UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 20-F

| | ☐ | 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 1934For the fiscal year ended December 31, 2014
| | - | -------------------------------------------------------------------------------------------------------------------------------



OR



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



OR



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



Date of event requiring this shell company
report:



For the transition period from ________
to ________



Commission file number: 001-35105

__________



PRIME ACQUISITION CORP.
(Exact name of the Registrant as specified in its charter)

__________



Cayman Islands
(Jurisdiction of incorporation or organization)



No. 322, Zhongshan East RoadShijiazhuangHebei Province, 050011People’s Republic of China
(Address of principal executive offices)



William Tsu-Cheng YuNo. 322, Zhongshan East RoadShijiazhuangHebei Province, 050011People’s Republic of ChinaTelephone: 408-621-8345Fax No.: 650-618-2552
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

__________

Securities registered or to be registered
pursuant to Section 12(b) of the Act: None



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

Ordinary SharesUnitsWarrants

(Title of Class)



Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act: None.



On December 31, 2015, the issuer had 2,040,451 ordinary
shares outstanding.












Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐   No ☒



If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. Yes ☐   No ☒



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒   No  ☐



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, 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 ☒   No ☐



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 | ☒Non-accelerated filer
|------------------------- | ------------------- | ----------------------



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



|☐US 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



|PART I   |                                                            | 5                                                       
|-------- | ---------------------------------------------------------- | --------------------------------------------------------
|ITEM 1.  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS      | 5                                                       
|ITEM 2.  | OFFER STATISTICS AND EXPECTED TIMETABLE                    | 5                                                       
|ITEM 3.  | KEY INFORMATION                                            | 5                                                       
|         | A.                                                         | Selected Financial Data                                 
|         | B.                                                         | Capitalization and Indebtedness                         
|         | C.                                                         | Reasons for the Offer and Use of Proceeds               
|         | D.                                                         | Risk Factors                                            
|ITEM 4.  | INFORMATION ON THE COMPANY                                 | 14                                                      
|         | A.                                                         | History and Development of the Company                  
|         | B.                                                         | Business Overview                                       
|         | C.                                                         | Organizational Structure                                
|         | D.                                                         | Property, Plant and Equipment                           
|ITEM 4A. | UNRESOLVED STAFF COMMENTS                                  | 19                                                      
|ITEM 5.  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS               | 19                                                      
|ITEM 6.  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                 | 26                                                      
|         | A.                                                         | Directors and Senior Management                         
|         | B.                                                         | Compensation                                            
|         | C.                                                         | Board Practices                                         
|         | D.                                                         | Employees                                               
|         | E.                                                         | Share Ownership                                         
|ITEM 7.  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS          | 29                                                      
|         | A.                                                         | Major Shareholders                                      
|         | B.                                                         | Related Party Transactions                              
|         | C.                                                         | Interests of Experts and Counsel                        
|ITEM 8.  | FINANCIAL INFORMATION                                      | 31                                                      
|         | A.                                                         | Consolidated Statements and Other Financial Information.
|         | B.                                                         | Significant Changes.                                    
|ITEM 9.  | THE OFFER AND LISTING                                      | 31                                                      
|         | A.                                                         | Offer and Listing Details.                              
|         | B.                                                         | Plan of Distribution                                    
|         | C.                                                         | Markets                                                 
|         | D.                                                         | Selling Shareholders                                    
|         | E.                                                         | Dilution                                                
|         | F.                                                         | Expenses of the Issue                                   
|ITEM 10. | ADDITIONAL INFORMATION                                     | 33                                                      
|         | A.                                                         | Share Capital                                           
|         | B.                                                         | Memorandum and Articles of Association                  
|         | C.                                                         | Material Contracts                                      
|         | D.                                                         | Exchange controls                                       
|         | E.                                                         | Taxation                                                
|         | F.                                                         | Dividends and paying agents                             
|         | G.                                                         | Statement by Experts                                    
|         | H.                                                         | Documents on Display                                    
|         | I.                                                         | Subsidiary Information                                  
|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 43                                                      
|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES     | 44                                                      















1






|PART II   |                                                                              |                                                                         | 44
|--------- | ---------------------------------------------------------------------------- | ----------------------------------------------------------------------- | --
|ITEM 13.  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | 44                                                                     
|ITEM 14.  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 45                                                                     
|          | A.                                                                           | Use of Proceeds                                                         | 45
|ITEM 15.  | CONTROLS AND PROCEDURES                                                      | 45                                                                     
|          | A.                                                                           | Disclosure Controls and Procedures                                      | 45
|          | B.                                                                           | Management’s Annual Report on Internal Control Over Financial Reporting | 45
|ITEM 16.  | [RESERVED]                                                                   | 46                                                                     
|ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT.                                            | 46                                                                     
|ITEM 16B. | CODE OF ETHICS.                                                              | 46                                                                     
|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES.                                      | 46                                                                     
|ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.                  | 46                                                                     
|ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.      | 46                                                                     
|ITEM 16F. | CHANGES IN THE REGISTRANT’S CERTIFYING ACCOUNTANT.                           | 46                                                                     
|ITEM 16G. | CORPORATE GOVERNANCE                                                         | 47                                                                     
|ITEM 16H. | MINE SAFETY DISCLOSURE                                                       | 47                                                                     
|          |                                                                              |                                                                         |   
|PART III  |                                                                              |                                                                         | 47
|ITEM 17.  | FINANCIAL STATEMENTS                                                         | 47                                                                     
|ITEM 18.  | FINANCIAL STATEMENTS                                                         | 47                                                                     
|ITEM 19.  | EXHIBITS                                                                     | 48                                                                     











2






CERTAIN INFORMATION



Except where the context requires otherwise
and for purposes of this report only:



| | · | “Prime,” “we,” “us,” “our company,” “the Company”, or “our,” refers to Prime Acquisition Corp., a company with limited liability incorporated in the Cayman Islands;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | “Business Combination” refers to the acquisition by Prime of entities owning 11 commercial real estate properties in Italy on September 30, 2013.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | · | “IPO” or “initial public offering” refer to the Company’s initial public offering pursuant to its prospectus, dated March 24, 2011, which was consummated on March 30, 2011;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | “shares” or “ordinary shares” refers to our ordinary shares, par value $0.001 per share;
| | - | ----------------------------------------------------------------------------------------



| | · | “Group” refers to Prime Acquisition Corp., and its subsidiaries acquired on the closing of Business Combination on September 30, 2013;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | · | “Manager” refers to BHN LLC, our former manager; and
| | - | ----------------------------------------------------



| | · | all discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------













3






FORWARD-LOOKING STATEMENTS



The statements contained in this report
that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to,
statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future.
In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “would” and similar expressions may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include, for example,
statements about our:



| | · | Continued compliance with government regulations;
| | - | -------------------------------------------------



| | · | Changing legislation or regulatory environments;
| | - | ------------------------------------------------



| | · | Requirements or changes affecting the businesses in which we are engaged;
| | - | -------------------------------------------------------------------------



| | · | Industry trends, including factors affecting supply and demand;
| | - | ---------------------------------------------------------------



| | · | Labor and personnel relations;
| | - | ------------------------------



| | · | Credit risks affecting the combined business’ revenue and profitability;
| | - | ------------------------------------------------------------------------



| | · | Changes in the real estate industry;
| | - | ------------------------------------



| | · | Ability to effectively manage Prime’s growth, including implementing effective controls and procedures and attracting and retaining key management and personnel;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Changing interpretations of generally accepted accounting principles;
| | - | ---------------------------------------------------------------------



| | · | Public securities’ limited liquidity and trading;
| | - | -------------------------------------------------



| | · | General economic conditions; and
| | - | --------------------------------



| | · | Other relevant risks detailed in Prime’s filings with the Securities and Exchange Commission.
| | - | ---------------------------------------------------------------------------------------------



The forward-looking statements contained
in this report are based on our current expectations and beliefs concerning future developments and their potential effects on
us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause
actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.”
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results
may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required
under applicable securities laws and/or if and when management knows or has a reasonable basis on which to conclude that previously
disclosed projections are no longer reasonably attainable.





4






PART I



|ITEM1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|------ | -----------------------------------------------------



Not Required.



|ITEM2. | OFFER STATISTICS AND EXPECTED TIMETABLE
|------ | ---------------------------------------



Not required.



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



| | A. | Selected Financial Data
| | -- | -----------------------



Prime Acquisition Corp. Selected Financial Data



Following the Business Combination, Prime
is considered to be our predecessor for accounting purposes, as further described in Item 18 of this report. The following selected
consolidated financial data have been derived from our consolidated financial statements as of December 31, 2014, 2013 and 2012
and for the years ended December 31, 2014, 2013 and 2012, which are included elsewhere in this report. The consolidated financial
statements for December 2014, 2013 and 2012 have been prepared and presented in accordance with IFRS and its related interpretations.
The financial statements for December 31, 2012 were previously prepared in US GAAP, but converted to IFRS. The results of operations
in any period may not necessarily be indicative of the results that may be expected for any future period. See “Risk Factors”
included elsewhere in this report. The selected consolidated financial information as of December 31, 2014, 2013 and 2012 should
be read in conjunction with those consolidated financial statements and the accompanying notes and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” included elsewhere in this report.



|Balance Sheet Data                                                                                                                                                                    |  | As of December 31, 2014 |            |  | As of December 31, 2013 |   |            | As of December 31, 2012 | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---------- |  | ----------------------- | - | ---------- | ----------------------- | 
|Total assets                                                                                                                                                                          |  | $                       | 49,130,528 |  |                         | $ | 78,545,589 |                         | 
|Total liabilities                                                                                                                                                                     |  |                         | 47,353,887 |  |                         |   | 75,951,411 |                         | 
|Value of ordinary shares which may be redeemed for cash ($10.02 per share)                                                                                                            |  |                         | –          |  |                         |   | –          |                         | 
|Shareholders’ equity                                                                                                                                                                  |  |                         | 1,776,641  |  |                         |   | 2,594,178  |                         | 
|Ordinary shares, $0.001 par value (Authorized 50,000,000 shares; 2,428,532, 3,179,721 and 4,894,983 shares issued and outstanding at December 31, 2014, 2013, and 2012, respectively) |  |                         | 2,429      |  |                         |   | 3,180      |                         | 







5






|Selected statement of operation data:                 |  | For the year ended December 31, 2014 |           |  | For the year ended December 31, 2013* |   |             | For the year ended December 31, 2012 | 
|----------------------------------------------------- |  | ------------------------------------ | --------- |  | ------------------------------------- | - | ----------- | ------------------------------------ | 
|Revenues                                              |  | $                                    | 4,212,240 |  |                                       | $ | 1,084,451   |                                      | 
|Operating expenses                                    |  |                                      | 2,876,638 |  |                                       |   | 11,341,292  |                                      | 
|Operating profit/(loss)                               |  |                                      | 1,335,602 |  |                                       |   | (10,256,841 | )                                    | 
|Profit/(loss) for the year from continuing operations |  |                                      | 4,147,183 |  |                                       |   | (16,116,285 | )                                    | 
|Net profit/(loss) for the year                        |  |                                      | 3,419,319 |  |                                       |   | (15,885,478 | )                                    | 
|                                                      |  |                                      |           |  |                                       |   |             |                                      | 
|From continuing and discontinued operations           |  |                                      |           |  |                                       |   |             |                                      | 
|Basic earnings/(loss) per share                       |  |                                      | 1.10      |  |                                       |   | (5.23       | )                                    | 
|Diluted earnings/(loss) per share                     |  |                                      | 1.04      |  |                                       |   | (5.23       | )                                    | 
|                                                      |  |                                      |           |  |                                       |   |             |                                      | 
|From continuing operations                            |  |                                      |           |  |                                       |   |             |                                      | 
|Basic earnings/(loss) per share                       |  |                                      | 1.34      |  |                                       |   | (5.31       | )                                    | 
|Diluted earnings/(loss) per share                     |  |                                      | 1.26      |  |                                       |   | (5.31       | )                                    | 



*Restated for discontinued operations



| | B. | Capitalization and Indebtedness
| | -- | -------------------------------



Not required.



| | C. | Reasons for the Offer and Use of Proceeds
| | -- | -----------------------------------------



Not required.



| | D. | Risk Factors
| | -- | ------------



An investment in our
securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other
information contained in this annual report before making a decision to invest in our securities. If any of the following events
occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading
price of our securities could decline and you could lose all or part of your investment.



Risk Factors Relating to Our Business



Prior to becoming
members of our management team, no member of our management team had direct experience in operating businesses such as ours, which
could lead to errors in the management of the business.



Prior to becoming our
officers and directors, our management team had no direct experience in operating real estate assets and will rely on third party
managers to operate the real estate properties. This lack of experience could lead to errors in managing our company, which could
harm our results of operations.



6






Current economic
conditions and the global tightening of credit may adversely impact the financial condition of our business.



Since the onset of
the “credit crisis” in mid-2007, the number of banks advancing new loans against Southern European properties has fallen
substantially and that decline, together with a tightening of lending policies, has resulted in a significant contraction in the
amount of debt available to fund re-financings, acquisitions, developments and other commercial real estate investments. There
can be no assurance that the continuation of current economic conditions will not affect our real estate properties. For example,
such properties could experience higher levels of vacancy than anticipated, which could adversely impact the financial performance
of our company.



As a foreign
private issuer, we are exempt from certain rules that are applicable to U.S. companies and you may receive less information about
us and our operations than you would receive if such agreements were not waived or we were a U.S. company.



As a foreign private
issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders,
and our executive officers, directors and principal shareholders are exempt from certain of the reporting and short-swing profit
recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file
periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered
under the Exchange Act. Therefore you may receive less information about us than you would receive if we were a U.S. company.



Because we are
incorporated under the laws of the Cayman Islands, you may face difficulty protecting your interests, and your ability to protect
your rights through the U.S. federal courts may be limited.



We are a company incorporated
under the laws of the Cayman Islands, and certain of our assets are located outside the United States. As a result, it may be difficult
for investors to effect service of process within the United States in a way that will permit a U.S. court to have jurisdiction
over us.



We are incorporated
as a Cayman Islands exempted company. A Cayman Islands exempted company:



| | · | is a company that conducts its business outside the Cayman Islands;
| | - | -------------------------------------------------------------------



| | · | is exempted from certain requirements of the Cayman Companies Law, including the filing of an annual return of its shareholders with the Registrar of Companies;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | does not have to make its register of shareholders open to inspection; and
| | - | --------------------------------------------------------------------------



| | · | may obtain an undertaking against the imposition of any future taxation.
| | - | ------------------------------------------------------------------------



Our corporate affairs
are governed by our Articles of Association, the Companies Law of the Cayman Islands, as the same may be supplemented or amended
from time to time, which we refer to herein as the Companies Law, and the common law of the Cayman Islands. The rights of shareholders
to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us
under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands, as well as from English common law, the
decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they
would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands 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. In addition, Cayman Islands companies may not have standing to initiate a shareholder
derivative action in a federal court of the United States.



The Cayman Islands
courts are also unlikely:



| | · | to recognize or enforce against us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | · | to impose liabilities against us, in original actions brought in the Cayman Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





7






There is no statutory
recognition in the Cayman Islands of judgments obtained in the United States. We have been advised by Conyers Dill & Pearman,
our counsel as to Cayman Islands law, that (i) they are unaware of any proceedings that have been successfully brought in the Cayman
Islands to enforce judgments of the courts in the United States or to impose liabilities based on the civil liability provisions
of the securities laws of the United States or any state in the United States; (ii) a final and conclusive judgment in the federal
or state courts of the United States under which a sum of money is payable, other than a sum payable in respect of taxes, fines,
penalties or similar charges, may be subject to enforcement proceedings as a debt in the courts of the Cayman Islands under the
common law doctrine of obligation; and (iii) because it is uncertain whether a Cayman Islands court would determine that a judgment
of a U.S. court based on the civil liability provisions of the securities laws of the United States or any state in the United
States is in the nature of a penalty, it is uncertain whether such a liability judgment would be enforceable in the Cayman Islands.
The Grand Court of the Cayman Islands may stay proceedings if concurrent proceedings are being brought elsewhere.



Because some
of our directors and officers reside, and all of our assets are held, outside of the United States, it may be difficult for you
to enforce your rights against them or to enforce U.S. court judgments against them outside the United States.



Some of our directors
and officers reside, and all of our assets are held, outside of the United States. As a result, it may be necessary to comply with
local law in order to obtain an enforceable judgment against certain of our directors and officers and assets. It may therefore
be difficult for investors in the United States to enforce their legal rights, to effect service of process upon our directors
or officers outside of the United States or to enforce judgments of U.S. courts predicated upon civil liabilities and criminal
penalties of our directors and officers under U.S. federal securities laws. Further, it is unclear if extradition treaties now
in effect between the United States and certain countries would permit effective enforcement of criminal penalties of the U.S.
federal securities laws.



Our ordinary
shares may be subject to the SEC’s penny stock rules, broker-dealers may experience difficulty in completing customer transactions
and trading activity in our securities may be adversely affected.



Because we have net
tangible assets of $5,000,000 or less and our ordinary shares have a market price per share of less than $5.00, transactions in
our ordinary shares may be subject to the “penny stock” rules promulgated under the Securities Exchange Act of 1934.
Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors must:



| | · | make a special written suitability determination for the purchaser;
| | - | -------------------------------------------------------------------



| | · | receive the purchaser’s written agreement to the transaction prior to sale;
| | - | ---------------------------------------------------------------------------



| | · | provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock” can be completed.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



If our ordinary shares
become subject to these rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in
our securities may be adversely affected. As a result, the market price of our securities may be depressed, and you may find it
more difficult to sell our securities.



Our Qualification
as a passive foreign investment company, or “PFIC” could result in adverse U.S. federal income tax consequences to
U.S. investors.



In general, we will
be treated as a PFIC for any taxable year in which either (1) at least 75% of our gross income (looking through certain 25% or
more-owned corporate subsidiaries) is passive income or (2) at least 50% of the average value of our assets (looking through certain
25% or more-owned corporate subsidiaries) is attributable to assets that produce, or are held for the production of, passive income.
Passive income generally includes, without limitation, dividends, interest, rents, royalties, and gains from the disposition of
passive assets. 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 (as defined in the section of this report captioned “Taxation – United States Federal Income Taxation
— General”) of our securities, the U.S. Holder may be subject to increased U.S. federal income tax liability and may
be subject to additional reporting requirements. Based on the composition and estimated values of our assets and the nature of
our income for our 2014 taxable year, we believe that we are a PFIC for such taxable year. We urge U.S. investors to consult their
own tax advisors regarding the possible application of the PFIC rules. For a more detailed explanation of the tax consequences
of PFIC classification to U.S. Holders, see the section of this report captioned “Taxation – United States Federal
Income Taxation — U.S. Holders — Passive Foreign Investment Company Rules.”





8






Risk Factors Relating to Prime’s
Business



Our current portfolio
of real estate properties is geographically concentrated in Italy, and factors affecting the local economy could reduce our revenues.



Our current portfolio
of real estate properties is geographically concentrated in Italy, specifically in Milan and its immediate surroundings. Therefore,
any adverse effect on the local economy could impact our tenants' ability to continue to meet their rental obligations or otherwise
adversely affect the average size of our tenant base, which could reduce revenues.



Any downturn
in the office, commercial and industrial sectors of the real estate industry, or the industries of our tenants, could reduce our
revenues and the value of our properties.



Our properties are
concentrated in the office, commercial, industrial and logistics sectors and our tenants are mainly retail, office and industrial
tenants. Any economic downturns in the office, commercial and industrial and logistics sectors may make us susceptible to adverse
events to a greater extent than if our properties included greater diversification into other sectors of the real estate industry.
Likewise, the concentration of our tenants in certain industries, and the fact that we have a couple of very large tenants (namely,
Microelettrica Scientifica, producing braking systems for trucks and trains), could adversely impact us if those industries or
significant tenants experience a downturn. This could result in a reduction in our revenues and the value of our properties.



Litigation against
certain of our subsidiaries may result in liabilities to the combined company, which could adversely affect our results of operation
and cash flows.



Certain of our subsidiaries
have lawsuits pending against them (see page 17 for a description of the lawsuits). Such lawsuits could result in significant legal
fees to us and reduce our net income and cash flows. In addition, if any of such pending litigations are resolved against us, we
could be required to make significant cash payments, again reducing our cash flows and net income.



We face possible
adverse changes in tax laws, which may result in an increase in our tax liability.



From time to time changes
in tax laws or regulations are enacted, which may result in an increase in our tax liability. The shortfall in tax revenues of
governments in recent years may lead to an increase in the frequency and size of such changes. If such changes occur, we may be
required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition
and results of operations and the amount of cash available for payment of dividends.



We may change
our policies without obtaining the approval of our shareholders.



Our operating and financial
policies, including our policies with respect to acquisitions of real estate or other companies, growth, operations, indebtedness,
capitalization and dividends, are exclusively determined by our Board of Directors. Accordingly, our shareholders do not control
these policies.



Geopolitical
conditions and global economic factors may adversely affect us.



Our operating results
may be adversely affected by the uncertain geopolitical conditions and global economic factors. Adverse factors affecting economic
conditions worldwide have contributed to a general inconsistency in the real estate industry and may continue to adversely impact
our business. The uncertainty of the international economic situation, civil unrest, terrorist activity and military actions may
continue to adversely affect global economic conditions. Economic and market conditions could deteriorate as a result of any of
the foregoing reasons. We may experience material adverse effects upon our business, operating results, and financial condition
as a consequence of the above factors or otherwise.



Capital markets
and economic conditions can materially affect our financial condition and results of operations and the value of our securities.



There are many factors
that can affect the value of our securities, including the state of the capital markets and the economy. Demand for office and
retail space may decline nationwide due to bankruptcies, downsizing, layoffs and cost cutting. Government action or inaction may
adversely affect the state of the capital markets. The cost and availability of credit may be adversely affected by illiquid credit
markets and wider credit spreads, which may adversely affect our liquidity and financial condition, and the liquidity and financial
condition of our tenants. Our inability or the inability of our tenants to timely refinance maturing liabilities and access the
capital markets to meet liquidity needs may materially affect our financial condition and results of operations and the value of
our securities.





9






Risk Factors Related to Our Real Estate
Business



Real estate investments’
value and income fluctuate due to various factors.



The value of real estate
fluctuates depending on conditions in the general economy and the real estate business. These conditions may also adversely impact
our revenues and cash flows.



The factors that affect
the value of our real estate investments include, among other things:



| | · | National, regional and local economic conditions;
| | - | -------------------------------------------------



| | · | Competition from other available space;
| | - | ---------------------------------------



| | · | Local conditions such as an oversupply of space or a reduction in demand for real estate in the area;
| | - | -----------------------------------------------------------------------------------------------------



| | · | How well we manage our properties;
| | - | ----------------------------------



| | · | The development and/or redevelopment of our properties;
| | - | -------------------------------------------------------



| | · | Changes in market rental rates;
| | - | -------------------------------



| | · | The timing and costs associated with property improvements and rentals;
| | - | -----------------------------------------------------------------------



| | · | Whether we are able to pass all or portions of any increases in operating costs through to tenants;
| | - | ---------------------------------------------------------------------------------------------------



| | · | Changes in real estate taxes and other expenses;
| | - | ------------------------------------------------



| | · | Whether tenants and users such as customers and shoppers consider a property attractive;
| | - | ----------------------------------------------------------------------------------------



| | · | The financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
| | - | ------------------------------------------------------------------------------------------------



| | · | Availability of financing on acceptable terms or at all;
| | - | --------------------------------------------------------



| | · | Fluctuations in interest rates;
| | - | -------------------------------



| | · | Our ability to obtain adequate insurance;
| | - | -----------------------------------------



| | · | Changes in zoning laws and taxation;
| | - | ------------------------------------



| | · | Government regulation;
| | - | ----------------------



| | · | Consequences of any armed conflict or terrorist attacks;
| | - | --------------------------------------------------------



| | · | Potential liability under environmental or other laws or regulations;
| | - | ---------------------------------------------------------------------



| | · | Natural disasters;
| | - | ------------------



| | · | General competitive factors; and
| | - | --------------------------------



| | · | Climate changes
| | - | ---------------



The rents or sales
proceeds we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of these factors.
If rental revenues, sales proceeds and/or occupancy levels decline, we generally would expect to have less cash available to pay
indebtedness and for distribution to shareholders. In addition, some of our major expenses, including mortgage payments, real estate
taxes and maintenance costs generally do not decline when the related rents decline.





10






Real estate is
a competitive business.



Our business segments
operate in a highly competitive environment. We compete with a large number of property owners and developers, some of which may
be willing to accept lower returns on their investments than we are. Principal factors of competition include rents charged, sales
prices, attractiveness of location, the quality of the property and the breadth and quality of services provided. Our success depends
upon, among other factors, trends of the national, regional and local economies, financial condition and operating results of current
and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental
regulation, legislation and population trends.



We depend on
leasing space to tenants on economically favorable terms and collecting rent from tenants who may not be able to pay.



Our financial results
depend significantly on leasing space in our properties to tenants on economically favorable terms. In addition, because a majority
of our income comes from renting of real property, our income, funds available to pay indebtedness and funds available for distribution
to shareholders will decrease if a significant number of our tenants cannot pay their rent or if we are not able to maintain occupancy
levels on favorable terms. If a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays
and may incur substantial legal costs. During periods of economic adversity, there may be an increase in the number of tenants
that cannot pay their rent and an increase in vacancy rates.



Bankruptcy or
insolvency of tenants may decrease our revenue, net income and available cash.



Our tenants may declare
bankruptcy or become insolvent in the future. In the case of our shopping centers, the bankruptcy or insolvency of a major tenant
could cause us to suffer lower revenues and operational difficulties, including leasing the remainder of the property. As a result,
the bankruptcy or insolvency of a major tenant could result in decreased revenue, net income and funds available for the payment
of indebtedness or for distribution to shareholders.



We may incur
costs to comply with environmental laws.



Our operations and
properties are subject to various federal, state and local laws and regulations concerning the protection of the environment, including
air and water quality, hazardous or toxic substances and health and safety. Under some environmental laws, a current or previous
owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property.
The owner or operator may also be held liable to a governmental entity or to third parties for property damage or personal injuries
and for investigation and clean-up costs incurred by those parties because of the contamination. These laws often impose liability
without regard to whether the owner or operator knew of the release of the substances or caused the release. The presence of contamination
or the failure to remediate contamination may impair our ability to sell or lease real estate or to borrow using the real estate
as collateral. Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement
or removal of asbestos-containing materials in the event of damage, demolition, renovation or remodeling and also govern emissions
of and exposure to asbestos fibers in the air. The maintenance and removal of lead paint and certain electrical equipment containing
polychlorinated biphenyls (PCBs) and underground storage tanks are also regulated by federal and state laws. We are also subject
to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which,
above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in susceptible individuals.
Our predecessor companies may be subject to similar liabilities for activities of those companies in the past. We could incur fines
for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances
or tanks or related claims arising out of environmental contamination or human exposure to contamination at or from our properties.



Each of our properties
has been subject to varying degrees of environmental assessment. The environmental assessments did not, as of this date, reveal
any environmental condition material to our business. However, identification of new compliance concerns or undiscovered areas
of contamination, changes in the extent or known scope of contamination, discovery of additional sites, human exposure to the contamination
or changes in clean-up or compliance requirements could result in significant costs to us.



Inflation or
deflation may adversely affect our financial condition and results of operations.



Although neither inflation
nor deflation has materially impacted our operations in the recent past, increased inflation could have a pronounced negative impact
on our mortgages and interest rates and general and administrative expenses, as these costs could increase at a rate higher than
our rents. Inflation could also have an adverse effect on consumer spending which could impact our tenants’ sales and, in
turn, our percentage rents, where applicable. Conversely, deflation could lead to downward pressure on rents and other sources
of income. In addition, we own residential properties which are leased to tenants with one- year lease terms. Because these are
short- term leases, declines in market rents will impact our residential properties faster than if the leases were for longer terms.





11






Some of our potential
losses may not be covered by insurance.



We currently maintain
Directors’ & Officers’ liability insurance with limit of $1 million and all risk property and rental value insurance
with limits of €12.88 million (approximately $15.59 million) for five of the subsidiaries’ investment properties, including
coverage for terrorist acts, with sub-limits for certain perils such as floods. The property and rental value insurance for the
remaining six investment properties are included in the finance lease. The limits of such insurance were determined by each finance
lease creditor with payments of such policies included in the finance lease scheduled payments.



We will continue to
monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism. However, we cannot anticipate
what coverage will be available on commercially reasonable terms in future policy years.



The debt instruments
of our subsidiaries, consisting of mortgage loans secured by the subsidiary’s properties, senior unsecured notes and revolving
credit agreements contain customary covenants requiring the applicable subsidiary to maintain insurance. Although we believe that
our subsidiaries have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent
amount of coverage at reasonable costs in the future. Further, if lenders insist on greater coverage than we are able to obtain
it could adversely affect our ability to finance our properties and expand our portfolio.



Compliance or
failure to comply with certain governmental regulations could result in substantial costs.



Our properties are
subject to various governmental regulatory requirements, such as fire and life safety requirements. If we fail to comply with these
requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether
compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results
of operations.



Our business
and operations would suffer in the event of system failures.



Despite system redundancy,
the implementation of security measures and the existence of a disaster recovery plan for our internal information technology systems,
our systems are vulnerable to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts,
natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our
operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by
such disruptions.



The occurrence
of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations,
a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively
impact our financial results.



A cyber incident is
considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources.
More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access
to systems to disrupt operations, corrupt data, or steal confidential information. As our reliance on technology has increased,
so have the risks posed to our systems, both internal and those we have outsourced. Our three primary risks that could directly
result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants, and
private data exposure. We have implemented processes, procedures and controls to help mitigate these risks, but these measures,
as well as our increased awareness of a risk of a cyber incident, do not guarantee that our financial results will not be negatively
impacted by such an incident.



Our investments
are concentrated in Southern Europe. Economic circumstances affecting these areas could adversely affect our business.



A significant portion
of our properties are located in Southern Europe and are affected by the economic cycles and risks inherent to those areas. Real
estate markets are subject to economic downturns and we cannot predict how economic conditions will impact these markets in either
the short or long term. Declines in the economy or declines in real estate markets in these areas could hurt our financial performance
and the value of our properties. In addition to the factors affecting the national economic condition generally, the factors affecting
economic conditions in these regions include:



| | · | Financial performance and productivity of the publishing, advertising, financial, technology, retail, insurance and real estate industries;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | · | Business layoffs or downsizing;
| | - | -------------------------------





12






| | · | Industry slowdowns;
| | - | -------------------



| | · | Relocations of businesses;
| | - | --------------------------



| | · | Changing demographics;
| | - | ----------------------



| | · | Increased telecommuting and use of alternative work places;
| | - | -----------------------------------------------------------



| | · | Infrastructure quality; and
| | - | ---------------------------



| | · | Any oversupply of, or reduced demand for, real estate.
| | - | ------------------------------------------------------



It is impossible for
us to assess the future effects of trends in the economic and investment climates of the geographic areas in which we concentrate
or the real estate markets in these areas. Local, national or global economic downturns would negatively affect our businesses
and profitability.



Natural disasters
could have a concentrated impact on the areas where we operate and could adversely impact our results.



Natural disasters could
impact our properties. Additionally, natural disasters, including earthquakes, could impact several of our properties in other
areas in which we operate. Potentially adverse consequences of “global warming” could similarly have an impact on our
properties. As a result, we could become subject to significant losses and/or repair costs that may or may not be fully covered
by insurance and to the risk of business interruption. The incurrence of these losses, costs or business interruptions may adversely
affect our operating and financial results.



We may acquire
or sell assets or entities or develop properties. Our failure or inability to consummate these transactions or manage the results
of these transactions could adversely affect our operations and financial results.



We may acquire or develop
properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with
our business strategy. We may not, however, succeed in consummating desired acquisitions or in completing developments on time
or within budget. In addition, we may face competition in pursuing acquisition or development opportunities that could increase
our costs. When we do pursue a project or acquisition, we may not succeed in leasing or selling newly- developed or acquired properties
at rents or sales prices sufficient to cover costs of acquisition or development and operations. Difficulties in integrating acquisitions
may prove costly or time- consuming and could divert management’s attention. Acquisitions or developments in new markets
or industries where we do not have the same level of market knowledge may result in weaker than anticipated performance. We may
also abandon acquisition or development opportunities that we have begun pursuing and consequently fail to recover expenses already
incurred, and we may devote management time to a matter not consummated. Furthermore, acquisitions of new properties or companies
will expose us to the liabilities of those properties or companies, some of which we may not be aware of at the time of acquisition.
Development of our existing properties presents similar risks.



We may seek to
make, one or more material acquisitions in the future. The announcement of such a material acquisition may result in a rapid and
significant decline in the price of our securities.



We are continuously
looking at material transactions that we believe will maximize shareholder value. However, an announcement by us of one or more
significant acquisitions could result in a quick and significant decline in the price of our securities.



Our decision
to dispose of real estate assets would change the holding period assumption in our valuation analyses, which could result in material
impairment losses and adversely affect our financial results.



We evaluate real estate
assets using the discounted cash flow method conducted by an independent qualified professional valuation expert. The methods and
assumptions adopted for the real estate appraisal carried out by the expert in determining the fair value of the investment property
is in accordance to IAS 40, Investment Property. Depending on the result of the evaluation, we may record a gain/loss that would
favorably/adversely affect our financial results due to the valuation change on these investment properties. This gain/loss could
be material to our results of operations in the period that it is recognized.





13






It may be difficult
to buy and sell real estate quickly, which may limit our flexibility.



Real estate investments
are relatively difficult to buy and sell quickly. Consequently, we may have limited ability to vary our portfolio promptly in response
to changes in economic or other conditions.



We may not be
permitted to dispose of certain properties or pay down the debt associated with those properties when we might otherwise desire
to do so without incurring additional costs. In addition, when we dispose of or sell assets, we may not be able to reinvest the
sales proceeds and earn similar returns.



As part of an acquisition
of a property, or a portfolio of properties, we may agree, and in the past have agreed, not to dispose of the acquired properties
or reduce the mortgage indebtedness for a long- term period, unless we pay certain of the resulting tax costs of the seller. These
agreements could result in us holding on to properties that we would otherwise sell and not pay down or refinance our debts. In
addition, when we dispose of or sell assets, we may not be able to reinvest the sales proceeds and earn returns similar to those
generated by the assets that were sold.



There are material
internal control weaknesses in our internal control.



Our internal control
over financial reporting was not effective due to material weaknesses in our internal control over financial reporting as of December
31, 2014, and such weaknesses continues to date. Material weaknesses in our internal controls include the lack of periodic interim
review of the financial statements by the management, lack of segregation of duties, untimely reconciliation, improper checks and
balances, lack of an audit committee, and the fact that the Company’s review procedures in connection with financial reporting
are limited. Our current management further identified other weaknesses in entity level controls, including, but not limited to,
control environment, risk assessment processes, information sharing, and monitoring processes. Such weaknesses resulted in the
Company’s restatement of its 2013 financial statements. Our current management intends to design and implement processes
and procedures that will provide reasonable assurance regarding the reliability of our financial reporting and preparation of financial
statements for external purposes in accordance with IFRS and its related interpretations as funding becomes available to be able
to put the components in place.





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



| | A. | History and Development of the Company
| | -- | --------------------------------------



Prime Acquisition Corp.
is an exempt company organized on February 4, 2010 under the laws of the Cayman Islands, formed to acquire through a merger, capital
stock exchange, asset acquisition, stock purchase or similar business combination, or control through contractual arrangements,
one or more operating businesses.



On March 30, 2011,
the initial public offering of 3,600,000 units of the Company was consummated. Each unit issued in the IPO consisted of one ordinary
share, par value $0.001 per share, and one redeemable warrant. Each redeemable warrant entitles the holder to purchase one ordinary
share at a price of $7.50. On January 4, 2014, the Company’s management reduced the exercise price of the warrants from $7.50
to $5.00 and extended the expiration date from March 30, 2016 to March 30, 2018. The warrants are exercisable provided that there
is an effective registration statement or post-effective amendment covering the ordinary shares issuable upon exercise of the redeemable
warrants. In addition, the Company can only call for redemption of such warrants if the last sale price of our ordinary shares
on the stock exchange equals to or exceeds $15.00 per share for any 20 trading days within a 30 trading day period after the completion
of business. As of December 31, 2014, the warrants are not exercisable because no such effective registration statement or post-effective
amendment has been filed. Prior to the consummation of the IPO, the Company completed a private placement of 2,185,067 warrants
to the Company’s founding shareholders, generating gross proceeds of $1,638,800. On May 10, 2011, the Company announced that
the underwriters of its IPO exercised their over-allotment option in part, for a total of an additional 52,975 units (over and
above the 3,600,000 units sold in the IPO). The 3,652,975 units sold in the IPO, including the 52,975 units subject to the over-allotment
option, were sold at an offering price of $10.00 per unit, generating gross proceeds of $36,529,750. A total of $36,606,096, which
includes a portion of the $1,638,800 of proceeds from the private placement of warrants to the founding shareholders, was placed
in trust. On May 25, 2011, the ordinary shares and warrants underlying the units sold in the IPO began to trade separately on a
voluntary basis.



