UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



|(Mark One) | FORM 10-K | 
|---------- | --------- | 



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



For the fiscal year ended December 31, 2017



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



For the transition period from __________________ to ___________________



Commission file number: 333-171637



NOWNEWS DIGITAL
MEDIA TECHNOLOGY CO. LTD.

(Exact name of registrant as specified in
its charter)



|Nevada                         |  | 36-4794119         
|------------------------------ |  | -------------------
|State or other jurisdiction of |  | (I.R.S. Employer   
|Incorporation or organization  |  | Identification No.)



|4F, No. 32, Ln. 407, Sec. 2, Tiding Road, Neihu District, Taipei City, Taiwan |  | 114       
|----------------------------------------------------------------------------- |  | ----------
|(Address of principal executive offices)                                      |  | (Zip Code)



Registrant’s telephone number, including
area code: +886-2-87978775



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



Securities registered pursuant to section
12(g) of the Act: None.



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



Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  ̈
Yes x 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.

x 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). x Yes
 ̈ No



Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.  ̈



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



|Large accelerated filer |  ̈ | Accelerated filer         |  ̈
|----------------------- | - | ------------------------- | -
|Non-accelerated filer   |  ̈ | Smaller reporting company | x
|                        |   | Emerging growth company   |  ̈



If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐



Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act).

 ̈ Yes x No



On June 30, 2017, the last business day of the registrant’s
most recently completed second fiscal quarter, the aggregate market value of the Common Stock held by non-affiliates of the registrant
was $80,881,500, based upon the closing price on that date of the Common Stock of the registrant on the OTCQB of $5.00. For purposes
of this response, the registrant has assumed that its directors, executive officers and beneficial owners of 5% or more of its
Common Stock are deemed affiliates of the registrant.



The number of shares of common stock, par
value $0.001 (the “Common Stock”), outstanding as of April 16, 2018 is 23,072,000.



DOCUMENTS INCORPORATED BY REFERENCE



None.


















Table of Contents



|         |                                                                                                               | Page
|-------- | ------------------------------------------------------------------------------------------------------------- | ----
|         |                                                                                                               |     
|         | PART I                                                                                                        |     
|         |                                                                                                               |     
|Item 1.  | Business.                                                                                                     | 3   
|         |                                                                                                               |     
|Item 1A. | Risk Factors.                                                                                                 | 15  
|         |                                                                                                               |     
|Item 1B. | Unresolved Staff Comments.                                                                                    | 15  
|         |                                                                                                               |     
|Item 2.  | Properties.                                                                                                   | 15  
|         |                                                                                                               |     
|Item 3.  | Legal Proceedings.                                                                                            | 15  
|         |                                                                                                               |     
|Item 4.  | Mine Safety Disclosures.                                                                                      | 15  
|         |                                                                                                               |     
|         | PART II                                                                                                       |     
|         |                                                                                                               |     
|Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 16  
|         |                                                                                                               |     
|Item 6.  | Selected Financial Data.                                                                                      | 17  
|         |                                                                                                               |     
|Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations.                        | 17  
|         |                                                                                                               |     
|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk.                                                   | 27  
|         |                                                                                                               |     
|Item 8.  | Financial Statements and Supplementary Data.                                                                  | F-1 
|         |                                                                                                               |     
|Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.                         | 28  
|         |                                                                                                               |     
|Item 9A. | Controls and Procedures.                                                                                      | 28  
|         |                                                                                                               |     
|Item 9B. | Other Information.                                                                                            | 29  
|         |                                                                                                               |     
|         | PART III                                                                                                      |     
|         |                                                                                                               |     
|Item 10. | Directors, Executive Officers, and Corporate Governance.                                                      | 29  
|         |                                                                                                               |     
|Item 11. | Executive Compensation.                                                                                       | 31  
|         |                                                                                                               |     
|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.               | 34  
|         |                                                                                                               |     
|Item 13. | Certain Relationships and Related Transactions, and Director Independence.                                    | 35  
|         |                                                                                                               |     
|Item 14. | Principal Accountant Fees and Services.                                                                       | 36  
|         |                                                                                                               |     
|Item 15. | Exhibits, Financial Statement Schedules.                                                                      | 37  



