, 2011,
the Company issued bonus shares by way of capitalization of additional paid-in capital amounting to $5,133,505.



Under the new Hong Kong Companies Ordinance (Cap. 622),
which commenced operation on 3 March 2014, the concept of authorised share capital no longer exists. In accordance with
section 135 of the new Hong Kong Companies Ordinance (Cap. 622), the Company’s shares no longer have a par or nominal
value with effect from 3 March 2014. There is no impact on the number of shares in issue or the relative entitlement of any
of the members as a result of this transition. In accordance with the transitional provisions set out in section 37 of
Schedule 11 to the new Hong Kong Companies Ordinance (Cap. 622) on 3 March 2014 any amount standing to the credit of the
share premium account has become part of the Company’s share capital. An amount of $3,665,212 has been transferred from
additional paid-in capital to share capital.



Note 13 - Income Taxes



The income tax provision consisted of the following:



|                           |  | 2014 |           |  | 2013 |   |           | 2012 | 
|-------------------------- |  | ---- | --------- |  | ---- | - | --------- | ---- | 
|Current income tax expense |  | $    | 1,784,278 |  |      | $ | 4,250,820 |      | 
|Deferred taxation          |  |      | 822,200   |  |      |   | (94,179   | )    | 
|                           |  |      |           |  |      |   |           |      | 
|                           |  | $    | 2,606,478 |  |      | $ | 4,156,641 |      | 



The difference between the income tax expenses and the expected
income tax computed at statutory Enterprise Income Tax rate (“EIT”)of the PRC was as follows:



|                                                                   |  | 2014 |           |  | 2013 |   |            | 2012 | 
|------------------------------------------------------------------ |  | ---- | --------- |  | ---- | - | ---------- | ---- | 
|Income before income taxes                                         |  | $    | 9,434,787 |  |      | $ | 15,862,377 |      | 
|Income tax computed at statutory EIT rate (25%)                    |  |      | 2,358,696 |  |      |   | 3,965,594  |      | 
|Effect of different tax rates available to different jurisdictions |  |      | 23,964    |  |      |   | (10,150    | )    | 
|Non-deductible expenses                                            |  |      | 25,773    |  |      |   | 6,105      |      | 
|Change in valuation allowance and others                           |  |      | 198,045   |  |      |   | 195,092    |      | 
|                                                                   |  |      |           |  |      |   |            |      | 
|Income tax expenses                                                |  | $    | 2,606,478 |  |      | $ | 4,156,641  |      | 



Dividends paid by Jiangsu Delta to the Company are subject to
the withholding tax of 5%. The Company’s PRC entities historically have not paid any dividends.



The tax effects of temporary differences that give rise to the
Company’s net deferred tax assets and liabilities are summarized as follows:



|                           |  | 2014 |         |  | 2013 |   |         | 2012 | 
|-------------------------- |  | ---- | ------- |  | ---- | - | ------- | ---- | 
|Deferred tax assets        |  |      |         |  |      |   |         |      | 
|Current portion:           |  |      |         |  |      |   |         |      | 
|Receivables provision      |  | $    | 449,509 |  |      | $ | 344,371 |      | 
|Tax losses carried forward |  |      | 207,868 |  |      |   | 187,121 |      | 
|Less: Valuation allowance  |  |      | -       |  |      |   | -       |      | 
|                           |  |      |         |  |      |   |         |      | 
|Total deferred tax assets  |  | $    | 657,377 |  |      | $ | 531,492 |      | 



F-17







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 13 - Income Taxes (Continued)

|                                                                  |  | 2014 |           |   | 2013 |   |         | 2012 | 
|----------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | ------- | ---- | 
|Deferred tax liabilities                                          |  |      |           |   |      |   |         |      | 
|Revenue cut-off difference derived from Value Added Tax reporting |  |      |           |   |      |   |         |      | 
|system to calculate PRC Corporation Income Tax in accordance with |  |      |           |   |      |   |         |      | 
|the PRC State Administration of Taxation                          |  | $    | 1,020,209 |   |      | $ | 74,967  |      | 
|                                                                  |  |      |           |   |      |   |         |      | 
|Total deferred tax liabilities                                    |  | $    | 1,020,209 |   |      | $ | 74,967  |      | 
|                                                                  |  |      |           |   |      |   |         |      | 
|Net deferred tax (liabilities) assets                             |  | $    | (362,832  | ) |      | $ | 456,525 |      | 