Since we could not
complete an acquisition prior to March 30, 2013, the date by which we were required to complete our initial business combination
by our Amended and Restated Memorandum and Articles of Association, our board of directors determined that it would be in the best
interests of our shareholders for us to continue our existence for an additional six months (until September 30, 2013) rather than
dissolve as required by our Articles of Association, which we refer to as the Extension. In order to effect the Extension, our
shareholders approved certain amendments to our Articles of Association at a special meeting of shareholders held on Wednesday,
March 27, 2013. In connection with the Extension, our board of directors determined that it was in our best interest to allow shareholders
with the opportunity to redeem their ordinary shares for cash by means of a tender offer, which we refer to as the Extension Tender
Offer. Following approval of the Extension, the Extension Tender Offer expired at 5:00 p.m., United States Eastern Time on the
evening of Thursday, March 28, 2013. Pursuant to the terms of the Extension Tender Offer, 3,008,955 of our ordinary shares were
tendered and accepted for redemption by the Company for an aggregate purchase price of $30,149,729.





14






On May 23, 2013, Prime
and the Manager entered into a Management Agreement, in connection with the Business Combination. Pursuant to the terms of the
Management Agreement, and subject to the closing of the Business Combination, Prime appointed the Manager to manage the assets
of Prime following the Business Combination on an exclusive basis. On May 13, 2014, Manager and our then officers resigned from
their positions with us and the Management Agreement was terminated. On June 10, 2014, Diana Liu became the sole director of our
Italian subsidiaries, replacing the designee of the Manager.



On June 22, 2013, June
24, 2013 and July 9, 2013, Prime entered into a series of definitive agreements to acquire certain real estate assets in Italy,
as more fully described below.



In addition, on September
27, 2013, Prime completed the Business Combination Tender Offer and redeemed the one share validly tendered and not withdrawn,
and on September 30, 2013, it consummated its initial Business Combination by acquiring 100% of Seba S.r.l. (“Seba”),
Nova S.r.l. (“Nova”), Delfin S.r.l. (“Delfin”), SIM S.r.l. (“SIM”), Dieci Real Estate S.r.l.
(“Dieci”), Ellegi S.r.l. (“Ellegi”), G.S.I. S.r.l. (“GSI”), Magfin S.r.l. (“Magfin”),
all of which are Italian limited liability companies (Delfin, SIM, Dieci, Ellegi, GSI and Magfin, collectively the “Bell
Group”; Bell Group, Seba and Nova, collectively the “Subsidiaries”), which collectively owned 11 commercial real
estate properties based in Italy, for an aggregate of 1,719,317 ordinary shares. As a result, immediately following consummation
of the Business Combination, Prime had a total of 3,635,344 ordinary shares outstanding.



On December 18, 2014,
Prime entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Prime Luxembourg S.a.r.l., the Company’s
wholly owned subsidiary (“LuxCo”), Seba, at the time LuxCo’s wholly owned subsidiary, Francesco Rotondi and Luca
Failla. Pursuant to the Purchase Agreement, on December 18, 2014, Messrs. Rotondi and Failla acquired all of the outstanding equity
interests in Seba in exchange for the return of 497,308 of the Company’s shares. Seba’s sole asset consists of four
floors of Corso Europa 22, an office building in central Milan.



In connection with
the Purchase Agreement, the Company, LuxCo, Messrs. Rotondi and Failla and Giuseppe Pantaleo entered into an agreement which terminated
the Transaction Value Agreement dated September 30, 2013 among them (the “Seba-Nova TVA”). The Seba-Nova TVA required
the Company to make Messrs. Rotondi, Failla and Pantaleo whole in the event that the average sales price of all of the shares that
were issued to them were sold in public market transactions at less than $10 per share. In addition, the Company, LuxCo, Nova,
and Mr. Rotondi entered into an option agreement (the “Option Agreement”) pursuant to which Mr. Rotondi would have
the right to purchase all of the equity interests in Nova owned by LuxCo in the event that (i) the mortgage payments that Mr. Rotondi
has personally guaranteed are not made, or (ii) a certain power of attorney that would facilitate the transfer of Nova’s
equity interests to Mr. Rotondi is not renewed. The Option Agreement will terminate on the repayment of the mortgages or the termination
of Mr. Rotondi’s personal guaranties. The consideration for the exercise of the option would be the return of 50,000 shares
of the Company’s ordinary shares. Nova’s sole asset consists of two floors of Corso Europa 22, an office building in
central Milan.



Separately on December
15, 2014, the Company, LuxCo, Cesare Lanati, Stefano Lanati, Davide Rigamonte, Bell Real Estate S.r.l. and IGS S.r.l. entered into
an agreement which terminated the Transaction Value Agreement dated September 30, 2013 among them (the “Bell TVA”).
The Bell TVA, similar to the aforementioned Seba-Nova TVA, required the Company to make Messrs. Lanati, Lanati and Rigamonte and
Bell Real Estate S.r.l. and IGS S.r.l. whole in the event that the average sales price of all of the shares that were issued to
them were sold in public market transactions at less than $10 per share. As a result of the cancellation of Bell TVA and Seba-Nova
TVA, there are no Transaction Value Agreements outstanding as of December 31, 2014.



| | B. | Business Overview
| | -- | -----------------



We currently own real
estate assets that consist of office, commercial and industrial properties in Italy.



Although we have not
yet entered into any agreements to do so, we plan to acquire additional properties to create a diverse portfolio of commercial
real estate assets, including, primarily, well located office buildings and industrial/warehouse buildings. We may also acquire
retail properties, including regional malls, shopping centers and single-tenant retail locations, that are leased to national,
regional and local tenants. We plan to target properties strategically situated in densely populated, middle and upper income markets
in Southern Europe, primarily in Italy, Spain and Portugal.



We believe that the
current market environment in Southern Europe presents an opportunity to acquire performing properties at compelling yields and
at values substantially below their replacement cost, offering us the potential to achieve attractive returns for our shareholders
over time. The Southern European real estate market is currently experiencing significant weakness driven by economic uncertainty
and sharply reduced capital availability. Despite the challenging economic environment in Europe, we believe that our properties
have high quality lessees who are not credit impaired, long term leases, low vacancy rates and stable rents. These will also be
characteristics that we will seek out for additional properties we may acquire in the future.





15






In addition, since
the onset of the “credit crisis” in mid-2007, the number of banks advancing new loans against Southern European properties
has fallen substantially and that decline, together with a tightening of lending policies, has resulted in a significant contraction
in the amount of debt available to fund re-financings, acquisitions, developments and other commercial real estate investments.
Our view is that, in the current capital constrained environment, many property owners have limited options to sell and the prospects
for negotiating attractive acquisitions at compelling prices should be significant. There can be no assurance, however, that the
continuation of current economic conditions will not impact certain of the properties we may acquire and such properties could
experience higher levels of vacancy than anticipated at the time of our acquisition of such properties.



We believe we will
have a competitive advantage relative to other potential acquirers of such properties because we have the ability to issue publicly
traded ordinary shares for a portion of the acquisition consideration and because we are not burdened by a legacy portfolio of
under-performing assets or assets that may have significant debt obligations. However, no assurance can be given at this time that
these plans can be carried out successfully and that the risks associated with investing in real estate assets in the region can
be properly mitigated.



Competition



The leasing of real
estate is highly competitive. We compete for tenants with landlords and developers of similar properties located in our markets
primarily on the basis of location, rent charged, services provided, balance sheet strength and liquidity, and the design and condition
of our properties. We face competition from other real estate companies, including REITs, that currently invest in markets other
than or in addition to Southern Europe, private real estate funds, domestic and foreign financial institutions, life insurance
companies, pension trusts, partnerships, individual investors, and others that may have greater financial resources or access to
capital than we do or that are willing to acquire properties in transactions which are more highly leveraged or with different
financial attributes than we are willing to pursue.



Litigation



From time to time in
the normal course of conducting business the Group is subject to legal disputes of varying nature such as but not limited to expenses
on building maintenance, moving expenses and others. Management believes that any liability that may ultimately result from the
resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the
Company.



The following summarizes
litigation that is outside of the normal course of the Group’s business.



Auchan S.p.A.



On March 14, 2013,
the tenant Auchan filed a lawsuit with the Court of Milan against Ellegi and GSI in connection with a lease agreement entered into
with Ellegi on July 15, 2010 and a contract entered into with GSI on August 5, 2010 for certain repairs to be performed. 
Auchan was not satisfied with the repairs performed and claimed that they suffered a loss of potential income from new business
opportunities, together with certain damages which totaled to €4.5 million. We disagree with the allegations and are defending
against this claim, although no assurance can be made that we will be successful.  The actual amount in dispute is approximately
€200,000 related to the actual repair work paid by Auchan. Management deemed the difference of €4.3 million Auchan is
claiming and the actual amount in dispute to be without merit. The Group has accrued a provision of approximately two-thirds, or
€131,240 or $158,814 and €131,240 or $180,837 for the risk associated with this litigation as at December 31, 2014 and
2013 respectively (the US dollar amounts differ due to exchange differences). The first hearing was held on October 10, 2013, and
a subsequent hearing was held on September 24, 2014 with no resolution with a follow-up hearing scheduled on September 29, 2015.
On that day, the judge granted the Group the right to submit an amended argument by December, 2015. The Group’s legal counsel
had amended and filed the amended argument with the court. On December 21, 2015, the court officially accepted the amended argument
for final court decision by December, 2016. Management deemed this as a positive development in nature as it allowed the Group
another opportunity to fully defend its position.



Morgan Joseph and BHN LLC



In July 2014, Morgan Joseph filed a complaint
against Prime and BHN LLC (“BHN”) for breach of contract, seeking at least approximately $1.3 million plus damages
from Prime. On October 20, 2014, Prime moved to dismiss the complaint on the basis there were no contracts between Morgan Joseph
and Prime. On November 14, 2014, BHN moved to add additional cross-claims, among other things.





16






On March 19, 2015, the court dismissed
Morgan Joseph's complaint against Prime as well as BHN LLC's cross-claim for indemnification from the Company but gave Morgan
Joseph until May 1, 2015 to file an amended complaint.



On April 8, 2015, BHN brought an amended
complaint against Prime for breach of contract, seeking approximately $9 million in damages. BHN did not serve Prime or Prime’s
legal counsel with this complaint. Separately, on April 27, 2015, Morgan Joseph filed an amended complaint against Prime and BHN,
asserting claims of breach of contract and seeking approximately $2.5 million plus damages.



The Company filed an answer to Morgan Joseph’s
amended complaint on June 1, 2015. Management estimated the probability of damages in these cases is low due to (1) there being
no formal contracts between the Company and Morgan Joseph, and (2) the court dismissing earlier complaints and there being no new
evidence brought forward in the amended complaints. Due to these factors, Management deemed no potential loss from this complaint
and hence no provision has been accrued in relation to this case. However, there is no assurance the court will dismiss this amended
complaint.



In addition, on June 26, 2015, the Company
has filed a cross-claim against BHN LLC and certain individuals connected with BHN LLC for damages and certain costs caused the
Company. The amount of damages and costs are to be determined at trial. As of the date of this report, the Management has not yet
determined the potential damages and costs.



| | C. | Organizational Structure
| | -- | ------------------------



LuxCo is a Luxembourg
company and the only wholly owned subsidiary of Prime. LuxCo holds all of the equity interest in each of the Italian limited liability
companies (collectively the “Subsidiaries”) Nova S.r.l. (“Nova”), Delfin S.r.l. (“Delfin”),
SIM S.r.l. (“SIM”), Dieci Real Estate S.r.l. (“Dieci”), Ellegi S.r.l. (“Ellegi”), G.S.I. S.r.l.
(“GSI”), Magfin S.r.l. (“Magfin”).



| | D. | Property, Plant and Equipment
| | -- | -----------------------------



We currently maintain
our executive offices in an approximately 500 sq. foot suite at No. 322, Zhongshan East Road; Shijiazhuang; Hebei Province, 050011;
China. Prior to the Business Combination the cost for this space was included in the $7,500 per month fee payable to Kaiyuan Real
Estate Development. This monthly fee arrangement terminated upon completion of the Business Combination. Kaiyuan Real Estate Development
is an affiliate of Mr. Yong Hui Li, our former Chairman.



Description of
Investment Properties



We own the following
properties, which are office, logistics, commercial and industrial real estate assets located in Milan, Italy.



|   |  | Property Name & Location  |  | Type               |  | Tenant                          |  | Average Lease Duration (Years) |    |  | Approx. Gross Leasable Area (sq. meters) |  |        | Purchase Price on  September 30, 2013 ($ in millions) | 
|-- |  | ------------------------- |  | ------------------ |  | ------------------------------- |  | ------------------------------ | -- |  | ---------------------------------------- |  | ------ | ----------------------------------------------------- | 
|1  |  | Corso Europa 22, Milano   |  | Office             |  | Italian firms                   |  |                                | 10 |  |                                          |  | 560    |                                                       | 
|2  |  | Milanofiori, Building A5  |  | Office             |  | Various int’l and Italian firms |  |                                | 10 |  |                                          |  | 865    |                                                       | 
|3  |  | Milanofiori, Building Q7  |  | Office             |  | Various int’l and Italian firms |  |                                | 10 |  |                                          |  | 586    |                                                       | 
|4  |  | Milanofiori, Building N   |  | Office             |  | Various int’l and Italian firms |  |                                | 10 |  |                                          |  | 1,750  |                                                       | 
|5  |  | Viale Lucania, Buccinasco |  | Office, Industrial |  | Microelettrica Scientifica      |  |                                | 18 |  |                                          |  | 16,230 |                                                       | 
|6  |  | Via Buozzi 22, Buccinasco |  | Office, Warehouse  |  | Various int’l and Italian firms |  |                                | 10 |  |                                          |  | 525    |                                                       | 
|7  |  | Via Newton, Assago        |  | Office             |  | Italian firms                   |  |                                | 10 |  |                                          |  | 1,244  |                                                       | 
|8  |  | Via Lazio 95, Buccinasco  |  | Office, Warehouse  |  | Italian cos.                    |  |                                | 10 |  |                                          |  | 4,320  |                                                       | 
|9  |  | Via Emilia, Buccinasco    |  | Commercial         |  | Italian commercial co.          |  |                                | 10 |  |                                          |  | 200    |                                                       | 
|10 |  | Via Mulino, Buccinasco    |  | Commercial         |  | Merkur                          |  |                                | 8  |  |                                          |  | 360    |                                                       | 
|11 |  | Milanofiori, Building Q5  |  | Office             |  | Italian firms                   |  |                                | 10 |  |                                          |  | 400    |                                                       | 
|   |  | Total:                    |  |                    |  |                                 |  |                                |    |  |                                          |  | 27,040 |                                                       | 





17






| | 1. | Property 1 is part of an office building located at Corso Europa 22 in a central area of Milan, near San Babila’s Square, close to the fashion district called “quadrilatero della moda” and 500 meters from the Milan Cathedral at the center of the city (the “Duomo”). The building’s 560 square meters (“sqm”) includes two floors and a basement. The structure was designed in 1957 by Architect Vico Magistretti, a leading figure in the Italian cultural and architectural space after WWII, and was completely renovated in 2012.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Property 2 is part of a large office complex, Assago Milanofiori, in the southern part of Milan. Milanofiori is a real estate business district built in the late 1970s with the aim to provide prime location to Italian and multinational firms in the service and high-tech service industries. The buildings in the area are connected by tree-lined roads and large parking lots. The property is Building A5 of the complex. The complex has a direct subway connection to the center of the Milan and is located near major freeways and highways. The building’s 865 sqm are rented to Italian and multinational firms. The contracts have an average 10-year duration.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Property 3 is part of a large office complex, Assago Milanofiori, in the southern part of Milan. The property is Building Q7 of the complex. The complex has a direct subway connection to the center of the city and is located near major freeways and highways. The building’s 586 sqm are rented to Italian and multinational companies. The contracts have an average 10-year duration.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Property 4 is part of a large office complex, Assago Milanofiori, in the southern part of Milan. The property is Building N of the complex. The complex has a direct subway connection to the center of the city and is located near major freeways and highways. The building’s 1,750 sqm are rented to Italian and multinational companies. The contracts have an average 10-year duration.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Property 5 is an industrial and office building located on viale Lucania in Buccinasco, a large commercial and industrial area in the southern part of Milan. The property is located about 3 km from Milan, is very well connected with the major adjacent cities such as Assago, Corsico, Trezzano sul Naviglio and is near major freeways and the highway towards Genova. The facility encompasses a 16,230 sqm industrial plant, of which 10,230 sqm warehouse, and 6,000 sqm office. It is a flexible use structure that was recently renovated in 2011. The building is rented to Microelettrica Scientifica, a subsidiary of the large multi-national Knorr-Bremse group, a leading global producer of braking systems for trucks and trains. The contract has an 18-year duration.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | Property 6 is an office and warehouse building located at via Buozzi 22 in Buccinasco, a large commercial and industrial area in the southern part of Milan. The property is located near major freeways and the highway towards Genova. The building includes offices and warehouse. Its 525 sqm are rented to multiple international and Italian firms. The contracts have an average 10-year duration.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | Property 7 is an office building located on via Newton in the southern part of Milan. The property has a direct subway connection with the center of the city and is located near major freeways and highways. The building’s 1,244 sqm are rented to Italian firms. The contracts have average duration of 10-years.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Property 8 is an office and warehouse building. The property is located at via Lazio 95 in Buccinasco, a large commercial and industrial area in the southern part of Milan. The building is located near major freeways and the highway towards Genova. The building’s 4,320 sqm is rented to Italian companies. The contract has a 10-year duration.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 9. | Property 9 is a commercial building located on via Emilia in Buccinasco, a large commercial and industrial area in the southern part of Milan. The building is located near major freeways and the highway towards Genova. The facility’s 200 sqm are rented to an Italian commercial company. The contract has a 10-year duration.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10. | Property 10 is a commercial building is located on via Mulino in Buccinasco, a large commercial and industrial area in the southern part of Milan. The building is located near major freeways and the highway towards Genova. The facility’s 360 sqm are rented to a gaming company for an 8-year duration.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 11. | Property 11 is part of a large office complex, Assago Milanofiori, in the southern part of Milan. The property is Building Q5 of the complex. The complex has a direct subway connection to the center of the city and is located near major freeways and highways. The building’s 400 sqm are rented to Italian and multinational companies. The contracts have an average 10-year duration.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





18






Current occupancy rates
and approximate rent per square meter for each of the properties is as follows:



|   |  | Property                   |  | Current occupancy |     |   | Rent per square meter ($) | 
|-- |  | -------------------------- |  | ----------------- | --- | - | ------------------------- | 
|1  |  | Corso Europa 22, Milan (1) |  |                   | 48  | % |                           | 
|2  |  | Milanofiori, building A5   |  |                   | 100 | % |                           | 
|3  |  | Milanofiori, building Q7   |  |                   | 100 | % |                           | 
|4  |  | Milanofiori, building N    |  |                   | 100 | % |                           | 
|5  |  | Viale Lucania, Buccinasco  |  |                   | 100 | % |                           | 
|6  |  | Via Buozzi 22, Buccinasco  |  |                   | 100 | % |                           | 
|7  |  | Via Newton, Assago (2)     |  |                   | 63  | % |                           | 
|8  |  | Via Lazio, Buccinasco      |  |                   | 100 | % |                           | 
|9  |  | Via Emilia, Buccinasco     |  |                   | 100 | % |                           | 
|10 |  | Via Mulino, Buccinasco     |  |                   | 100 | % |                           | 
|11 |  | Milanofiori, building Q5   |  |                   | 100 | % |                           | 



|(1) | The occupancy rate of the property located in Corso Europa, Milan, is at 48% due to the recent termination of certain leases.  The managers of the property are seeking new tenants for the spaces.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                    
|(2) | The occupancy rate of the property located in via Newton, Assago, is at 63% due to the recent termination of certain leases.  The managers of the property are seeking new tenants for the spaces. 





|ITEM4A. | UNRESOLVED STAFF COMMENTS
|------- | -------------------------



None.





|ITEM5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------ | --------------------------------------------



Prime Acquisition Corporation,
a Cayman Island company, was incorporated on February 4, 2010 in order to serve as a vehicle for the acquisition of an operating
business (through a merger, capital stock exchange, asset acquisition or other similar business combination). Prime did not engage
in any substantive commercial business until the Business Combination.



On September 30, 2013,
we consummated the Business Combination by purchasing all of the issued and outstanding stock of the Subsidiaries (Seba, Nova,
Delfin, Dieci, Ellegi, SIM, Magfin, and GSI), for a total consideration of $18,843,714, as represented by the issuance of 1,719,317
of Prime’s shares from the treasury. As part of the Business Combination, the Group assumed all the current and non-current
loans and borrowings associated with the investment properties which amounted to approximately $50.9 million.



On December 18, 2014,
Prime exchanged Seba with Francesco Rotondi and Luca Failla whereby Rotondi and Failla returned 497,308 of the Company’s
shares (“Seba Unwinding”) for 100% of the ownership of Seba. Seba’s sole asset consisted of four floors of Corso
Europa 22, an office building in central Milan.



In addition, see Item
10C Material Contracts for certain details of contingent consideration.



Our Business Subsequent to the Acquisition
of the Real Estate Portfolio



The entirety of our revenues is derived
from rental income from our tenants in the eleven properties.





19






Results of Operations



This section discusses our 2014, 2013 and
2012 financial results prepared under IFRS.



Years Ended December 31, 2014, 2013 and 2012



The information below
is summarized from the audited financial statements for the years ended December 31, 2014, 2013 and 2012.



|                                                                 |  | 2014 |            |   | 2013* |   |             | 2012 | 
|---------------------------------------------------------------- |  | ---- | ---------- | - | ----- | - | ----------- | ---- | 
|Rental income                                                    |  | $    | 4,086,075  |   |       | $ | 1,007,015   |      | 
|Other revenues                                                   |  |      | 126,165    |   |       |   | 77,436      |      | 
|Total Revenues                                                   |  |      | 4,212,240  |   |       |   | 1,084,451   |      | 
|                                                                 |  |      |            |   |       |   |             |      | 
|Depreciation and bad debt provision                              |  |      | (107,400   | ) |       |   | (59,295     | )    | 
|Impairment of goodwill                                           |  |      | –          |   |       |   | (6,914,458  | )    | 
|Other expenses                                                   |  |      | (2,769,238 | ) |       |   | (4,367,539  | )    | 
|Total operating expenses                                         |  |      | (2,876,638 | ) |       |   | (11,341,292 | )    | 
|Operating profit/(loss)                                          |  |      | 1,335,602  |   |       |   | (10,256,841 | )    | 
|                                                                 |  |      |            |   |       |   |             |      | 
|Finance income                                                   |  |      | 75,880     |   |       |   | –           |      | 
|Finance costs                                                    |  |      | (1,891,493 | ) |       |   | (712,545    | )    | 
|Contingent consideration in connection with business combination |  |      | 5,157,951  |   |       |   | (5,157,951  | )    | 
|Interest earned from investment held in trust                    |  |      | –          |   |       |   | 3,868       |      | 
|Net fair value gain on revaluation of investment properties      |  |      | 332,425    |   |       |   | –           |      | 
|Profit/(loss) for the year from continuing operations            |  |      | 5,010,365  |   |       |   | (16,123,469 | )    | 
|                                                                 |  |      |            |   |       |   |             |      | 
|Tax expenses, current                                            |  |      | (208,603   | ) |       |   | –           |      | 
|Deferred tax expense                                             |  |      | (654,579   | ) |       |   | 7,184       |      | 
|Profit/(loss) for the year from continuing operations            |  | $    | 4,147,183  |   |       | $ | (16,116,285 | )    | 
|                                                                 |  |      |            |   |       |   |             |      | 
|Profit/(loss) from discontinued operations                       |  |      |            |   |       |   |             |      | 
|Net loss from discontinued operations                            |  |      | (727,864   | ) |       |   | 230,807     |      | 
|Profit/(loss) for the year                                       |  | $    | 3,419,319  |   |       | $ | (15,885,478 | )    | 
|                                                                 |  |      |            |   |       |   |             |      | 
|Other comprehensive income, net of income tax                    |  |      |            |   |       |   |             |      | 
|Foreign currency translation reserve                             |  |      | (999,519   | ) |       |   | 131,878     |      | 
|Total comprehensive profit/(loss) for the year                   |  | $    | 2,419,800  |   |       | $ | (15,753,600 | )    | 



*Restated for discontinued operations



Year Ended December
31, 2014 Compared to Year Ended December 31, 2013



Revenues:We
did not engage in any substantive commercial business until the acquisition of the Subsidiaries on September 30, 2013. The revenues
for 2013 were for the period from the date of the acquisition to December 31, 2013. Revenues increased by 288% to $4,212,240 for
the year ended December 31, 2014 from $1,084,451 for the year ended December 31, 2013. The increase was largely attributable to
2014 consisted of a full year of operations whereas 2013 consisting of only three months of operations.





20






Expenses:



For the year ended December 31, 2013, bad
debt provision on certain aged trade receivables accounted for the majority of the depreciation and bad debt provision ($41,176
out of a total of $59,295), followed by depreciation of tangible assets of $18,119.



In comparison, for the year ended December
31, 2014, depreciation of tangible assets accounted for the majority of the depreciation and bad debt provision ($75,245 out of
a total of $107,400), followed by bad debt provision on certain aged trade receivables of $32,155.



Goodwill of $6,914,458
arising from the Business Combination was fully impaired at December 31, 2013. Approximately 49.9%, or about $1.38 million, of
the Other Expenses (which totaled approximately $3.50 million) in 2014 were professional and legal expenses compared to 61.9%,
or about $2.70 million, in 2013. The decrease of professional and legal expenses in 2014 is primarily due to the additional services
required related to the Business Combination in 2013. These additional expenses are non-recurring in nature. Day-to-day operating
costs such as administrative, rent, staff, maintenance, insurance and travel costs account for about 68.3% (or about $1.89 million)
of Other Expenses in 2014, as compared to $0.98 million, or about 22.5% of the total expenses in 2013. The increase of day-to-day
operating costs in 2014 was largely attributed to 2014 consisting of a full year of operations whereas 2013 consisted of only three
months of operations. We incurred $5,044 of stock option expenses in 2014 versus $154,343 in 2013.



Contingent consideration
in connection with the Business Combination of $5,157,951 arising from certain transaction value agreements (see detail in Item
10C) Prime has entered into with the sellers of Subsidiaries in connection with the Business Combination is recorded as an expense
in the consolidated statements of income/(loss) and comprehensive income/(loss) and a current liability in the consolidated statements
of financial position in 2013. During 2014, Prime has reached agreement with the appropriate parties to cancel the said transaction
value agreements. As of December 31, 2014, there are no outstanding transaction value agreements. The amount was recorded as non-operating
income in the consolidated statements of income/(loss) and comprehensive income/(loss), and no related liability in the consolidated
statements of financial position in 2014.



Balance Sheet



In connection with
the acquisition of the Subsidiaries, we had approximately $47.8 and $73.1 million of non-current assets, at December 31, 2014 and
2013, respectively. Investment properties, calculated using discounted cash flow method by an independent qualified professional
valuation expert, were valued at $47,629,537 in 2014, as compared to $72,877,131 in 2013. The significant decrease of value is
due to (1) the Seba Unwinding resulting in disposal of one of the investment properties, and (2) the decrease of 12.18% in the
2014 year-end Euro currency exchange rate as compared to the US Dollar from the prior year.



Trade and other receivables
at the end of 2014 and 2013 was $1,005,261 and $4,757,018, respectively, net of allowance for bad debts. The significant decrease
was primarily due to various agreements between Prime and Lanati to offset certain receivables (due from Lanati) and payables (due
to Lanati) and the Seba Unwinding. Lanati was one of the sellers of the investment properties and a current shareholder of the
Group.



There was $165,091
and $133,414 of cash at December 31, 2014 and 2013, respectively.



In 2014, the Company
had non-current loans and borrowings from various institutions of $9.12 million and current loans and borrowings of approximately
$23.15 million. Total current and non-current borrowings amounted to approximately $32.3 million. Loans and borrowings consist
of bank loans, revolving lines of credit, finance leases, and other loans. Bank loans include both secured and unsecured bank loans.
Secured bank loans are secured by the investment properties. In addition, some of the secured loans are further personally guaranteed
by the former owners of the properties. The revolving line of credit is unsecured and personally guaranteed by the former owners
of the properties. Non-current other loans consist of one loan from the current tenant of the property located on Via Lucania in
Buccinasco. Current other loans consist of an interest bearing convertible promissory note with the underwriters from our initial
public offering.



In 2013, the Company
had non-current loans and borrowings from various financial institutions of $45.4 million and current loans and borrowings of approximately
$5.5 million. Total current and non-current borrowings amounted to approximately $50.9 million. Loans and borrowings consist of
bank loans, revolving lines of credit, finances leases, and other loans. Similar to 2014, bank loans include both secured and unsecured
bank loans. Secured bank loans are secured by the investment properties. Some of the secured loans are further personally guaranteed
by the former owners of the properties. The revolving line of credit is unsecured and personally guaranteed by the former owners
of the properties. Other loans consist of an interest bearing convertible promissory note with the underwriters. The significant
decrease of total current and non-current loans and borrowings is primarily due to Seba Unwinding.





21






In 2014, there was
approximately $3.74 million in deferred tax liabilities, which is calculated in full on temporary differences using a tax rate
of 27.5%, if the temporary difference is subject only to IRES (an Italian corporate income tax) rules, or 31.4% if the temporary
difference is subject both to IRES and IRAP (an Italian regional production tax) rules. In comparison, there was approximately
$5.4 million in deferred taxes liabilities in 2013, which is calculated in full on temporary differences using a tax rate of 27.5%,
if the temporary difference is subject only to IRES rules, or 31.4% if the temporary difference is subject both to IRES and IRAP
rules.



In 2014, the $5,311,130
of trade and other payables consisted largely of $2.74 million of accrued expenses incurred by Prime with its service providers,
and trade account payables of $2.18 million were incurred by the Subsidiaries. In 2013, the $8,699,717 of trade and other payables
consisted largely of $2.27 million of accrued expenses incurred by Prime with its service providers, and trade accounts payables
of $2.50 million were incurred by the Subsidiaries. The Subsidiaries also owed $3.77 million to Mr. Cesare Lanati for regular maintenance
and other services. The decrease of trade account payables is primarily due to the Seba Unwinding. The decrease of amount owed
to Lanati is primarily due to an agreement between Prime and Lanati to offset certain receivables (due from Lanati) and payables
owed (due to Lanati).



In 2014, the $179,885
in provisions was largely attributed to a legal dispute underway from one of the Subsidiaries. In 2013, the $493,076 in provisions
was largely attributed to certain legal disputes by certain Subsidiaries. The provision was estimated based on management evaluation
of the amount at risk and legal considerations.



Year Ended December
31, 2013 Compared to Year Ended December 31, 2012



Revenues:We
did not engage in any substantive commercial business until the acquisition of the Subsidiaries on September 30, 2013, and as such
there were no revenues prior to that date. The revenues for 2013 were for the period from the date of the acquisition to December
31, 2013, and are therefore not meaningful to compare to the 2012 results.



Expenses:



Bad debt provision on certain aged trade
receivables accounted for the majority of the depreciation and bad debt provision ($41,176 out of a total of $59,295), followed
by depreciation of tangible assets of $18,119.



Goodwill of $6,914,458
arising from the Business Combination was impaired at December 31, 2013. Approximately 61.9%, or about $2.70 million, of the
Other Expenses (which totaled approximately $4.37 million) in 2013 were professional and legal expenses primarily related to the
Business Combination compared to 61%, or about $683,000, in 2012. These expenses are non-recurring in nature. Day-to-day operating
costs such as administrative, rent, staff, insurance and travel costs account for about 22.4% (or about $0.98 million) of Other
Expenses, as compared to $220,000, or about 20% of the total expenses in 2012. We incurred $154,343 stock option expenses in 2013
versus $180,750 in 2012.



Contingent consideration
in connection with Business Combination of $5,157,951 arising from certain transaction value agreements (see detail in Item 10C)
Prime has entered into with the sellers of Subsidiaries in connection with the Business Combination is recorded as an expense in
the consolidated statements of loss and comprehensive loss and a current liability in the consolidated statements of financial
position in 2013. This contingent consideration will be re-measured at each reporting period until settled.



Balance Sheet



In connection with
the acquisition of the Subsidiaries, we have approximately $73.1 million worth of non-current assets. Investment properties, calculated
using discounted cash flow method by an independent qualified professional valuation expert, stood at $72,877,131 in 2013.



Trade Receivables at the end of 2013 was $4,757,018, net of
allowance for bad debts. Mr. Cesare Lanati owed $3,209,940 to the Subsidiaries for certain expenses paid by the Subsidiaries on
his behalf.



There was $133,414
of cash at the end of the year.



The Subsidiaries have
non-current loans and borrowings from various financial institutions of $45.4 million and current loans and borrowings of approximately
$5.5 million. Total current and non-current borrowings amounted to approximately $50.9 million. Loans and borrowings consist of
bank loans, revolving lines of credit, finances leases, and other loans. Bank loans include both secured and unsecured bank loans.
Secured bank loans are secured by the investment properties. In addition, some of the secured loans are further personally guaranteed
by the former owners of the properties. The revolving line of credit is unsecured and is personally guaranteed by the former owners
of the properties. Non-current other loans consist of one loan from the current tenant of the property located on Via Lucania in
Buccinasco. Other loans consist of an interest bearing convertible promissory note with the underwriters.





22






There was approximately
$5.4 million in deferred tax liabilities in 2013, which is calculated in full on temporary differences using a tax rate of 27.5%,
if the temporary difference is subject only to IRES (an Italian corporate income tax) rules, or 31.4% if the temporary difference
is subject both to IRES and IRAP (an Italian regional production tax) rules.



The $8,699,717 of trade
and other payables consist largely of $2.3 million of accrued expenses incurred by Prime with its service providers, and trade
accounts payables of $2.5 million were incurred by the Subsidiaries. The Subsidiaries also owe $3.8 million to Mr. Cesare Lanati
for regular maintenance and other services.



The $493,076 in provisions
is largely attributed to certain legal disputes by certain Subsidiaries. The provision was estimated based on management evaluation
of the amount at risk and legal considerations.



Liquidity and Capital
Resources



The Company had $165,091
and $133,414 in cash at the end of years 2014 and 2013, respectively.



The Company did not
generate enough cash flow in 2014 from its operations to fund all interest and day-to-day expenses and therefore was not cash flow
positive and would require capital injections to fund current operations. Principal sources of cash may be a) issuance of treasury
shares in exchange for cash, b) exercise of warrants, c) disposition of the real estate assets and d) issuance of debt instruments,
or a combination of the above four possibilities.



The Company may elect
to, when market conditions are favorable, engage broker dealers to sell its securities from treasury to raise funding. However,
management believes without improvements to the Company’s stock performance both in terms of price and trading volume, as
well as the current operating conditions, this may not be a viable solution.



The Company also has
over 7 million warrants outstanding; the exercise price of the warrants is $5.00 per common share. The warrants are exercisable
if there is an effective registration statement or post-effective amendment covering the ordinary shares issuable upon exercise
of the redeemable warrants. In addition, the Company can only call for redemption of such warrants if the last sale price of our
ordinary shares on the stock exchange equals to or exceeds $15.00 per share for any 20 trading days within a 30 trading day period
after the completion of the Business Combination. As of December 31, 2014, the warrants are not exercisable because no such effective
registration statement or post-effective amendment has been filed. In addition, as our share price is not within this trading price,
it is unlikely we will call the warrants in the near future.



On December 18, 2014,
Prime sold Seba to Francesco Rotondi and Luca Failla in exchange for the return of 497,308 of the Company’s shares. Seba’s
sole asset consists of four floors of Corsa Europa 22, an office building in central Milan. As a result of this sale, the Company’s
investment properties value was reduced by approximately 26%. However, Seba produced a net loss of $301,454 for 2014. We believe
the disposal of Seba will result in a positive effect to our overall result of operations in the coming year, although no assurance
can be made this will be the result for the coming year.



While our real estate
portfolio of eleven properties in Italy does not generate positive cash flow, management believes that when the market conditions
are more favorable, some of these properties may be sold. However, real estate transactions in the greater Milan area have been
relatively few when compared to the pre- financial crisis level, and an actual transaction may take longer than viable for the
company’s current needs.



The Company has been
seeking lenders who will finance the Company with market rates, and has been financing current operations by issuing unsecured
convertible Promissory Notes to Diana Liu, one of its directors. These unsecured convertible Promissory Notes carry interest rate
of 10% per annum, compounding annually. The notes mature on the earlier of (i) the date on which the Company liquidates and winds-up
its affairs, or (ii) one year from the date of the interest bearing unsecured convertible notes. During 2015, some of these notes
reached maturity. The Company rolled-over these matured notes with an additional 10% to the principal for one year, with the same
interest rate and terms as the original Notes. As of November 30, 2015, a total of $2,546,500 in such Notes have been issued to
Ms. Liu since the inception of Prime. There is no assurance the Company will be successful seeking lenders to finance the Company
with market rate or that such practice of funding the company’s operations by Ms. Liu will continue.



Management
is currently indiscussion with several funding sources for a combination of debt and equity financing.
However, there can be no assurance the Group will be able to obtain funding from these sources.