2







Cautionary Statement Regarding Forward
Looking Statements



The discussion contained
in this Annual Report on Form 10-K (“Annual Report”) contains “forward-looking statements” within the meaning
of Section 27A of the United States Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the United States
Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but
not always, made through the use of words or phrases like “anticipate,” “estimate,” “plans,”
“projects,” “continuing,” “ongoing,” “target,” “expects,” “management
believes,” “we believe,” “we intend,” “we may,” “we will,” “we should,”
“we seek,” “we plan,” the negative of those terms, and similar words or phrases. We base these forward-looking
statements on our expectations, assumptions, estimates and projections about our business and the industry in which we operate
as of the date of this Annual Report. These forward-looking statements are subject to a number of risks and uncertainties that
cannot be predicted, quantified or controlled and that could cause actual results to differ materially from those set forth in,
contemplated by, or underlying the forward-looking statements. Statements in this Annual Report describe factors, among others,
that could contribute to or cause these differences. Actual results may vary materially from those anticipated, estimated, projected
or expected should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect. Because
the factors discussed in this Annual Report could cause actual results or outcomes to differ materially from those expressed in
any forward-looking statement made by us or on our behalf, you should not place undue reliance on any such forward-looking statement.
New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess
the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statement. Except as required by law, we undertake no obligation
to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this Annual Report
or the date of documents incorporated by reference herein that include forward-looking statements.



PART I



Item 1. Business.



Corporate History



We were incorporated
as Forever Zen Ltd. on March 20, 2010 under the laws of the State of Nevada. On December 13, 2013, we changed our name to NowNews
Digital Media Technology Co., Ltd. and planned to enter into the business of internet media and news content. Prior to the Share
Exchange described below, we were a development stage company and had not yet realized any revenues from our planned operations.



On November 14, 2014,
we entered into and closed a share exchange agreement (the “Share Exchange Agreement”), with Worldwide Media Investments
Corp., an Anguilla corporation (“Worldwide”), the shareholders of Worldwide, and NOWnews Network Co., Ltd., a Taiwan
corporation (“NOWnews Network”). Pursuant to the Share Exchange Agreement, (i) the Company issued an aggregate of 20,000,000
shares of common stock to the shareholders of Worldwide in exchange for all the issued and outstanding capital stock of Worldwide.
Worldwide, through its wholly owned subsidiary, Sky Media Investments Co., Ltd. (“Sky Media”), owns 66% of all the
issued and outstanding capital stock of NOWnews Network(the “Share Exchange”). As a result of the Share Exchange, Worldwide
and Sky Media become our wholly owned subsidiary and NOWnews Network is now our majority owned subsidiary in which we indirectly
holds 66% of the equity interest. Upon consummation of the Share Exchange, we ceased to be a shell company.