Note 14 - Earnings Per Share



The Company calculates earnings per share in accordance with
ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share
are computed using the weighted average number of shares outstanding during the fiscal year. Potentially dilutive common shares
consist of convertible bonds (using the if-converted method) and exercisable warrants. The following table sets forth the computation
of basic and diluted net income per common share:



|                                                                                                  |  | 2014 |            |  | 2013 |   |            | 2012 | 
|------------------------------------------------------------------------------------------------- |  | ---- | ---------- |  | ---- | - | ---------- | ---- | 
|Numerator:                                                                                        |  |      |            |  |      |   |            |      | 
|Net income attributable to ordinary shareholders for computing                                    |  |      |            |  |      |   |            |      | 
|net income per ordinary share – basic                                                             |  | $    | 6,828,308  |  |      | $ | 11,705,736 |      | 
|Loss on valuation of convertible bonds                                                            |  |      | 156,199    |  |      |   | 37,000     |      | 
|                                                                                                  |  |      |            |  |      |   |            |      | 
|Net income attributable to ordinary shareholders for computing                                    |  |      |            |  |      |   |            |      | 
|net income per ordinary share – diluted                                                           |  | $    | 6,984,507  |  |      | $ | 11,742,736 |      | 
|                                                                                                  |  |      |            |  |      |   |            |      | 
|Denominator:                                                                                      |  |      |            |  |      |   |            |      | 
|Weighted average number of shares used in calculating net income per ordinary share – basic       |  |      | 40,000,000 |  |      |   | 40,000,000 |      | 
|Adjustments for                                                                                   |  |      |            |  |      |   |            |      | 
|- Execution of convertible bonds                                                                  |  |      | 18,099,220 |  |      |   | 18,099,220 |      | 
|- Execution of stock warrant                                                                      |  |      | 92,753     |  |      |   | 92,753     |      | 
|                                                                                                  |  |      |            |  |      |   |            |      | 
|Weighted average number of shares used in calculating net income per ordinary share –
    diluted |  |      | 58,191,973 |  |      |   | 58,191,973 |      | 
|                                                                                                  |  |      |            |  |      |   |            |      | 
|Net income per ordinary share – basic                                                             |  | $    | 0.17       |  |      | $ | 0.29       |      | 
|                                                                                                  |  |      |            |  |      |   |            |      | 
|Net income per ordinary share – diluted                                                           |  | $    | 0.12       |  |      | $ | 0.20       |      | 



F-18







Delta Advanced Materials
Limited

Notes to Consolidated
Financial Statements

For the years ended
June 30, 2014, 2013 and 2012



Note 15 - Acquisition



On August 18, 2012, Zhengxin International and Jiangsu Delta
entered into a sale and purchase agreement, pursuant to which the entire equity interest of Jiangsu Zhengxin R&D was acquired
by Jiangsu Delta from Zhengxin International at a consideration of $525,363 (RMB3.3 million). The acquisition of Jiangsu Zhengxin
R&D was approved by the Danyang Bureau of Commerce on September 18, 2012 in accordance with “The Approval and Transfer
of and the Alteration of Nature of Zhengxin New Material R&D Co., Limited”.



|Assets acquired and liabilities assumed at the date of acquisition: |  |   |          |  
|------------------------------------------------------------------- |  | - | -------- | -
|Cash and cash equivalents                                           |  | $ | 1,146    |  
|Property, plant and equipment                                       |  |   | 524,909  |  
|Trade and other payables                                            |  |   | (72,330  | )
|                                                                    |  |   |          |  
|                                                                    |  | $ | 453,725  |  
|Goodwill arising on acquisition:                                    |  |   |          |  
|Consideration transferred                                           |  | $ | 525,363  |  
|Less: Fair value of identifiable net assets acquired                |  |   | (453,725 | )
|                                                                    |  |   |          |  
|                                                                    |  | $ | 71,638   |  
|Net cash outflow on acquisition of subsidiary:                      |  |   |          |  
|Consideration paid in cash                                          |  | $ | 525,363  |  
|Less: Cash and cash equivalents acquired                            |  |   | (1,146   | )
|                                                                    |  |   |          |  
|                                                                    |  | $ | 524,217  |  



Note 16 - Commitments

|                                                             |  | 2014 |           |  | 2013 |   |            | 2012 | 
|------------------------------------------------------------ |  | ---- | --------- |  | ---- | - | ---------- | ---- | 
|Capital commitments                                          |  |      |           |  |      |   |            |      | 
|Capital expenditures contracted for are analyzed as follows: |  |      |           |  |      |   |            |      | 
|Contracted but not provided for:                             |  |      |           |  |      |   |            |      | 
|Property, plant and equipment                                |  | $    | 8,180,814 |  |      | $ | 12,582,246 |      | 



Note 17 –Related party transactions



In addition to the information disclosed elsewhere in the financial
statements, the following transaction took place between the Company and related parties at terms agreed between the parties:



Guarantees in favour of the Company’s bank borrowings
were received from a key management for the year ended June 30, 2014.