23






Off-Balance Sheet
Arrangements



We do not have any
off-balance sheet arrangements.



Contractual Obligations



Our
contractual obligations consist mainly of bank loans, revolving line of credit and finance leases, and will be paid off with our
cash flow from operations.



Bank loans



Bank loans include
both secured and unsecured bank loans. Certain bank loans are secured by the investment properties. In addition to using the investment
properties as collateral, some of the loans are further personally guaranteed by the former owners of the properties.



The table below shows
the detail of bank loans by expiry date and rate (floating or fixed) as of December 31, 2014; all bank loans contracts provide
for floating rates.



|                            |  | Floating rate |           |  | Total |  
|--------------------------- |  | ------------- | --------- |  | ----- | -
|                            |  |               |           |  |       |  
|Expiry within 1 year        |  | $             | 2,093,671 |  |       | $
|Expiry within 1 and 3 years |  |               | 969,345   |  |       |  
|Expiry within 3 and 5 years |  |               | 277,687   |  |       |  
|Expiry in more than 5 years |  |               | 3,466,784 |  |       |  
|Total                       |  | $             | 6,807,487 |  |       | $



As at December 31,
2014, the effective interest rate varies from EURIBOR+1.125% to EURIBOR+2.554%.



During 2014, one of
the Subsidiaries missed certain scheduled repayments on a bank loan totaling $193,011 in principal and $22,680 in interest. Except
for these missed scheduled repayments, the Group has been current on all scheduled repayments. According to the mortgage agreement,
missing scheduled payments can cause the bank to request immediate repayment of the residual debt, totaling approximately $1,515,720
as of December 31, 2014. Management is negotiating with the bank to postpone repayment for 12 months. Separately during 2014, one
of our other Subsidiaries missed certain scheduled finance lease payments to the leasing department of the same bank. As of the
date of this report, the bank official from the mortgage department, on the Group’s behalf, is in negotiation with their
leasing department on the issuance of a final moratorium. As the negotiation is in the final stages, management believes the risk
of the bank demanding immediate repayment of the full residual debt is very low. However, there can be no assurance the bank will
not decide to refuse granting the postponement to the Group during this final negotiation stage and request for immediate repayment
of the residual debt. As a result of this possibility, the Management has classified such residual debt as current loans and borrowings
as of December 31, 2014



Revolving line
of credit



The Group has committed
borrowing facilities available at December 31, 2014 as follows:



|2014                 |  | Floating rate |         |  | Fixed rate |   |         | Total | 
|-------------------- |  | ------------- | ------- |  | ---------- | - | ------- | ----- | 
|                     |  |               |         |  |            |   |         |       | 
|Expiry within 1 year |  | $             | 377,251 |  |            | $ | 403,418 |       | 
|Total                |  | $             | 377,251 |  |            | $ | 403,418 |       | 



The facilities expiring
within 1 year are annual facilities subject to renewal at various dates. As at December 31, 2014, the effective interest rate varies
from 5.50% to 15.50%.



The revolving line
of credit is unsecured, but personally guaranteed by the former owners of the properties. The total revolving line of credit approved
by the bank as of December 31, 2014 was $806,607. The total balance of the revolving line of credit as at December 31, 2014 was
$780,699.





24






Finance leases



Future lease payments are due as follows:

|2014                                                 |  | Minimum lease payments |            |  | Interest |   |            | Present value | 
|---------------------------------------------------- |  | ---------------------- | ---------- |  | -------- | - | ---------- | ------------- | 
|                                                     |  |                        |            |  |          |   |            |               | 
|Not more than one year                               |  | $                      | 28,431,853 |  |          | $ | 9,049,255  |               | 
|Later than one year and not later than three years   |  |                        | 635,189    |  |          |   | 260,164    |               | 
|Later than three years and not later than five years |  |                        | 635,190    |  |          |   | 228,486    |               | 
|Later than five years                                |  |                        | 3,159,958  |  |          |   | 538,479    |               | 
|Total                                                |  | $                      | 32,862,190 |  |          | $ | 10,076,384 |               | 



As at December 31,
2014, the effective interest rate varies from EURIBOR + 1.4% to EURIBOR+2.762%.



During 2014, four of
the Subsidiaries missed certain scheduled payment to four finance lease creditors, totaling approximately $244,234 in principal
and $241,328 in interest as at December 31, 2014. Except for these missed scheduled payments, the Group has been current with all
the scheduled payments. Pursuant to the leasing agreements, the finance lease creditors have the right to declare the borrower
in default in case of missing scheduled payments via official written notice and demand full payment of outstanding principal balance
at the time of such default declaration. Management has been negotiating with all the affected finance lease creditors for modification
repayment plans on these missed payments. The Group remitted full missed payments to one of the finance lease creditors in the
second quarter of 2015 and thus corrected the default. As of the date of this report, the remaining finance lease creditors are
going through an internal approval process relating to the proposed modified repayment terms. The communications between the Group
and the affected finance lease creditors are ongoing and positive. Management believes there is very low risk of the finance lease
creditors declaring the borrowers in default and demanding immediate full principal payment during the approval process. However,
there can be no assurance the finance lease creditors will not decide to refuse granting the requested modification repayment plans
to the Group during this approval process and request for immediate repayment of the residual debt. As a result of this possibility,
the Management has classified such residual finance leases as current loans and borrowings as of December 31, 2014.



Other loans



Non-current other loans
consist of one loan from the current tenant of the property located on Via Lucania in Buccinasco. The loan proceeds were used for
the modification of the property to the tenant’s specifications. The repayment of this loan will start in the year 2021 for
a period of three years, and will offset the rent to be collected from the tenant. The effective interest rate is fixed at EURIBOR+1.90%.



Current other loans
consist of an interest bearing convertible promissory note with the underwriters.



Immediately following the closing of the
Business Combination on September 30, 2013, the Company entered into an interest-bearing promissory note with its underwriter,
Chardan Capital Markets, LLC for the total remaining amount of $889,833 due to the underwriter, at the rate of 5% per annum, maturing
on December 31, 2013. If the note was not repaid by December 31, 2013, Chardan had the right to convert the note and accrued interest
into ordinary shares at a price of $9.10 per share. In connection with the convertible right, $184,584 was allocated to the value
of the beneficial conversion feature. As of December 31, 2013, full amount of the beneficial conversion feature has been recorded
as interest expense. As of the date of this report, the convertible right had not been exercised. On December 31, 2013 (the note’s
maturity date), the Company was not able to repay the note. As a result of the payment default, an additional default interest
rate of 10% per annum is added to the original 5% per annum interest rate starting December 31, 2013. As of November 30, 2015,
$269,546 of interest expense has been recorded in connection with this note.George Kaufman, one of our directors, is an employee of Chardan Capital Markets.



Results of Operations – Pro-forma
for 2013



The consolidated statements
of income/(loss) and comprehensive income/(loss) for the years ended 2014 and 2013 include consolidated operating results of the
Group for the full year of 2014, and consolidated operating results of the Group for the fourth quarter of 2013 (after the September
30 acquisition of the Subsidiaries) and the operating results of Prime as a special-purpose acquisition company for the first three
quarters of 2013. Since the significant changes primarily relate to our transition from a special-purpose acquisition company to
a real estate operating company, we do not feel that the above disclosure by itself is adequate for investors to understand the
business.





25






To assist investors
in better understanding the operating results of the Subsidiaries and Prime in 2013, we are presenting here a Results of Operations
table prepared for Prime and Subsidiaries which includes the operations of the Subsidiaries with Prime from the date of acquisition
(September 30, 2013), and the Subsidiaries on a stand-alone basis from January 1 to September 30, 2013, and on a consolidated basis
for the whole year, from January 1 to December 31 of 2013. The Results of Operations for Prime and Subsidiaries is audited, while
those of the Subsidiaries from January 1 to September 30 are unaudited, and the consolidated results, which are a mathematical
addition of the two, are also unaudited.



|                                                                 |  | Prime Acquisition Corp. and Subsidiaries        |             |   | Subsidiaries                                                     |   |            | Combined  pro-forma                              | 
|---------------------------------------------------------------- |  | ----------------------------------------------- | ----------- | - | ---------------------------------------------------------------- | - | ---------- | ------------------------------------------------ | 
|                                                                 |  | For the year ended December 31, 2013 (audited*) |             |   | For the period  January 1, 2013 - September 30, 2013 (unaudited) |   |            | For the year ended December 31, 2013 (unaudited) | 
|                                                                 |  |                                                 |             |   |                                                                  |   |            |                                                  | 
|Revenues                                                         |  | $                                               | 1,084,451   |   |                                                                  | $ | 7,865,495  |                                                  | 
|Other expenses:                                                  |  |                                                 |             |   |                                                                  |   |            |                                                  | 
|Depreciation and bad debt provision                              |  |                                                 | (59,295     | ) |                                                                  |   | (1,054,242 | )                                                | 
|Impairment of goodwill                                           |  |                                                 | (6,914,458  | ) |                                                                  |   | –          |                                                  | 
|Other expenses                                                   |  |                                                 | (4,367,539  | ) |                                                                  |   | (2,582,546 | )                                                | 
|Operating profit (loss)                                          |  |                                                 | (10,256,841 | ) |                                                                  |   | 4,228,707  |                                                  | 
|Finance income                                                   |  |                                                 | –           |   |                                                                  |   | 894,224    |                                                  | 
|Finance costs                                                    |  |                                                 | (712,545    | ) |                                                                  |   | (1,917,601 | )                                                | 
|Contingent consideration in connection with business combination |  |                                                 | (5,157,951  | ) |                                                                  |   | –          |                                                  | 
|Other interest earned                                            |  |                                                 | 3,868       |   |                                                                  |   | –          |                                                  | 
|Loss before tax                                                  |  |                                                 | (16,123,469 | ) |                                                                  |   | 3,205,330  |                                                  | 
|Deferred tax expense                                             |  |                                                 | 7,184       |   |                                                                  |   | (82,459    | )                                                | 
|Net Loss for the period from continuing operations               |  |                                                 | (16,116,285 | ) |                                                                  |   | 3,122,871  |                                                  | 
|Net profit from discontinued operations                          |  |                                                 | 230,807     |   |                                                                  |   | –          |                                                  | 
|Net loss for the period                                          |  | $                                               | (15,885,478 | ) |                                                                  | $ | 3,122,871  |                                                  | 

*Restated for discontinued operations



On the pro-forma basis
we would have earned $8,949,946 in revenues for the whole year and incurred about $14.98 million in expenses, of which $6.91 million
was impairment of goodwill and about $2.70 million was Business Combination related fees incurred with professional service providers.
Operating loss would have been $6,028,134, and net of financing related costs and contingent consideration in connection with business
combination, losses before tax would have been about $12.92 million. Net loss for the period would have been $12.76 million.



We stress that the
combined statement of operations for 2013 is an unaudited financial statement and, therefore, has limits in its usefulness to investors.
Due to its non-standardized definition, it will not be comparable with the calculation of similar measures for other companies.
The pro-forma combined basis statement of operations is presented solely to permit investors to more fully understand our business
in the ways that management sees it.





|ITEM6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------ | ------------------------------------------



| | A. | Directors and Senior Management
| | -- | -------------------------------



Our current directors and executive officers
are as follows:



|Name                   |  | Age |  | Position                                       
|---------------------- |  | --- |  | -----------------------------------------------
|William Tsu-Cheng Yu   |  | 54  |  | Interim Chief Executive Officer and Director   
|Amy Lau                |  | 41  |  | Interim Chief Financial Officer                
|Andrea Crespi Bel'skij |  | 40  |  | Executive Vice President of European Operations
|Diana Chia-Huei Liu    |  | 51  |  | Chairman, Director                             
|George Kaufman         |  | 39  |  | Independent Director                           





26






William Tsu-Cheng Yu has
been a director since inception and our Chief Financial Officer from inception until September 30, 2013 and has been our Interim
Chief Executive Officer since May 8, 2014. Mr. Yu was our President from April 2010 until September 30, 2013 and Since May 5, 2014.
Since July 2000, Mr. Yu has served as the Managing Partner of Cansbridge Capital. From October 2009 until January 2010, Mr. Yu
served as Chief Financial Officer and Chief Operating Officer of Optoplex Corporation, a communication networks company. Mr. Yu
served as a director of Optoplex Corporation from April 2004 until January 2010. From July 2006 through October 2008, Mr. Yu served
as a special advisor to the Chief Executive Officer of Optoplex Corporation. Mr. Yu served as a director of Abebooks, Inc., the
world’s largest on-line used book seller, from 2001 to 2008, prior to its acquisition by Amazon.com (NASDAQ:AMZN). From February
2002 to August 2003, Mr. Yu served as the Chief Financial Officer to Telos Technology Corp., a supplier of wireless solutions for
voice and data communication networks (acquired by UT Starcom (NASDAQ: UTSI) in 2004). Mr. Yu co-founded Intrinsyc Software Inc.
(TSE: ICS), a TSE-listed embedded software company, and served in various capacities including director, Chief Financial Officer,
Executive Vice President and Chief Operating Officer from July 1996 to November 2002. From August 1994 to May 1996, Mr. Yu was
an associate in the Asia Pacific corporate finance group of Marleau, Lemire Securities, Inc., an investment banking firm headquartered
in Montreal, Canada. From July 1991 to August 1994, Mr. Yu was an investment portfolio manager at Discovery Enterprises Inc., a
provincial-government sponsored venture capital fund. Mr. Yu also previously worked with China-Canada Investment and Development
and the Lawson Mardon Group. He has also served in various Board-level capacities with the Monte Jade Science and Technology Association,
a non-profit organization supporting entrepreneurship and investment in technology companies in North America and Asia. Mr. Yu
served as Chief Financial Officer and as a director of AutoChina International Limited (OTCBB: AUTCF) from October 2007 through
April 2009 (during which time it was known as Spring Creek Acquisition Corp., a blank check company formed to acquire and operating
business). Mr. Yu earned a BS in Mechanical Engineering with Honors and an MBA with Honors from Queen’s University in Canada.
Mr. Yu is married to Ms. Diana Liu, our Chairman and a director.



Amy Lauhas been our
Interim Chief Financial Officer since May 8, 2014. Ms. Lau is a Certified Management Accountant and previously served as a financial
consultant to the Company from its inception in 2010 until September 2013. From 2007 to 2010, she served as controller at Optoplex
Corp., an optic fiber component company based in Silicon Valley, CA. From 2008 to 2009, she served as a financial consultant to
Spring Creek Acquisition Corp., a blank check company. In addition, Ms. Lau has been serving as the Director of Outsourced Services
at Morling & Company, a financial services firm based in San Francisco, since April 2014.



Andrea Crespi Bel'skijhas
been our Executive Vice President of European Operations since May 8, 2014. Mr. Crespi Bel'skij is a financial asset
management professional and a certified international investment analyst, and has been serving as the CEO of EF Finance & Investments,
a structured finance and M&A advisory firm in Milan, Italy since May 2013. From 2011 to 2012, he served as the executive director
of Helpy Finance, a debt financing consulting firm, in Brescia. In 2011, he served as the investor relation and M&A officer
of LandiRenzo Spa, a motor producer and alternative fuel solutions company in Reggio Emilia, Italy. From 2009 to 2010, he served
as the head of Corporate Finance for FBS SpA, a company involved in the management of portfolios of distressed loans for international
institutions and in the securitization of credit portfolios, in Milan, Italy.



Diana Chia-Huei Liu was
our Chief Executive Officer and a director from our inception until September 30, 2013 and has been a director since May 5, 2014.
Ms. Liu was also our President from inception until April 2010. Ms. Liu served as President of AutoChina International Limited
(OTCBB: AUTCF) from its inception to April 9, 2009 (during which time it was known as Spring Creek Acquisition Corp., a blank check
company formed to acquire an operating business), and currently serves as a director. Ms. Liu has served as the President of Cansbridge
Capital Corp., a private investment firm specializing in early stage investments along the west coast of North America (namely
U.S. and Canada) and Asia, since August 1998. Prior to Cansbridge, Ms. Liu served as the Executive Vice-President at Polaris Securities
Group (TW: 6011), an investment firm in Taiwan, where she founded and managed its North American operations from April 1994 to
August 1998. From August 1991 to April 1994, Ms. Liu was an account portfolio manager in global private banking at the Royal Bank
of Canada (NYSE:RY), a full service banking firm. From October 1988 to August 1991, Ms. Liu served as the regional sales manager
for the province of British Columbia, Canada, at CIBC Securities, a subsidiary of CIBC (NYSE:CM), a full service banking firm,
where she founded and managed the mutual funds promotion division. Ms. Liu has served since June 2006 as a member of the Executive
Committee and the Chair of the Investment Committee at the Asia Pacific Foundation, a Canadian federal government created think
tank and policy advisory board where she works closely with the co-CEOs on operational issues and investment of its endowment funds.
In addition, she also served as a director of the Vancouver Goh Ballet Society and BaySpec, Inc., a supplier of optical components
based in Fremont, California. Ms. Liu graduated with a BA in economics from the University of British Columbia in Canada. Ms. Liu
is married to Mr. William Yu, our Interim Chief Executive Officer and a director.





27






George Kaufman was a
director from March 2012 until September 30, 2013 and has been a director since May 5, 2014. Mr. Kaufman has served as the Managing
Director of Investment Banking for Chardan Capital Markets, LLC, a New York based broker/dealer, since January 2006 and served
as an Investment Banking Associate for Chardan from November 2004, when he joined the firm, to December 2005. As one of the seven
original members of Chardan, Mr. Kaufman established the investment banking, brokerage and marketing protocols and standards. He
has extensive experience with operating and development stage companies, having lead and/or managed over 30 public and private
transactions. In addition, 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. Since June 2009, Mr. Kaufman
has also served as a director of China Networks International Holdings Ltd. (OTCBB: CNWHF), a broadcast television advertising
company based in China. Mr. Kaufman received a Bachelor of Arts degree in Economics from the University of Vermont in 1999.



| | B. | Compensation
| | -- | ------------



Director and Executive Compensation



Director Compensation



The Board of Directors
did not receive compensation in 2014 and does not currently receive compensation. However, the Company’s board of directors
granted 100,000 stock options to a director in September, 2015 at an exercise price of $0.01 per share. 50% (50,000 shares) of
the stock options are vested immediately at grant date, with the remaining stock options vesting at a rate of 6.25% every three
months. The vesting will stop when this director ceases his engagement with the Company. The fair value of the options granted
using the Black-Scholes option-pricing model was $309,100.



Executive Compensation



Overview of our
Executive Compensation



William Yu, our Interim
Chief Executive Officer currently receives no compensation.



Amy Lau, our Interim
Chief Financial Officer is paid a monthly fee of USD$2,000 and was granted stock options to purchase 12,000 and 18,000 ordinary
shares at an exercise price of 2.00 and 2.60 per share in May 2014 and May 2015 respectively, vesting on a monthly basis for a
duration of 12 months from the grant date. The options will cease vesting when the optionee is no longer the Interim Chief Financial
Officer of the Company. The fair value of the stock options granted in May 2014 and May 2015 using the Black-Scholes option-pricing
model was $792 and $21,690 respectively.



Andrea Crespi Bel’skij,
our Executive Vice President is paid a monthly fee of €3,500 and was granted stock options to purchase 50,000 ordinary shares
at an exercise price of $2.00 per share in May 2014. 25% of the stock options granted was vested on the first anniversary of the
grant date, with the remaining stock options vesting at a rate of 6.25% every three months thereafter. The options will cease vesting
when the optionee is no longer the Executive Vice President of European Operation of the Company. The fair value of the stock options
granted using the Black-Scholes option-pricing model was $3,300.



Share Options



Our board of directors
has approved the grant of options to purchase up to 220,000 of our ordinary shares to our directors, employees, and consultants
from time to time, with such terms and conditions as our officers may establish. Such option grants are governed by individual
grant agreements and stock restriction agreements as determined by our board of directors, and may be subject to either time-based
or performance-based vesting provisions. Our board of directors has the authority to amend, alter, suspend or terminate our right
to grant such share options without the consent of our shareholders within the 220,000 option limit. Accordingly, such options
may dilute the equity interest of our shareholders. In September, 2015, our board of directors has approved a grant of an additional
280,000 options, bringing the total grant of such options to 500,000. As of the date hereof 247,500 options has been granted since
inception and 195,000 options are currently outstanding.



Employment Agreements



We currently have employment
agreements with two employees in one of the subsidiaries, and one employee in the Company.



Pension Benefits



None of our named executives
participates in or have account balances in qualified or nonqualified defined benefit plans sponsored by us.



Nonqualified
Deferred Compensation



None of our named executives
participates in or have account balances in nonqualified defined contribution plans or other deferred compensation plans maintained
by us.





28






Potential Payments
upon Termination or Change in Control



None of our named executives
is entitled to any payments upon termination or change in control of our company.



| | C. | Board Practices
| | -- | ---------------



Board Committees



Given its small size,
our board of directors no longer has committees.



Director Independence



Our board of directors
has determined that George Kaufman qualifies as an independent director under the Nasdaq Marketplace Rules because he is not currently
employed by us, and does not fall into any of the enumerated categories of people who cannot be considered independent in the Nasdaq
Marketplace Rules.



| | D. | Employees
| | -- | ---------



We currently have two employees in one of
our subsidiaries in Italy who perform certain administrative services for us, and one employee in the Company who perform certain
European related operations services for us.



| | E. | Share Ownership
| | -- | ---------------



See Item 7, below.





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



| | A. | Major Shareholders
| | -- | ------------------



The following table
sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our
ordinary shares, as of December 31, 2015:



| | · | each person known to us to own beneficially more than 5% of our ordinary shares;
| | - | --------------------------------------------------------------------------------



| | · | each of our directors and executive officers; and
| | - | -------------------------------------------------



| | · | all of our directors and executive officers as a group.
| | - | -------------------------------------------------------



Beneficial ownership
includes voting or investment power with respect to the securities and takes into consideration options exercisable by a person
within 60 days after the date of this report. Except as indicated below, and subject to applicable community property laws, the
persons named in the table have sole voting and investment power with respect to all ordinary shares shown as beneficially owned
by them.



|Name and Address (1)                                            |  | Number of SharesBeneficially Owned |           |     | Percentage ofOwnership (2) | 
|--------------------------------------------------------------- |  | ---------------------------------- | --------- | --- | -------------------------- | 
|Diana Chia-Huei Liu                                             |  | 2,595,989                          | (4)       |     | 54.12%                     | 
|William Tsu-Cheng Yu                                            |  |                                    | 2,595,989 | (4) |                            | 
|Amy Lau                                                         |  |                                    | 5,500     |     |                            | 
|Andrea Crespi Bel'skij                                          |  |                                    | 0         |     |                            | 
|George Kaufman                                                  |  |                                    | 5,000     |     |                            | 
|All directors and executive officers as a group (5 individuals) |  |                                    | 2,606,489 |     |                            | 
|Yong Hui Li                                                     |  |                                    | 980,331   | (3) |                            | 
|Bell Real Estate S.r.l.                                         |  |                                    | 582,499   |     |                            | 



|* | Less than 1%
|- | ------------



| | (1) | Unless otherwise noted, the business address for each of our beneficial owners is c/o Kaiyuan Real Estate Development; No. 322, Zhongshan East Road; Shijiazhuang; Hebei Province; 050011; China.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





29






| | (2) | Based on 2,040,451 ordinary shares outstanding as of December 31, 2015. Beneficial ownership includes voting or investment power with respect to the securities and takes into consideration options exercisable by a person within 60 days after the date of this report.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Consists of (i) 183,562 ordinary shares, and (ii) 796,769 shares issuable upon exercise of warrants owned by Mr. Li.
| | --- | --------------------------------------------------------------------------------------------------------------------



| | (4) | Consists of (i) 220,275 ordinary shares held by Diana Liu, (ii) 225,000 ordinary shares held by Brudders Capital, of which Diana Liu is the sole owner and director, (iii) 127,266 ordinary shares held by William Yu, (iv) 63,632 ordinary shares held by Conrad Yu and Byron Yu, (v) 1,039,270 shares issuable upon exercise of warrants owned by Ms. Liu, (vi) 812,906 shares issuable upon exercise of warrants owned by Mr. Yu, and (vii) 107,640 shares issuable upon exercise of warrants owned by Conrad Yu and Byron Yu. Diana Liu and William Yu are married, and Conrad Yu and Byron Yu are the sons of Diana Liu and William Yu.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2015, 4.51% of our outstanding
ordinary shares are held by record holders in the United States.



| | B. | Related Party Transactions
| | -- | --------------------------



Concurrently with the
Company’s IPO in 2010, the Company issued to Chardan Capital Markets, LLC, the representative of the underwriters of the
Company’s IPO as additional compensation, for a purchase price of $100, a unit purchase option to purchase 215,000 units
for $12.00 per unit. The units issuable upon exercise of this option are identical to those sold in the IPO, except for some differences
in redemption rights. The unit purchase option will be exercisable at any time, in whole or in part, commencing on the consummation
of the Company’s initial business combination, including the Business Combination, and expiring on the March 24, 2016. George
Kaufman, our director, is an employee of Chardan Capital Markets.



The holders of the
founders’ units (including the founders’ shares and founders’ warrants, and the ordinary shares underlying the
founders’ warrants), as well as the holders of the placement warrants (and underlying securities), will be entitled to registration
rights pursuant to an agreement signed at the time of the Company’s IPO. 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 founders’ units can
elect to exercise these registration rights at any time commencing three months prior to the date on which these ordinary 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 Business Combination. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the Company’s consummation of a business
combination, including the Business Combination. The Company will bear the expenses incurred in connection with the filing of any
such registration statements, except that in no event will Chardan Capital Markets, LLC have more than one demand registration
right at the Company’s expense. As of December 31, 2014, no such effective registration statement or post-effective amendment
has been filed.



The Company agreed
to pay to Kaiyuan Real Estate Development a total of $7,500 per month for office space, administrative services and secretarial
support for a period commencing on March 24, 2011 and ending on the earlier of the Company’s consummation of a business combination,
including the Business Combination, or the Company’s liquidation. Kaiyuan Real Estate Development is an affiliate of Mr.
Yong Hui Li, the Company’s Chairman. This arrangement was agreed to by Kaiyuan Real Estate Development for the Company’s
benefit and is not intended to provide Mr. Li compensation. From February 1, 2012 until January 31, 2013, the Company secured approximately
150 sq. foot of additional office space, administrative services and secretarial support in Taipei, Taiwan. Fees for the additional
office space, administrative services and secretarial support were included in the $7,500 monthly fee paid to Kaiyuan. This arrangement
terminated upon completion of the Business Combination. As of December 31, 2013, the Company owed Kaiyuan an aggregate of $203,312
under this arrangement. This amount is still outstanding as of August 31, 2015.



Prior to completion
of the Company’s IPO, Diana Liu, and William Yu loaned us an aggregate of $150,000 to cover expenses related to the Company’s
IPO. The loans were repaid in full on the consummation of the Company’s IPO. Diana Liu, and William Yu loaned us an aggregate
of $2,415,000 to fund the Company’s working capital requirements since the initial public offering as well as certain reimbursable
expenses incurred on behalf of the Company. Such loans did not bear interest prior to the Business Combination, but currently bear
interest at a rate of 10% per annum and are repayable on demand or at maturity. During 2015, certain such loans reached their maturity.
Diana Liu and William Yu have renewed these matured loans to a future date with an additional of 10% to the principal amounts (“Rollover”).
As of November 30, 2015, the Company owed Ms. Liu an aggregate of $2,790,974 including $244,474 of interest and $131,500 of Rollover
related to these loans.





30






Immediately following
the closing of the Business Combination on September 30, 2013, the Company entered into an interest-bearing promissory note with
its underwriter, Chardan Capital Markets, LLC for the total remaining amount of $889,833 due to the underwriter, at the rate of
5% per annum, maturing on December 31, 2013. If the note was not repaid by December 31, 2013, Chardan had the right to convert
the note and accrued interest into ordinary shares at a price of $9.10 per share. In connection with the convertible right, $184,584
was allocated to the value of the beneficial conversion feature. As of December 31, 2013, full amount of the beneficial conversion
feature has been recorded as interest expense. As of the date of this report, the convertible right had not been exercised. On
December 31, 2013 (the note’s maturity date), the Company was not able to repay the note. As a result of the payment default,
an additional default interest rate of 10% per annum is added to the original 5% per annum interest rate starting December 31,
2013. As of November 30, 2015, $269,546 of interest expense has been recorded in connection with this note. George Kaufman, one
of our directors, is an employee of Chardan Capital Markets.



Mr. Cesare Lanati (one of the sellers of
the subsdiaries and a current shareholder of the Group) performed maintenance and other services for the Group’s investment
properties. The Group leases office and parking spaces to Lanati and pays certain expenses on Lanati’s behalf. The amount
due from Lanati represents the amount due at December 31, 2014 and 2013. The amount due to Lanati was $0 and $3,773,041 at
December 31, 2014 and 2013 respectively (see note 27 — Trade and Other Payables). In October, 2014 and July, 2015,
the Group has reached various offsetting agreements with Lanati on offsetting of certain receivables (due from Lanati) and payables
(due to Lanati). The total amount offset in October, 2014 and July, 2015 were approximately $1,926,217 and $1,544,265 respectively.
(see Consolidated Financial Statements Note 20 — Trade and Other Receivables, and Note 27 — Trade and Other Payables)



All ongoing and future
transactions between the Company and any of the Company’s executive officers and directors or their respective affiliates,
including loans by the Company’s directors or any forgiveness of loans, will require prior approval in each instance by a
majority of the Company’s disinterested directors, who had access, at the Company’s expense, to the Company’s
attorneys or independent legal counsel.



| | C. | Interests of Experts and Counsel
| | -- | --------------------------------



Not required.





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



| | A. | Consolidated Statements and Other Financial Information.
| | -- | --------------------------------------------------------



See Item 18.



| | B. | Significant Changes.
| | -- | --------------------



None.





|ITEM9. | THE OFFER AND LISTING
|------ | ---------------------



| | A. | Offer and Listing Details.
| | -- | --------------------------



Prime’s ordinary shares, warrants
and units have been traded on the OTCPink market since October 11, 2013, under the symbols “PACQF,” “PAQWF”
and “PAQUF,” respectively. Each of Prime’s units consists of one ordinary share and one warrant, each to purchase
an additional share of Prime’s ordinary shares. Prime’s units commenced to trade on Nasdaq Stock Market on March 24,
2011. Prime’s ordinary shares and warrants commenced to trade separately from its units on March 25, 2011. Prime’s
securities were delisted from the Nasdaq Stock Market on October 10, 2013 due to failure to meet the minimum requirement of 300
shareholders.





31






The following tables set forth, for the
periods indicated, the high and low sale prices for our shares, warrants and units, respectively.



|                                     |  | Units |       |  | Ordinary Shares |   |       | Warrants | 
|------------------------------------ |  | ----- | ----- |  | --------------- | - | ----- | -------- | 
|                                     |  | High  |       |  | Low             |   |       | High     | 
|Annual Highs and Lows                |  |       |       |  |                 |   |       |          | 
|2011 (from March 24)                 |  | $     | 10.10 |  |                 | $ | 9.55  |          | 
|2012                                 |  |       | 10.33 |  |                 |   | 9.57  |          | 
|2013                                 |  |       | 17.95 |  |                 |   | 1.03  |          | 
|2014                                 |  |       | 2.06  |  |                 |   | 1.03  |          | 
|2015 (through December 31, 2015)     |  |       | 3.25  |  |                 |   | 1.40  |          | 
|                                     |  |       |       |  |                 |   |       |          | 
|Fiscal Quarterly Highs and Lows 2013 |  |       |       |  |                 |   |       |          | 
|First Quarter                        |  | $     | 10.50 |  |                 | $ | 9.95  |          | 
|Second Quarter                       |  |       | 10.02 |  |                 |   | 10.01 |          | 
|Third Quarter                        |  |       | 17.95 |  |                 |   | 10.69 |          | 
|Fourth Quarter                       |  |       | 14.35 |  |                 |   | 1.03  |          | 
|                                     |  |       |       |  |                 |   |       |          | 
|Fiscal Quarterly Highs and Lows 2014 |  |       |       |  |                 |   |       |          | 
|First Quarter                        |  |       | 1.03  |  |                 |   | 1.03  |          | 
|Second Quarter                       |  |       | 1.03  |  |                 |   | 1.03  |          | 
|Third Quarter                        |  |       | 2.06  |  |                 |   | 1.01  |          | 
|Fourth Quarter                       |  |       | 1.55  |  |                 |   | 1.22  |          | 
|                                     |  |       |       |  |                 |   |       |          | 
|Fiscal Quarterly Highs and Lows 2015 |  |       |       |  |                 |   |       |          | 
|First Quarter                        |  |       | 1.90  |  |                 |   | 1.40  |          | 
|Second Quarter                       |  |       | 3.25  |  |                 |   | 1.75  |          | 
|Third Quarter                        |  |       | 3.00  |  |                 |   | 2.70  |          | 
|Fourth Quarter                       |  |       | 3.25  |  |                 |   | 2.70  |          | 
|                                     |  |       |       |  |                 |   |       |          | 
|Monthly Highs and Lows               |  |       |       |  |                 |   |       |          | 
|January 2015                         |  |       | 1.90  |  |                 |   | 1.40  |          | 
|February 2015                        |  |       | 1.90  |  |                 |   | 1.90  |          | 
|March 2015                           |  |       | 1.90  |  |                 |   | 1.75  |          | 
|April 2015                           |  |       | 2.15  |  |                 |   | 1.75  |          | 
|May 2015                             |  |       | 2.35  |  |                 |   | 2.15  |          | 
|June 2015                            |  |       | 3.25  |  |                 |   | 2.35  |          | 
|July 2015                            |  |       | 3.00  |  |                 |   | 3.00  |          | 
|August 2015                          |  |       | 3.00  |  |                 |   | 3.00  |          | 
|September 2015                       |  |       | 3.00  |  |                 |   | 2.70  |          | 
|October 2015                         |  |       | 2.70  |  |                 |   | 2.70  |          | 
|November 2015                        |  |       | 2.70  |  |                 |   | 2.70  |          | 
|December 2015                        |  |       | 3.25  |  |                 |   | 2.70  |          | 



| | B. | Plan of Distribution
| | -- | --------------------



Not Required.



| | C. | Markets
| | -- | -------



Prime’s ordinary
shares, warrants and units have been traded on the OTCPink market since October 11, 2013, under the symbols “PACQF,”
“PAQWF” and “PAQUF,” respectively. Each of Prime’s units consists of one ordinary share and one warrant,
each to purchase an additional share of Prime’s ordinary shares. Prime’s units commenced to trade on Nasdaq Stock Market
on March 24, 2011. Prime’s ordinary shares and warrants commenced to trade separately from its units on March 25, 2011. Prime’s
securities were delisted from the Nasdaq Stock Market on October 10, 2013.





32






| | D. | Selling Shareholders
| | -- | --------------------



Not Required.



| | E. | Dilution
| | -- | --------



Not Required.



| | F. | Expenses of the Issue
| | -- | ---------------------



Not Required.





|ITEM10. | ADDITIONAL INFORMATION
|------- | ----------------------



| | A. | Share Capital
| | -- | -------------



As of December 31, 2015, we had a total
of 50,000,000 authorized ordinary shares at $0.001 par value, of which 2,040,451 ordinary shares were issued and outstanding. The
difference of 388,081 shares between balance at December 31, 2014 and December 31, 2015 is due to (i) 134,200 ordinary shares being
cancelled in connection with the closing of the  unwinding transaction described above, and (ii) 253,881 of the founders’
ordinary shares being forfeited as a result of pre-determined stock target not being reached pursuant to the terms of certain agreements
entered into by the Company’s founders at the time of the Company’s IPO in 2011.



The detail of the movement of the number
of shares issued and outstanding at the beginning and end of the year is as follow:



|                              |  | Number of shares ordinary shares issued and outstanding |          
|----------------------------- |  | ------------------------------------------------------- | ---------
|                              |  |                                                         |          
|Balance at December 31, 2013  |  |                                                         | 3,179,721
|Forfeiture of founders shares |  |                                                         | (253,881 
|Derecognition of subsidiary   |  |                                                         | (497,308 
|Balance at December 31, 2014  |  |                                                         | 2,428,532



We have issued warrants to purchase 7,241,054 ordinary shares,
options to purchase 215,000 units consisting of one ordinary share and one warrant to purchase an ordinary share, and options to
purchase 195,000 ordinary shares as of December 31, 2015.



| | B. | Memorandum and Articles of Association
| | -- | --------------------------------------



Amended and Restated Memorandum and
Articles of Association



Registered Office. Under our Amended and
Restated Memorandum of Association, our Registered Office is located at the offices of Codan Trust Company (Cayman) Limited, Cricket
Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.



Objects and Purposes. Under Article 3 of
our Amended and Restated Memorandum of Association, the objects for which we are established are unrestricted.



Directors. Under Article 94 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
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (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
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (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.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------





33






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, and their respective affiliates.



Rights, Preferences and Restrictions Attaching
to our ordinary shares. We are authorized to issue 50,000,000 ordinary shares, par value $0.001. As of the date of this report,
2,040,451 ordinary shares are issued and outstanding. Each share 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 ordinary shares for such consideration as the board
of directors determines.