3







On August 5, 2015,
NOWnews Network, Sky Media, Mr. Alan Chen, the former Chairman of the Company, and Ms. Tu entered into a Stock Purchase Agreement
(the “Stock Purchase Agreement”) with Gamania Digital Entertainment Co. Ltd. (“Gamania Digital”) and Ta
Ya Venture Capital Co. Ltd. (“Ta Ya”), pursuant to which there were two phases of stock transfers. In Phase I, NOWnews
Network was committed to issue and sell to Gamania Digital and Ta Ya 1,250,000 and 400,000 shares of its outstanding shares at
a price of NT$10 per share, respectively. The share transfer of Phase I shall be completed sixty (60) days upon signing the agreement.
In Phase II, Gamania Digital and Ta Ya were expected, but not obligated, to purchase the same amount of shares from NOWnews Network,
and Mr. Chen and Ms. Tu, as in Phase I. On August 14, 2015, NOWnews Network has fulfilled its obligation of Phase I through the
issuance and sale of 1,250,000 and 400,000 shares at a price of NT$10 per share to Gamania Digital and Ta Ya for approximately
$388,803 (or NT$12.5 million) and $124,417 (or NT$4.0 million), respectively. On September 8, 2015, NOWnews Network issued and
sold additional 350,000 shares at a price of NT$10 per share to Gamania Digital for approximately $107,230 (or NT$3.5 million).
On November 30, 2016, NOWnews Network issued and sold additional 1,000,000 shares at a price of NT$10 per share to Gamania Digital
for approximately $313,283 (or NT$10 million). On March 16, 2017, NOWnews Network issued and sold additional 2,200,000 shares
at a price of NT$10 per share to Gamania Digital for approximately $711,054 (or NT $22,000,000). On March 31, 2017, Sky Media
purchased 1,065,000 shares of NOWnews Network held by Jin Hao Kang Marketing Co., Ltd for a purchase price of approximately US$30,930
(or NT$937,200). On October 2, 2017 and November 17, 2017, NOWnews Network issued and sold additional 1,114,100 and 600,000 shares
at a price of NT$10 per share to Gamania Digital for approximately $366,722 (or NT$11,141,000) and $199,667 (or NT$6,00,000),
respectively. On November 17, 2017, Sky Media also made capital contribution to NOWnews Network in cash of NT$10,000,000 (approximately
$332,779).  As a result of the above transactions, NOWnews Network remains the Company’s majority owned subsidiary
in which Company indirectly holds 50.36% of the equity interest at December 31, 2017.



On August 19, 2015,
we incorporated Dawnrain Media Co., Ltd. (“Dawnrain”) in the Republic of Seychelles (“Seychelles”). Dawnrain
is our wholly owned subsidiary. On August 27, 2015, Dawnrain incorporated New Taoyard Cultural Transmission Co., Ltd. (“New
Taoyard”) in Seychelles. On November 15, 2016, we incorporated Asia Well Ltd. in Seychelles. Dawnrain, New Taoyard,
and Asia Well are holding companies and have not carried out substantive business operations of their own.





On August 1, 2017,
New Taoyard entered into a share purchase agreement (the “Lovelife Agreement) with Shanghai Lovelife Trading Co., Ltd. (“Lovelife”),
a limited liability formed in the People’s Republic of China, and its sole shareholder and director. Pursuant to the Lovelife
Agreement, Lovelife shall transfer 100% of its equity interest to New Taoyard. As of the date of this report, Lovelife has a registered
capital of USD 160,000 but no capital has been actually paid to Lovelife.





4







Corporate Structure



The diagram below illustrates our corporate structure
as of the date of this report:







Worldwide was incorporated
in Anguilla on June 4, 2013 under the Anguilla International Business Companies Act, 2000. Worldwide is a holding company and has
not carried out substantive business operations of its own. Mr. Alan Chen is the sole director and controlling beneficiary shareholder
of Worldwide.



Sky Media was incorporated
under the laws of Anguilla on June 4, 2013.



NOWnews Network Co.
Ltd. (“NOWnews Network”) was incorporated in Taipei City, Taiwan on June 8, 2006. NOWnews Network is a media company
with operations in Taiwan and is our primary operating subsidiary as of December 31, 2016.



NOWnews Network owns
55% of the equity interest of Nownews International Marketing Co., Ltd, a Taiwan corporation (“Nownews International”),
primarily engaged in sales of advertising spaces in newspapers. The operation of Nownews International was terminated in December
2013. On January 17, 2017, Nownews International started the liquidation process and registered as a dissolved company in process.



Dawnrain was incorporated
in Seychelles on August 19, 2015. Dawnrain is a holding company and has not carried out substantive business operations of its
own.



On August 27, 2015,
Dawnrain incorporated New Taoyard Cultural Transmission Co., Ltd. in Seychelles. New Taoyard is a holding company and has not carried
out substantive business operations of its own.



On November 15, 2016,
Asia Well Ltd. was incorporated in Seychelles. Asia Well Ltd. is a holding company and has not carried out substantive business
operations of its own.