Guarantees in favour of the Company’s bank borrowings
were received from the ultimate controlling party for the years ended June 30, 2014, 2013 and 2012.



The immediate and ultimate controlling party of the Company
is Mr Chao Xin.



Note 18 - Subsequent Events



On September 11, 2014, the Board of Directors approved an interim
cash dividend of $35,000,000 (or $0.875 per share) be declared to the shareholders as at the same date.



On September 16,
2014, the holders of the Company entered into a stock purchase agreement to merge the Company with CIS Acquisition Ltd.



F-19









UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS



CIS Acquisition Ltd.
(“CIS”) is providing the following unaudited pro forma condensed combined financial information to aid you in your
analysis of the financial aspects of the Acquisition.



The following unaudited
pro forma condensed combined balance sheet combines the audited consolidated historical statement of financial position of Delta
Advanced Materials Limited (“Delta”) as of June 30, 2014 with the unaudited historical balance sheet of CIS as of April
30, 2014, giving effect to the Acquisition as if it had been consummated as of June 30, 2014.



The following unaudited
pro forma condensed combined statement of operations combines the audited historical statement of operations and comprehensive
income of Delta for the year ended June 30, 2014 with the unaudited historical statement of operations of CIS for the year ended
April 30, 2014, giving effect to the Acquisition as if it had occurred on July 1, 2013.



The historical financial
information has been adjusted to give effect to the final events that are related and/or directly attributable to the Acquisition,
are factually supportable and are expected to have a continuing impact on the combined results. The adjustments presented on the
unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information
necessary for an accurate understanding of the combined company upon consummation of the Acquisition.



The historical financial
statements of Delta and CIS have been prepared in accordance with accounting principles generally accepted in the United States
of America (“US GAAP”) and presented in US Dollars. The unaudited pro forma condensed combined financial statements
included herein are prepared under US GAAP and presented in US Dollars. Following the consummation of the Acquisition, the combined
entity intends to prepare its consolidated financial statements under US GAAP and present such consolidated financial statements
in US Dollars.



The historical financial
information of Delta was derived from the audited financial statements of Delta for the years ended June 30, 2014, 2013 and 2012,
included elsewhere in this Shell Company Report. The historical financial information of CIS was derived from the unaudited financial
statements of CIS as of and for the six months ended April 30, 2014 and the audited financial statements of CIS for the year ended
October 31, 2013, for the period from November 28, 2011 (inception) through October 31, 2012 and for the period from November 28,
2011 (inception) through October 31, 2013, included elsewhere in this Shell Company Report. This information should be read together
with Delta’s and CIS’s financial statements and related notes, “Management’s Discussion and Analysis
of Financial Condition and Results of Operations of Delta,” “Management’s Discussion and Analysis of Financial
Condition and Results of Operations of CIS ” and other financial information included elsewhere in this Shell Company
Report.



The unaudited pro forma
condensed combined financial information is for illustrative purposes only. The financial results may have been different had the
companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being
indicative of the historical results that would have been achieved had the companies always been combined or the future results
that the combined company will experience.



In the Acquisition,
CIS acquired 100% of the issued and outstanding equity interests of Elite Ride Limited (“Elite”), of which Delta is
a wholly owned subsidiary. As a result, following the Acquisition, Delta became a wholly-owned subsidiary of CIS. In exchange,
the holders of the all of the outstanding shares of Elite immediately prior to the Acquisition received consideration consisting
of:



(i) 6,060,000 shares
of CIS common stock (the “CIS Share Consideration”). Of the CIS Share Consideration, 4,560,000 shares were fully vested
and issued upon the closing, and 1,500,000 shares (“Earnout Shares”) were issued and held in escrow, deemed not outstanding,
and shall be released from escrow if the post merger Company’s adjusted net income (as defined) meets the targets as follows:
(a) 500,000 shares shall be released from escrow based if the Company achieves Adjusted Net Income of at least $8 million for the
period starting July 1, 2014 and ending June 30, 2015, (b) 500,000 shares shall be released from escrow if the combined company
achieves Adjusted Net Income of at least $9.2 million for the period starting July 1, 2015 and ending June 30, 2016 and (c) 500,000
shares shall be released from escrow based if the combined company achieves Adjusted Net Income of at least $10.6 million for the
period starting July 1, 2016 and ending June 30, 2017.