Alteration of Rights. If, at any time,
our share capital 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 general 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. Our annual meeting may be held
at such time and place as their chairman or any two directors or any director and the secretary or the board of directors shall
appoint. The chairman or any two directors or any director and the secretary or the board of directors may convene an extraordinary
general meeting whenever in their judgment such a meeting is necessary. At least 10 clear days notice of an annual 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 annual meeting, and,
if practicable, the other business to be conducted at the meeting. At least 10 clear days notice of an extraordinary general 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 the general nature of the business to be considered 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 so agreed by (i) all
of the shareholders entitled to attend and vote thereat in the case of an annual meeting, and (ii) 75% of the shareholders entitled
to attend and vote thereat in the case of an extraordinary general meeting. The accidental omission 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 Cayman Islands law).



| | C. | Material Contracts
| | -- | ------------------



Transaction Value Agreement



In connection with
the Business Combination, we entered into transaction value agreements (each, a “TVA” and collectively, the “TVAs”)
with the sellers of the Subsidiaries we acquired in the Business Combination. Each of the TVAs are based on the same form of agreement,
with the only material difference being the respective parties thereto.



Pursuant to the TVAs,
Prime has agreed to make the sellers whole in the event that the average sales price of all of the shares issued pursuant to the
purchase agreements that are sold in public market transactions is less than $10 per share, by issuing additional ordinary shares
of Prime to the sellers. The make whole will be available only after the respective seller has sold all of the shares issued pursuant
to the applicable purchase agreement. The number of shares issuable pursuant to the make whole provisions of the TVAs is the quotient
of the total shortfall between $10 and the average price for all such shares sold in public market transactions, divided by the
then current fair market value of the combined company’s ordinary shares. Prime will be obligated to make additional issuances
of shares to the extent the sellers have a shortfall after disposing of any shares issued pursuant to the make whole provisions.
The make whole will terminate, and Prime will be entitled to repurchase any unsold shares issued, if any, pursuant to the make
whole for an aggregate purchase price of $1, once the total proceeds received by the applicable seller for any sales of shares
(public or private) together with any cash dividend distributions received from the combined company equals the product of the
number of shares issued pursuant to the applicable purchase agreement multiplied by $10. The terms of the TVAs do not become
effective until there is an effective registration statement covering such shares. The registration rights agreement entered into
with the sellers requires the Company to file a registration statement covering these shares as soon as practicable. There are
no liquidating damage or penalty provisions included in the registration rights agreement.





34






Each of the TVAs grants
the applicable seller a call option on the equity interest of the respective entity acquired by us in the Business Combination
in the event that such seller is unable to sell a sufficient number of shares to reach certain dollar targets in certain periods
set forth in the TVAs. Notwithstanding the foregoing and provided there is any effective registration statement covering such shares,
if the total value of shares traded in the public market equals the dollar target for a given period, then the call option cannot
be exercised for such period. In order to exercise the call option, a seller must deliver to the combined company all of the proceeds
received from the sale of shares issued pursuant to the applicable purchase agreement and TVA, together with any such shares that
have not been sold by the seller, but less certain franchise tax payments made by the sellers.



The Company, LuxCo,
Messrs. Rotondi and Failla and Giuseppe Pantaleo, three of the sellers of the Subsidiaries, entered into an agreement which terminated
the TVA dated September 30, 2013 among them, resulting in there being no TVAs outstanding as of December 31, 2014.



| | D. | Exchange controls
| | -- | -----------------



Under Cayman Islands
law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions
that affect the remittance of dividends, interest or other payments to nonresident holders of our shares.



| | E. | Taxation
| | -- | --------



The
following summary of the material Cayman Islands and U.S. federal income tax consequences of an investment in our units, ordinary
shares and redeemable warrants to acquire our ordinary shares, sometimes referred to individually or collectively in this summary
as our “securities,” is based upon laws and relevant interpretations thereof in effect as of the date of this report,
all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in
our securities, such as the tax consequences under state, local and other tax laws.



Cayman Islands Taxation



The
Government of the Cayman Islands will not, under existing legislation, impose any income, corporate or capital gains tax, estate
duty, inheritance tax, gift tax or withholding tax upon us or our security holders. The Cayman Islands are not party to any double
taxation treaties.



No
Cayman Islands stamp duty will be payable by our security holders in respect of the issue or transfer of our securities. However,
an instrument transferring title to our securities, if brought to or executed in the Cayman Islands, would be subject to Cayman
Islands stamp duty.



We
have received an undertaking from the Governor-in-Cabinet of the Cayman Islands that, in accordance with section 6 of the Tax Concessions
Law (1999 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in
the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations
and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty
or inheritance tax shall be payable (i) on our securities, debentures or other obligations or (ii) by way of the withholding in
whole or in part in connection with the payment of a dividend or other distribution of income or capital by us to our security
holders or a payment by us of principal or interest or other sums due under a debenture or other obligation.



United States Federal Income
Taxation



General



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



Because
the components of a unit are separable at the option of the holder, the holder of a unit generally should be treated, for U.S.
federal income tax purposes, as the owner of the underlying ordinary share and one redeemable warrant components of the unit, as
the case may be. As a result, the discussion below of the U.S. federal income tax consequences with respect to actual holders of
ordinary shares and redeemable warrants should also apply to holders of units (as the deemed owners of the underlying ordinary
shares and redeemable warrants which comprise the units).





35






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 for U.S. federal income tax purposes:



| | · | 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 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
summary is based on the Internal Revenue Code of 1986, as amended, or 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 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;
| | - | ------------------------------------------------------



| | · | broker-dealers;
| | - | ---------------



| | · | persons that are subject to the mark-to-market accounting rules under Section 475 of the Code;
| | - | ----------------------------------------------------------------------------------------------



| | · | tax-exempt entities;
| | - | --------------------



| | · | governments or agencies or instrumentalities thereof;
| | - | -----------------------------------------------------



| | · | insurance companies;
| | - | --------------------



| | · | regulated investment companies;
| | - | -------------------------------



| | · | real estate investment trusts;
| | - | ------------------------------



| | · | certain expatriates or former long-term residents of the United States;
| | - | -----------------------------------------------------------------------



| | · | persons that actually or constructively own 5 percent or more of our voting shares;
| | - | -----------------------------------------------------------------------------------



| | · | persons that acquired our securities pursuant to the exercise of employee share options, in connection with employee share 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;
| | - | ---------------------------------------------------------



| | · | controlled foreign corporations; or
| | - | -----------------------------------



| | · | passive foreign investment companies.
| | - | -------------------------------------





36






This
discussion does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, or 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 generally will 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 ordinary shares 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, or “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 IS ONLY A SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION
OF OUR SECURITIES. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR
TAX CONSEQUENCES TO SUCH INVESTOR 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



While
not free from doubt, each unit should be treated for U.S. federal income tax purposes as an investment unit consisting of one ordinary
share and one redeemable warrant to acquire one ordinary share. For U.S. federal income tax purposes, each holder of a unit must
allocate the purchase price of a unit between the ordinary 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 the ordinary share or to the redeemable warrant
will be the holder’s tax basis in such share or redeemable warrant, as the case may be.



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 ordinary share and the redeemable warrant that comprise a unit. The balance of this discussion assumes that our 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
Paid on Ordinary Shares



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 ordinary shares. A cash distribution
on our 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 ordinary shares. Any remaining excess generally will be treated as gain from the sale or other taxable disposition of such
ordinary shares and will be treated as described under “Taxation on the Disposition of Ordinary Shares and Redeemable Warrants”
below.



With
respect to non-corporate U.S. Holders, such dividends 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 Ordinary Shares and Redeemable Warrants” 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. Under published IRS authority, 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 do not include
the OTC Pink market. Because our ordinary shares are currently listed and traded only on the OTC Pink market, any dividends paid
on such shares are not expected to qualify for the lower rate. 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 ordinary shares.





37






Possible Constructive Distributions



The
terms of each redeemable warrant provide for an adjustment to the number of shares for which the redeemable warrant may be exercised
or to the exercise price of the redeemable warrant in certain events. An adjustment which 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 ordinary shares which is taxable to the U.S. Holders of such ordinary shares as
described under “— Taxation of Cash Distributions Paid on Ordinary Shares” 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.



Taxation on the Disposition of
Ordinary Shares and Redeemable Warrants



Upon
a sale or other taxable disposition of our ordinary shares or redeemable warrants (which, in general, would include a distribution
in connection with our liquidation or a redemption of ordinary shares, as described in “Taxation on the Redemption of Ordinary
Shares” below, or a redemption of redeemable warrants), 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 ordinary shares or redeemable warrants. See “Exercise or Lapse of Redeemable Warrants” below
for a discussion regarding a U.S. Holder’s basis in the ordinary shares acquired pursuant to the exercise of redeemable warrants.



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 are generally
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 ordinary shares or redeemable warrants exceeds one year. The deductibility
of capital losses is subject to various limitations.



Taxation on the Redemption of
Ordinary Shares



In
the event that a U.S. Holder receives cash pursuant to a redemption of its ordinary shares, the redemption generally will be treated
as a sale of our ordinary shares, rather than as a distribution. The redemption, however, will be treated as a distribution and
taxed as described in “— Taxation of Cash Distributions Paid on Ordinary Shares,” 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, which provide, among other things, that the
U.S. Holder is deemed to own any shares that it holds a warrant to acquire) 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 ordinary shares and, taking into account the effect of redemptions by other shareholders, its percentage ownership
(including constructive ownership) in us 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 ordinary shares.



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 applicable 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.



Exercise or Lapse of Redeemable
Warrants



Subject
to the PFIC rules discussed below, a U.S. Holder 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 a redeemable warrant is allowed to lapse unexercised, a U.S. Holder will generally recognize a capital loss equal
to such holder’s adjusted tax basis in the redeemable warrant.





38






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.



Based
on the composition and estimated values of our assets and the nature of our income for our 2014 taxable year, we believe that we
are a PFIC for such taxable year.



If
we are a PFIC, as we believe we were in 2014, for any taxable year (or portion thereof) that is included in the holding period
of a U.S. Holder of our ordinary shares or redeemable warrants and, in the case of our ordinary shares, the U.S. Holder did not
make either a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) ordinary
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 ordinary 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 ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the ordinary shares).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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 ordinary 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 a PFIC, as we believe we were in 2014, a U.S. Holder may avoid the PFIC tax consequences described above in
respect to our ordinary 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 generally 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 if we are treated as a PFIC for that taxable
year. 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 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 ordinary shares), the QEF election will apply to the newly acquired ordinary shares, but the adverse tax consequences relating
to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply
with respect to such newly acquired ordinary shares (which generally will be deemed to have a holding period for purposes of the
PFIC rules that includes the period the U.S. Holder held the redeemable warrants), unless the U.S. Holder makes a purging election.
The purging election creates a deemed sale of such shares at their fair market value. The gain recognized by the purging election
will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As
a result of the purging election, the U.S. Holder will increase the adjusted tax basis in its ordinary shares acquired upon the
exercise of the redeemable warrants by the gain recognized and also will have a new holding period in such shares for purposes
of the PFIC rules.





39






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. Therefore, a U.S. Holder’s QEF election may not be effective. Any U.S. Holder wishing to make a QEF election
should consult with its own tax advisor.



If
a U.S. Holder has made a QEF election with respect to our ordinary shares, and the special tax and interest charge rules do not
apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or
is deemed to hold) such shares or a QEF election, along with a purge of the PFIC taint pursuant to a purging election, as described
below), any gain recognized on the sale or other taxable disposition of our ordinary 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 generally 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 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 ordinary 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 ordinary shares, however, will not be subject to the PFIC
tax and interest charge rules discussed above in respect to such shares. In addition, such U.S. Holder will not be subject to the
QEF inclusion regime with respect to such shares for any 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 ordinary 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 sold the ordinary 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 ordinary shares for purposes of the PFIC rules.



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





40






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, which does not include the OTC Pink 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. Because
our ordinary shares are currently listed and traded only on the OTC Pink market, such shares are not expected to be treated as
marketable stock for purposes of the election. 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 ordinary shares under their particular circumstances.



If
we are a PFIC, as we believe we were for 2014, and, at any time, have a foreign subsidiary that is classified as a PFIC, a U.S.
Holder of our ordinary shares should be deemed to own a portion of the shares of such lower-tier PFIC, and 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 were otherwise 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, we do not plan to make annual determinations
or otherwise notify U.S. Holders of the status of any such lower-tier PFIC. There is also no assurance that we will be able to
cause the lower-tier PFIC to provide the required information. A mark-to-market election generally would not be available with
respect to such a lower-tier PFIC. 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 ordinary shares and redeemable warrants should consult their
own tax advisors concerning the application of the PFIC rules to our ordinary shares and redeemable warrants under their particular
circumstances.



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 such 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 a redeemable warrant, or the lapse of a redeemable warrant
held by a Non-U.S. Holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a redeemable
warrant by a U.S. Holder, as described under “U.S. Holders — Exercise or Lapse of Redeemable Warrants,” above.





41






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.



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 our securities by a U.S. Holder (other
than an exempt recipient), in each case who (a) fails to provide an accurate taxpayer identification number; (b) is notified by
the IRS that backup withholding is required; or (c) 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
| | -- | ---------------------------



Prime
paid a dividend to its public shareholders of one warrant for every four shares that were not redeemed in connection with the Business
Combination on October 24, 2013. Except for the foregoing, the Company does not have future dividend plans and any future dividend
policy will be determined by the Company’s Board of Directors.



| | G. | Statement by Experts
| | -- | --------------------



Not
applicable.



| | H. | Documents on Display
| | -- | --------------------



Documents
concerning us that are referred to in this document may be inspected at our principal executive offices at No. 322, Zhongshan East
Road, Shijiazhuang, Hebei Province, 050011 People’s Republic of China.



In
addition, we will file annual reports and other information with the Securities and Exchange Commission. We will file annual reports
on Form 20-F and submit other information under cover of Form 6-K. As a foreign private issuer, we are exempt from the proxy requirements
of Section 14 of the Exchange Act and our officers, directors and principal shareholders will be exempt from the insider short-swing
disclosure and profit recovery rules of Section 16 of the Exchange Act. Annual reports and other information we file with the Commission
may be inspected at the public reference facilities maintained by the Commission at Room 1580, 100 F. Street, N.E., Washington,
D.C. 20549, and copies of all or any part thereof may be obtained from such office upon payment of the prescribed fees. You may
call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference room and you can request
copies of the documents upon payment of a duplicating fee, by writing to the Commission. In addition, the Commission maintains
a web site that contains reports and other information regarding registrants (including us) that file electronically with the Commission
which can be assessed at http://www.sec.gov.



| | I. | Subsidiary Information
| | -- | ----------------------



Not
required.





42






|ITEM11. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|------- | ---------------------------------------------------------



Interest Rate
Risk



The Group’s exposure
to interest rate risk primarily relates to its outstanding debts, which is mostly in the form of a variable interest rate mortgage.
The current weighted average interest rate on such debts is 3.5%.



According to the Group’s
lease agreements with its tenants, there is a clause allowing the Group to increase the lease payment at the end of each year term
in connection with the official inflation rate published by the Italian government. A 1% inflation rate would yield a 1% increase
in rental income. Although there is no direct correlation between the increase of the inflation rate and the increase in interest
rate published by the Italian Central Bank, the increase of interest rate has been historically significantly less than the inflation
rate. This clause in the lease agreements aims to increase the level of cash inflow for covering the variable interest rate mortgage.



The current weighted
average interest rate on the variable interest rate mortgage is 3.5%. The following sensitivity analysis demonstrates different
scenarios that may occur in the future. Based on the following sensitivity analysis, a 1% increase in inflation with a 0.25% increase
in interest rate would yield a 1% increase in the rental income and 16% increase in the gross profit before operating expenses.
If the interest rate increases in a significant lower rate than the inflation rate, the effect on net profit would be favorable.



|                                                                                                      |  | Current at 3.5% weighted
    average interest rate |           |  | Assuming 1% inflation
    and 0.25% interest rate increase |   |           | Assuming 1% inflation
    and 0.5% interest rate increase |  |   | Assuming 2% inflation
    and 0.5% interest rate increase |   |  | Assuming 2% inflation
    and 1% interest rate increase |           |   | Assuming 3% inflation
    and 1% interest rate increase |   |           | Assuming 3% inflation
    and 1.5% interest rate increase | 
|----------------------------------------------------------------------------------------------------- |  | -------------------------------------------------- | --------- |  | ---------------------------------------------------------- | - | --------- | --------------------------------------------------------- |  | - | --------------------------------------------------------- | - |  | ------------------------------------------------------- | --------- | - | ------------------------------------------------------- | - | --------- | --------------------------------------------------------- | 
|                                                                                                      |  |                                                    |           |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|Current annual rental based on existing lease agreements                                              |  | $                                                  | 3,725,819 |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|                                                                                                      |  |                                                    |           |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|Adjusted annual rental income according to the inflation rate                                         |  |                                                    |           |  |                                                            | $ | 3,763,078 |                                                           |  | $ | 3,763,078                                                 |   |  | $                                                       | 3,800,336 |   |                                                         | $ | 3,800,336 |                                                           | 
|                                                                                                      |  |                                                    |           |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|$ Increase
    in rental income                                                                       |  |                                                    |           |  |                                                            | $ | 37,259    |                                                           |  | $ | 37,259                                                    |   |  | $                                                       | 74,517    |   |                                                         | $ | 74,517    |                                                           | 
|                                                                                                      |  |                                                    |           |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|% increase in rental income with inflation rate
    adjustment                                        |  |                                                    |           |  |                                                            |   | 1         | %                                                         |  |   | 1                                                         | % |  |                                                         | 2         | % |                                                         |   | 2         | %                                                         | 
|                                                                                                      |  |                                                    |           |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|Annual finance expense                                                                                |  |                                                    | 1,653,774 |  |                                                            |   | 1,139,024 |                                                           |  |   | 1,214,959                                                 |   |  |                                                         | 1,214,959 |   |                                                         |   | 1,366,828 |                                                           | 
|                                                                                                      |  |                                                    |           |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|Effect of interest expense on the gross profit
    before operating expenses                          |  |                                                    |           |  |                                                            |   | 552,009   |                                                           |  |   | 476,074                                                   |   |  |                                                         | 513,332   |   |                                                         |   | 361,463   |                                                           | 
|                                                                                                      |  |                                                    |           |  |                                                            |   |           |                                                           |  |   |                                                           |   |  |                                                         |           |   |                                                         |   |           |                                                           | 
|% increase (decrease) on effect of interest expense
    on the gross profit before operating expenses |  |                                                    |           |  |                                                            |   | 15        | %                                                         |  |   | 13                                                        | % |  |                                                         | 14        | % |                                                         |   | 10        | %                                                         | 





43






One Subsidiary has
stipulated Interest Rate Swap agreements linked to floating rate medium-term leasing contracts with the aim of ensuring itself
a fixed rate on their operations. The notional value as at December 31, 2014 is equal to $1,668,905. The fair value as at December
31, 2014 was $221,191, whilst the change in fair value during 2014 amounted to $68,821.



Impact of Inflation



Each of the Subsidiaries
are exposed to the impact of inflation primarily relating to its operating expenses, and the variable interest rate mortgages it
carries. There is no direct correlation between the increase of the inflation rate and the increase in interest rate published
by the Italian Central Bank; however, the increase of interest rate has been historically significantly less than the inflation
rate. The clause allowing the Group to increase the lease payment each year in connection with inflation rate (see note “Interest
Rate Risk”) is aimed at facilitating an increased level of cash inflow for covering the inflation affecting operating expenses
and the increase in the variable interest rate mortgage.



Foreign Currency
Risk



The Euro is the functional
and reporting currency for the Group’s operation in Italy. All transactions in currencies other than the functional currency
during the year are recorded at the exchange rates on the date of such transactions. The Subsidiaries have not entered into transactions
denominated in a currency other than their functional currency and hence the exposure to foreign currency risk within the Subsidiaries
is limited. However, Prime’s functional and reporting currency is the U.S. dollar. During consolidation of Subsidiaries’
and Prime’s financial statements, monetary assets and liabilities of the Subsidiaries are translated from Euro into U.S.
dollars at the exchange rates on the reporting date. The historical amounts in the statements of income/(loss) and comprehensive
income/(loss) are translated at an appropriate weighted average rate for the period presented. The exchange differences are recorded
in our consolidated statements of income/(loss) and comprehensive income/(loss). The amounts in the statements of financial position
are translated at the historical exchange rate as of the date of the report. Therefore, fluctuations in exchange rates may affect
our consolidated statements of financial position.



According to the historical
exchange rate published by U.S. Federal Reserve Bank, the exchange rate between Euro and U.S. dollar has been relatively stable
for the past 10 years. The average exchange rate of U.S. dollar to Euro from 2004 to 2014 was $1.3314 to €1, with a 12.18%
decrease in the 2014 year-end Euro currency exchange rate as compared to the US Dollar from the prior year.





|ITEM12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|------- | ------------------------------------------------------



The description of
securities other than equity securities included under the heading “Description of Securities” in the company’s
registration statement on Form F-1 (File No. 333-171777), initially filed with the Securities & Exchange Commission on January
20, 2011, as amended, is hereby incorporated by reference.





PART II



|ITEM13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|------- | -----------------------------------------------



Immediately following
the closing of the Business Combination on September 30, 2013, the Company entered into an interest-bearing promissory note with
its underwriter, Chardan Capital Markets, LLC for the total remaining amount of $889,833 due to the underwriter at the rate of
5% per annum, maturing on December 31, 2013. If the note was not repaid by December 31, 2013, Chardan had the right to convert
the note and accrued interest into ordinary shares at a price of $9.10 per share. In connection with the convertible right, $184,584
was allocated to the value of the beneficial conversion feature. As of December 31, 2013, the full amount of the beneficial conversion
feature has been recorded as interest expense. As of the date of this report, the convertible right had not been exercised. On
December 31, 2013 (the note’s maturity date), the Company was not able to repay the note. As a result of the payment default,
an additional default interest rate of 10% per annum is added to the original 5% per annum interest rate starting December 31,
2013. As of October 31, 2015, $258,393 of interest expense has been recorded in connection with this note.



During 2014, one of
the Subsidiaries missed certain scheduled repayments on a bank loan totaling $193,011 in principal and $22,680 in interest. Except
for these missed scheduled repayments, the Group has been current on all scheduled repayments. According to the mortgage agreement,
missing scheduled payments can cause the bank to request immediate repayment of the residual debt totaling approximately $1,515,720
as of December 31, 2014. Management is negotiating with the bank to postpone repayment for 12 months. Separately during 2014, one
of our other Subsidiaries missed certain scheduled finance lease payments to the leasing department of the same bank. As of the
date of this report, the bank official from the mortgage department, on the Group’s behalf, is in negotiation with their
leasing department on the issuance of a final moratorium. As the negotiation is in the final stage, management believes the risk
of the bank demanding immediate repayment of the full residual debt is very low. However, there can be no assurance the bank will
not decide to refuse granting the postponement to the Group during this final negotiation stage and request for immediate repayment
of the residual debt. As a result of this possibility, the Management has classified such residual debt as current loans and borrowings
as of December 31, 2014.





44






During 2014, four of
the Subsidiaries missed certain scheduled payment to four finance lease creditors, totaling approximately $244,234 in principal
and $241,328 in interest as at December 31, 2014. Except for these missed scheduled payments, the Group has been current with all
the scheduled payments. Pursuant to the leasing agreement, the finance lease creditors have the right to declare the borrower in
default in case of missing scheduled payments via official written notice and demand full payment of outstanding principal balance
at the time of such default declaration. Management has been negotiating with all the affected finance lease creditors for modification
repayment plans on these missed payments. The Group remitted full missed payments to one of the finance lease creditors in the
second quarter of 2015 and thus corrected the default. As of the date of this report, the remaining finance lease creditors are
going through an internal approval process relating to the proposed modified repayment terms. The communications between the Group
and the affected finance lease creditors are ongoing and positive. Management believes there is very low risk of the finance lease
creditors declaring the borrowers in default and demanding immediate full principal payment during the approval process. However,
there can be no assurance the finance lease creditors will not decide to refuse granting the requested modification repayment plans
to the Group during this approval process and request for immediate repayment of the residual debt. As a result of this possibility,
the Management has classified such residual finance leases as current loans and borrowings as of December 31, 2014.





|ITEM14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|------- | ----------------------------------------------------------------------------



Not applicable.





|ITEM15. | CONTROLS AND PROCEDURES
|------- | -----------------------



| | A. | Disclosure Controls and Procedures
| | -- | ----------------------------------



An evaluation of the
effectiveness of our disclosure controls and procedures as of December 31, 2014 was made under the supervision and with the participation
of our management, including our Chief Executive Officer and Interim Chief Financial Officer. Based on that evaluation, our Chief
Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were not effective
as of the end of the period covered by this report due to our internal control over financial reporting not being effective, as
described further below.



Disclosure controls
and procedures are designed to ensure that information required to be disclosed by us in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities
and Exchange Commission rules and forms.



| | B. | Management’s Annual Report on Internal Control Over Financial Reporting
| | -- | -----------------------------------------------------------------------



Our internal control
over financial reporting is a process designed by, or under the supervision of, our Interim Chief Executive Officer and Interim
Chief Financial Officer and effected by our board of directors to provide reasonable assurance regarding the reliability of our
financial reporting and the preparation of our financial statements for external reporting purposes in accordance with generally
accepted accounting principles. Internal control over financial reporting includes policies and procedures that pertain to the
maintenance of records that in reasonable detail accurately reflect the transactions and dispositions of our assets; provide reasonable
assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with IFRS
and its related interpretations, and that our receipts and expenditures are being made only in accordance with the authorization
of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of the unauthorized
acquisition, use or disposition of our assets that could have a material effect on our financial statements.



Under the supervision
and with the participation of our current management, including our Interim Chief Executive Officer and Interim Chief Financial
Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria
established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission as issued in 1992. Based on this evaluation under the criteria established in Internal Control – Integrated Framework,
our management concluded that our internal control over financial reporting was not effective due to material weaknesses in our
internal control over financial reporting that applied as of December 31, 2014, and such weaknesses continue to apply to date.
Material weaknesses in our internal controls include the lack of periodic interim review of the financial statements by the management,
lack of segregation of duties, untimely reconciliation, improper checks and balances, lack of audit committee, and the fact that
the Company’s review procedures in connection with financial reporting are limited. Our current management further identified
other weaknesses in entity level controls, including, but not limited to, control environment, risk assessment processes, information
sharing, and monitoring processes. Such weaknesses resulted in the Company’s restatement of its 2013 financial statements.
Our current management intends to design and implement processes and procedures that will provide reasonable assurance regarding
the reliability of our financial reporting and preparation of financial statements for external purposes in accordance with IFRS
and its related interpretations as funding becomes available to be able to put the components in place.





45






|ITEM16. | [RESERVED]
|------- | ----------





|ITEM16A. | AUDIT COMMITTEE FINANCIAL EXPERT.
|-------- | ---------------------------------



We
do not currently have an audit committee. Our board of directors believes that Mr. Kaufman qualifies as “audit committee
financial expert”, as such term is defined in the rules of the Securities and Exchange Commission, and qualifies as an independent
director under the Nasdaq Marketplace Rules.





|ITEM 16B. | CODE OF ETHICS.
|--------- | ---------------



In
November 2010, our board of directors adopted a code of ethics that applies, and following the Business Combination will continue
to apply, to our directors, officers and employees.





|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|--------- | ---------------------------------------



The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by Marcum LLP (“Marcum”), our independent registered public accounting firm for the year ended December 31, 2014
and WeiserMazars LLP (“WM”), our principal external independent registered public accounting firm, for the year ended
December 31, 2013.



|                      |  | 2014 |         |  | 2013 |  
|--------------------- |  | ---- | ------- |  | ---- | -
|                      |  |      |         |  |      |  
|Audit fees(1)         |  | $    | 226,196 |  |      | $
|Audit related fees(2) |  |      | 52,500  |  |      |  
|Tax fees              |  |      | –       |  |      |  
|Total fees            |  | $    | 278,696 |  |      | $



| | (1) | “Audit fees” means the aggregate fees billed for an audit of our consolidated financial statements.
| | --- | ---------------------------------------------------------------------------------------------------



| | (2) | “Audited related fees” means the aggregate fees billed for time incurred other than audit of our consolidated financial statements, such as fees in connection with 2013 consolidated financial statements restatement with and related 6-K or 20-F amendment by prior or current auditors, and review of 2014 20-F filing by prior auditors.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our
board of directors is to pre-approve all auditing services and permitted non- audit services to be performed for us by our independent
auditor, including the fees and terms thereof (subject to the de minimums exceptions for non-audit services described in section
10A(i)(1)(B) of the Exchange Act which are approved by the audit committee or our board of directors prior to the completion of
the audit).





|ITEM16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
|-------- | -----------------------------------------------------------



None.





|ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.
|--------- | -----------------------------------------------------------------------



Not applicable.





|ITEM 16F. | CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT.
|--------- | ----------------------------------------------



On January 29, 2015,
the Board of Directors of Prime voted to dismiss its independent registered public accounting firm WM. On January 29, 2015, Prime
engaged Marcum as its new independent registered public accounting firm. The decision to retain Marcum was approved by Prime’s
Board of Directors.





46






WM’s report on
Prime’s financial statements for the fiscal year ended December 31, 2013 did not contain an adverse opinion or disclaimer
of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles, except that the opinion of
WM for the fiscal year ended December 31, 2013 did include a statement that there was substantial doubt as to Prime’s ability
to continue as a going concern.



In addition, as discussed
in Item 15.B above, the current management has identified material weaknesses in our internal control over financial reporting
that include the lack of periodic interim review of the financial statements by the management, lack of segregation of duties,
untimely reconciliation, improper checks and balances, lack of audit committee participation, and the fact that the Company’s
review procedures in connection with financial reporting are limited. Our current management further identified other weaknesses
in entity level controls, including, but not limited to, control environment, risk assessment processes, information sharing, and
monitoring processes. Such weaknesses resulted in the Company’s restatement of its 2013 financial statements. Our current
management intends to design and implement processes and procedures that will provide reasonable assurance regarding the reliability
of our financial reporting and preparation of financial statements for external purposes in accordance with IFRS and its related
interpretations as funding becomes available to be able to put the components in place.



During Prime's fiscal
year ended December 31, 2013 and the subsequent period through the date of WM’s dismissal, there were no disagreements with
WM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if
not resolved to WM’s satisfaction, would have caused WM to make reference to the subject matter of the disagreement(s) in
connection with its report on Prime’s consolidated financial statements for such period.



During Prime’s
year ended December 31, 2013 and the subsequent period through the date of WM’s dismissal, there were no “reportable
events” (defined below) requiring disclosure pursuant to Item 16F(a)(1)(v) of Form 20-F. As used herein, the term “reportable
event” means any of the items listed in paragraphs (a)(1)(v)(A)-(D) of Item 16F of Form 20-F.



Prime provided WM with
a copy of the foregoing disclosures and requested that WM review such disclosures and provide a letter addressed to the Securities
and Exchange Commission (“SEC”) as specified by Item 16F(a)(3) of Form 20-F. Incorporated by reference as Exhibit 16.1
is a copy of WM’s letter dated February 2, 2015, addressed to the SEC relating to the statements made by Prime.



During Prime’s
fiscal years ended December 31, 2014 and 2013 and through January 29, 2015, neither Prime nor anyone on its behalf consulted Marcum
regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the
type of audit opinion that might be rendered on Prime’s consolidated financial statements, and neither a written report nor
oral advice was provided to Prime that Marcum concluded was an important factor considered by Prime in reaching a decision as to
any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined
in Item 16F(a)(1)(iv) of Form 20-F and the related instructions to Item 304 of Regulation S-K) or a reportable event.





|ITEM16G. | CORPORATE GOVERNANCE
|-------- | --------------------



Not applicable.





|ITEM16H. | MINE SAFETY DISCLOSURE
|-------- | ----------------------



Not applicable.