(ii) upon the exercise
of the CIS outstanding public warrants and warrants issued to the CIS Sponsor, the Company shall distribute the proceeds of any
such exercise to the former holders of Delta, (as defined) (“Warrant Proceeds Consideration”). In connection with the
Closing, 4,500,000 warrants owned by the CIS Sponsor (“Placement Warrants”) were amended to (a) provide that such Placement
Warrants may be redeemed at a price of $17.50 per share, and (b) provide that such Sponsor Warrants may not be exercised on a cashless
basis, and



F-1







(iii) CIS and
the CIS Sponsor entered into a call agreement (the “Call Agreement”) mutually acceptable to the Company, the former
holders of Delta and the CIS Sponsor pursuant to which the Company shall be permitted, on a date which is between the 360th and
390th after the Closing Date, to require the CIS Sponsor to sell to it, at a price of $5.00 per share, up to 1,500,000 shares of
the Company’s common stock (the “Call Option”).



Concurrently with the
Acquisition, CIS issued 500,000 shares of CIS Common Stock to Kyle Shostak and CIS Acquisition Holding Co. Ltd. (collectively,
the “CIS Sponsor”) and (the “CIS Sponsor Shares”), proportionally in accordance with their ownership in
CIS. In addition, if the 10 trading day volume weighted average price of the CIS Common Stock (the “VWAP”) is lower
than $5.00 per share on the principal stock exchange on which such stock is traded on the earlier to occur of (i) the 395th day
after the closing and (ii) the 30th day after the SEC declares a registration statement filed by CIS effective during the first
12 months after the closing,  then CIS will issue the CIS Sponsor, proportionally in accordance with their respective share
ownership in CIS, an additional number of shares of CIS Common Stock equal to  (i) $5.00 minus the VWAP, divided by the VWAP,
multiplied by (ii) the lesser of (a) 1,500,000 and (b) the total number of shares of CIS Common Stock owned by CIS Sponsor on such
date. The total number of CIS Common Stock will be reduced by the number of shares CIS Sponsor sells during 13 months post-closing.



The pro forma balance
sheet reflects the issuance of the CIS Acquisition Share Consideration and the CIS Sponsor Shares, but does not reflect the Warrant
Proceeds Consideration or the shares which might be exchanged in connection with the Call Option.



Pursuant to the terms
of the Acquisition, the holders of Delta or their affiliates purchased 500,000 shares of CIS’s Class A shares from public
shareholders and Delta agreed that upon the closing, that it would have ) indebtedness for borrowed money not in excess of $85,000,000,
(b) no shareholder indebtedness (c) trade and other payables not in excess of $40,000,000, (d) advances from customers not in excess
of $2,000,000, (e) tax and deferred tax liabilities not in excess of $2,500,000, (f) dividend payable of $35,000,000 and (g) not
less than $7,500,000 in unrestricted cash on the balance sheet post dividend.



As a result of the
Acquisition, the former holders of Delta own approximately 72.0% of CIS’s common stock outstanding immediately after the
Acquisition, and the other CIS stockholders own approximately 28.0% of CIS’s outstanding common stock, based on the number
of shares of CIS common stock outstanding as of June 30, 2014.



The Acquisition was
accounted for as a reverse acquisition in accordance with US GAAP. Under this method of accounting, CIS was treated as the “acquired”
company for financial reporting purposes. This determination was primarily based on Delta comprising the ongoing operations of
the combined entity, Delta senior management comprising the senior management of the combined company, and the former holders of
Delta having a controlling interest in terms of the voting power of the combined entity. In accordance with guidance applicable
to these circumstances, the Acquisition was considered to be a capital transaction in substance. Accordingly, for accounting purposes,
the Acquisition was treated as the equivalent of Delta issuing stock for the net assets of CIS, accompanied by a recapitalization.
The net assets of CIS will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior
to the Acquisition will be those of Delta.



Included in the weighted
average shares outstanding as presented in the pro forma condensed combined financial statements are 4,560,000 shares of CIS common
stock issued to the former holders of Delta in exchange for their shares in Delta. The weighted average shares outstanding exclude
1,500,000 shares that were issued and considered not outstanding, as such shares are subject to forfeiture. These shares are held
in escrow.



F-2









CIS ACQUISITION LTD.

UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET

As of June 30, 2014



|                                                                           |  | Note A            |             |  | Note B          |   |            |                       |  |                   |             |   |                   |  
|-------------------------------------------------------------------------- |  | ----------------- | ----------- |  | --------------- | - | ---------- | --------------------- |  | ----------------- | ----------- | - | ----------------- | -
|                                                                           |  | Delta Advanced    |             |  | CIS Acquisition |   |            | Pro Forma Adjustments |  | Pro Forma Balance |            
|                                                                           |  | Materials Limited |             |  | Ltd.            |   |            | Adjustment            |  |                   | Note        |   | Sheet As Adjusted |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|ASSETS                                                                     |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Current assets:                                                            |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Cash and cash equivalents                                                  |  | $                 | 9,045,950   |  |                 | $ | 12,648     |                       |  |                   | 41,622,401  |   |                   | 1
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | (30,000     | ) |                   | 3
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | (36,400,000 | ) |                   | 4
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | (611,000    | ) |                   | 7
|Restricted cash                                                            |  |                   | 22,855,107  |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Trade and other receivables                                                |  |                   | 77,745,875  |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Prepaid expenses and other current assets                                  |  |                   | -           |  |                 |   | 36,333     |                       |  |                   | -           |   |                   |  
|Inventories                                                                |  |                   | 14,062,567  |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Total current assets                                                       |  |                   | 123,709,499 |  |                 |   | 48,981     |                       |  |                   | 4,581,401   |   |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Property, plant and equipment                                              |  |                   | 76,439,788  |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Land use rights                                                            |  |                   | 5,724,636   |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Deferred tax assets                                                        |  |                   | 657,377     |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Restricted investments and cash equivalents
    held in trust account      |  |                   | -           |  |                 |   | 41,622,401 |                       |  |                   | (41,622,401 | ) |                   | 1
|Total assets                                                               |  | $                 | 206,531,300 |  |                 | $ | 41,671,382 |                       |  | $                 | (37,041,000 | ) |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                       |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Current liabilities:                                                       |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Trade and other payables                                                   |  | $                 | 35,850,810  |  |                 | $ | 191,674    |                       |  |                   | -           |   |                   |  
|Dividend payable                                                           |  |                   | -           |  |                 |   | -          |                       |  |                   | 35,000,000  |   |                   | 2
|Advances from customers                                                    |  |                   | 1,776,624   |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Due to a shareholder                                                       |  |                   | 2,857,432   |  |                 |   | -          |                       |  |                   | (2,857,432  | ) |                   | 8
|Loan payable - related party                                               |  |                   | -           |  |                 |   | 30,000     |                       |  |                   | (30,000     | ) |                   | 3
|Borrowings                                                                 |  |                   | 81,377,050  |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Income tax payables                                                        |  |                   | 814,051     |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Deferred tax liabilities                                                   |  |                   | 1,020,209   |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Convertible bonds - current
    portion                                    |  |                   | 27,375,750  |  |                 |   | -          |                       |  |                   | (27,375,750 | ) |                   | 8
|Total current liabilities                                                  |  |                   | 151,071,926 |  |                 |   | 221,674    |                       |  |                   | 4,736,818   |   |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Long-term liabilities:                                                     |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Warrant liability                                                          |  |                   | -           |  |                 |   | 3,185,000  |                       |  |                   | -           |   |                   |  
|Total long-term liabilities                                                |  |                   | -           |  |                 |   | 3,185,000  |                       |  |                   | -           |   |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Total liabilities                                                          |  |                   | 151,071,926 |  |                 |   | 3,406,674  |                       |  |                   | 4,736,818   |   |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Class A shares, $0.0001 par value, subject to possibleredemption or tender |  |                   | -           |  |                 |   | 36,400,000 |                       |  |                   | (36,400,000 | ) |                   | 4
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Stockholders' equity:                                                      |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Class A shares, $0.0001 par value                                          |  |                   | -           |  |                 |   | 164        |                       |  |                   | (164        | ) |                   | 4
|Ordinary shares                                                            |  |                   | -           |  |                 |   | -          |                       |  |                   | 164         |   |                   | 4
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | 506         |   |                   | 5
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | 34          |   |                   | 7
|Share Capital                                                              |  |                   | 8,852,713   |  |                 |   | -          |                       |  |                   | (39,085,895 | ) |                   | 5
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | 30,233,182  |   |                   | 8
|Additional paid-in capital                                                 |  |                   | -           |  |                 |   | 5,563,747  |                       |  |                   | 39,085,389  |   |                   | 5
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | (3,699,203  | ) |                   | 6
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | (611,000    | ) |                   | 7
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   | (34         | ) |                   | 7
|Statutory reserves                                                         |  |                   | 6,196,949   |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Retained earnings                                                          |  |                   | 34,370,050  |  |                 |   | -          |                       |  |                   | (35,000,000 | ) |                   | 2
|Accumulated deficit                                                        |  |                   | -           |  |                 |   | (3,699,203 | )                     |  |                   | 3,699,203   |   |                   | 6
|Accumulated other comprehensive
    income                                 |  |                   | 6,039,662   |  |                 |   | -          |                       |  |                   | -           |   |                   |  
|Total stockholders' equity                                                 |  |                   | 55,459,374  |  |                 |   | 1,864,708  |                       |  |                   | (5,377,818  | ) |                   |  
|                                                                           |  |                   |             |  |                 |   |            |                       |  |                   |             |   |                   |  
|Total liabilities and
    stockholders equity                              |  | $                 | 206,531,300 |  |                 | $ | 41,671,382 |                       |  | $                 | (37,041,000 | ) |                   |  



See footnotes to unaudited pro forma condensed
combined financial statements



F-3







CIS ACQUISITION LTD.

UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS

For the Year Ended June 30, 2014



|                                                               |  | Note A            |             |   | Note B               |   |           |                       |  |                  |           |   |                       |  
|-------------------------------------------------------------- |  | ----------------- | ----------- | - | -------------------- | - | --------- | --------------------- |  | ---------------- | --------- | - | --------------------- | -
|                                                               |  | Delta Advanced    |             |   |                      |   |           | Pro Forma Adjustments |  | Pro Forma Income |          
|                                                               |  | Materials Limited |             |   | CIS Acquisition Ltd. |   |           | Adjustment            |  |                  | Note      |   | Statement As Adjusted |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Revenues                                                       |  | $                 | 175,327,717 |   |                      | $ | -         |                       |  | $                | -         |   |                       |  
|Cost of Sales                                                  |  |                   | 157,904,729 |   |                      |   | -         |                       |  |                  | -         |   |                       |  
|Gross Profit                                                   |  |                   | 17,422,988  |   |                      |   | -         |                       |  |                  | -         |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Operating expenses:                                            |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Selling expenses                                               |  |                   | 2,306,021   |   |                      |   | -         |                       |  |                  | -         |   |                       |  
|Legal and professional fees                                    |  |                   | -           |   |                      |   | 306,326   |                       |  |                  | -         |   |                       |  
|Office expense - related party                                 |  |                   | -           |   |                      |   | 90,000    |                       |  |                  | -         |   |                       |  
|General and administrative
    expenses                        |  |                   | 3,482,027   |   |                      |   | 55,293    |                       |  |                  | -         |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Total operating expenses                                       |  |                   | 5,788,048   |   |                      |   | 451,619   |                       |  |                  | -         |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Income (loss) from operations                                  |  |                   | 11,634,940  |   |                      |   | (451,619  | )                     |  |                  | -         |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Other income (expense):                                        |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Change in fair value of warrants                               |  |                   | -           |   |                      |   | 810,000   |                       |  |                  | -         |   |                       |  
|Interest expense                                               |  |                   | (4,000,626  | ) |                      |   | -         |                       |  |                  | 1,080,000 |   |                       | 1
|Interest income                                                |  |                   | 1,948,743   |   |                      |   | 15,420    |                       |  |                  | -         |   |                       |  
|Change in fair value of convertible bonds                      |  |                   | (156,199    | ) |                      |   | -         |                       |  |                  | 156,199   |   |                       | 2
|Other gains/(loss) - net                                       |  |                   | 7,929       |   |                      |   | -         |                       |  |                  | -         |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Income before income taxes                                     |  |                   | 9,434,787   |   |                      |   | 373,801   |                       |  |                  | 1,236,199 |   |                       |  
|Income taxes                                                   |  |                   | (2,606,479  | ) |                      |   | -         |                       |  |                  | (341,516  | ) |                       | 3
|Net income                                                     |  | $                 | 6,828,308   |   |                      | $ | 373,801   |                       |  | $                | 894,683   |   |                       |  
|Other comprehensive income:                                    |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Foreign currency translation adjustments                       |  |                   | 316,439     |   |                      |   | -         |                       |  |                  | -         |   |                       |  
|Comprehensive income                                           |  | $                 | 7,144,747   |   |                      | $ | 373,801   |                       |  | $                | 894,683   |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Basic net loss per share                                       |  |                   |             |   |                      | $ | 0.23      |                       |  |                  |           |   |                       |  
|Diluted net loss per share                                     |  |                   |             |   |                      | $ | 0.23      |                       |  |                  |           |   |                       |  
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Weighted average number of common shares outstanding - basic   |  |                   |             |   |                      |   | 1,636,000 |                       |  |                  | 5,397,059 |   |                       | 4
|                                                               |  |                   |             |   |                      |   |           |                       |  |                  |           |   |                       |  
|Weighted average number of common shares outstanding - diluted |  |                   |             |   |                      |   | 1,636,000 |                       |  |                  | 5,397,059 |   |                       | 4