PART III



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



We have elected to provide financial statements
pursuant to Item 18.





|ITEM18. | FINANCIAL STATEMENTS
|------- | --------------------



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





47






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



|Exhibit
 No. | Description                                                                                                                                                                        
|------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1          | Amended and Restated Articles of Association(1)                                                                                                                                    
|1.2          | Amendment to Amended and Restated Articles of Association(2)                                                                                                                       
|2.1          | Specimen Unit Certificate(1)                                                                                                                                                       
|2.2          | Specimen Ordinary Share Certificate(1)                                                                                                                                             
|2.3          | Specimen Public Redeemable Warrant Certificate(1)                                                                                                                                  
|2.4          | Specimen Founder Warrant Certificate(1)                                                                                                                                            
|2.5          | Specimen Placement Warrant Certificate(1)                                                                                                                                          
|2.6          | Form of Warrant Agreement(1)                                                                                                                                                       
|2.7          | Form of Unit Purchase Option(1)                                                                                                                                                    
|4.1          | Form of Underwriting Agreement(1)                                                                                                                                                  
|4.2          | Form of Letter Agreement by and among the Registrant, Chardan Capital Markets, LLC and the founders(1)                                                                             
|4.3          | Promissory Note dated March 25, 2010 by the Registrant to Diana Chia-Huei Liu(1)                                                                                                   
|4.4          | Promissory Note dated March 25, 2010 by the Registrant to William Tsu-Cheng Yu(1)                                                                                                  
|4.5          | Promissory Note dated November 10, 2010 by the Registrant to Diana Chia-Huei Liu(1)                                                                                                
|4.6          | Promissory Note dated November 10, 2010 by the Registrant to William Tsu-Cheng Yu(1)                                                                                               
|4.7          | Promissory Note, dated as of February 10, 2010, issued to Diana Liu(1)                                                                                                             
|4.8          | Promissory Note, dated as of February 10, 2010, issued to William Yu(1)                                                                                                            
|4.9          | Amendment dated as of February 3, 2011 to that certain Promissory Note dated February 10, 2010 issued to Diana Liu(1)                                                              
|4.10         | Amendment dated as of February 3, 2011 to that certain Promissory Note dated February 10, 2010 issued to William Yu(1)                                                             
|4.11         | Amendment dated as of February 3, 2011 to that certain Promissory Note dated as of March 25, 2010 issued to Diana Liu(1)                                                           
|4.12         | Amendment dated as of February 3, 2011 to that certain Promissory Note dated as of March 25, 2010 issued to William Yu(1)                                                          
|4.13         | Promissory Note, dated as of May 3, 2012, issued to William Yu(2)                                                                                                                  
|4.14         | Promissory Note, dated as of November 1, 2012, issued to William Yu(2)                                                                                                             
|4.15         | Promissory Note, dated as of February 12, 2013, issued to William Yu(2)                                                                                                            
|4.16         | Promissory Note, dated as of March 4, 2013, issued to William Yu(2)                                                                                                                
|4.17         | Form of Securities Escrow Agreement between the Registrant, American Stock Transfer & Trust Company and the Founders(1)                                                            
|4.18         | Form of Registration Rights Agreement among the Registrant and the Founders(1)                                                                                                     
|4.19         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and Amy Lau(1)                                                                                       
|4.20         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and Carolyne Yu(1)                                                                                   
|4.21         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and Dane Chauvel(1)                                                                                  
|4.22         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and Dave Sagar(1)                                                                                    
|4.23         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and Elizabeth Pulchny(1)                                                                             
|4.24         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and John Chase(1)                                                                                    
|4.25         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and Lance Wei(1)                                                                                     
|4.26         | Stock Option Agreement, dated as of February 25, 2010, between the Registrant and Rebecca Poon(1)                                                                                  
|4.27         | Stock Option Agreement, dated as of December 3, 2010, between the Registrant and Dane Chauvel(1)                                                                                   
|4.28         | Stock Option Agreement, dated as of December 3, 2010, between the Registrant and Jason Wang(1)                                                                                     
|4.29         | Stock Option Agreement, dated as of December 3, 2010, between the Registrant and HuiKai Yan(1)                                                                                     
|4.30         | Stock Option Agreement, dated as of March 21, 2012, between the Registrant and George Kaufman(3)                                                                                   
|4.31         | Put Agreement, dated February 25, 2013, by and among Prime Acquisition Corp. and Advanced Series Trust – AST Academic Strategies Asset Allocation Portfolio(2)                     
|4.32         | Put Agreement, dated February 25, 2013, by and among Prime Acquisition Corp. and CNH Diversified Opportunities Master Account, L.P.(2)                                             
|4.33         | Put Agreement, dated February 25, 2013, by and among Prime Acquisition Corp. and AQR Opportunistic Premium Offshore Fund, L.P.(2)                                                  
|4.34         | Put Agreement, dated February 25, 2013, by and among Prime Acquisition Corp. and AQR Diversified Arbitrage Fund(2)                                                                 
|4.35         | Management Agreement, dated May 22, 2013, by and among bhn LLC, Prime Acquisition Corp., and certain subsidiaries(4)                                                               
|4.36         | Stock Purchase Agreement, dated June 22, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, Seba S.r.l., Francesco Rotondi and Giuseppe Pantaleo(5)





48






|Exhibit
 No. | Description                                                                                                                                                                                                                  
|------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.37         | Stock Purchase Agreement, dated June 22, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, Nova S.r.l., Francesco Rotondi and Luca Massimo Failla(5)                                        
|4.38         | Stock Purchase Agreement, dated July 9, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, Delfin S.r.l., Davide Rigamonti, Cesare Lanati and G.S.I. S.r.l.(6)                               
|4.39         | Stock Purchase Agreement, dated July 9, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, SIM S.r.l., G.S.I. S.r.l. and Bell Real Estate S.r.l. (6)                                         
|4.40         | Stock Purchase Agreement, dated July 9, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, Dieci Real Estate S.r.l., ELLEGI S.r.l. and G.S.I. S.r.l. (6)                                     
|4.41         | Stock Purchase Agreement, dated July 9, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, ELLEGI S.r.l., Bell Real Estate S.r.l. and Stefano Lanati(6)                                      
|4.42         | Stock Purchase Agreement, dated July 9, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, G.S.I. S.r.l., Bell Real Estate S.r.l. and IGS S.r.l. (6)                                         
|4.43         | Stock Purchase Agreement, dated July 9, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, Magfin S.r.l., Bell Real Estate S.r.l., G.S.I. S.r.l. (6)                                         
|4.44         | Letter of Intent, dated July 3, 2013, by and among Prime Acquisition Corp., Union European Concept Futurum Geie, Radiomarelli SA(6)                                                                                          
|4.45         | Purchase Agreement, dated August 30, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC and Futurum Enegry S.A.(7)                                                                            
|4.46         | Purchase Agreement, dated August 30, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC and Radiomarelli S.A.(7)                                                                              
|4.47         | Transaction Value Agreement, dated as of September 30, 2013 by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l. and the Bell Group holders named therein.(8)                                                  
|4.48         | [Reserved]                                                                                                                                                                                                                   
|4.49         | Transaction Value Agreement, dated as of September 30, 2013 by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l. and the Nova holders named therein.(8)                                                        
|4.50         | Voting Agreement, dated as of September 27, 3013, by and among Prime Acquisition Corp., BHN LLC, and the voting parties named therein (Seba)(8)                                                                              
|4.51         | Voting Agreement, dated as of September 27, 3013, by and among Prime Acquisition Corp., BHN LLC, and the voting parties named therein (Nova)(8)                                                                              
|4.52         | Voting Agreement, dated as of September 27, 3013, by and among Prime Acquisition Corp., BHN LLC, and the voting parties named therein (Delfin)(8)                                                                            
|4.53         | Voting Agreement, dated as of September 27, 3013, by and among Prime Acquisition Corp., BHN LLC, and the voting parties named therein (SIM)(8)                                                                               
|4.54         | [Reserved]                                                                                                                                                                                                                   
|4.55         | Voting Agreement, dated as of September 27, 3013, by and among Prime Acquisition Corp., BHN LLC, and the voting parties named therein (ELLEGI)(8)                                                                            
|4.56         | Voting Agreement, dated as of September 27, 3013, by and among Prime Acquisition Corp., BHN LLC, and the voting parties named therein (G.S.I.)(8)                                                                            
|4.57         | Voting Agreement, dated as of September 27, 3013, by and among Prime Acquisition Corp., BHN LLC, and the voting parties named therein (Magfin)(8)                                                                            
|4.58         | Registration Rights Agreement, dated September 27, 2013, by and among Prime Acquisition Corp., BHN LLC, and the investors named therein(8)                                                                                   
|4.59         | Amendment, dated September 11 ,2013, to Stock Purchase Agreement, dated June 22, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, Seba S.r.l., Francesco Rotondi and Giuseppe Pantaleo(8)  
|4.60         | Amendment, dated September 11, 2013, to Stock Purchase Agreement, dated June 22, 2013, by and among Prime Acquisition Corp., Prime BHN Luxembourg S.àr.l., BHN LLC, Nova S.r.l., Francesco Rotondi and Luca Massimo Failla(8)
|4.61         | Amendment, dated September 27, 2013, to Bell Group Stock Purchase Agreements(8)                                                                                                                                              
|4.62         | Amendment, dated September 27, 2013, to Management Agreement, dated May 22, 2013, by and among bhn LLC, Prime Acquisition Corp., and certain subsidiaries(8)                                                                 
|4.63         | Promissory Note, dated as of September 30, 2013, issued to Chardan Capital Markets(8)                                                                                                                                        
|4.64         | Promissory Note, dated as of May 27, 2014, issued to Diana Liu*                                                                                                                                                              
|4.65         | Promissory Note, dated as of July 1, 2014, issued to Diana Liu*                                                                                                                                                              
|4.66         | Promissory Note, dated as of July 31, 2014, issued to Diana Liu*                                                                                                                                                             
|4.67         | Promissory Note, dated as of August 15, 2014, issued to Diana Liu*                                                                                                                                                           
|4.68         | Stock Option Agreement, dated as of May 10, 2014, between the Registrant and Andrea Crespi Bel’skij*                                                                                                                         
|4.69         | Stock Option Agreement, dated as of May 10, 2014, between the Registrant and Amy Lau*                                                                                                                                        





49






|Exhibit
 No. | Description                                                                                                                                                                                                                   
|------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.70         | Stock Purchase Agreement, dated as of December 18, 2014, between the Registrant and LuxCo, Seba, Francesco Rotondi and Luca Failla (10)                                                                                       
|4.71         | Option Agreement, dated as of December 18, 2014, between the Registrant and LuxCo, Nova, Francesco Rotondi (10)                                                                                                               
|4.72         | Stock Option Agreement, dated as of September 11, 2014, between the Registrant and Michela Del Molino                                                                                                                         
|4.73         | Stock Option Agreement, dated as of September 11, 2014, between the Registrant and Monica Sironi                                                                                                                              
|4.74         | Stock Option Agreement, dated as of September 11, 2014, between the Registrant and Rosaria Racco                                                                                                                              
|4.75         | Termination of Transaction Value Agreement, dated as of December 17, 2014 by and among Prime Acquisition Corp., Prime Luxembourg S.àr.l., Francesco Rotondi, Luca Massimo Failla and Giuseppe Pantaleo                        
|4.76         | Termination of Transaction Value Agreement, dated as of December 15, 2014 by and among Prime Acquisition Corp., Prime Luxembourg S.àr.l., Cesare Lanati, Stefano Lanati, Davide Rigamonti, Bell Real Estate S.r.l., IGS S.r.l.
|4.77         | Promissory Note, dated as of August 25, 2014, issued to Diana Liu                                                                                                                                                             
|4.78         | Promissory Note, dated as of October 1, 2014, issued to Diana Liu                                                                                                                                                             
|4.79         | Promissory Note, dated as of October 2, 2014, issued to Diana Liu                                                                                                                                                             
|4.80         | Promissory Note, dated as of October 30, 2014, issued to Diana Liu                                                                                                                                                            
|4.81         | Promissory Note, dated as of November 21, 2014, issued to Diana Liu                                                                                                                                                           
|4.82         | Promissory Note, dated as of December 6, 2014, issued to Diana Liu                                                                                                                                                            
|4.83         | Promissory Note, dated as of December 17, 2014, issued to Diana Liu                                                                                                                                                           
|4.84         | Promissory Note, dated as of December 17, 2014, issued to Amy Lau                                                                                                                                                             
|4.85         | Promissory Note, dated as of February 1, 2015, issued to Diana Liu                                                                                                                                                            
|4.86         | Promissory Note, dated as of March 1, 2015, issued to Diana Liu                                                                                                                                                               
|4.87         | Promissory Note, dated as of April 1, 2015, issued to Diana Liu                                                                                                                                                               
|4.88         | Promissory Note, dated as of May 1, 2015, issued to Diana Liu                                                                                                                                                                 
|4.89         | Promissory Note, dated as of May 27, 2015, issued to Diana Liu                                                                                                                                                                
|4.90         | Promissory Note, dated as of June 1, 2015, issued to Diana Liu                                                                                                                                                                
|4.91         | Promissory Note, dated as of July 1, 2015, issued to Diana Liu                                                                                                                                                                
|4.92         | Promissory Note, dated as of July 1, 2015, issued to Diana Liu                                                                                                                                                                
|4.93         | Promissory Note, dated as of August 1, 2015, issued to Diana Liu                                                                                                                                                              
|4.94         | Promissory Note, dated as of August 14, 2015, issued to Diana Liu                                                                                                                                                             
|4.95         | Promissory Note, dated as of August 25, 2015, issued to Diana Liu                                                                                                                                                             
|4.96         | Promissory Note, dated as of August 25, 2015, issued to Diana Liu                                                                                                                                                             
|4.97         | Promissory Note, dated as of September 30, 2015, issued to Diana Liu                                                                                                                                                          
|4.98         | Promissory Note, dated as of October 1, 2015, issued to Diana Liu                                                                                                                                                             
|4.99         | Promissory Note, dated as of October 1, 2015, issued to Diana Liu                                                                                                                                                             
|4.100        | Promissory Note, dated as of October 2, 2015, issued to Diana Liu                                                                                                                                                             
|4.101        | Promissory Note, dated as of October 8, 2015, issued to Diana Liu                                                                                                                                                             
|4.102        | Promissory Note, dated as of November 5, 2015, issued to Diana Liu                                                                                                                                                            
|4.103        | Promissory Note, dated as of November 16, 2015, issued to Diana Liu                                                                                                                                                           
|4.104        | Promissory Note, dated as of November 21, 2015, issued to Diana Liu                                                                                                                                                           
|4.105        | Stock Option Agreement, dated as of May 10, 2015, between the Registrant and Amy Lau                                                                                                                                          
|4.106        | Stock Purchase Agreement, dated as of June 26, 2014, between the Registrant and LuxCo, GSI, SIM, Bell Real Estate S.r,l., Cesare Lanati and Stefano Lanati                                                                    
|4.107        | Stock Option Agreement, dated as of September 1, 2015, between the Registrant and George Kaufman                                                                                                                              
|4.108        | Stock Option Agreement, dated as of September 1, 2015, between the Registrant and Michela Del Molino                                                                                                                          
|4.109        | Stock Option Agreement, dated as of September 1, 2015, between the Registrant and Mattia Nigro                                                                                                                                
|4.110        | Stock Option Agreement, dated as of September 1, 2015, between the Registrant and Rosaria Racco                                                                                                                               
|8.1          | List of Subsidiaries(8)                                                                                                                                                                                                       
|11.1         | Code of Ethics(1)                                                                                                                                                                                                             
|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 and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                    
|16.1         | Letter from Marcum Bernstein & Pinchuk LLP, dated March 20, 2014 (9)                                                                                                                                                          





50






|* | Previously Filed
|- | ----------------



|(1) | Incorporated by reference to the registration statement on Form F-1 of the registrant (File No. 333-171777).
|--- | ------------------------------------------------------------------------------------------------------------



|(2) | Incorporated by reference to the Annual Report on Form 20-F of the registrant, filed on April 30, 2013.
|--- | -------------------------------------------------------------------------------------------------------



|(3) | Incorporated by reference to the Annual Report on Form 20-F of the registrant, filed on April 30, 2012.
|--- | -------------------------------------------------------------------------------------------------------



|(4) | Incorporated by reference to the Report of Foreign Private Issuer on Form 6-K of the registrant, filed on May 24, 2013.
|--- | -----------------------------------------------------------------------------------------------------------------------



|(5) | Incorporated by reference to the Report of Foreign Private Issuer on Form 6-K of the registrant, filed on June 27, 2013.
|--- | ------------------------------------------------------------------------------------------------------------------------



|(6) | Incorporated by reference to the Report of Foreign Private Issuer on Form 6-K of the registrant, filed on July 16, 2013.
|--- | ------------------------------------------------------------------------------------------------------------------------



|(7) | Incorporated by reference to Amendment No. 1 the Schedule TO/A of the registrant, filed on September 6, 2013.
|--- | -------------------------------------------------------------------------------------------------------------



|(8) | Incorporated by reference to the Shell Company Report on Form 20-F of the registrant, filed on September 30, 2013.
|--- | ------------------------------------------------------------------------------------------------------------------



|(9)  | Incorporated by reference to the Report of Foreign Private Issuer on Form 6-K of the registrant, filed on March 20, 2014.   
|---- | ----------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                             
|(10) | Incorporated by reference to the Report of Foreign Private Issuer on Form 6-K of the registrant, filed on December 23, 2014.











51






SIGNATURES



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 annual
report on its behalf.



|                       |     | Prime Acquisition Corp.                     
|---------------------- | --- | --------------------------------------------
|Date: January 14, 2016 |     |                                             
|                       | By: | /s/ William Tsu-Cheng Yu                    
|                       |     | William Tsu-Cheng Yu                        
|                       |     | Interim Chief Executive Officer and Chairman
|                       |     | (Principal Executive Officer)               



|Date: January 14, 2016 |     |                                             
|---------------------- | --- | --------------------------------------------
|                       | By: | /s/ Amy Lau                                 
|                       |     | Amy Lau                                     
|                       |     | Interim Chief Financial Officer             
|                       |     | (Principal Financial and Accounting Officer)









52










CONSOLIDATED FINANCIAL STATEMENTS



Table of contents





|Report of independent registered accounting firm                         | F-2 
|------------------------------------------------------------------------ | ----
|                                                                         |     
|Report of independent registered accounting firm                         | F-3 
|                                                                         |     
|Report of independent registered accounting firm                         | F-4 
|                                                                         |     
|Consolidated statements of income/(loss) and comprehensive income/(loss) | F-5 
|                                                                         |     
|Consolidated statements of financial position                            | F-6 
|                                                                         |     
|Consolidated statements of changes in equity                             | F-7 
|                                                                         |     
|Consolidated statements of cash flow                                     | F-8 
|                                                                         |     
|Notes to the consolidated financial statements                           | F-10















F-1








REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM





To the Audit Committee of the

Board of Directors and Shareholders

of Prime Acquisition Corp.



We have audited the accompanying consolidated
statement of financial position of Prime Acquisition Corp.and its Subsidiaries (collectively the “Company”)
as of December 31, 2014, and the related consolidated statements of income and comprehensive income, changes in equity, and cash
flows for the year then ended. These consolidated financial statements 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 audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and
perform the audit 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 audit 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 audit provides 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 Prime Acquisition
Corp. and Subsidiaries, as of December 31, 2014, and the consolidated results of its operations and its cash flows for the year
then ended in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board.



The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated
financial statements, the Company has incurred significant recurring operating losses, negative cash flows from operations and
has a working capital deficiency. The Company is also dependent on the completion of additional equity and or/debt financing in
order to continue its operations. These factors raise substantial doubt about the Company’s ability to continue as a going
concern. Management’s plans concerning these matters are also discussed in Note 1 to the consolidated financial statements.
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
January 14, 2016





F-2








REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of
Directors and Shareholders of

Prime Acquisition
Corp.



We have audited
the accompanying consolidated statement of financial position of Prime Acquisition Corp. and its subsidiaries (collectively, the
“Company”) as of December 31, 2013, and the related consolidated statements of loss and comprehensive loss, changes
in equity, and cash flows for the year ended December 31, 2013. These consolidated financial statements 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 audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit 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 audit 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 audit provides 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 December 31, 2013, and the consolidated results of their operations and their cash flows for the year ended
December 31, 2013 in conformity with International Financial Reporting Standards (IFRS) and its related interpretations as issued
by the International Accounting Standards Board.



The accompanying
consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in
Note 1 to the consolidated financial statements, the Company has incurred significant recurring operating losses, negative cash
flows from operations and has a working capital deficiency. The Company is also dependent on the completion of additional equity
and/or debt financing in order to continue its operations. These factors raise substantial doubt about the Company’s ability
to continue as a going concern. Management’s plans in regard to 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/ WeiserMazars
LLP

New York, New York



September 8, 2014, except for Note 5 (paragraphs 3, 6 and 9),
Note 6, Note 10, Note 16 (paragraph 7), Note 20 and Note 27, as to which the date is May 21, 2015)









F-3






Report of Independent Registered Public
Accounting Firm



To the Board of Directors and Shareholders of
Prime Acquisition Corp.



We have audited the accompanying statement
of financial position of Prime Acquisition Corp. (a development stage company) (the “Company”) as of December 31, 2012
and January 1, 2012, and the statements of loss and comprehensive loss, changes in equity and cash flows for the year ended December
31, 2012. 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 audit 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 audit 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 the Company as of December 31, 2012 and January
1, 2012, and the results of its operations and its cash flows for the year then ended in conformity with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).



/s/ Shandong Haoxin Certified Public Accountants Co.,
Ltd



Shandong, PRC
September 8, 2014









F-4






Prime Acquisition Corp.
Consolidated statements of income/(loss) and comprehensive income/(loss)
For the years ended December 31,



|                                                                 |  | Notes |  |   | 2014       |   |  |   | 2013*       |   |  |   | 2012       |  
|---------------------------------------------------------------- |  | ----- |  | - | ---------- | - |  | - | ----------- | - |  | - | ---------- | -
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Continuing operations                                            |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Rental income                                                    |  |       |  | $ | 4,086,075  |   |  | $ | 1,007,015   |   |  | $ | –          |  
|Other revenues                                                   |  |       |  |   | 126,165    |   |  |   | 77,436      |   |  |   | –          |  
|Total Revenues                                                   |  |       |  |   | 4,212,240  |   |  |   | 1,084,451   |   |  |   | –          |  
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Depreciation and bad debt provision                              |  | 6     |  |   | (107,400   | ) |  |   | (59,295     | ) |  |   | –          |  
|Impairment of goodwill                                           |  |       |  |   | –          |   |  |   | (6,914,458  | ) |  |   | –          |  
|Other expenses                                                   |  | 7     |  |   | (2,769,238 | ) |  |   | (4,367,539  | ) |  |   | (1,120,793 | )
|Total operating expenses                                         |  |       |  |   | (2,876,638 | ) |  |   | (11,341,292 | ) |  |   | (1,120,793 | )
|Operating profit/(loss)                                          |  |       |  |   | 1,335,602  |   |  |   | (10,256,841 | ) |  |   | (1,120,793 | )
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Finance income                                                   |  | 8     |  |   | 75,880     |   |  |   | –           |   |  |   | –          |  
|Finance costs                                                    |  | 8     |  |   | (1,891,493 | ) |  |   | (712,545    | ) |  |   | –          |  
|Contingent consideration in connection with business combination |  | 9     |  |   | 5,157,951  |   |  |   | (5,157,951  | ) |  |   | –          |  
|Interest earned from investment held in trust                    |  |       |  |   | –          |   |  |   | 3,868       |   |  |   | 31,919     |  
|Net fair value gain on revaluation of investment properties      |  |       |  |   | 332,425    |   |  |   | –           |   |  |   | –          |  
|Profit/(loss) before tax                                         |  |       |  |   | 5,010,365  |   |  |   | (16,123,469 | ) |  |   | (1,088,874 | )
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Tax expense, current                                             |  | 11    |  |   | (208,603   | ) |  |   | –           |   |  |   | –          |  
|Deferred tax expense                                             |  | 11,12 |  |   | (654,579   | ) |  |   | 7,184       |   |  |   | –          |  
|Profit/(loss) for the year from continuing operations            |  |       |  |   | 4,147,183  |   |  |   | (16,116,285 | ) |  |   | (1,088,874 | )
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Profit/(loss) from discontinued operations                       |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Net profit/(loss) from discontinued operations                   |  | 13    |  |   | (727,864   | ) |  |   | 230,807     |   |  |   | –          |  
|Profit/(loss) for the year                                       |  |       |  | $ | 3,419,319  |   |  | $ | (15,885,478 | ) |  | $ | (1,088,874 | )
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Other comprehensive income, net of income tax                    |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Foreign currency translation reserve                             |  |       |  |   | (999,519   | ) |  |   | 131,878     |   |  |   | –          |  
|Total comprehensive income/(loss) for the year                   |  |       |  | $ | 2,419,800  |   |  | $ | (15,753,600 | ) |  | $ | (1,088,874 | )
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Earnings/(loss) per share                                        |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|From continuing and discontinued operations                      |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Weighted average number of ordinary shares outstanding - basic   |  |       |  |   | 3,098,017  |   |  |   | 3,037,806   |   |  |   | 4,894,983  |  
|Basic earnings/(loss) per share                                  |  |       |  | $ | 1.10       |   |  | $ | (5.23       | ) |  | $ | (0.22      | )
|Weighted average number of ordinary shares outstanding - diluted |  |       |  |   | 3,452,271  |   |  |   | 3,037,806   |   |  |   | 4,894,983  |  
|Diluted earnings/(loss) per share                                |  |       |  | $ | 1.04       |   |  | $ | (5.23       | ) |  | $ | (0.22      | )
|                                                                 |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|From continuing operations                                       |  |       |  |   |            |   |  |   |             |   |  |   |            |  
|Weighted average number of ordinary shares outstanding - basic   |  |       |  |   | 3,098,017  |   |  |   | 3,037,806   |   |  |   | 4,894,983  |  
|Basic earnings/(loss) per share                                  |  |       |  | $ | 1.34       |   |  | $ | (5.31       | ) |  | $ | (0.22      | )
|Weighted average number of ordinary shares outstanding - diluted |  |       |  |   | 3,452,271  |   |  |   | 3,037,806   |   |  |   | 4,894,983  |  
|Diluted earnings/(loss) per share                                |  |       |  | $ | 1.26       |   |  | $ | (5.31       | ) |  | $ | (0.22      | )



*Restated for discontinued operations (see note 13 — Discontinued
Operations)



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





F-5






Prime Acquisition Corp.
Consolidated statements of financial position
As at December 31,



|                                                                                                                                                                                      |  | Notes      |  | 2014 |             |   | 2013 |   |             | 2012 | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- |  | ---- | ----------- | - | ---- | - | ----------- | ---- | 
|ASSETS                                                                                                                                                                                |  |            |  |      |             |   |      |   |             |      | 
|                                                                                                                                                                                      |  |            |  |      |             |   |      |   |             |      | 
|Non-current assets                                                                                                                                                                    |  |            |  |      |             |   |      |   |             |      | 
|Property and equipment, net                                                                                                                                                           |  | 17         |  | $    | 156,944     |   |      | $ | 265,757     |      | 
|Investment properties                                                                                                                                                                 |  | 18         |  |      | 47,629,537  |   |      |   | 72,877,131  |      | 
|Total non-current assets                                                                                                                                                              |  |            |  |      | 47,786,481  |   |      |   | 73,142,888  |      | 
|                                                                                                                                                                                      |  |            |  |      |             |   |      |   |             |      | 
|Current assets                                                                                                                                                                        |  |            |  |      |             |   |      |   |             |      | 
|Prepaid expenses and other current assets                                                                                                                                             |  | 19         |  |      | 173,695     |   |      |   | 512,269     |      | 
|Trade and other receivables, net                                                                                                                                                      |  | 20         |  |      | 1,005,261   |   |      |   | 4,757,018   |      | 
|Cash held in trust account                                                                                                                                                            |  |            |  |      | –           |   |      |   | –           |      | 
|Cash and cash equivalents                                                                                                                                                             |  | 21         |  |      | 165,091     |   |      |   | 133,414     |      | 
|Total current assets                                                                                                                                                                  |  |            |  |      | 1,344,047   |   |      |   | 5,402,701   |      | 
|TOTAL ASSETS                                                                                                                                                                          |  |            |  | $    | 49,130,528  |   |      |   | 78,545,589  |      | 
|                                                                                                                                                                                      |  |            |  |      |             |   |      |   |             |      | 
|EQUITY AND LIABILITIES                                                                                                                                                                |  |            |  |      |             |   |      |   |             |      | 
|                                                                                                                                                                                      |  |            |  |      |             |   |      |   |             |      | 
|Equity                                                                                                                                                                                |  |            |  |      |             |   |      |   |             |      | 
|Ordinary shares, $0.001 par value (Authorized 50,000,000 shares; 2,428,532, 3,179,721 and 4,894,983 shares issued and outstanding at December 31, 2014, 2013, and 2012, respectively) |  | 22         |  | $    | 2,429       |   |      | $ | 3,180       |      | 
|Share premium                                                                                                                                                                         |  |            |  |      | 16,722,007  |   |      |   | 19,958,593  |      | 
|Retained deficit                                                                                                                                                                      |  |            |  |      | (14,080,154 | ) |      |   | (17,499,473 | )    | 
|Foreign currency translation reserve                                                                                                                                                  |  |            |  |      | (867,641    | ) |      |   | 131,878     |      | 
|Total equity                                                                                                                                                                          |  |            |  |      | 1,776,641   |   |      |   | 2,594,178   |      | 
|                                                                                                                                                                                      |  |            |  |      |             |   |      |   |             |      | 
|Liabilities                                                                                                                                                                           |  |            |  |      |             |   |      |   |             |      | 
|Non-current liabilities                                                                                                                                                               |  |            |  |      |             |   |      |   |             |      | 
|Ordinary shares, subject to possible redemption 3,031,969 shares at $10.02 per share at December 31, 2012, and January 1, 2012                                                        |  |            |  |      | –           |   |      |   | –           |      | 
|Loans and borrowings, less current portion                                                                                                                                            |  | 23, 24     |  |      | 9,121,409   |   |      |   | 45,428,789  |      | 
|Deferred tax liabilities                                                                                                                                                              |  | 12         |  |      | 3,738,082   |   |      |   | 5,399,745   |      | 
|Corporate tax liabilities, less current portion                                                                                                                                       |  |            |  |      | 419,388     |   |      |   | 550,792     |      | 
|Tenant security deposits                                                                                                                                                              |  |            |  |      | 896,289     |   |      |   | 1,273,452   |      | 
|Total non-current liabilities                                                                                                                                                         |  |            |  |      | 14,175,168  |   |      |   | 52,652,778  |      | 
|                                                                                                                                                                                      |  |            |  |      |             |   |      |   |             |      | 
|Current liabilities                                                                                                                                                                   |  |            |  |      |             |   |      |   |             |      | 
|Deferred underwriters fees                                                                                                                                                            |  |            |  |      | –           |   |      |   | –           |      | 
|Notes payable to stockholders                                                                                                                                                         |  | 25         |  |      | 1,677,538   |   |      |   | 420,000     |      | 
|Due to related party                                                                                                                                                                  |  | 25         |  |      | 379,330     |   |      |   | 426,959     |      | 
|Loans and borrowings                                                                                                                                                                  |  | 23, 24, 26 |  |      | 23,146,771  |   |      |   | 5,503,242   |      | 
|Trade and other payables                                                                                                                                                              |  | 27         |  |      | 5,311,130   |   |      |   | 8,699,717   |      | 
|Accrued expenses and other deferred income                                                                                                                                            |  | 28         |  |      | 437,203     |   |      |   | 546,010     |      | 
|Corporate tax liabilities                                                                                                                                                             |  |            |  |      | 1,825,671   |   |      |   | 910,364     |      | 
|Derivative financial liabilities                                                                                                                                                      |  | 29         |  |      | 221,191     |   |      |   | 1,141,314   |      | 
|Contingent consideration in connection with business combination                                                                                                                      |  | 9          |  |      | –           |   |      |   | 5,157,951   |      | 
|Provisions                                                                                                                                                                            |  | 30         |  |      | 179,885     |   |      |   | 493,076     |      | 
|Total current liabilities                                                                                                                                                             |  |            |  |      | 33,178,719  |   |      |   | 23,298,633  |      | 
|Total liabilities                                                                                                                                                                     |  |            |  |      | 47,353,887  |   |      |   | 75,951,411  |      | 
|                                                                                                                                                                                      |  |            |  |      |             |   |      |   |             |      | 
|TOTAL EQUITY AND LIABILITIES                                                                                                                                                          |  |            |  | $    | 49,130,528  |   |      | $ | 78,545,589  |      | 



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



F-6






Prime Acquisition Corp.

Consolidated statements of changes in equity

For the period from January 1, 2012 to December 31, 2014



|                                                                                       |  | Ordinary Shares |            |   | Share  |   |       | Retained |  |   | Foreign Currency
    Translation |   |  | Total   |            
|-------------------------------------------------------------------------------------- |  | --------------- | ---------- | - | ------ | - | ----- | -------- |  | - | -------------------------------- | - |  | ------- | -----------
|                                                                                       |  | Shares          |            |   | Amount |   |       | Premium  |  |   | Deficit                          |   |  | Reserve |            
|Balance at January 1, 2012                                                             |  |                 | 4,894,983  |   |        | $ | 1,863 |          |  | $ | 5,685,171                        |   |  | $       | (525,121   
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Non-employee stock based compensation                                                  |  |                 | –          |   |        |   | –     |          |  |   | 180,750                          |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Reversal of over-accrual of offering costs                                             |  |                 | –          |   |        |   | –     |          |  |   | 25,000                           |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Loss for the year                                                                      |  |                 | –          |   |        |   | –     |          |  |   | –                                |   |  |         | (1,088,874 
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Balance at December 31, 2012                                                           |  |                 | 4,894,983  |   |        |   | 1,863 |          |  |   | 5,890,921                        |   |  |         | (1,613,995 
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|IPO shares redeemed in connection with tender offer                                    |  |                 | (3,008,955 | ) |        |   | –     |          |  |   | –                                |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Shares issued for non-employee services rendered                                       |  |                 | 30,000     |   |        |   | 30    |          |  |   | 299,970                          |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|IPO shares redeemed in connection with tender offer                                    |  |                 | (1         | ) |        |   | –     |          |  |   | –                                |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Proceeds from 23,013 IPO shares not redeemed in connection with
    final tender offer |  |                 | –          |   |        |   | 23    |          |  |   | 230,577                          |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Ordinary shares issued in connection with the business combination                     |  |                 | 1,719,317  |   |        |   | 1,719 |          |  |   | 18,841,995                       |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Exercise of put option                                                                 |  |                 | (508,123   | ) |        |   | (508  | )        |  |   | (5,643,744                       | ) |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Beneficial conversion feature on convertible promissory note                           |  |                 | –          |   |        |   | –     |          |  |   | 184,584                          |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Foreign currency translation reserve                                                   |  |                 | –          |   |        |   | –     |          |  |   | –                                |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Non-employee stock options exercised                                                   |  |                 | 52,500     |   |        |   | 53    |          |  |   | (53                              | ) |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Non-employee stock based compensation                                                  |  |                 | –          |   |        |   | –     |          |  |   | 154,343                          |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Loss for the year                                                                      |  |                 | –          |   |        |   | –     |          |  |   | –                                |   |  |         | (15,885,478
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Balance at December 31, 2013                                                           |  |                 | 3,179,721  |   |        |   | 3,180 |          |  |   | 19,958,593                       |   |  |         | (17,499,473
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Non-employee stock based compensation                                                  |  |                 | –          |   |        |   | –     |          |  |   | 5,044                            |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Forfeiture of founders shares                                                          |  |                 | (253,881   | ) |        |   | (253  | )        |  |   | 253                              |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Derecognition of subsidiary                                                            |  |                 | (497,308   | ) |        |   | (498  | )        |  |   | (3,243,040                       | ) |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Beneficial conversion feature on convertible promissory note                           |  |                 | –          |   |        |   | –     |          |  |   | 1,157                            |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Profit for the year                                                                    |  |                 | –          |   |        |   | –     |          |  |   | –                                |   |  |         | 3,419,319  
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Foreign currency translation reserve                                                   |  |                 | –          |   |        |   | –     |          |  |   | –                                |   |  |         | –          
|                                                                                       |  |                 |            |   |        |   |       |          |  |   |                                  |   |  |         |            
|Balance at December 31, 2014                                                           |  |                 | 2,428,532  |   |        | $ | 2,429 |          |  | $ | 16,722,007                       |   |  | $       | (14,080,154



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



F-7








Prime Acquisition Corp.

Consolidated statements of cash flows

For the years ended December 31,



|                                                                  |  | 2014 |            |   | 2013 |   |             | 2012 | 
|----------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ----------- | ---- | 
|Cash flows from operating activities                              |  |      |            |   |      |   |             |      | 
|                                                                  |  |      |            |   |      |   |             |      | 
|Profit/(loss) for the year                                        |  | $    | 3,419,319  |   |      | $ | (15,885,478 | )    | 
|Adjustments to loss for non-cash items                            |  |      |            |   |      |   |             |      | 
|Share-based payments                                              |  |      | 5,044      |   |      |   | 454,343     |      | 
|Derivatives fair value adjustment                                 |  |      | (75,622    | ) |      |   | (50,649     | )    | 
|Net fair value gain on revaluation of investment property         |  |      | (332,425   | ) |      |   | –           |      | 
|Loss on disposal of property and equipment                        |  |      | 16,080     |   |      |   | –           |      | 
|Goodwill impairment                                               |  |      | –          |   |      |   | 6,914,458   |      | 
|Depreciation                                                      |  |      | 75,245     |   |      |   | 18,119      |      | 
|Provision for bad debt                                            |  |      | 32,155     |   |      |   | 41,176      |      | 
|Provision/(release of provision) relating to litigation           |  |      | (300,000   | ) |      |   | 300,000     |      | 
|Other provisions                                                  |  |      | 11,342     |   |      |   | –           |      | 
|Share premium                                                     |  |      | 1,157      |   |      |   | –           |      | 
|Loss on foreign currency exchange on discontinued operation       |  |      | 426,410    |   |      |   | –           |      | 
|Contingent consideration in connection with business combination  |  |      | (5,157,951 | ) |      |   | 5,157,951   |      | 
|Revenues normalization                                            |  |      | 148,926    |   |      |   | –           |      | 
|Deferred tax liabilities                                          |  |      | 562,730    |   |      |   | (44,719     | )    | 
|Finance costs                                                     |  |      | 1,891,493  |   |      |   | 601,039     |      | 
|                                                                  |  |      | 723,903    |   |      |   | (2,493,760  | )    | 
|Working capital adjustments                                       |  |      |            |   |      |   |             |      | 
|Decrease in prepaid expenses and other current assets             |  |      | 298,617    |   |      |   | 420,424     |      | 
|Decrease/(increase) in trade and other receivables                |  |      | 388,658    |   |      |   | (3,569,837  | )    | 
|(Decrease)/increase in trade and other payables                   |  |      | 97,717     |   |      |   | 5,001,811   |      | 
|(Decrease)/increase in accrued expenses and other deferred income |  |      | –          |   |      |   | 546,010     |      | 
|Increase/(decrease) in tenant security deposits                   |  |      | 232,061    |   |      |   | (69,623     | )    | 
|Increase/(decrease) in corporate tax liabilities                  |  |      | 821,296    |   |      |   | (18,692     | )    | 
|Cash generated from operations                                    |  |      | 2,562,252  |   |      |   | (183,667    | )    | 
|Corporate taxes paid                                              |  |      | (140,114   | ) |      |   | –           |      | 
|Finance costs paid                                                |  |      | (1,363,673 | ) |      |   | (400,540    | )    | 
|Net cash (used in)/generated by operating activities              |  |      | 1,058,465  |   |      |   | (584,207    | )    | 
|                                                                  |  |      |            |   |      |   |             |      | 
|Cash flows from investing activities                              |  |      |            |   |      |   |             |      | 
|Transfer from trust to operating account                          |  |      | –          |   |      |   | 36,624,800  |      | 
|Interest received on trust account                                |  |      | –          |   |      |   | (3,867      | )    | 
|Cash acquired on acquisition/(given on disposition)               |  |      | (17,361    | ) |      |   | 181,461     |      | 
|Acquisition of property and equipment                             |  |      | (6,401     | ) |      |   | (4,820      | )    | 
|Net cash (used in)/generated by investing activities              |  |      | (23,762    | ) |      |   | 36,797,574  |      | 
|                                                                  |  |      |            |   |      |   |             |      | 
|Cash flows from financing activities                              |  |      |            |   |      |   |             |      | 
|Advances from/(payment to) related party                          |  |      | (47,629    | ) |      |   | 151,188     |      | 
|Payment to underwriters                                           |  |      | –          |   |      |   | (240,000    | )    | 
|Proceeds from notes payable to stockholders                       |  |      | 1,257,537  |   |      |   | 360,000     |      | 
|Proceeds from line of credit, net                                 |  |      | 33,520     |   |      |   | 565,359     |      | 
|Repayment on finance leases and loans                             |  |      | (2,308,190 | ) |      |   | (1,128,680  | )    | 
|Redemption of ordinary shares                                     |  |      | –          |   |      |   | (30,149,729 | )    | 
|Payment of put option                                             |  |      | –          |   |      |   | (5,644,252  | )    | 
|Net cash (used in)/generated by financing activities              |  |      | (1,064,762 | ) |      |   | (36,086,114 | )    | 
|                                                                  |  |      |            |   |      |   |             |      | 
|Effect of exchange rates on cash and cash equivalents             |  |      | 61,736     |   |      |   | (1,250      | )    | 
|                                                                  |  |      |            |   |      |   |             |      | 
|Net increase (decrease) in cash and cash equivalents              |  |      | 31,677     |   |      |   | 126,003     |      | 
|                                                                  |  |      |            |   |      |   |             |      | 
|Cash and cash equivalents at beginning of year                    |  |      | 133,414    |   |      |   | 7,411       |      | 
|                                                                  |  |      |            |   |      |   |             |      | 
|Cash and cash equivalents at end of year                          |  | $    | 165,091    |   |      | $ | 133,414     |      | 





F-8








2014 Non cash transactions



In 2014, the Group has reached various offsetting agreements with one of the former owners of the investment properties (and a current shareholder of the Group) on offsetting certain receivables and payables of $3,470,482 in total (see note 20 — Trade and Other Receivables).   On December 18, 2014, the Company returned one of the subsidiaries (Seba S.r.l.) acquired through the closing of the Purchase Agreement to the original seller in exchange for the return of 497,308 of the Company’s shares. No additional cash was exchanged in addition to the Company’s share returned (see note 13 — Discontinued Operations).