See footnotes to unaudited pro forma condensed
combined financial statements





F-4









Pro Forma Adjustments to the Unaudited
June 30, 2014 Audited Condensed Combined Balance Sheet



| | (A) | Derived from the audited balance sheet of Delta as of June 30, 2014.
| | --- | --------------------------------------------------------------------

| | (B) | Derived from the balance sheet of CIS as of April 30, 2014
| | --- | ----------------------------------------------------------



| | (1) | To liquidate investments held in trust by CIS.
| | --- | ----------------------------------------------

| | (2) | To record the dividend payable of $35,000,000 declared by Delta.
| | --- | ----------------------------------------------------------------

| | (3) | To record payment of related party loans payable of $30,000, net, due to CIS Acquisition Holding
Co. Ltd.  The balance of the related party loans as of the date of the pro forma were $150,000.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | To reflect the use of cash in connection with the redemption of 3,500,000 Class A shares held by
CIS public shareholders at $10.40 per share and the recharacterization of the remaining 1,636,000 Class A shares to ordinary shares.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | To reflect the recapitalization of Delta through the issuance of 4,560,000 shares of CIS’s
common stock, excluding 1,500,000 Earnout Shares held in escrow. Concurrently, with the Acquisition, CIS issued 500,000 shares
of common stock to the CIS sponsor.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | To eliminate the historical accumulated deficit of CIS of $3,699,203, the accounting acquiree.
| | --- | ----------------------------------------------------------------------------------------------

| | (7) | To reflect the cash payment of estimated legal, financial advisory, accounting, printing and other
professional fees and expenses incurred in connection with the Acquisition and to record the issuance of 337,059 shares of common
stock to Chardan Capital Markets as M&A Advisory Compensation, valued at $3,464,967, or $10.28 per share (based upon the closing
price of the CIS common stock on June 30, 2014).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | To reflect the issuance of Delta Share Capital in exchange for the full amount of the convertible
bonds and the amount due to shareholder, as if the exchange occurred on July 1, 2013.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Pro Forma Adjustments to the Unaudited
Condensed Combined Income Statement



| | (A) | Derived from the audited statement of comprehensive income of Delta for the year ended June 30,
2014.
| | --- | -----------------------------------------------------------------------------------------------------

| | (B) | Derived from the statement of operations of CIS for the six months ended April 30, 2014 and the
year ended October 31, 2013.
| | --- | ----------------------------------------------------------------------------------------------------------------------------



| | (1) | Adjustment to reduce interest expense for the convertible bonds which were exchanged for Delta
Share Capital, as if the transfer occurred on July 1, 2013.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Adjustment to remove the change in fair value of convertible bonds, because the convertible bonds
were exchanged for Delta Share Capital, as if the exchange occurred on July 1, 2013.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Adjustment to increase income taxes for the increase in pro forma income before income taxes.  The
additional income tax expense was derived using the Company’s effective income tax rate of 28%.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-5







Pro Forma Adjustments to the Unaudited Condensed Combined
Income Statement



| | (4) | As the Acquisition is being reflected as if it had occurred at the beginning of the period presented, the calculation of weighted
average shares outstanding for basic and diluted net income (loss) per share assumes that the shares issued relating to the Acquisition
have been outstanding for the entire period presented. In this calculation, the shares redeemed were retroactively adjusted to
eliminate such shares for the entire period. Weighted average common shares outstanding – basic and diluted is calculated
as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                        |  | Combined |           
|--------------------------------------------------------------------------------------- |  | -------- | ----------
|CIS Acquisition public shares held by Delta's investors                                 |  |          | 500,000   
|Adjustment to public shares                                                             |  |          | (500,000  
|CIS Acquisition public shares redeemed                                                  |  |          | (3,500,000
|CIS Acquisition public shares outstanding - IPO                                         |  |          | 4,000,000 
|CIS Acquisition shares outstanding - Founders                                           |  |          | 1,136,000 
|CIS Acquisition shares issued in merger to Delta investors - fully vested upon issuance |  |          | 4,560,000 
|CIS Acquisition shares issued in merger to CIS Founders                                 |  |          | 500,000   
|CIS Acquisition shares issued as finders fee to Chardan                                 |  |          | 337,059   
|Shares outstanding                                                                      |  |          | 7,033,059 
|                                                                                        |  |          |           
|Of the Weighted Average Shares:                                                         |  |          |           
|Percent of shares owned by Delta investors                                              |  |          | 72        
|Percent of shares owned by other CIS stockholders, including public and others          |  |          | 28        
|                                                                                        |  |          |           
|Weighted average shares calculation:                                                    |  |          |           
|Delta Investors (excluding forfeitable shares)                                          |  |          | 5,060,000 
|CIS shares owned by other CIS stockholders, including public shares and others          |  |          | 1,973,059 
|Weighted average shares, basic and diluted                                              |  |          | 7,033,059 



The computation of diluted income per share excludes
the effect of warrants to purchase 8,500,000 common stock and the underwriter's option to purchase 280,000 Units because it
could not be assumed for the period presented that the market price would have exceeded the strike price for these
instruments.