2013 Supplemental information



Other supplemental information consists of:



|1,719,317 ordinary shares issued in connection with business combination |  | $ | 18,843,714 | 
|------------------------------------------------------------------------ |  | - | ---------- | 
|                                                                         |  |   |            | 
|Conversion of deferred underwriter fees to note payable to underwriters  |  | $ | 889,833    | 













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



F-9








PRIME ACQUISITION CORP.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Note 1 — Corporate Information
and Plan of Business Operations



The consolidated financial statements of
Prime Acquisition Corp. and its wholly-owned subsidiaries (collectively, the “Group”) for the year ended December 31,
2014 were authorized for issue in accordance with a resolution of the directors on December 31, 2015. Prime Acquisition Corp. (the
“Company”) is a Cayman Islands exempted company initially organized as a blank check company for the purpose of acquiring,
through a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or similar business
combination, an operating business. The registered office is located at No 322, Zhongshan East Road, Shijiazhuang, Hebei Province
05001, China.



The Group is principally engaged in the
management of investment property (see note 18 — Investment Properties). On September 30, 2013, the Company consummated
a business combination (the “Business Combination”), through Prime BHN Luxembourg S.a.r.l (a Luxembourg company and
wholly-owned subsidiary of the Company, “LuxCo”), by acquiring 100% of Seba S.r.l. (“Seba”), Nova S.r.l.
(“Nova”), Delfin S.r.l. (“Delfin”), SIM S.r.l. (“SIM”), Dieci Real Estate S.r.l. (“Dieci”),
Ellegi S.r.l. (“Ellegi”), G.S.I. S.r.l. (“GSI”), Magfin S.r.l. (“Magfin”), all are Italian
limited liability companies (collectively the “Subsidiaries”) for an aggregate of 1,719,317 ordinary shares. The fair
value of the shares is the closing market price of the Company at the acquisition date, at $10.96 per share. The fair value of
the consideration given was therefore $18,843,714. As a result of this Business Combination, eleven properties were acquired. All
of the properties in the portfolio are commercial real estate assets based in Italy. The existing strategic management function
and associated processes were acquired with the property and, as such, the Company’s management considers this transaction
the acquisition of a business, rather than an asset acquisition. Immediately following consummation of the Business Combination,
the Company had a total of 3,635,344 ordinary shares outstanding.



On December 18, 2014, the Company entered
into a Stock Purchase Agreement (the “Purchase Agreement”) with LuxCo, Seba, at the time LuxCo’s wholly owned
subsidiary, Francesco Rotondi and Luca Failla (the former owners of Seba prior to the Business Combination). Pursuant to the Purchase
Agreement, on December 18, 2014, Messrs. Rotondi and Failla acquired all of the outstanding equity interests in Seba in exchange
for the return of 497,308 of the Company’s shares (the “Consideration Shares”, the Purchase Agreement event “Unwinding”).
Seba’s sole asset consists of four floors of Corso Europa 22, an office building in central Milan. As a result, immediately
following the closing of this Purchase Agreement, the Company had a total of 2,682,413 ordinary shares outstanding and the Company’s
portfolio comprised of eleven properties (see note 18 — Investment Properties).



Additionally in connection with the Purchase
Agreement:



1. The Company, LuxCo, Messrs. Rotondi
and Failla and Giuseppe Pantaleo entered into an agreement which terminated the Transaction Value Agreement dated September 30,
2013 among them (the “Seba-Nova TVA”). The Seba-Nova TVA required the Company to make Messrs. Rotondi, Failla and Pantaleo
whole in the event that the average sales price of all of the shares that were issued to them were sold in public market transactions
at less than $10 per share (see note 9 — Contingent Consideration).



2. The Company, LuxCo, Nova, and Mr. Rotondi
entered into an option agreement (the “Option Agreement”) pursuant to which Mr. Rotondi would have the right to purchase
all of the equity interests in Nova owned by LuxCo in the event that (i) the mortgage payments that Mr. Rotondi has personally
guaranteed are not made, or (ii) a certain power of attorney that would facilitate the transfer of Nova’s equity interests
to Mr. Rotondi is not renewed. The Option Agreement will terminate on the repayment of the mortgages or the termination of Mr.
Rotondi’s personal guaranties. The consideration for the exercise of the option would be the return of 50,000 shares of the
Company’s ordinary shares. Nova’s sole asset consists of two floors of Corso Europa 22, an office building in central
Milan.



Separately, on December 15, 2014, the Company,
LuxCo, Cesare Lanati, Stefano Lanati, Davide Rigamonte Bell Real Estate S.r.l. and IGS S.r.l. entered into an agreement which terminated
the Transaction Value Agreement dated September 30, 2013 among them (the “Bell TVA”). The Bell TVA, similar to the
aforementioned Seba-Nova TVA, required the Company to make Messrs. Lanati, Lanati and Rigamonte and Bell Real Estate S.r.l. and
IGS S.r.l. whole in the event that the average sales price of all of the shares that were issued to them were sold in public market
transactions at less than $10 per share. As a result of the cancellation of Bell TVA and Seba-Nova TVA, there are no Transaction
Value Agreements outstanding as of December 31, 2014 (see note 9 — Contingent Consideration).





F-10






The accompanying consolidated financial
statements have been prepared assuming the Group will continue as a going concern. The Group has incurred recurring operating losses,
negative cash flows from operations, and has a working capital deficiency as of December 31, 2014. These factors raise substantial
doubt about the Group’s ability to continue as a going concern.



The real estate portfolio of eleven properties
in Italy does not currently generate positive cash flows. Management believes that when the market conditions are more favorable,
some of these properties may be liquidated to generate cash. However, real estate transactions in the greater Milan area have been
relatively few when compared to the pre-financial crisis period. An actual transaction may take longer than viable for the Group’s
current needs.



The Group’s ability to continue as
a going concern is dependent upon management’s ability to generate profitable operations in the future and obtain the necessary
financing to meet obligations and pay liabilities arising from business operations when they come due. If the Group does not generate
profitable operations or obtain the necessary financing, the Group may not have enough operating funds to continue to operate as
a going concern. There is no assurance that the Company will be able to secure such financing. A failure to generate profitable
operations or obtain additional financing could prevent the Group from paying current obligations, allow the hiring of additional
resources and continue its operating strategy. The Group is actively seeking additional capital through private placements of equity
and debt.



The funding of the Group has been primarily
by the Company entering into interest bearing unsecured convertible promissory notes with one of the directors (see note 25 —
Related Party Transactions and Balances). However, if additional financing from different source is not obtained, the Group may
not be able to execute its business plan and may need to curtail certain of its operations.



Management
is currently indiscussion with several funding sources for a combination of
debt and equity financing. However, there can be no assurance the Group will be able to obtain funding
from these sources.



Note 2 — Basis of Presentation



|(a) | Statement of compliance
|--- | -----------------------



The consolidated financial statements of
the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and its related
interpretations as issued by the International Accounting Standards Board (IASB).



i. Application of IFRS 1



For all periods up to and including the
year ended December 31, 2012, the Company previously prepared its financial statements in accordance with accounting principles
generally accepted in the United States of America (“US GAAP”). The financial statements, for the year ended December
31, 2013, are the first the Company has prepared in accordance with IFRS.



Accordingly, the Group has prepared consolidated
financial statements which comply with IFRS applicable for periods ending on or after December 31, 2013, together with the comparative
period data as at and for the year ended December 31, 2012, as described in the summary of significant accounting policies. In
preparing these financial statements, the Company’s opening statement of financial position was prepared as at January 1,
2012, the Company’s date of transition to IFRS. Management determined that no adjustments were necessary to convert the consolidated
financial statements from US GAAP to IFRS.



The Company’s financial statements
for the year ended December 31, 2012, was the first annual financial statements that comply with IFRS. The Company has applied
IFRS 1 in preparing these consolidated financial statements.



In preparing these consolidated financial
statements in accordance with IFRS 1, the Company has applied the relevant mandatory exceptions and certain optional exemptions
from full retrospective application of IFRS.



ii. Exemptions from full retrospective application –
elected by the Company



There were no optional exemptions applicable to the Company.



iii. Exceptions from full retrospective application followed
by the Company



The Company has applied the following mandatory exceptions from
retrospective application.



| | (1) | Estimates exception
| | --- | -------------------



Estimates under IFRS at January 1, 2012, are consistent
with estimates made for the same date under US GAAP.





F-11






All other mandatory exceptions in IFRS 1 were not applicable
because there were no significant differences in management’s application of US GAAP in these areas.



|(b) | Basis of measurement
|--- | --------------------



The consolidated financial statements have
been prepared on the historical cost basis except for the following which are measured at fair value:



| | · | Derivative financial instruments; and
| | - | -------------------------------------



| | · | Investment properties
| | - | ---------------------



|(c) | Functional and presentation currency
|--- | ------------------------------------



The consolidated financial statements are
presented in US dollars, which is the Group’s functional currency. All financial information presented in US dollars have
been rounded to the nearest dollar amount, except when otherwise indicated.



|(d) | Use of estimates and judgments
|--- | ------------------------------



The preparation of the consolidated financial
statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts
of assets, liabilities, revenue and expenses and the disclosure of contingent liabilities at the reporting date. Actual results
may differ from these estimates.



Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised
and in any future periods affected.



|(e) | Basis of consolidation
|--- | ----------------------



The consolidated financial statements comprise
the financial statements of the Company and its wholly-owned subsidiaries as at December 31, 2014 and 2013.



The Subsidiaries are consolidated from
September 30, 2013 (the date of Business Combination), being the date on which the Company obtained control, and continue to be
consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and
losses resulting from intra-group transactions are eliminated in consolidation.



On December 18, 2014, the Company ceased control of Seba through
the closing of the Purchase Agreement in exchange for the return of 497,308 of the Company’s shares. Seba’s operating
result from January 1, 2014 to December 18, 2014 is reported as discontinued operations on the Group’s consolidated statements
of income/(loss) and comprehensive income/(loss) for the years ended December 31, 2014 and December 31, 2013.





Note 3 — Significant Accounting Policies



|(a) | Determination of Fair Values
|--- | ----------------------------



A number of the Group’s accounting
policies and disclosures require the determination of fair value, for both financial assets and liabilities. Fair values have been
determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about
the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.



Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.



The Company uses valuation techniques that
are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs significant to the fair value measurement as a whole:



| | · | Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
| | - | -------------------------------------------------------------------------------------------------



| | · | Level 2 – Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
| | - | --------------------------------------------------------------------------------------------------------------





F-12






For assets and liabilities that are recognized
in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between levels
in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement
as a whole) at the end of each reporting period.



|(b) | Revenue
|--- | -------



Rental income is recognized in the period
on an accrual basis if the amount of revenue can be measured reliably and it is probable that the Group will receive the consideration.



i. Rental income



The Group is the lessor in operating leases.
Rental income arising from operating leases on investment property is accounted for on a straight-line basis over the lease terms
and is included in the consolidated statements of income/(loss) and comprehensive income/(loss) due to its operating nature, except
for contingent rental income which is recognized when it arises.



Amounts received from tenants to terminate
leases or to compensate for dilapidations are recognized in the consolidated statements of income/(loss) and comprehensive income/(loss)
when the right to receive them arises.



|(c) | Cash and Cash Equivalents
|--- | -------------------------



Cash and short-term deposits in the consolidated
statements of financial position comprise cash at bank and short-term deposits with an original maturity of three months or less.



|(d) | Loans and Borrowings
|--- | --------------------



All loans and borrowings are initially
recognized at fair value less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortized cost using the effective interest method.



In accordance to IAS 17 —Leases,
the direct costs of the leases are added to the amount recognized as an asset and amortized over the duration of the leases.



|(e) | Trade and Other Receivables
|--- | ---------------------------



Trade and other receivables are recognized
at their original invoiced value. The fair values of trade and other receivables classified as loans and receivables are not materially
different to their net carrying values. A provision is made when there is objective evidence that the Company will not be able
to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote.



|(f) | Cash Held in Trust
|--- | ------------------



Cash held in trust consists of United States
Treasury securities. The Company classifies these securities as held-to-maturity. 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 and adjusted for the amortization or accretion of premiums or discounts.



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 income/(loss) and comprehensive
income/(loss). Interest income is recognized when earned.



|(g) | Income Taxes
|--- | ------------



The Company was incorporated as a Cayman
Islands exempted company and therefore the Group is not currently subject to income tax in the Cayman Islands or United States
of America.



The Subsidiaries are subject to income
tax in Italy and judgment is required in determining the provision for income taxes. During the ordinary course of business, there
are transactions and calculations for which the ultimate tax determination is uncertain. As a result, the subsidiaries recognized
tax liabilities based on estimates of whether additional taxes and interest will be due. These tax liabilities are recognized when
the Group’s management believes that certain positions are likely to be challenged and may not be fully sustained upon review
by tax authorities. The Group management believes that its accruals for tax liabilities are adequate for all open audit years based
on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates
and assumptions and may involve a series of complex judgments about future events. To the extent that the final tax outcome of
these matters is different than the amount recorded, such differences will impact income tax expense in the period in which such
determination is made.





F-13






|(h) | Deferred Taxation
|--- | -----------------



Deferred tax assets and liabilities are
recognized where the carrying amount of an asset or liability in the consolidated statement of financial position differs from
its tax base.



Recognition of deferred tax assets is restricted
to those instances where it is probable that taxable profit will be available against which the difference can be utilized.



The amount of the asset or liability is
determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when
the deferred tax liabilities/(assets) are settled/(recovered).



Deferred tax assets and liabilities are
offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets
and liabilities relate to taxes levied by the same tax authority on either:



| | · | The same taxable group company; or
| | - | ----------------------------------



| | · | Different group entities which intend either to settle current tax assets and liabilities on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(i) | Property and equipment
|--- | ----------------------



Items of property and equipment are initially
recognized at cost. Depreciation is provided on all items of property and equipment so as to write off their carrying value over
their expected useful economic lives. It is provided at the following rates:



Plant and machinery – 7.5% per annum
straight line

Fixture and fittings – 15.0% per
annum straight line

Office and office related equipment –
20% per annum straight line



|(j) | Share-Based Payment
|--- | -------------------



Share-based payment awards granted to employees
and non-employees are recognized as stock option expense, with a corresponding increase in equity, over the period that the optionees
become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards
for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized
as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting
date.



The Company estimates the fair value of
option awards using the Black-Scholes option pricing model. Determining the fair value of awards under this model represents management’s
best estimates, but these estimates involve inherent uncertainties and the application of management judgment.



|(k) | Earnings/(loss) per Share
|--- | -------------------------



Basic earnings/(loss) per share is computed
by dividing net profit/(loss) by the weighted-average number of ordinary shares outstanding of the year.



Warrants and options are excluded from
the computation of fully diluted loss per share if their effect is anti-dilutive.



|(l) | Provisions
|--- | ----------



Provisions for environmental restoration,
restructuring costs and legal claims are recognized when: the Group has a present legal or constructive obligation as a result
of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been
reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions
are not recognized for future operating losses.





F-14






Where there are a number of similar obligations,
the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole.
A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations
may be small.



Provisions are measured at the present
value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized
as interest expense.



|(m) | Geographical Risk
|--- | -----------------



The Subsidiaries’ operation is located
in Italy. Therefore, it is subject to local government regulations and to the uncertainties of the economic and political conditions
of this area.



The overall performance is affected by
the increase or decrease of the gross Italian national product. During 2012 and 2013, there was a general slowdown of the economic
trend in Europe and especially in Italy. This general slowdown has continued during 2014.



|(n) | Foreign currencies
|--- | ------------------



The financial statements of the Subsidiaries
were translated from Euro to U.S. Dollars pursuant to the provisions of IAS 21 “The Effects of Changes in Foreign Exchange
Rates”, as follows:



| | · | Assets and liabilities were translated using the exchange rate at the balance sheet date                                                                                                       
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Amounts in the statement of operations were translated at an appropriate weighted average rate for the period presented                                                                        
| | · | The subsidiaries equity accounts were translated using historical exchange rates                                                                                                               
| | · | The translation adjustments resulting from translating the foreign entity’s financial statements are reported separately in Translation Reserve as a separate component of stockholders’ equity



|(o) | Business Combination and Goodwill
|--- | ---------------------------------



Business combinations are accounted for
using the acquisition method. The cost of an acquisition is measuredas the aggregate of the consideration transferred
measured at the acquisition date fair value. Acquisition-related costs are expensed as incurred and included in otherexpenses.



When the Group acquires a business, it
assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual
terms, economic circumstances and pertinent conditions as at the acquisition date.



Goodwill is initially measured at cost,
being the excess of the aggregate of the consideration transferred over the net identifiable assets acquired and liabilities assumed.



After initial recognition, goodwill is
measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.



Goodwill is tested for impairment annually
as at December 31 and when circumstances indicate that the carrying value may be impaired.



Impairment is determined for goodwill by
assessing the recoverable amount of each cash-generating unit to which the goodwill relates. Where the recoverable amount of the
cash-generating unit is less than their carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill
cannot be reversed in future periods.



|(p) | Operating lease contracts – the Group as lessor
|--- | -----------------------------------------------



The Group has entered into commercial property
leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the
arrangements, particularly the duration of the lease terms and minimum lease payments, that it retains all the significant risks
and rewards of ownership of these properties and so accounts for the leases as operating leases.





F-15






|(q) | Leases – Group as lessee
|--- | ------------------------



The determination of whether an arrangement
is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether
fulfillment of the arrangement is dependent on the use of a specific asset(s) or the arrangement conveys a right to use the asset(s),
even if that right is not explicitly specified in the arrangement.



Finance leases, which transfer to the Group
substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease
at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.



Lease payments are apportioned between
the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are charged to the statements of income/(loss) and comprehensive income/(loss) as they arise.



|(r) | Derivative financial instruments – Initial recognition and subsequent measurement
|--- | ---------------------------------------------------------------------------------



The Group uses interest rate swaps to hedge
its risks associated with interest rates. Such derivative financial instruments are initially recognized at fair value on the date
on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as assets
when the fair value is positive and as liabilities when the fair value is negative. They are carried in the consolidated statement
of financial position at fair value with changes in fair value recognized in the consolidated statements of income/(loss) and comprehensive
income/(loss).





|(s) | Share Capital
|--- | -------------



Ordinary shares are
classified as equity. Ordinary shares subject to possible conversion are classified as liabilities.



|(t) | New standards and interpretations not yet adopted
|--- | -------------------------------------------------



Standards issued but not yet effective
as of the date of issuance of the Group’s financial statements are listed below. This listing of standards and interpretations
issued are those that the Group reasonably expects to have on impact on disclosures, financial position or performance when applied
at a future date. The Group intends to adopt these standards when they become effective.



IFRS 9 Financial instruments: Classification
and Measurement



IFRS 9, as issued in 2010, reflects the
first phase of the IASB’s work on the replacement of IAS 39 and applies to classification and measurement of financial assets
and financial liabilities as defined in IAS 39. The standard was initially effective for annual reports beginning on or after January
1, 2013. In November 2013, Chapter 6 of IFRS on hedge accounting was published. At the same time, Chapter 7 containing the effective
date and transition provisions was amended to remove the mandatory effective date of IFRS 9. Entities may still choose to apply
IFRS 9 immediately, but are not required to do so.



In subsequent phases, the IASB is addressing
impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement
of the Group’s financial assets, but will not have an impact on classification and measurements of financial liabilities.
The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.



IFRS 15 Revenue from Contracts with
Customers



The IASB have issued a new revenue recognition
standard, IFRS 15 in May 2014, which replaces all existing IFRS revenue requirements. The standard applies to all revenue contracts
and provides a model for the recognition and measurement of sales of some non-financial assets. Application is required for all
annual periods beginning on or after January 1, 2018. There are new specific requirements in respect of variable consideration
such that it is only included in the transaction price if it is highly probable that the amount of revenue recognized would not
be subject to significant future reversals as a result of subsequent re-estimation. The adoption of IFRS 15 may have an impact
on the revenue recognition as the tenants’ credit risk will be taken into consideration when rental revenue is being recognized.
The effect of this to the Group’s consolidated financial statements is undetermined at this time.





F-16






Note 4 — Reclassifications to Prior
Year Financial Statements



The Group revised the presentation of prepaid
expenses and other current assets, trade and other receivables, corporate tax liabilities (less current portion), trade and other
payables, accrued expenses and other deferred income, and corporate tax liabilities in its consolidated statements of financial
position for the year ended December 31, 2013. The amounts were reclassified from one account to another account in the same section
to better reflect the nature of these amounts. The reclassification did not affect the total assets, the total liabilities amounts,
and the previously reported net income/(loss) in either of the years ended December 31, 2013 or 2014.



A tabular summary of the reclassifications
are presented below:



|                                                |  | Consolidated statements of financial position |            
|----------------------------------------------- |  | --------------------------------------------- | -----------
|                                                |  | As at December 31, 2013                       |            
|                                                |  | Previously reported                           |            
|Prepaid expenses and other current assets       |  | $                                             | 92,154     
|Trade and other receivables, net                |  |                                               | 5,177,133  
|                                                |  |                                               |            
|Total assets                                    |  |                                               | 78,545,589 
|                                                |  |                                               |            
|Trade and other payables                        |  |                                               | 9,245,727  
|Accrued expenses and other deferred income      |  |                                               | –          
|Corporate tax liabilities                       |  |                                               | 1,461,156  
|Corporate tax liabilities, less current portion |  |                                               | –          
|                                                |  |                                               |            
|Total liabilities                               |  |                                               | 75,951,411 
|                                                |  |                                               |            
|Profit/(loss) for the year                      |  |                                               | (15,885,478



The Company analyzed the revisions under
SEC staff guidance (Staff Accounting Bulletin 108) and determined that the revisions are immaterial on a quantitative and qualitative
basis and that it is probable that the judgment of a reasonable person relying upon the consolidated financial statements would
not have been changed or influenced by the inclusion or reclassification of the items in the year ended December 31, 2013.





Note 5 – Business Combinations
and Goodwill



On September 30, 2013, the Company consummated
the Business Combination by acquiring 100% of Seba, Nova, Delfin, SIM, Dieci, Ellegi, GSI, and Magfin for an aggregate of 1,719,317
ordinary shares. The fair value of the shares is the closing market price of the Company at the acquisition date, at $10.96 per
share. The fair value of the consideration given is therefore $18,843,714. As a result of this Business Combination, eleven properties
were acquired. The existing strategic management function and associated processes were acquired with the property and, as such,
the Company’s management considers this transaction the acquisition of a business, rather than an asset acquisition.



The business combination was accounted
for as a forward acquisition under acquisition method and management has concluded that the Company is the accounting acquirer
because the Company has effective control of the entities acquired after the business combination by retaining both management
control and majority shareholder control. No management of the Subsidiaries became part of the Company or BHN’s management
team or board of directors following the business combination. The Subsidiaries’ results of operations were consolidated
with the Company’s results of operations beginning on the date of the Business Combination.



The Subsidiaries’ assets and liabilities
are measured at their acquisition-date fair value. The purchase price is allocated over the fair value of assets acquired and liabilities
assumed with any excess of purchase price over the fair value of net assets acquired allocated to goodwill. All direct costs of
the transaction were charged to operations in the period that such costs were incurred.



In connection with the Business Combination
in 2013, the Company entered into various transaction value agreements (each, a “TVA” and collectively, “TVAs”)
with the sellers of the properties (See note 9 — Contingent Consideration).



On December 18, 2014, the Company ceased
control of one of the Subsidiaries acquired from this Business Combination (see note 13 — Discontinued Operations) through
the closing of the Purchase Agreement in exchange for the return of 497,308 of the Company’s shares.





F-17






Assets acquired and liabilities assumed



The fair value of the identifiable assets
and liabilities of the Subsidiaries as at the date of acquisition were:



|                                            |  | Fair value recognized on date of acquisition |           
|------------------------------------------- |  | -------------------------------------------- | ----------
|Investment properties                       |  | $                                            | 71,586,615
|Machinery & other equipment                 |  |                                              | 272,710   
|Current assets                              |  |                                              | 650,207   
|                                            |  |                                              | 72,509,532
|Loans and borrowings                        |  |                                              | 51,141,017
|Trade and other payables                    |  |                                              | 4,713,958 
|Tenant security deposits                    |  |                                              | 1,343,075 
|Corporate tax liabilities                   |  |                                              | 1,981,326 
|Derivative financial liabilities            |  |                                              | 1,400,900 
|Total identifiable net assets at fair value |  |                                              | 11,929,256
|Goodwill arising on acquisition             |  |                                              | 6,914,458 
|Purchase consideration transferred          |  | $                                            | 18,843,714



The costs incurred in connection with the
acquisition of $2,420,083 have been expensed and are included in operating expenses.



From the date of acquisition through December
31, 2013, the Subsidiaries have contributed a net loss of approximately $2.5 million to the loss after tax and $1,374,728 to the
revenues. If the combination has taken place at the beginning of the year, the net loss after tax through December 31, 2013 for
the Company would have been $2,118,521 and revenue would have been $7,667,476.



The goodwill of $6,914,458  consists
of the amount the Company considered to be in excess of the Subsidiaries’ fair value. None of the goodwill is expected to
be deductible for tax purposes.



Management determined that the goodwill
was fully impaired at December 31, 2013 because the fair value at December 31, 2013 was principally equal to the acquisition date
fair value.



The fair value as at December 31, 2013
was determined to be principally equal to as the acquisition date due to: (1) the short time period between the acquisition date
and December 31, 2013, and (2) there were no significant events that affected the real estate prices in Italy where all the investment
properties are located. This was further confirmed by the professional appraiser by comparing the market data as at September 30,
2013 and December 31, 2013.





Note 6 — Depreciation and Bad Debt Provision



Details of depreciation and bad debt provision are as follows:



|                                          |  | 2014 |         |  | 2013 |  
|----------------------------------------- |  | ---- | ------- |  | ---- | -
|Depreciation of property and equipment    |  | $    | 75,245  |  |      | $
|Bad debt provision                        |  |      | 32,155  |  |      |  
|Total depreciation and bad debt provision |  | $    | 107,400 |  |      | $







F-18






Note 7 — Other Expenses



Details of other expenses is shown in the table below:



|                                                          |  |   | 2014      |   |  |   | 2013*     |  |  |   | 2012      | 
|--------------------------------------------------------- |  | - | --------- | - |  | - | --------- |  |  | - | --------- | 
|Rental costs                                              |  | $ | 177,271   |   |  | $ | 35,382    |  |  | $ | 90,000    | 
|Staff costs                                               |  |   | 250,881   |   |  |   | 35,136    |  |  |   | –         | 
|Sundry operating expenses                                 |  |   | 51,336    |   |  |   | 105,765   |  |  |   | –         | 
|Taxation on buildings                                     |  |   | 275,471   |   |  |   | 88,190    |  |  |   | –         | 
|Administrative and other expenses                         |  |   | 295,921   |   |  |   | 323,858   |  |  |   | 16,720    | 
|Maintenance expenses                                      |  |   | 372,907   |   |  |   | 201,065   |  |  |   | –         | 
|Insurance costs                                           |  |   | 127,449   |   |  |   | 55,650    |  |  |   | 41,857    | 
|Provision/(release of provision) related to legal dispute |  |   | (300,000  | ) |  |   | 300,000   |  |  |   | –         | 
|Legal expenses                                            |  |   | 517,265   |   |  |   | 1,438,367 |  |  |   | 524,737   | 
|Professional fees                                         |  |   | 864,255   |   |  |   | 1,263,002 |  |  |   | 157,870   | 
|Bank fees                                                 |  |   | 50,100    |   |  |   | 11,056    |  |  |   | 34,544    | 
|Licenses, registration & fees                             |  |   | 11,596    |   |  |   | 25,090    |  |  |   | 2,915     | 
|Put option fees                                           |  |   | –         |   |  |   | 160,500   |  |  |   | –         | 
|Rent expense                                              |  |   | –         |   |  |   | 67,500    |  |  |   | –         | 
|Stock option expense                                      |  |   | 5,044     |   |  |   | 154,343   |  |  |   | 180,750   | 
|Travel expense                                            |  |   | 69,742    |   |  |   | 102,635   |  |  |   | 71,400    | 
|Total other expenses                                      |  | $ | 2,769,238 |   |  | $ | 4,367,539 |  |  | $ | 1,120,793 | 



*Restated for discontinued operations (see note 13 — Discontinued
Operations)





Note 8 — Finance Income and
Costs



The details of finance income and costs on the statements of
income/(loss) and comprehensive income/(loss) is as follow:



|Finance income                                                               |  | 2014 |        |  | 2013 |  
|---------------------------------------------------------------------------- |  | ---- | ------ |  | ---- | -
|Finance income from variation of fair value on interest rate swap agreements |  |      | 75,622 |  |      |  
|Other finance income                                                         |  |      | 258    |  |      |  
|Total finance income                                                         |  | $    | 75,880 |  |      | $



|Finance costs                                                               |  | 2014 |           |  | 2013 |  
|--------------------------------------------------------------------------- |  | ---- | --------- |  | ---- | -
|Finance cost on note payable to underwriters and other debt                 |  | $    | 237,719   |  |      | $
|Interest expense of bank loans, revolving line of credit and finance leases |  |      | 1,653,774 |  |      |  
|Total finance costs                                                         |  | $    | 1,891,493 |  |      | $





Note 9 — Contingent Consideration



In connection with the Business Combination
in 2013, the Company entered into various TVAs with the sellers of the properties. Pursuant to the TVAs, the Company had agreed
to make the sellers whole in the event that the average sales price of the ordinary shares issued to the sellers in public market
transaction is less than $10, by issuing additional ordinary shares of the Company to the sellers. The make-whole would be available
only after the respective seller had sold all of the shares received at the Business Combination. The number of shares issuable
pursuant to the make-whole provisions of the TVAs was the quotient of the total shortfall between $10 and the average price for
all such shares sold in public market transactions, divided by the then current fair market value of the combined company’s
ordinary shares. The terms of the TVAs did not become effective until there was an effective registration statement covering such
shares. The registration rights agreement entered into with the sellers requires the Company to file a registration statement covering
these shares as soon as practicable. There were no liquidating damage or penalty provisions included in the registration rights
agreement. Management deemed that as soon as practicable would not be a date prior to April 30, 2014. At December 31, 2013, the
market price of the Company’s ordinary shares was $7 per share. As a result, the Company recorded a liability under these
TVAs for $5,157,951 at December 31, 2013.



In addition, each of the TVAs granted
the sellers a call option on the equity interest in the Business Combination in the event that such sellers are unable to sell
a sufficient number of shares to reach certain dollar targets in certain periods set forth in the TVAs. Notwithstanding the foregoing
and provided there was any effective registration statement covering such shares, if the total value of shares traded in the public
market equaled the dollar target for a given period, then the call option could not be exercised for such period. In order to
exercise the call option, a seller must delivered to the Company all of the proceeds received from the sale of shares issued pursuant
to the applicable purchase agreement and TVA, together with any such shares that had not been sold by the seller, but less certain
franchise tax payments made by the sellers. The Management deemed that there was no accounting implication on the call option
granted.





F-19






On December 15 and 18, 2014, the Company
had entered into separate agreements with the sellers of the properties to terminate the TVAs. As a result of these agreements
on termination of the TVAs, there are no outstanding TVAs as of December 31, 2014. The liability recorded at December 31, 2013
is therefore reversed at December 31, 2014.





Note 10 – Impairment of Goodwill



All goodwill arising on acquisition which
amounted to $6,914,458 was deemed impaired during the annual impairment test at December 31, 2013. See note 5 – Business
Combinations and Goodwill for detail.





Note 11 – Income Taxes



The income taxes relating to continuing operations for the years
ended December 31 are as follow:



|                                                                                                    |  | 2014 |         |  | 2013 |  
|--------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | -
|Current tax                                                                                         |  |      |         |  |      |  
|In respect of the current year                                                                      |  | $    | 208,603 |  |      | $
|                                                                                                    |  |      |         |  |      |  
|Deferred tax (see note 12 — Deferred Taxes)                                                         |  |      |         |  |      |  
|In respect of the current year                                                                      |  |      | 654,579 |  |      |  
|Deferred tax related Seba (see note 13 — Discontinued Operations)                                   |  |      | –       |  |      |  
|                                                                                                    |  |      | 654,579 |  |      |  
|Total income tax expense/(benefit) recognized in the current year relating to continuing operations |  | $    | 863,182 |  |      | $



The income tax expense for the years ended December 31 can be
reconciled to the accounting profit as follows:



|                                                                                                                                   |  | 2014 |            |   | 2013 |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Profit/(loss) before tax from continuing operations                                                                                |  | $    | 5,010,365  |   |      | $
|                                                                                                                                   |  |      |            |   |      |  
|Income tax expense calculated at 31.4% (2013: 31.4%)                                                                               |  | $    | 1,573,255  |   |      | $
|Effect on income that is exempt from taxation                                                                                      |  |      | (1,873,555 | ) |      |  
|Effect of expenses that are not deductible in determining taxable profit                                                           |  |      | 489,814    |   |      |  
|Effect of unused tax losses and tax offsets not recognized as deferred tax assets                                                  |  |      | 702,544    |   |      |  
|Effect of previously unrecognized and unused tax losses and deductible temporary differences now recognized as deferred tax assets |  |      | (36,121    | ) |      |  
|Others                                                                                                                             |  |      | 7,246      |   |      |  
|Income tax expense recognized
    in profit or loss relating to continuing operations (current & deferred)                         |  | $    | 863,183    |   |      | $



The tax rate used for the 2014 and 2013 reconciliations above
is the tax rate of 31.4% on taxable profits in Italy. This tax rate consists of both IRES (an Italian corporate income tax) and
IRAP (an Italian regional production tax).





Note 12 — Deferred Taxes



The amount of unused tax losses for which
no deferred tax assets is recognized in the consolidated statements of financial position as at December 31, 2014 was $547,046
with no expiration date limitation.





F-20






Deferred tax is calculated in full on temporary
differences using a tax rate of 27.5%, if the temporary difference is subject only to IRES (an Italian corporate income tax) rules,
or 31.4% if the temporary difference is subject both to IRES and IRAP (an Italian regional production tax) rules.



The movement on the deferred tax account
is as shown below:



|                                                          |  | 2014 |            |   | 2013 |  
|--------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|At January 1                                              |  | $    | (5,399,745 | ) |      | $
|At September 30                                           |  |      |            |   |      |  
|                                                          |  |      |            |   |      |  
|Recognized directly in equity                             |  |      |            |   |      |  
|Unwinding of Seba (see note 13 — Discontinued Operations) |  |      | 1,757,921  |   |      |  
|Currency exchange difference                              |  |      | 558,321    |   |      |  
|                                                          |  |      |            |   |      |  
|Recognized in profit and loss                             |  |      |            |   |      |  
|Tax expense                                               |  |      | (654,579   | ) |      |  
|                                                          |  |      |            |   |      |  
|At December 31                                            |  | $    | (3,738,082 | ) |      | $



Details of the deferred tax liability and amounts recognized
in net income/(loss) are as follows:



|                                                                                                 |  | 2014  |         |  | 2014      |   |            | 2014            |  |   | 2014       |  
|------------------------------------------------------------------------------------------------ |  | ----- | ------- |  | --------- | - | ---------- | --------------- |  | - | ---------- | -
|                                                                                                 |  | Asset |         |  | Liability |   |            | (Charged) / Net |  |   | Movement   |  
|Adjustment for IFRS purposes (deductible/taxable for
    local tax rules in future fiscal years) |  |       |         |  |           |   |            |                 |  |   |            |  
|Writing off of intangibles                                                                       |  | $     | 754,518 |  |           | $ | –          |                 |  | $ | 754,518    |  
|Writing off of leasing agreements entry fee                                                      |  |       | 190     |  |           |   | –          |                 |  |   | 190        |  
|Writing off of tangibles                                                                         |  |       | –       |  |           |   | (67,457    | )               |  |   | (67,457    | )
|Accounting of lease contracts according to IAS 17                                                |  |       | –       |  |           |   | (1,950,996 | )               |  |   | (1,950,996 | )
|Accounting of investment properties according to fair value                                      |  |       | –       |  |           |   | (2,553,242 | )               |  |   | (2,553,242 | )
|Mark to market on derivative instruments                                                         |  |       | 69,454  |  |           |   | –          |                 |  |   | 69,454     |  
|Other temporary differences                                                                      |  |       |         |  |           |   |            |                 |  |   |            |  
|Bad debt provision                                                                               |  |       | 9,451   |  |           |   | –          |                 |  |   | 9,451      |  
|Others                                                                                           |  |       | –       |  |           |   | –          |                 |  |   | –          |  
|Total                                                                                            |  | $     | 883,613 |  |           | $ | (4,571,695 | )               |  | $ | (3,738,082 | )



|                                                                                             |  |   | 2013      |  |  |   | 2013       |   |  |   | 2013            |   |  |   | 2013*    |  
|-------------------------------------------------------------------------------------------- |  | - | --------- |  |  | - | ---------- | - |  | - | --------------- | - |  | - | -------- | -
|                                                                                             |  |   | Asset     |  |  |   | Liability  |   |  |   | (Charged) / Net |   |  |   | Movement |  
|Adjustment for IFRS purposes (deductible/taxable for local tax rules in future fiscal years) |  |   |           |  |  |   |            |   |  |   |                 |   |  |   |          |  
|Writing off of intangibles                                                                   |  | $ | 1,092,908 |  |  | $ | –          |   |  | $ | 1,092,908       |   |  | $ | 23,399   |  
|Writing off of leasing agreements entry fee                                                  |  |   | 310,706   |  |  |   | –          |   |  |   | 310,706         |   |  |   | 1,799    |  
|Writing off of tangibles                                                                     |  |   | –         |  |  |   | (2,950     | ) |  |   | (2,950          | ) |  |   | 20,825   |  
|Accounting of lease contracts according to IAS 17                                            |  |   | –         |  |  |   | (2,270,344 | ) |  |   | (2,270,344      | ) |  |   | 76,087   |  
|Accounting of investment properties according to Fair Value                                  |  |   | –         |  |  |   | (4,908,756 | ) |  |   | (4,908,756      | ) |  |   | (118,711 | )
|Mark to market on derivative instruments                                                     |  |   | 358,373   |  |  |   | –          |   |  |   | 358,373         |   |  |   | (3,561   | )
|Elimination property revaluation                                                             |  |   | –         |  |  |   | (125,492   | ) |  |   | (125,492        | ) |  |   | –        |  
|Normalization income                                                                         |  |   | 61,766    |  |  |   | –          |   |  |   | 61,766          |   |  |   | (15,442  | )
|Other temporary differences                                                                  |  |   |           |  |  |   |            |   |  |   |                 |   |  |   |          |  
|Bad debt provision                                                                           |  |   | –         |  |  |   | (38,499    | ) |  |   | (38,499         | ) |  |   | –        |  
|Provision for risk                                                                           |  |   | 49,260    |  |  |   | –          |   |  |   | 49,260          |   |  |   | –        |  
|Others                                                                                       |  |   | 73,283    |  |  |   | –          |   |  |   | 73,283          |   |  |   | 8,420    |  
|Total                                                                                        |  | $ | 1,946,296 |  |  | $ | (7,346,041 | ) |  | $ | (5,399,745      | ) |  | $ | (7,184   | )



*Restated for discontinued operations (see note 13 — Discontinued
Operations)





F-21






Note 13 — Discontinued Operations



On December 18, 2014, the Company ceased
control of Seba through the closing of the Purchase Agreement in exchange for the return of 497,308 of the Company’s shares.
Seba’s operating result from January 1, 2014 to December 18, 2014 and from September 30, 2013 to December 31, 2013 is reported
as discontinued operations on the Group’s consolidated statements of income/(loss) and comprehensive income/(loss) for the
years ended December 31, 2014, and December 31, 2013.