F-6







EXHIBIT INDEX



|Exhibit
        No. |  | Description                                                                                                                                                                                                               
|------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1(1)              |  | Memorandum and Articles of Association                                                                                                                                                                                    
|1.2(1)              |  | Amended and Restated Memorandum of Association                                                                                                                                                                            
|1.3(1)              |  | Amended and Restated Articles of Association                                                                                                                                                                              
|2.1(1)              |  | Specimen Unit Certificate                                                                                                                                                                                                 
|2.2(1)              |  | Specimen Class A Share Certificate                                                                                                                                                                                        
|2.3(1)              |  | Specimen Class B Share Certificate                                                                                                                                                                                        
|2.4(1)              |  | Specimen Class C Share Certificate                                                                                                                                                                                        
|2.5(1)              |  | Specimen Public Warrant Certificate                                                                                                                                                                                       
|2.6(1)              |  | Specimen Placement Warrant Certificate                                                                                                                                                                                    
|2.7(1)              |  | Form of Warrant Agreement                                                                                                                                                                                                 
|2.8(1)              |  | Form of Unit Purchase Option                                                                                                                                                                                              
|4.1(1)              |  | Form of Underwriting Agreement                                                                                                                                                                                            
|4.2(1)              |  | Form of Letter Agreement by and among the Registrant, Chardan Capital Markets, LLC and the founders                                                                                                                       
|4.3(1)              |  | Form of Investment Management Trust Agreement between American Stock Transfer & Trust Company, LLC, and the Registrant                                                                                                    
|4.4(1)              |  | Form of Securities Escrow Agreement between the Registrant, American Stock Transfer & Trust Company, LLC, the Founders, Chardan Capital Markets, LLC, C&Co/PrinceRidge LLC, Euro Pacific Capital, Inc. and Maxim Group LLC
|4.5(1)              |  | Form of Services Agreement between the Registrant and Chardan Capital Markets, LLC                                                                                                                                        
|4.6(1)              |  | Form of Registration Rights Agreement among the Registrant and the Founders                                                                                                                                               
|4.7(1)              |  | Form of Placement Warrant Purchase Agreement between the Registrant and the founders                                                                                                                                      
|4.8(1)              |  | Promissory Note, dated February 13, 2012, issued by the Registrant to Intercarbo Holding AG                                                                                                                               
|4.9(1)              |  | Agreement, dated January 10, 2012, among the Registrant, Kyle Shostak and CIS Acquisition Holding Co. Ltd.                                                                                                                
|4.10(1)             |  | Promissory Note, dated April 30, 2012, issued by the Registrant to Intercarbo Holding AG                                                                                                                                  
|4.11(1)             |  | Promissory Note, dated July 16, 2012, issued by the Registrant to Intercarbo Holding AG                                                                                                                                   
|                    |  | Form of Underwriter Share Purchase Agreement among the Registrant, Chardan Capital Markets, LLC, C&Co/PrinceRidge LLC, Euro Pacific Capital, Inc. and Maxim Group LLC                                                     
|10.1(2)             |  | Stock Purchase Agreement by and among CIS Acquisition Ltd., Elite Ride Limited, Delta Advanced Materials Limited, and the shareholders of Elite Ride Limited, dated September 16, 2014                                    
|10.2                |  | Registration Rights Agreement by and among CIS Acquisition Ltd. and the holders of Elite Ride Limited, dated September 19, 2014                                                                                           
|10.3                |  | Voting Agreement by and among CIS Acquisition Ltd., Elite Ride Limited, Delta Advanced Materials Limited, and certain shareholders of Elite Ride Limited dated September 19, 2014                                         
|10.4                |  | Call Agreement by and among CIS Acquisition Ltd. and CIS Sponsors dated September 19, 2014                                                                                                                                
|11.1(1)             |  | Code of Ethics                                                                                                                                                                                                            
|12.1                |  | Certification of the Chief Executive Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.                                                                         
|12.2                |  | Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended                                                                          
|13.1                |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                             
|13.2                |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                             
|99.1(1)             |  | Audit Committee Charter                                                                                                                                                                                                   
|99.2(1)             |  | Compensation Committee Charter                                                                                                                                                                                            
|99.3(1)             |  | Governance and Nominating Committee Charter                                                                                                                                                                               



| | (1) | Incorporated by reference to the registrant’s Registration Statement on Form F-1 (File No. 333-180224). 
| | --- | --------------------------------------------------------------------------------------------------------
| | (2) | Incorporated by reference to the registrant’s Form 6-K (File No. 001-35755) filed on September 19, 2014.





98