The results of Seba for the years ended December 31 assets are
presented below:



|                                                            |  | 2014 |            |   | 2013 |  
|----------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Rental income                                               |  | $    | 1,170,255  |   |      | $
|Other revenues                                              |  |      | 159,257    |   |      |  
|Expenses                                                    |  |      | (384,953   | ) |      |  
|Operating income                                            |  |      | 944,559    |   |      |  
|Finance income                                              |  |      | –          |   |      |  
|Finance costs                                               |  |      | (1,152,416 | ) |      |  
|Profit/(loss) before tax from discontinued operations       |  |      | (207,857   | ) |      |  
|Tax expenses, current                                       |  |      | (152,916   | ) |      |  
|Deferred tax credit/(expense)                               |  |      | 59,319     |   |      |  
|Net profit/(loss) from discontinued operations              |  |      | (301,454   | ) |      |  
|Loss on foreign currency exchange on discontinued operation |  |      | (426,410   | ) |      |  
|Profit/(loss) for the year from discontinued operations     |  | $    | (727,864   | ) |      | $



The net cash flows incurred by Seba are
as follows:



|                          |  | 2014 |            |   | 2013 |  
|------------------------- |  | ---- | ---------- | - | ---- | -
|Operating                 |  | $    | 2,227,623  |   |      | $
|Investing                 |  |      | 1,305      |   |      |  
|Financing                 |  |      | (2,178,858 | ) |      |  
|Net cash inflow/(outflow) |  | $    | 50,070     |   |      | $



|Earnings/(loss) per share:                                       |  | 2014 |       |   | 2013 |  
|---------------------------------------------------------------- |  | ---- | ----- | - | ---- | -
|Basic, profit/(loss) for the year from discontinued operations   |  | $    | (0.23 | ) |      | $
|Diluted, profit/(loss) for the year from discontinued operations |  | $    | (0.22 | ) |      |  



This Unwinding transaction in substance
is returning the financial asset (Seba) to the original seller in exchange for the price the Company had paid for at the Business
Combination. Based on the considerations of: (1) the transfer of control and risk of Seba acquired at Business Combination (an
asset on its entirety) back to its original owner, not an unrelated third party, and (2) the Company did not in action seek any
gain from this transfer of Seba, and (3) there was no additional consideration in exchange to the common stock issued to the former
owners. The management deemed the Unwinding to be a derecognition of financial asset in substance. With this consideration, the
management is derecognizing the acquisition of Seba in accordance to IAS 39 (IAS 39.16 – derecognition of a financial asset
in its entirety).





F-22






The following is a condensed statement
of financial position for Seba as at December 18, 2014 (date of disposition):



|                             |  | As at 12/18/14 |           
|---------------------------- |  | -------------- | ----------
|Investment properties        |  | $              | 16,924,707
|Other current assets         |  |                | 354,431   
|Total Assets                 |  | $              | 17,279,138
|                             |  |                |           
|Stockholders' Equity         |  | $              | 3,243,538 
|Loans & borrowings           |  |                | 12,195,383
|Other Liabilities            |  |                | 1,840,217 
|Total Equity and liabilities |  | $              | 17,279,138





Note 14 – Financial Instruments – Risk Management



The Group, through its subsidiaries, is exposed to the following
financial risks through its operations:



| | · | Risks related to the general economic trend
| | - | -------------------------------------------



| | · | Risks related to fund requirements
| | - | ----------------------------------



| | · | Other financial risks
| | - | ---------------------



| | · | Credit risks
| | - | ------------



| | · | Liquidity risk
| | - | --------------



| | · | Interest rate risk
| | - | ------------------



| | · | Risk relevant to the environment
| | - | --------------------------------



In common with all other businesses, the
Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s objectives, policies
and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.



There have been no substantive changes
in the Group’s exposure to financial instruments risks, its objectives, policies and processes for managing those risks or
the methods used to measure them during the period unless otherwise stated in this note.



i. Principal financial instruments



The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:



| | · | Trade and other receivables
| | - | ---------------------------



| | · | Cash and cash equivalents
| | - | -------------------------



| | · | Trade and other payables
| | - | ------------------------



| | · | Revolving line of credit
| | - | ------------------------



| | · | Floating-rate bank loans and lease agreements
| | - | ---------------------------------------------



| | · | Interest rate swaps
| | - | -------------------



| | · | Notes payable
| | - | -------------



A summary of the financial instruments held by category is provided
below:



Financial assets

|                            |  | December 31, 2014           |           |  | December 31, 2013           |   |           | December 31, 2012           | 
|--------------------------- |  | --------------------------- | --------- |  | --------------------------- | - | --------- | --------------------------- | 
|                            |  | Cash, loans and receivables |           |  | Cash, loans and receivables |   |           | Cash, loans and receivables | 
|                            |  |                             |           |  |                             |   |           |                             | 
|Cash and cash equivalents   |  | $                           | 165,091   |  |                             | $ | 133,414   |                             | 
|Trade and other receivables |  |                             | 1,005,261 |  |                             |   | 4,757,018 |                             | 
|Total financial assets      |  | $                           | 1,170,352 |  |                             | $ | 4,890,432 |                             | 





F-23






Financial liabilities

|                                       |  | December 31, 2014                                              |         |  | December 31, 2013                           |   |            | December 31, 2012                                              | 
|-------------------------------------- |  | -------------------------------------------------------------- | ------- |  | ------------------------------------------- | - | ---------- | -------------------------------------------------------------- | 
|                                       |  | Financial liabilities
    at fair value through profit or loss |         |  | Financial liabilities
    at amortized cost |   |            | Financial liabilities
    at fair value through profit or loss | 
|                                       |  |                                                                |         |  |                                             |   |            |                                                                | 
|Trade and other payables               |  | $                                                              | –       |  |                                             | $ | 5,311,130  |                                                                | 
|Loans and borrowings and notes payable |  |                                                                | –       |  |                                             |   | 33,945,717 |                                                                | 
|Derivatives financial liabilities      |  |                                                                | 221,191 |  |                                             |   | –          |                                                                | 
|Total financial liabilities            |  | $                                                              | 221,191 |  |                                             | $ | 39,256,847 |                                                                | 



Financial instruments measured at fair value



|                                                                |  | Fair value measurements at December 31, 2014 using |  
|--------------------------------------------------------------- |  | -------------------------------------------------- | -
|                                                                |  | Level 1                                            |  
|Financial liabilities                                           |  |                                                    |  
|Derivative financial liabilities – interest rate swap agreement |  | $                                                  | –



|                                                                 |  | Fair value measurements at December 31, 2013 using |  
|---------------------------------------------------------------- |  | -------------------------------------------------- | -
|                                                                 |  | Level 1                                            |  
|Financial liabilities                                            |  |                                                    |  
|Derivative financial liabilities – interest rate swap agreements |  | $                                                  | –



General objectives, policies and processes



The Board has overall responsibility for
the determination of the Group’s risk management objectives and policies.



The overall objective of the Board is to
set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility.
Further details regarding these policies are set out below:



Risk related to the general economic
trend



The Group performance is affected by the
increase or decrease of the gross Italian national product. During 2012 and 2013, there was a general slowdown of the economic
trend in Europe and especially in Italy. This has continued during 2014.



Related to fund requirements



Operations may not continue to generate
adequate financial resources for operations. The Group may raise the necessary financial resource by obtaining new loans. If the
Group attempts to obtain new loans in the future, management believes that the Group may encounter higher interest rate spreads
and greater difficulties in obtaining long-term loans in comparison to the past.



Other financial risks



The Group is exposed to financial risks
associated with its business operations:



| | · | Credit risk in relation to normal trade transactions with customers;
| | - | --------------------------------------------------------------------



| | · | Liquidity risk, with particular reference to the raising of financial resources associated with investments and the financing of working capital;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Market risks (mainly related to interest rates).
| | - | ------------------------------------------------





F-24








Credit risk



The granting of credit to end customers
is subject to specific preliminary and on-going assessments of each tenant. Positions amongst trade receivables (if individually
significant) for which objective partial or total non-recoverability is ascertained, are subject to individual write-down.



The Group’s cash is held with the
following institutions:



|Description                                              |  | Rating |      |  | December 31, 2014 |   |         | December 31, 2013 |  |   | December 31, 2012 | 
|-------------------------------------------------------- |  | ------ | ---- |  | ----------------- | - | ------- | ----------------- |  | - | ----------------- | 
|                                                         |  |        |      |  |                   |   |         |                   |  |   |                   | 
|Banca Popolare di Vicenza                                |  |        | BB   |  |                   | $ | 70,848  |                   |  | $ | 8,405             | 
|Cassa Rurale e Artigiana di Binasco Credito Coorperativo |  |        | N/A  |  |                   |   | 48,798  |                   |  |   | 2,280             | 
|First Republic Bank                                      |  |        | A-   |  |                   |   | 20,890  |                   |  |   | –                 | 
|Bank of China                                            |  |        | A    |  |                   |   | 9,215   |                   |  |   | –                 | 
|Banca Cassa di Risparmio di Asti                         |  |        | N/A  |  |                   |   | 7,212   |                   |  |   | 912               | 
|ING Luxembourg                                           |  |        | A    |  |                   |   | 6,113   |                   |  |   | 17,981            | 
|Banca Popolare Commercio e Industria                     |  |        | C+   |  |                   |   | 1,252   |                   |  |   | 30,840            | 
|M&T Bank                                                 |  |        | A-   |  |                   |   | 427     |                   |  |   | 41,645            | 
|Banca Popolare di Sondrio                                |  |        | BBB  |  |                   |   | 231     |                   |  |   | 10,941            | 
|Unicredit                                                |  |        | BBB+ |  |                   |   | –       |                   |  |   | 19,769            | 
|JP Morgan                                                |  |        | A+   |  |                   |   | –       |                   |  |   | –                 | 
|Total cash at bank                                       |  |        |      |  |                   | $ | 164,986 |                   |  | $ | 132,773           | 



Accounts at the institutions in United
States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. Accounts at the institutions in
Italy are guaranteed by Interbank Deposit Protection Fund for up to €100,000. The Company performs ongoing evaluations of
these institutions to limit its concentration of risk exposure.



Foreign exchange risk



The Subsidiaries transactions are denominated
in Euro. Therefore, the fair value of the investment properties may decrease if the Euro to US dollar exchange rate decreases,
whilst the loans & borrowings would decrease accordingly. The Management believes the foreign exchange risk the Group encounters
is relatively low.



Liquidity risk



The liquidity risk may manifest with regards
to the inability to raise the financial resources necessary for the anticipated investments under good economic conditions and
for financing working capital.



The Group has adopted a series of policies
and processes aimed at optimizing the management of the financial resources, reducing the liquidity risk, such as the maintenance
of an adequate level of available liquidity, the obtaining of adequate credit facilities and the systematic monitoring of the forecast
liquidity conditions.



Management believes that the funds and
the credit facilities currently available, in additional to those that will be generated by operating and financing activities,
will permit the Group to satisfy its requirement deriving from activities for investments, working capital management and debt
repayments on their natural maturity dates. However, there can be no assurance that the funds and the credit facilities will continue
to be available in the future.



The following table sets out the contractual
maturities (representing undiscounted contractual cash-flows) of financial liabilities:



|At December 31, 2014             |  | Up to 1 year |            |  | Between 1 and 5 years |   |           | Over 5 years |  |   | Total     | 
|-------------------------------- |  | ------------ | ---------- |  | --------------------- | - | --------- | ------------ |  | - | --------- | 
|                                 |  |              |            |  |                       |   |           |              |  |   |           | 
|Trade and other payables         |  | $            | 5,311,130  |  |                       | $ | –         |              |  | $ | –         | 
|Loans and borrowings             |  |              | 23,146,771 |  |                       |   | 2,028,761 |              |  |   | 7,092,648 | 
|Derivative financial liabilities |  |              | 221,191    |  |                       |   |           |              |  |   |           | 
|Total                            |  | $            | 28,679,092 |  |                       | $ | 2,028,761 |              |  | $ | 7,092,648 | 





F-25






|At December 31, 2013             |  | Up to 1 year |            |  | Between 1 and 5 years |   |            | Over 5 years |  |   | Total      | 
|-------------------------------- |  | ------------ | ---------- |  | --------------------- | - | ---------- | ------------ |  | - | ---------- | 
|                                 |  |              |            |  |                       |   |            |              |  |   |            | 
|Trade and other payables         |  | $            | 8,699,717  |  |                       | $ | –          |              |  | $ | –          | 
|Loans and borrowings             |  |              | 5,503,242  |  |                       |   | 10,116,534 |              |  |   | 35,312,255 | 
|Derivative financial liabilities |  |              | 1,141,314  |  |                       |   | –          |              |  |   | –          | 
|Total                            |  | $            | 15,344,273 |  |                       | $ | 10,116,534 |              |  | $ | 35,312,255 | 



Interest rate risk



One of the Subsidiaries has stipulated
Interest Rate Swap agreement linked to floating rate medium-term leasing contracts with the aim of ensuring itself a fixed rate
on said operations.



Risk relevant to the environment



The activities of the Group are not directly
subject to authorization and environmental rules and regulations. The activities of some tenants may be subject to regulations
on emissions in the atmosphere, waste disposal, wastewater disposal and land contamination ban.



Capital Disclosures



The Group monitors adjusted capital which
comprises all components of equity (i.e. capital quotas, legal reserve, non-controlling interest and retained earnings).



The Group’s objectives when maintaining capital are:



| | · | To safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | To provide an adequate return to shareholders by pricing services commensurate with the level of risk.
| | - | ------------------------------------------------------------------------------------------------------





Note 15 — Operating Leases – Group as Lessor



The Group has entered into leases on its
property portfolio. The commercial property leases typically have lease terms between 6 and 9 years and include clauses to enable
periodic upward revision of the rental charge according to prevailing market conditions. Some leases contain options to terminate
before the end of the lease term.



Future minimum rental receivable under
non-cancellable operating leases as of December 31, 2014 and 2013 (without and with Seba) are as follows:



|                                        |  | 2014 |            |  | 2013 (without Seba) |   |            | 2013 (with Seba) | 
|--------------------------------------- |  | ---- | ---------- |  | ------------------- | - | ---------- | ---------------- | 
|Within 1 year                           |  | $    | 3,124,537  |  |                     |   | 3,826,530  |                  | 
|After year 1, but not more than 5 years |  |      | 10,505,324 |  |                     |   | 14,785,704 |                  | 
|More than 5 years                       |  |      | 2,536,799  |  |                     |   | 6,889,093  |                  | 
|Total                                   |  | $    | 16,166,660 |  |                     | $ | 25,501,327 |                  | 



The significant decrease from 2013 to 2014 is due to the Unwinding
of Seba, and hence the transfer of the future rental receivable to its current owner.





Note 16 — Earnings/(loss) per share



Basic and diluted earnings/(loss) per share
is computed by dividing profit/(loss) for the year by the weighted-average number of ordinary shares outstanding during the period.





F-26






Potentially dilutive securities include:



|                                                                                                             |  | For the year ended December 31, 2014 |           |  | For the year ended December 31, 2013 |  |           | For the year ended December 31, 2012 | 
|------------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | --------- |  | ------------------------------------ |  | --------- | ------------------------------------ | 
|                                                                                                             |  |                                      |           |  |                                      |  |           |                                      | 
|Warrants to purchase common stock                                                                            |  |                                      | 7,241,054 |  |                                      |  | 7,241,054 |                                      | 
|Common stock in the unit purchase option for underwriters                                                    |  |                                      | 215,000   |  |                                      |  | 215,000   |                                      | 
|Options in the unit purchase option for underwriters to purchase common stock                                |  |                                      | 215,000   |  |                                      |  | 215,000   |                                      | 
|Convertible promissory notes issued to underwriters and other related parties subject to possible conversion |  |                                      | 112,100   |  |                                      |  | 99,243    |                                      | 
|Convertible promissory notes issued to shareholder subject to possible conversion                            |  |                                      | 945,006   |  |                                      |  | –         |                                      | 
|Options to purchase common stock                                                                             |  |                                      | 14,969    |  |                                      |  | 7,500     |                                      | 
|Total potential dilutive securities                                                                          |  |                                      | 8,743,129 |  |                                      |  | 7,777,797 |                                      | 



The Company paid a dividend to its public
shareholders of one warrant for every four shares that were not redeemed in connection with the Business Combination on October
24, 2014. As a result, 161,004 shares of warrants were issued.



The exercise price of the Company’s
warrants to purchase common stock is $7.50, expiring on March 30, 2016. On January 4, 2014, the Company’s management amended
the exercise price from $7.50 to $5.00, and extended the expiration date from March 30, 2016 to March 30, 2018. The warrants are
exercisable upon calls for redemption by the Company only if the last sale price of our ordinary shares on the stock exchange equals
to or exceeds $15.00 per share for any 20 trading days within a 30 trading day period.



The exercise price of the 215,000 units
of unit purchase option (“UPO”) issued to underwriters is $12.00. Total proceeds from the UPO exercise will be $2,580,000
(if exercised in full). The UPO is exercisable at any time, in whole or in part, commencing on the later of the consummation of
our initial business combination (September 30, 2013) or September 24, 2011 and expiring March 24, 2016. As of December 31, 2014,
no underwriters’ unit purchase option has been exercised.



The warrants, UPO, the options to purchase
common stocks, and the convertible promissory notes subject to possible conversion are excluded from the computation of fully diluted
earnings/(loss) per share for December 31, 2013 and 2012, as their effect is anti-dilutive due to the net loss at the year end.
For December 31, 2014, the warrants, UPO, and the options to purchase common stocks are excluded due to the exercising price below
the market price and hence their effect is anti-dilutive. However, the convertible promissory notes subject to possible conversion
are included in the computation of fully diluted earnings/(loss) per share due to its dilutive effect.



The following reflects the basic and diluted
earnings/(loss) per share for the year ended December 31:



|Basic earnings/(loss) per share       |  | 2014 |       |   | 2013 |   |       | 2012 | 
|------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- | 
|                                      |  |      |       |   |      |   |       |      | 
|From continuing operations            |  | $    | 1.34  |   |      | $ | (5.31 | )    | 
|From discontinued operations          |  |      | (0.23 | ) |      |   | 0.08  |      | 
|Total basic earnings/(loss) per share |  | $    | 1.10  |   |      | $ | (5.23 | )    | 



|Diluted earnings/(loss) per share       |  | 2014 |       |   | 2013 |   |       | 2012 | 
|--------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- | 
|                                        |  |      |       |   |      |   |       |      | 
|From continuing operations              |  | $    | 1.26  |   |      | $ | (5.31 | )    | 
|From discontinued operations            |  |      | (0.22 | ) |      |   | 0.08  |      | 
|Total diluted earnings/(loss) per share |  | $    | 1.04  |   |      | $ | (5.23 | )    | 





F-27






The earnings/(loss) and weighted average number of ordinary
shares used in the calculation of basic earnings/(loss) per share for the year ended December 31 are as follow:



|Basic earnings/(loss) per share                                                                                                                   |  | 2014 |           |   | 2013 |   |             | 2012 | 
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | ----------- | ---- | 
|                                                                                                                                                  |  |      |           |   |      |   |             |      | 
|Earnings/(loss) used in the calculation of basic earnings/(loss) per share                                                                        |  | $    | 4,147,183 |   |      | $ | (16,116,285 | )    | 
|Earnings/(loss) for the year from discontinued operations used in the calculation of basic earnings/(loss) per share from discontinued operations |  |      | (727,864  | ) |      |   | 230,807     |      | 
|Earnings/(loss) used in the calculation of diluted earnings/(loss) per share                                                                      |  | $    | 3,419,319 |   |      | $ | (15,885,478 | )    | 
|                                                                                                                                                  |  |      |           |   |      |   |             |      | 
|Weighted average number of ordinary shares for the purposes of basic earnings/(loss) per share                                                    |  |      | 3,098,017 |   |      |   | 3,037,806   |      | 



The earnings/(loss) and weighted average number of ordinary
shares used in the calculation of diluted earnings/(loss) per share for the year ended December 31 are as follow:



|Diluted earnings/(loss) per share                                                                                                            |  | 2014 |           |   | 2013 |   |             | 2012 | 
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | ----------- | ---- | 
|                                                                                                                                             |  |      |           |   |      |   |             |      | 
|Earnings/(loss) used in the calculation of basic earnings/(loss) per share                                                                   |  | $    | 4,147,183 |   |      | $ | (16,116,285 | )    | 
|Interest on convertible promissory notes (non-taxable)                                                                                       |  |      | 185,985   |   |      |   | –           |      | 
|Earnings/(loss) used in the calculation of diluted earnings/(loss) per share                                                                 |  |      | 4,333,168 |   |      |   | (16,116,285 | )    | 
|Earnings/(loss) for the year from discontinued operations used in the calculation of basic earnings/(loss) per share from diluted operations |  |      | (727,864  | ) |      |   | 230,807     |      | 
|Earnings/(loss) used in the calculation of diluted earnings/(loss) per share                                                                 |  | $    | 3,605,304 |   |      | $ | (15,885,478 | )    | 
|                                                                                                                                             |  |      |           |   |      |   |             |      | 
|Weighted average number of ordinary shares used in the calculation of basic earnings/(loss) per share                                        |  |      | 3,098,017 |   |      |   | 3,037,806   |      | 
|Weighted average number of shares subject to possible conversion from the convertible promissory notes                                       |  |      | 354,254   |   |      |   | –           |      | 
|Weighted average number of ordinary shares used in the calculation of diluted earnings/(loss) per share                                      |  |      | 3,452,271 |   |      |   | 3,037,806   |      | 





Note 17 — Property and Equipment



The table below shows the detailed movements
which occurred in property and equipment during the year ended December 31, 2013 and 2014 considering cost and accumulated depreciation,
separately.



|Cost or valuation             |  | Plant and machinery |         |   | Industrial and commercial equipment |   |       | Office and office-related equipment |  |   | Total  |  
|----------------------------- |  | ------------------- | ------- | - | ----------------------------------- | - | ----- | ----------------------------------- |  | - | ------ | -
|Balance at January 1, 2013    |  | $                   | –       |   |                                     | $ | –     |                                     |  | $ | 5,005  |  
|Additions through acquisition |  |                     | 273,964 |   |                                     |   | 1,112 |                                     |  |   | –      |  
|Additions                     |  |                     | –       |   |                                     |   | –     |                                     |  |   | 7,516  |  
|Balance at December 31, 2013  |  | $                   | 273,964 |   |                                     | $ | 1,112 |                                     |  | $ | 12,521 |  
|                              |  |                     |         |   |                                     |   |       |                                     |  |   |        |  
|Balance at January 1, 2014    |  |                     | 273,964 |   |                                     |   | 1,112 |                                     |  |   | 12,521 |  
|Additions                     |  |                     | 3,926   |   |                                     |   | –     |                                     |  |   | 2,478  |  
|Disposals                     |  |                     | (12,457 | ) |                                     |   | –     |                                     |  |   | (2,177 | )
|Revaluations                  |  |                     | (31,083 | ) |                                     |   | (123  | )                                   |  |   | (825   | )
|Balance at December 31, 2014  |  | $                   | 234,350 |   |                                     | $ | 989   |                                     |  | $ | 11,997 |  





F-28






|Accumulated depreciation                         |  | Plant and machinery |         |  | Industrial and commercial equipment |   |       | Office and office-related equipment |  |   | Total | 
|------------------------------------------------ |  | ------------------- | ------- |  | ----------------------------------- | - | ----- | ----------------------------------- |  | - | ----- | 
|Balance at January 1, 2013                       |  | $                   | –       |  |                                     | $ | –     |                                     |  | $ | 1,410 | 
|Depreciation charge for the year                 |  |                     | 18,730  |  |                                     |   | 108   |                                     |  |   | 1,592 | 
|Balance at December 31, 2013                     |  | $                   | 18,730  |  |                                     | $ | 108   |                                     |  | $ | 3,002 | 
|                                                 |  |                     |         |  |                                     |   |       |                                     |  |   |       | 
|Balance at January 1, 2014                       |  |                     | 18,730  |  |                                     |   | 108   |                                     |  |   | 3,002 | 
|Depreciation charge for the year                 |  |                     | 66,449  |  |                                     |   | –     |                                     |  |   | 2,103 | 
|Balance at December 31, 2014                     |  | $                   | 85,179  |  |                                     | $ | 108   |                                     |  | $ | 5,105 | 
|                                                 |  |                     |         |  |                                     |   |       |                                     |  |   |       | 
|Property and equipment, net at December 31, 2013 |  | $                   | 255,234 |  |                                     | $ | 1,004 |                                     |  | $ | 9,519 | 
|                                                 |  |                     |         |  |                                     |   |       |                                     |  |   |       | 
|Property and equipment, net at December 31, 2014 |  | $                   | 149,171 |  |                                     | $ | 881   |                                     |  | $ | 6,892 | 



Revaluations of the property and equipment arise from decrease
in the 2014 year-end Euro currency exchange rate as compared to the US Dollar from the prior year.





Note 18 — Investment Properties



Investment properties were valued on December
31, 2013 and 2014 using the discounted cash flow (DCF) method by an independent qualified professional valuation expert. The methods
and assumptions adopted for the real estate appraisal carried out by the expert in determining the fair value of the investment
property is in accordance with IAS 40, Investment Property. There are currently no obligations to purchase, construct, or develop
the investment properties.



Investment properties valuation at December
31, 2013 and 2014 are shown in the table below:



|Valuation                         |  | Investment Properties |            
|--------------------------------- |  | --------------------- | -----------
|                                  |  |                       |            
|Balance at January 1, 2013        |  | $                     | –          
|Additions through acquisition     |  |                       | 72,877,131 
|Disposals                         |  |                       | –          
|Revaluations                      |  |                       | –          
|Balance at December 31, 2013      |  |                       | 72,877,131 
|                                  |  |                       |            
|Balance at January 1, 2014        |  |                       | 72,877,131 
|Additions                         |  |                       | –          
|Disposals                         |  |                       | (18,973,683
|Revaluation adjustment            |  |                       | 290,425    
|Currency exchange rate adjustment |  |                       | (6,564,336 
|Balance at December 31, 2014      |  | $                     | 47,629,537 



Details of the investment properties is as follows:



|Location, address                 |  | 2014 Fair Value, Level 3 |            |  | 2013 Fair Value, Level 3 |  
|--------------------------------- |  | ------------------------ | ---------- |  | ------------------------ | -
|Milano, Corso Europa 22           |  | $                        | 7,768,842  |  |                          | $
|Buccinasco, Via Lucania 2-4-6     |  |                          | 19,760,934 |  |                          |  
|Buccinasco, Via Privata Mulino 24 |  |                          | 1,222,201  |  |                          |  
|Buccinasco, Via Lazio 95          |  |                          | 4,525,774  |  |                          |  
|Buccinasco, Via Bruno Buozzi 22   |  |                          | 1,512,625  |  |                          |  
|Buccinasco, Via Emilia 30         |  |                          | 193,616    |  |                          |  
|Assago, Via Isaac Newton 9        |  |                          | 2,952,644  |  |                          |  
|Rozzano, Milanofiori, Building A5 |  |                          | 2,807,432  |  |                          |  
|Rozzano, Milanofiori, Building N1 |  |                          | 4,053,835  |  |                          |  
|Rozzano, Milanofiori, Building Q5 |  |                          | 1,173,797  |  |                          |  
|Rozzano, Milanofiori, Building Q7 |  |                          | 1,657,837  |  |                          |  
|Total                             |  | $                        | 47,629,537 |  |                          | $





F-29






At December 31, 2014 and 2013, all investment
properties are in the commercial rental category.



The significant decrease of 2014 fair value
of the commercial rental property at Corso Europa 22 in Milan is primarily due to the closing of the Purchase Agreement between
the former sellers of Seba and the Company. Pursuant to the Purchase Agreement, the former sellers reacquired all of the outstanding
equity interests in Seba in exchange for the return of 497,308 of the Company’s ordinary shares in December, 2014. As a result
of the Purchase Agreement, the Group owns two floors of the property at Corso Europa 22 instead of six floors. In addition, the
overall reduction of the portfolio’s fair value from 2013 to 2014 reflects the 12.18% decrease in the 2014 year-end Euro
currency exchange rate as compared to the US Dollar from the prior year.



The portfolio of properties has low vacancy
rates. The properties have an average lease expiration of approximately 6 years. The properties composing the portfolio are commercial
real estate assets.



During 2014 and 2013 (continuing from 2012),
the economic recession in Italy has continued to affect the real estate industry causing a general delay in rental payments and
sometimes an early termination of outstanding leasing agreements. Nevertheless the amount of rental fees is essentially unchanged
compared to previous years.



Under the DCF method, a property’s
fair value is estimated using explicit assumptions regarding the benefits and liabilities of ownership over the asset’s life
including an exit or terminal value. As an accepted method within the income approach to valuation, the DCF method involves the
projection of a series of cash flows on a real property interest. To this projected cash flow series, an appropriate, market-derived
discount rate is applied to establish the present value of the cash inflows associated with the real property.



The duration of the cash flow and the specific
timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related lease up periods, re-letting,
redevelopment, or refurbishment. The appropriate duration is typically driven by market behavior that is a characteristic of the
class of real property.



In the case of investment properties, periodic
cash flow is typically estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives, maintenance
cost, extraordinary maintenance cost, agent and commission costs and other operating and management expenses. The series of periodic
net cash inflows, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted.



In regards to the commercial rental properties
in the town of Assago, Buccinasco and Rozzano, the market data of the outskirt area of Milan was used as a basis of comparison.
For the commercial rental property at Corso Europa 22 in Milan, it is considered to be in the top range category due to the location
of the property and the current rental agreements in place.



The Group, following the Business Combination,
has set up a policy of commencing an independent qualified professional valuation expert to value the investment properties on
an annual basis at the end of each year. Selection criteria include market knowledge, reputation, independence and whether professional
standards are maintained. The valuation performed by the independent qualified professional valuation expert was reviewed by the
Group’s CEO, CFO, and certain members of the Board of Directors.





F-30






The summary of the unobservable inputs
used for the year ended December 31, 2014 are as follow:



|Property                          | Fair Value |            | Valuation technique |     | Key unobservable inputs |                    | Inputs used
|--------------------------------- | ---------- | ---------- | ------------------- | --- | ----------------------- | ------------------ | -----------
|                                  |            |            |                     |     |                         |                    |            
|Milano, Corso Europa 22           | $          | 7,768,842  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Lucania 2-4-6     |            | 19,760,934 |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Privata Mulino 24 |            | 1,222,201  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Lazio 95          |            | 4,525,774  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Bruno Buozzi 22   |            | 1,512,625  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Emilia 30         |            | 193,616    |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Assago, Via Isaac Newton 9        |            | 2,952,644  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building A5 |            | 2,807,432  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building N1 |            | 4,053,835  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building Q5 |            | 1,173,797  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building Q7 |            | 1,657,837  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Total                             | $          | 47,629,537 |                     |     |                         |                    |            





F-31






The summary of the unobservable inputs
used for the year ended December 31, 2013 are as follow:



|Property                          | Fair Value |            | Valuation technique |     | Key unobservable inputs |                    | Inputs used
|--------------------------------- | ---------- | ---------- | ------------------- | --- | ----------------------- | ------------------ | -----------
|                                  |            |            |                     |     |                         |                    |            
|Milano, Corso Europa 22           | $          | 27,695,790 |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Lucania 2-4-6     |            | 22,666,455 |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Privata Mulino 24 |            | 1,391,679  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Lazio 95          |            | 5,098,230  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Bruno Buozzi 22   |            | 1,887,723  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Buccinasco, Via Emilia 30         |            | 358,254    |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Assago, Via Isaac Newton 9        |            | 3,458,529  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building A5 |            | 3,182,949  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building N1 |            | 4,560,849  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building Q5 |            | 1,281,447  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Rozzano, Milanofiori, Building Q7 |            | 1,295,226  |                     | DCF |                         | ERV                |            
|                                  |            |            |                     |     |                         | Rental growth p.a. |            
|                                  |            |            |                     |     |                         | Discount rate      |            
|                                  |            |            |                     |     |                         | Cap rate           |            
|                                  |            |            |                     |     |                         |                    |            
|Total                             | $          | 72,877,131 |                     |     |                         |                    |            





F-32






Descriptions and definitions



Estimated rental value (ERV)



The rent at which space could be leased in the market conditions
prevailing at the date of valuation or the actual rental income of the property, whichever is higher.



Rental growth p.a. (per annum)



The estimated average increase in rent based on both market
estimations and contractual indexations.



Discount rate



Rate used to discount the net cash flows generated from rental
activities during the period of analysis (estimated up to 10 years).



Gross capitalization rate (Cap rate)



Rate used to estimate the value that the property will be sold
at the end of the rental period by capitalizing the final year’s gross income at an appropriate market gross capitalization
rate based on the ERV of the property.



Sensitivity analysis to significant changes in unobservable
inputs within Level 3 of the hierarchy



The significant unobservable inputs used in the fair value measurement
categorized within Level 3 of the fair value hierarchy of the entity’s portfolios of investment property are:



| | · | Estimated rental value (ERV)
| | - | ----------------------------
| | · | Rental growth p.a.          
| | · | Discount rate               
| | · | Gross capitalization rate   



Significant increases (decreases) in the ERV and rental growth
p.a. in isolation would result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in the
discount rate and gross capitalization rate in isolation would result in a significantly lower (higher) fair value measurement.



Generally, a change in the assumption made for the ERV is accompanied
by a similar change in the rent growth p.a., discount rate, and gross capitalization rate.





Note 19 — Prepaid Expenses and Other Current Assets



Prepaid Expenses and other current assets consist of the following
at December 31:



|                                                |  | 2014 |         |  | 2013 |   |         | 2012 | 
|----------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | ---- | 
|Prepaid expenses                                |  | $    | 149,493 |  |      | $ | 347,935 |      | 
|Other current assets                            |  |      | 24,202  |  |      |   | 84,424  |      | 
|Other accrued income                            |  |      | –       |  |      |   | 79,910  |      | 
|Total prepaid expenses and other current assets |  | $    | 173,695 |  |      | $ | 512,269 |      | 



Other current assets consist of a non-interest
earning fixed deposit at a bank. This fixed deposit is a requirement by the finance lease creditor of one of the Subsidiaries in
connection with the finance lease. The amount of the fixed deposit is determined by the finance lease creditor with consideration
in the total value of the finance lease.



Other accrued income is comprised of a
reimbursable expense from one of the tenants on the building improvement work performed by an outside service provider. The building
improvement work performed was not satisfactory to the tenant. In 2014, the management deemed the possibility of recovering the
amount from the tenant being remote and hence it was written off as an expense.





F-33






Note 20 — Trade and Other Receivables



Trade and other receivables consist of the following at December
31:



|                                                             |  | 2014 |           |   | 2013 |  
|------------------------------------------------------------ |  | ---- | --------- | - | ---- | -
|Trade receivables                                            |  | $    | 890,218   |   |      | $
|Less: bad debt provision                                     |  |      | (521,111  | ) |      |  
|Trade receivables, net                                       |  |      | 369,107   |   |      |  
|Other receivables (unbilled revenue and maintenance charges) |  |      | 549,083   |   |      |  
|Due from Lanati                                              |  |      | 87,071    |   |      |  
|Total trade and other receivables, net                       |  | $    | 1,005,261 |   |      | $



Lanati was one of the sellers of the investment
properties and a current shareholder of the Group, and performed maintenance and other services for the Group’s investment
properties. The Group leases office and parking spaces to Lanati and pays certain expenses on Lanati’s behalf. The amount
due from Lanati represents the amount due at December 31, 2014 and 2013. The amount due to Lanati was $0 and $3,773,041 at
December 31, 2014 and 2013 respectively (see note 27 — Trade and Other Payables). In October, 2014 and July, 2015,
the Group has reached various offsetting agreements with Lanati on offsetting of certain receivables (due from Lanati) and payables
(due to Lanati). The total amount offset in October, 2014 and July, 2015 were approximately $1,926,217 and $1,544,265 respectively
(see note 25 — Related Party Transactions and Balances).



Details of the Group’s bad debt provision at December
31 are as follows:



|                                                        |  | 2014 |          |   | 2013 |  
|------------------------------------------------------- |  | ---- | -------- | - | ---- | -
|At January 1                                            |  | $    | 877,842  |   |      | $
|Provided during the year                                |  |      | 29,263   |   |      |  
|Receivable written off during the year as uncollectible |  |      | (244,723 | ) |      |  
|Unused amount reversed                                  |  |      | –        |   |      |  
|Currency exchange rate adjustment                       |  |      | (141,271 | ) |      |  
|At December 31                                          |  | $    | 521,111  |   |      | $





Note 21 — Cash and Cash Equivalents



Cash and cash equivalents comprises:



|                               |  | December 31, 2014 |         |  | December 31, 2013 |   |         | December 31, 2012 | 
|------------------------------ |  | ----------------- | ------- |  | ----------------- | - | ------- | ----------------- | 
|Cash at bank                   |  | $                 | 164,986 |  |                   | $ | 132,773 |                   | 
|Cash on hand                   |  |                   | 105     |  |                   |   | 641     |                   | 
|Total cash and cash equivalent |  | $                 | 165,091 |  |                   | $ | 133,414 |                   | 





Note 22 — Shareholders’ Equity



Ordinary Shares



The Company is authorized to issue up to 50,000,000
ordinary shares, par value $0.001 per share. The holders of the ordinary shares are entitled to one vote for each ordinary share.



On December 18, 2014, the Company ceased
control of Seba through the closing of the Purchase Agreement in exchange for the return of 497,308 of the Company’s shares.
Theses shares were canceled immediate upon their return. Separately, 253,881 shares of the founders’ shares were forfeited
during 2014 as a result of pre-determined stock price target not being reached pursuant to conditions set forth during the Company’s
IPO in 2011.



As of December 31, 2014, 2013 and 2012,
there were 2,428,532, 3,179,721 and 4,894,983 ordinary shares outstanding, respectively.





F-34






Share Premium



As a result of the Company ceasing control
of Seba on December 18, 2014, the Group has derecognized the carrying amounts of the net assets and liabilities of Seba at December
18, 2014 which were determined to be in aggregate of $3,243,538. All goodwill arose from the Business Combination related to Seba
was fully impaired at the year end of 2013, and therefore, not considered as part of the carrying amount of Seba. Seba’s
equity accounts were derecognized from the Group’s share premium to reflect this cashless transaction.





Note 23 — Loans and Borrowings



The book value of loans and borrowings consist of the following:



|Loans and borrowings       |  | 2014 |            |  | 2013 |  
|-------------------------- |  | ---- | ---------- |  | ---- | -
|Non-current                |  |      |            |  |      |  
|Bank loans                 |  | $    | 4,713,816  |  |      | $
|Finance lease creditor     |  |      | 3,403,210  |  |      |  
|Other loans                |  |      | 1,004,383  |  |      |  
|Total non-current          |  |      | 9,121,409  |  |      |  
|                           |  |      |            |  |      |  
|Current                    |  |      |            |  |      |  
|Revolving line of credit   |  |      | 780,669    |  |      |  
|Bank loans                 |  |      | 2,093,671  |  |      |  
|Finance lease creditor     |  |      | 19,382,598 |  |      |  
|Other loans                |  |      | 889,833    |  |      |  
|Total current              |  |      | 23,146,771 |  |      |  
|                           |  |      |            |  |      |  
|Total loans and borrowings |  | $    | 32,268,180 |  |      | $



The significant decrease in bank loans
(non-current), revolving line of credit and finance lease creditor (current and non-current) is due to the Unwinding of Seba, and
hence the transfer of the related loan and borrowings to its previous owner (see note 13 — Discontinued Operations).



Bank loans



Bank loans include both secured and unsecured
bank loans. Certain bank loans are secured by the investment properties. In addition to using the investment properties as collateral,
some of the loans are further personally guaranteed by the former owners of the properties. The total fair value of the investment
properties used as collateral was $12,294,616 as at December 31, 2014.



The tables below show the detail of bank
loans by expiry date and rate; all bank loans contracts provide for floating rates.



|2014                        |  | Floating rate |           |  | Total |  
|--------------------------- |  | ------------- | --------- |  | ----- | -
|                            |  |               |           |  |       |  
|Expiry within 1 year        |  | $             | 2,093,671 |  |       | $
|Expiry within 1 and 5 years |  |               | 1,247,032 |  |       |  
|Expiry in more than 5 years |  |               | 3,466,784 |  |       |  
|Total                       |  | $             | 6,807,487 |  |       | $





|2013                        |  | Floating rate |           |  | Total |  
|--------------------------- |  | ------------- | --------- |  | ----- | -
|                            |  |               |           |  |       |  
|Expiry within 1 year        |  | $             | 799,474   |  |       | $
|Expiry within 1 and 5 years |  |               | 3,133,099 |  |       |  
|Expiry in more than 5 years |  |               | 4,949,760 |  |       |  
|Total                       |  | $             | 8,882,333 |  |       | $





F-35






As at December 31, 2014 and 2013, the effective
interest rate varies from EURIBOR+1.125% to EURIBOR+2.554%. This amounted to 1.203% to 2.632% as at December 31, 2014.



During 2014, one of the Subsidiaries missed
certain scheduled repayments on a bank loan totaling $193,011 in principal and $22,680 in interest. Except for these missed scheduled
repayments, the Group has been current on all scheduled repayments. According to the mortgage agreement, missing scheduled payments
can cause the bank to request immediate repayment of the residual debt totaling approximately $1,515,720 as of December 31, 2014.
Management is negotiating with the bank to postpone repayment for 12 months. Separately during 2014, one of our other Subsidiaries
missed certain scheduled finance lease payments to the leasing department of the same bank. As of the date of this report, the
bank official from the mortgage department, on the Group’s behalf, is in negotiation with their leasing department on the
issuance of a final moratorium. As the negotiation is in the final stage, management believes the risk of the bank demanding immediate
repayment of the full residual debt is very low. However, there can be no assurance the bank will not decide to refuse granting
the postponement to the Group during this final negotiation stage and request for immediate repayment of the residual debt. As
a result of this possibility, the Management has classified such residual debt as current loans and borrowings as of December 31,
2014.



Revolving line of credit



The Group has outstanding balance at December 31, 2014 and 2013
as follows:



|2014                        |  | Floating rate |         |  | Fixed rate |   |         | Total | 
|--------------------------- |  | ------------- | ------- |  | ---------- | - | ------- | ----- | 
|                            |  |               |         |  |            |   |         |       | 
|Expiry within 1 year        |  | $             | 377,251 |  |            | $ | 403,418 |       | 
|Expiry within 1 and 5 years |  |               | –       |  |            |   | –       |       | 
|Expiry in more than 5 years |  |               | –       |  |            |   | –       |       | 
|Total                       |  | $             | 377,251 |  |            | $ | 403,418 |       | 



|2013                        |  | Floating rate |           |  | Fixed rate |   |         | Total | 
|--------------------------- |  | ------------- | --------- |  | ---------- | - | ------- | ----- | 
|                            |  |               |           |  |            |   |         |       | 
|Expiry within 1 year        |  | $             | 1,418,280 |  |            | $ | 459,358 |       | 
|Expiry within 1 and 5 years |  |               | –         |  |            |   | –       |       | 
|Expiry in more than 5 years |  |               | –         |  |            |   | –       |       | 
|Total                       |  | $             | 1,418,280 |  |            | $ | 459,358 |       | 



The facilities expiring within 1 year are
annual facilities subject to renewal at various dates. As at December 31, 2014 and 2013, the effective interest rate varies from
5.50% to 15.50%, and 5.726% to 15.25% respectively.



The revolving line of credit is unsecured,
and personally guaranteed by the former owners of the properties. The total revolving line of credit approved by the bank as at
December 31, 2014 and 2013 was $806,607 and $1,816,590 respectively. The total balance of the revolving line of credit as at December
31, 2014 was $780,699. The full revolving line of credit has been utilized by the Group at December 31, 2013 and overdrawn by $61,048
on December 31, 2013. Therefore, the total balance of the revolving line of credit as at December 31, 2013 was $1,877,638.



Finance lease creditor



See note “Finance leases” below



Other loans



Non-current other loans consist of one
loan from the current tenant of the property located on Via Lucania in Buccinasco. The loan proceeds were used for the modification
of the property to the tenant’s specifications. The repayment of this loan will start in the year 2021 for a period of three
years, and will offset the rent to be collected from the tenant. The effective interest rate is fixed at EURIBOR+1.90%



Current other loans consist of an interest
bearing convertible promissory note with the underwriters (see Note 26 — Note Payable to Underwriters).





F-36






Note 24 — Finance Leases



The Group leases all of its real estate
properties except for the properties located in Via Lazio 95 in Buccinasco, Via Buozzi 22 in Buccinasco, and Corso Europa 22 in
Milan.



Such assets are classified as finance leases
as the Group has the right to purchase the assets outright at the end of the minimum lease term by paying a nominal amount. The
total fair value of the investment properties that carried finance leases was $33,628,679 as at December 31, 2014.



Future lease payments are due as follows:



|2014                                              |  | Minimum lease payments |            |  | Interest |   |            | Present value | 
|------------------------------------------------- |  | ---------------------- | ---------- |  | -------- | - | ---------- | ------------- | 
|                                                  |  |                        |            |  |          |   |            |               | 
|Not more than one year                            |  | $                      | 28,431,853 |  |          | $ | 9,049,255  |               | 
|Later than one year and not later than five years |  |                        | 1,270,379  |  |          |   | 488,650    |               | 
|Later than five years                             |  |                        | 3,159,958  |  |          |   | 538,477    |               | 
|Total                                             |  | $                      | 32,862,190 |  |          | $ | 10,076,382 |               | 



|2013                                              |  | Minimum lease payments |            |  | Interest |   |            | Present value | 
|------------------------------------------------- |  | ---------------------- | ---------- |  | -------- | - | ---------- | ------------- | 
|                                                  |  |                        |            |  |          |   |            |               | 
|Not more than one year                            |  | $                      | 3,640,541  |  |          | $ | 1,704,244  |               | 
|Later than one year and not later than five years |  |                        | 12,984,033 |  |          |   | 6,000,598  |               | 
|Later than five years                             |  |                        | 38,442,929 |  |          |   | 9,226,218  |               | 
|Total                                             |  | $                      | 55,067,503 |  |          | $ | 16,931,060 |               | 



As at December 31, 2014 and 2013, the effective interest rate
varies from EURIBOR+1.4% to EURIBOR+2.762%. This amounted to 1.478% to 2.840% as at December 31, 2014.



The present values of future lease payments are analyzed as:



|                        |  | 2014 |            |  | 2013 |  
|----------------------- |  | ---- | ---------- |  | ---- | -
|                        |  |      |            |  |      |  
|Current liabilities     |  | $    | 19,382,598 |  |      | $
|Non-current liabilities |  |      | 3,403,210  |  |      |  
|Total                   |  | $    | 22,785,808 |  |      | $



During 2014, four of the Subsidiaries missed
certain scheduled payment to four finance lease creditors, totaling approximately $244,234 in principal and $241,328 in interest
as at December 31, 2014. Except for these missed scheduled payments, the Group has been current with all the scheduled payments.
Pursuant to the leasing agreement, the finance lease creditors have the right to declare the borrower in default in case of missing
scheduled payments via official written notice and demand full payment of outstanding principal balance at the time of such default
declaration. Management has been negotiating with all the affected finance lease creditors for modification repayment plans on
these missed payments. The Group remitted full missed payments to one of the finance lease creditors in the second quarter of 2015
and thus corrected the default. As of the date of this report, the remaining finance lease creditors are going through an internal
approval process relating to the proposed modified repayment terms. The communications between the Group and the affected finance
lease creditors are ongoing and positive. Management believes there is very low risk of the finance lease creditors declaring the
borrowers in default and demanding immediate full principal payment during the approval process. However, there can be no assurance
the finance lease creditors will not decide to refuse granting the requested modification repayment plans to the Group during this
approval process and request for immediate repayment of the residual debt. As a result of this possibility, the Management has
classified such residual finance leases as current loans and borrowings as of December 31, 2014.





F-37






Note 25 — Related
Party Transactions and Balances



The Company entered into five non-interest
bearing unsecured promissory notes with one director of the Company which amounted to $420,000 before the Business Combination.
The notes were to be repaid on the earlier of consummation of the Business Combination or liquidation of the Company. At the closing
of the Business Combination, the funds released from the Trust Account were less than the aggregate of all payables. The director
agreed to extend the repayment date of the $420,000 promissory note to a later time to be determined by mutual agreement between
the Company and the director.



On July 1, 2014, all the aforementioned
non-interest bearing unsecured promissory notes amounted to $420,000 and $230,000 of reimbursable expenses owed to one director,
and additional cash injection of $30,000 to the Company on June 26, 2014 were converted to an interest bearing unsecured convertible
promissory notes of $680,000 with an interest rate of 10% per annum, compounding annually. The notes mature on the earlier of (i)
the date on which the Company liquidates and winds-up its affairs, or (ii) June 30, 2015 (one year from the date of the interest
bearing unsecured note). The convertible feature grants the payee the option to convert the principal sum and any unpaid interest
for the lower of (1) $2.29 per share, or (2) the price per share of the Company’s next round of financing. Following the
conversion of this aforementioned promissory note, the Company further entered into ten additional interest bearing unsecured convertible
promissory notes during 2014 which amounted to $980,000 with the same interest rate and similar convertible feature as the previously
converted notes. The total interest bearing unsecured promissory note payable to this director amounted to $1,660,000 as at December
31, 2014, with $1,157 of this amount allocated to the value of the beneficial conversion feature. As of December 31, 2014, $649
of the beneficial conversion feature has been recorded as interest expense. The beneficial conversion feature arises when the conversion
price of the promissory note ias less than the market value of the underlying common stock at the issuance of the note. The difference
between the conversion price and the market value of the common stock was recorded as beneficial conversion feature and amortized
over the term of the promissory note. As of the date of this report, the convertible right had not been exercised. The Company
has an interest payable to this director in the amount of $51,875 as at December 31, 2014(see note 34 — Events
After the Reporting Date).



From time to time, the Company’s
executives incurred expenses on behalf of the Company for various office and travel expenses prior to the Business Combination
and following the management change by way of majority shareholder consent on May 5, 2014.  No interest is charged by
the executives on any outstanding balance owed by the Company. For the years ended December 31, 2014, 2013 and 2012, total expenses
paid by the executives on behalf of the Company totaled $127,371, $246,105, and $122,092, respectively. Of these amounts, $120,768,
$223,397 and $137,291 has not been repaid to the Company’s executives as of December 31, 2014, 2013 and 2012, respectively.



Separately on December 16, 2014, the Company
and one of the current officers has agreed to convert $18,000 of the outstanding balance owed by the Company to an interest bearing
unsecured promissory note with the same interest rate and similar convertible feature as the ones aforementioned between the Company
and the director. The outstanding balance arose from the services the officer provided to the Company after the Business Combination
and before becoming the current officer of the Company. As of the date of this report, the convertible right had not been exercised.



In connection to the management change
by way of majority shareholder consent on May 5, 2014, a non-employee consultant from prior to the Business Combination has became
an officer of the Company. The outstanding amount of $55,000 for services provided by the consultant has not been repaid by the
Company as of December 31, 2014. As a result of this management change, this amount has been reclassified from trade and other
payables to due to related party as at December 31, 2014.



The Company has agreed to pay Kaiyuan Real
Estate Development (“Kaiyuan”) a total of $7,500 per month for office space, administrative services and secretarial
support for a period commencing March 24, 2011 and ending on the earlier of consummation of a Business Combination or liquidation
of the Company. Kaiyuan is an affiliate of Mr. Yong Hui Li, the Company’s chairman prior to the Business Combination. The
total expenses incurred under this agreement for the years ended December 31, 2014, 2013 and 2012, were $0, $64,833, and $70,495,
respectively. Commencing on February 1, 2012, and ending January 31, 2013, the Company rented additional office space, administrative
services and secretarial support in Taipei. Fees for the additional office space, administrative services and secretarial support
were deducted from the $7,500 monthly fee paid to Kaiyuan by the Company. The Company has a payable to Kaiyuan of $203,312
as at December 31, 2014 and 2013, and $138,479 as at December 31, 2012.



Mr. Cesare Lanati (the former owner of
certain subsidiaries and current stockholder of the Group) performed maintenance and other services for the Group’s investment
properties. The Group leases office and parking spaces to Lanati and pay certain expenses on Lanati’s behalf. During 2014
and 2015, the Group has reached various offsetting agreements with Lanati on offsetting of certain receivables and payables (see
Note 20 — Trade and Other Receivables, and Note 27 — Trade and Other Payables).







F-38








Note 26 — Note Payable to Underwriters



Immediately following the closing of the
Business Combination on September 30, 2013, the Company entered into an interest-bearing promissory note with its underwriter,
Chardan Capital Markets, LLC (“Chardan”) for the total remaining amount of $889,833 due to the underwriter at the rate
of 5% per annum, maturing on December 31, 2013. If the note was not repaid by December 31, 2013, Chardan had the right to convert
the note and accrued interest into ordinary shares at a price of $9.10 per share. In connection with the convertible right, $184,584
was allocated to the value of the beneficial conversion feature. As of December 31, 2013, full amount of the beneficial conversion
feature has been recorded as interest expense. As of the date of this report, the convertible right had not been exercised. On
December 31, 2013 (the note’s maturity date), the Company was not able to repay the note. As a result of the payment default,
an additional default interest rate of 10% per annum is added to the original 5% per annum interest rate starting December 31,
2013. The Company has an interest payable to Chardan in the amount of $134,036 and $11,336 as at December 31, 2014 and 2013 respectively.





Note 27 — Trade and Other Payables



Details of the balance sheet item trade and other payables:



|                                          |  | 2014 |           |  | 2013 |   |           | 2012 | 
|----------------------------------------- |  | ---- | --------- |  | ---- | - | --------- | ---- | 
|Accrued expenses                          |  | $    | 2,740,729 |  |      | $ | 2,274,075 |      | 
|Interest payables                         |  |      | 252,939   |  |      |   | 15,915    |      | 
|Trade account payables                    |  |      | 2,176,742 |  |      |   | 2,495,929 |      | 
|Due to Lanati                             |  |      | –         |  |      |   | 3,773,041 |      | 
|Other payables - social security payments |  |      | 140,720   |  |      |   | 140,757   |      | 
|Total trade and other payables            |  | $    | 5,311,130 |  |      | $ | 8,699,717 |      | 



Book values approximate to fair value at December 31, 2014 and
2013.





Note 28 — Accrued Expenses and Other Deferred Income



Details of the accrued expenses and other deferred income:



|                                                 |  | 2014 |         |  | 2013 |  
|------------------------------------------------ |  | ---- | ------- |  | ---- | -
|Other deferred income                            |  | $    | 360,700 |  |      | $
|Accrued expenses                                 |  |      | 76,503  |  |      |  
|Total accrued expenses and other deferred income |  | $    | 437,203 |  |      | $



Other deferred income consists of rental
income and condominium expenses reimbursement invoiced to certain tenants immediately before the actual leasing period (prepayment
from tenants). Accrued expenses consist of certain interest and condominium expenses of the current period with invoices expected
to receive in the future period.





Note 29 — Derivative Financial Liabilities



The fair value of a derivative financial liabilities from a
derivative financial instrument is considered current.



The fair value of the Group’s interest rate derivatives
is based on bank quotes.



|                                                        |  | 2014 |         |  | 2013 |  
|------------------------------------------------------- |  | ---- | ------- |  | ---- | -
|Derivatives not designated as hedging instruments       |  |      |         |  |      |  
|Interest rate swaps                                     |  | $    | 221,191 |  |      | $
|Total derivatives not designated as hedging instruments |  | $    | 221,191 |  |      | $



Interest rate swaps



The Group entered into interest rate swap
contracts by using floating-to-fixed interest rate swaps. The interest rate swap contracts are linked to a part of a leasing contract.
The notional value as at December 31, 2014 and 2013 is equal to $1,668,905 and $8,326,042 respectively. The change in fair value
during the year of 2014 and since the Business Combination in 2013 amounted to $75,623 and $53,648 respectively. The significant
decrease in the interest rate swaps between 2013 and 2014 is due to the Unwinding of Seba, and hence the transfer of the related
interest rate swap contracts to the former seller.





F-39






Note 30 — Provisions



Details of balance sheet item of current provisions:



|                         |  | 2014 |         |  | 2013 |  
|------------------------ |  | ---- | ------- |  | ---- | -
|Post employment benefits |  | $    | 11,987  |  |      | $
|Tax liabilities          |  |      | 9,084   |  |      |  
|Other provisions         |  |      | 158,814 |  |      |  
|Total provisions         |  | $    | 179,885 |  |      | $



Post employment benefits provision relates
to one of the Subsidiaries that has employees in Italy. The amount is based on a certain percentage of the salary paid to the employees
each pay period. The amount will be paid to the employees when the employments cease pursuant to the local Italian law.



Tax liabilities provision is related to
a type of tax imposed by tax authority in Italy in 2011, applicable to three of our subsidiaries. This law allows the Group to
deduct a portion of this tax paid in 2011 to be partially reversed each year over a certain number of years until the provision
is fully distinguished.



The other provisions refer to probable
liabilities deriving from legal disputes underway from one of the subsidiaries. This provision liability has been estimated based
on management evaluation of the amounts at risk and legal considerations. There are uncertainties that relate to whether claims
will be settled out by payment or if the subsidiary is successful in defending any action (see note 32 — Contingencies
and Commitments). The significant reduction of other provisions is primarily due to the settlement and payment of one of the legal
disputes during 2014, therefore releasing the potential liabilities of this legal dispute of $300,000 provisioned as at December
31, 2013. The payment of the settlement has been recorded in the consolidated statements of financial position as trade and other
receivables from a third party. This amount has been received in 2015 from the said third party as part of an offsetting agreement
with this party.





Note 31 — Share-Based Payment



On February 25, 2010, the Company’s
board of directors authorized and issued 20,000 stock options, each option to purchase one ordinary share of the Company to directors
and consultants of the Company.  On November 15, 2010, the Company’s board of directors authorized to reserve an
additional 200,000 stock options for issuance to directors and consultants of the Company from time to time, bringing the total
authorized to an aggregate of 220,000 stock options.



On December 3, 2010 and March 21, 2012,
the Company’s board of directors granted 35,000 and 5,000 stock options, respectively, each option to purchase one ordinary
share of the Company to officers or directors of the Company.   This brought the total stock options granted as of December
31, 2012 to 60,000.



With respect to the 60,000 shares of stock
options granted as of December 31, 2013, 9,500 shares of the options were granted to certain non-employee consultants for services
to be provided over a two year period that vest quarterly and 40,000 options to certain officers or directors over a two and a
half year period that vest quarterly. In addition, the Company granted certain consultants 10,500 options which vest upon such
consultants meeting certain performance requirements. On September 4, 2013, the board of directors approved the accelerated vesting
of the stock options granted. As a result, all stock options granted are fully vested and exercisable as at September 30, 2013.
The 52,500 shares of stock options were exercised as at December 31, 2013. The weighted average fair value of the stock options
exercised amounted to $527,910.



On May 10 and September 16, 2014, the Company’s board
of directors granted 62,000 stock options to an officer and an employee, and 7,500 stock options to certain employees of the Subsidiaries.
This brought the total stock options granted as of December 31, 2014 to 129,500.





F-40






The following table summarizes the stock
option activity for the years ended December 31, 2014, 2013 and 2012:



|                                 |  | Number of shares |         |   | Weighted average exercise price per share |   |       | Weighted average remaining contractual term (in years) |  |  | Aggregate intrinsic value | 
|-------------------------------- |  | ---------------- | ------- | - | ----------------------------------------- | - | ----- | ------------------------------------------------------ |  |  | ------------------------- | 
|Outstanding at January 1, 2012   |  |                  | 55,000  |   |                                           | $ | 0.001 |                                                        |  |  | 5.46                      | 
|Granted                          |  |                  | 5,000   |   |                                           |   | –     |                                                        |  |  | –                         | 
|Exercised                        |  |                  | –       |   |                                           |   | –     |                                                        |  |  | –                         | 
|Cancelled                        |  |                  | –       |   |                                           |   | –     |                                                        |  |  | –                         | 
|Outstanding at December 31, 2012 |  |                  | 60,000  |   |                                           |   | 0.001 |                                                        |  |  | 4.44                      | 
|Granted                          |  |                  | –       |   |                                           |   | –     |                                                        |  |  | –                         | 
|Exercised                        |  |                  | (52,500 | ) |                                           |   | 0.001 |                                                        |  |  | –                         | 
|Cancelled                        |  |                  | –       |   |                                           |   | –     |                                                        |  |  | –                         | 
|Outstanding at December 31, 2013 |  |                  | 7,500   |   |                                           |   | 0.001 |                                                        |  |  | 3.44                      | 
|Granted                          |  |                  | 69,500  |   |                                           |   | –     |                                                        |  |  | –                         | 
|Exercised                        |  |                  | –       |   |                                           |   | –     |                                                        |  |  | –                         | 
|Cancelled                        |  |                  | –       |   |                                           |   | –     |                                                        |  |  | –                         | 
|Outstanding at December 31, 2014 |  |                  | 77,000  |   |                                           | $ | 0.001 |                                                        |  |  | 4.40                      | 
|Exercisable at December 31, 2014 |  |                  | 77,000  |   |                                           | $ | 0.001 |                                                        |  |  | 4.40                      | 



The following table summarizes the unvested
stock option activity during the period from January 1, 2012 to December 31, 2014:



|                           |  | Number of shares |        
|-------------------------- |  | ---------------- | -------
|Unvested January 1, 2012   |  |                  | 29,587 
|Granted                    |  |                  | 5,000  
|Vested                     |  |                  | (18,487
|Cancelled                  |  |                  | –      
|Unvested December 31, 2012 |  |                  | 16,100 
|Granted                    |  |                  | –      
|Vested                     |  |                  | (16,100
|Cancelled                  |  |                  | –      
|Unvested December 31, 2013 |  |                  | –      
|Granted                    |  |                  | 69,500 
|Vested                     |  |                  | (7,469 
|Cancelled                  |  |                  | –      
|Unvested December 31, 2014 |  |                  | 62,031 



The fair value assigned to the vested increments
of these awards was estimated at the grant date of the stock options using the Black-Scholes option-pricing model with the following
assumptions:



|                                                          |  | For the year ended December 31, 2014 |               |   | For the year ended December 31, 2012 |  
|--------------------------------------------------------- |  | ------------------------------------ | ------------- | - | ------------------------------------ | -
|                                                          |  |                                      |               |   |                                      |  
|Stock price                                               |  |                                      | $1.25 - $8.50 |   |                                      |  
|Risk-free interest rate                                   |  |                                      | 1.49% - 1.76  | % |                                      |  
|Expected term (in years)                                  |  |                                      | 4.4           |   |                                      |  
|Weighted average expected stock price volatility          |  |                                      | 52.76         | % |                                      |  
|Expected dividend yield                                   |  |                                      | 0             | % |                                      |  
|Weighted average grant-date fair value of options granted |  | $                                    | 0.6688        |   |                                      | $





F-41






No stock option was granted during 2013.
For the year ended December 31, 2014, and 2012, management used the following assumptions for the Black-Scholes inputs: On the
option valuation date, the current stock price of the Company was used for determining the fair value of the Company’s stock
based on the closing price of common stock on the valuation date. The expected dividend rate of 0% is based on management’s
plan of operations. The risk-free interest rate is based on the U.S. Treasury 5-year Treasury Bill on the date of measurement.
For the year ended December 31, 2014, an expected volatility based on the Company’s historical stock price was used. For
the year ended December 31, 2012, an expected volatility was based on the average expected volatilities of a sampling of three
companies with similar attributes to the Company, including: industry, stage of life cycle, size and financial leverage. The Company
expects that no options will be forfeited.



The Company issued 30,000 shares to an
external consultant for press relation services in March 2013. The shares issued were valued at $300,000 using the stock’s
average market price when the services were rendered.



Share-based compensation expense from stock
options totaled $5,045, $154,343 and $180,750 for the years ended December 31, 2014, 2013 and 2012, respectively.





Note 32 — Contingencies and Commitments



The Group is subject to various claims
and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities, including
disputes on building repair and maintenance expenses, moving expenses and others. Management believes that any liability that may
ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results
of operations of the Company.



The following summarizes the material litigation
relating to our Group:



i. Auchan S.p.A



On March 14, 2013, the tenant Auchan filed
a lawsuit with the Court of Milan against Ellegi and GSI in connection with a lease agreement entered into with Ellegi on July
15, 2010 and a contract entered into with GSI on August 5, 2010 for certain repairs to be performed.  Auchan was not
satisfied with the repairs performed and claimed that they suffered a loss of potential income from new business opportunities,
together with certain damages which totaled to €4.5 million. We disagree with the allegations and are defending against this
claim, although no assurance can be made that we will be successful.  The actual amount in dispute is approximately €200,000
related to the actual repair work paid by Auchan. The management deemed the difference of €4.3 million Auchan is claiming
and the actual amount in dispute to be without merit. The Group has accrued a provision of approximately two-thirds, or €131,240
or $158,814 and €131,240 or $180,837 for the risk associated with this litigation as at December 31, 2014 and 2013 respectively
(the US dollar amounts differ due to exchange differences). The first hearing was held on October 10, 2013, and a subsequent hearing
was held on September 24, 2014 with no resolution with a follow-up hearing scheduled on September 29, 2015. On that day, the judge
granted the Group the right to submit an amended argument by December, 2015. The Group’s legal counsel amended and filed
the amended argument with the court. On December 21, 2015, the court officially accepted the amended argument for final court decision
by December, 2016. Management deemed this as a positive development in nature as it allowed the Group another opportunity to fully
defend its position.



ii. Morgan Joseph and BHN LLC



In July 2014, Morgan Joseph filed a complaint
against Prime and BHN LLC (“BHN”) for breach of contract, seeking at least approximately $1.3 million plus damages
from Prime. On October 20, 2014, Prime moved to dismiss the complaint on the basis there were no contracts between Morgan Joseph
and Prime. On November 14, 2014, BHN moved to add additional cross-claims, among other things.



On March 19, 2015, the court dismissed
Morgan Joseph's complaint against Prime, as well as BHN LLC's cross-claim for indemnification from the Company, but gave Morgan
Joseph until May 1, 2015 to file an amended complaint.



On April 8, 2015, BHN brought an amended
complaint against Prime for breach of contract, seeking approximately $9 million in damages. BHN did not serve Prime or Prime’s
legal counsel with this complaint. Separately, on April 27, 2015, Morgan Joseph filed an amended complaint against Prime and BHN,
asserting claims of breach of contract and seeking approximately $2.5 million plus damages.





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The Company filed an answer to Morgan Joseph’s
amended complaint on June 1, 2015. The management estimated the probability of damages in these cases is low due to (1) there being
no formal contracts between the Company and Morgan Joseph, and (2) the court dismissing earlier complaints and there being no new
evidence brought forward in the amended complaints.



In addition, on June 26, 2015, the Company
has filed cross-claim against BHN LLC and certain individuals connected with BHN LLC for damages and certain costs caused the Company.
The amount of damages and costs are to be determined at trial.





Note 33 — Capital Management



The primary objective of the Group’s
capital management is to ensure that it remains within its quantitative banking covenants and maintain a strong credit rating.
No changes were made in the objectives, policies or processes during the year ended December 31, 2014 and 2013. Prior to the Business
Combination on September 30, 2013, the Company was operated as a blank check company (see note 1 — Organization and plan
of business operations) in the development stage.



Following the Business Combination, the
Group monitors capital primarily using a loan-to-value ratio, which is calculated as the amount of outstanding debt divided by
the valuation of the investment property portfolio. The Group’s policy is to keep its average loan-to-value ratio lower than
80%.



Banking covenants vary according to each
loan agreement, but typically require that the loan-to-value ratio does not exceed 80% to 85%.



During 2014, certain Subsidiaries of the
Group missed scheduled repayments on a bank loan and four finance leases (see note 23 — Loans and Borrowings, and note 24
— Finance Leases). In addition, the Group was not able to repay the note payable to underwriters on its maturity date of
December 31, 2013. As a result of the payment default, an additional default interest rate is added to the original interest rate
(see note 27 — Note Payable to Underwriters)



|                                                    |  | 2014 |            |   | 2013 |  
|--------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Carrying amount of loans and borrowings             |  | $    | 32,268,180 |   |      | $
|External valuation of completed investment property |  | $    | 47,629,537 |   |      | $
|Loan to value ratio                                 |  |      | 68         | % |      |  





Note 34 — Events After the Reporting Date



On April 24, 2015, the Group sold a small
portion of the investment property on Via Buozzi in Buccinasco consisting of two warehouse spaces. The Group retains the ownership
of the remaining portion of the property after the sale. The total sales price was €200,000 (approximately $242,020) before
the deduction of expenses related to the sales transaction.



On May 10, 2015, the Company’s board
of directors granted 18,000 stock options to an officer. In addition, on September 1, 2015, the Company’s board of directors
granted 100,000 stock options to a director, and 7,500 stock options to various employees of the Subsidiaries. In addition on September
1, 2015, the board of directors authorized an increase of additional 280,000 stock options for issuance to directors, employees
and consultants of the Company from time to time, bringing the total option limit to an aggregate of 500,000 from 220,000.



On June 26, 2015, Prime Acquisition Corp.,
(the "Company") entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Prime Luxembourg
S.a.r.l., the Company’s wholly owned subsidiary (“LuxCo”), GSI S.r.l, LuxCo’s wholly owned subsidiary (“GSI”),
SIM S.r.l., at the time owned by LuxCo and GSI (“SIM”), Bell Real Estate S.r.l. (“Bell”), Cesare Lanati
and Stefano Lanati (Bell, Cesare Lanati and Stefano Lanati are collectively referred to as the “Buyers”). Pursuant
to the Purchase Agreement, on July 14, 2015, the Buyers acquired all of the outstanding equity interests in SIM in exchange for
the return of 220,000 of the Company’s shares (the “Consideration Shares”). SIM’s sole asset consists of
the property located at Via Newton 9, Milan, Italy. In addition, in connection with the transactions contemplated by the Purchase
Agreement, the Company extinguished certain trade liabilities associated with its portfolio of properties and the Buyers by the
offsetting of amounts due to and due from the Buyers and its affiliates, totaling approximately 20% of its total as of year-end.



On September 15, 2015, the Company has
entered into a binding letter of intents to purchase 100% of S.I.C.R.I., S.r.l., an Italian limited liability company. S.I.C.I.R.I.,
S.r.l. beneficially owns the land and real estate complex at the town of Pozzuolo Martesana (MI), Italy. The anticipated closing
date of this transaction is the first quarter of 2016.





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As of November 30, 2015, the Company has
entered into ten additional interest bearing unsecured convertible promissory notes with an interest rate of 10% annum, compounding
annually described in note 25 — Related Party Transactions with the same director of the Company which amounted to
$700,000. In addition, the Company has renewed eight of the interest bearing unsecured convertible promissory note from 2014 maturing
in 2015 to a future date with an additional of 10% to the original principal amounts (“Rollover”). These Rollovers
have added $131,500 to the total principal amount owed to this director. As a result of the additional interest bearing unsecured
convertible promissory notes and the Rollover, the Company owes this director and aggregate of $2,790,974, including $2,546,500
in principal amounts, and $244,474 of interest accrued.



On or about October 1, 2015, two of Prime’s
Italian subsidiaries were reorganized so that Prime Luxco directly owns 100% of their shares: Dieci S.r.l. was 50% owned by Prime
LuxCo and the other 50% owned by Ellegi S.r.l., and Delfin S.r.l., was owned 31% owned by Prime LuxCo and 69% owned by GSI S.r.l.



On October 20, 2015, a total of 253,881
ordinary shares of the founders’ shares were forfeited as a result of pre-determined stock target not being reached pursuant
to conditions set forth during the Company’s IPO in 2011.









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