On May 16, 2017, each
of Dawnrain, New Taoyard and Asian Well Ltd. has amended its share registry to reduce the amount of the issued and outstanding
shares to 10, 10, and 100 shares, respectively. Accordingly, there were capital contribution of $10, $10, and $100 paid into each
of Dawnrain, New Taoyard and Asian Well Ltd., respectively.





On August 1, 2017,
New Taoyard entered into a share purchase agreement with Lovelife and its sole shareholder and director, pursuant to which New
Taoyard acquired 100% of the registered capital interest of Lovelife.





5







Recent Development





As discussed above,
on August 1, 2017, the Company’s wholly-owned subsidiary, New Taoyard, entered into the Lovelife Agreement with Lovelife,
its sole shareholder and director. Pursuant to the Lovelife Agreement, Lovelife shall transfer 100% of its equity interest to New
Taoyard. As of the date of this report, Lovelife has a registered capital of USD160,000 but no capital has acutally been paid to
Lovelife.





Principal Services



We generate our revenues
primarily from online advertising and marketing services and news content licensing.



Advertising and Marketing



Our advertising product
offerings consist of banner, button, text-link and video advertisements that appear on pages within our website, and advertising
campaign design and management services. Our primary advertising and sponsorship client base for advertising and sponsorships includes
international and local companies. We offer brand advertising services in display formats on our website as well as performance-based
online marketing solutions, such as promoted feeds on mobile or tablet. Display advertising comprises the text, images and other
interactive ads that run across the web on computers and mobile devices, including content specially formatted to be displayed
on smartphones, tablets and other mobile personal digital devices.



We also provide advertising
campaign design and management services for a fee. Our services include design and implementation of marketing and advertising
projects consisting of content advertising through publishing topic news and experience articles, pop-up or embedded advertisements
on our website or applications, creation of visual/mobile/audio advertisement, etc. Through these services, we help our clients
establish their corporate image and brand and market their products.



News Content Licensing



We have our own team
comprising journalists and editors who produce approximately 350 - 500 news articles/reports on a daily basis, covering real-time
diversified news including politics, finance, life, technology, sport, entertainment, travel and others. Besides, NOWnews Network
also licenses its self-created news content to major portals and corporate partners with more extensive news network, such as Yahoo
Hong Kong, Yahoo Taiwan, MSN Taiwan, Yam, Sina Taiwan, Taiwan Mobile, Chunghwa Telecom, Far EasTone Telecommunications Co. Ltd.,
Vibo Telecom, etc.



Historically, we provided
editing services to customers including selecting, sorting, editing news for other website operators such as Yahoo Taiwan. We ceased
this service in December 2013 because this service was not profitable. In addition, we used to provide film/video editing services
and licensed copyrights to a related party, Chunghwa Wideband Best Network Co., Ltd., and stopped in later 2013.



Seasonality



We have experienced
seasonality in our online advertising business. Historically, the periods from May through August and from November to January
have seen increase of more than 20% in advertising revenues due to the summer break and the winter holiday season. February has
historically been the worst month for our advertising business as it is after the Lunar New Year holidays when advertising revenues
are generally down nationwide. Past performance may not be indicative of future trends, as the mix of advertising industry sectors,
which may have different seasonality factors, may shift from quarter to quarter. There is no seasonality in its licensing business.



6







Major Customers



For the fiscal year ended December 31,
2017, our top three customers and their respective sale amount are as follows:



|                          |  |           |         |  | Percentage of Total | 
|------------------------- |  | --------- | ------- |  | ------------------- | 
|Name                      |  | Sales ($) |         |  | Revenue             | 
|OUI Marketing Co., Ltd.   |  |           | 264,958 |  |                     | 
|Zenithoptimedia Co., Ltd. |  |           | 233,540 |  |                     | 
|GuoShi Partners Co.       |  |           | 137,890 |  |                     | 



For the fiscal year ended December 31,
2016, our top three customers and their respective sale amount are as follows:



|                          |  |           |         |  | Percentage of Total | 
|------------------------- |  | --------- | ------- |  | ------------------- | 
|Name                      |  | Sales ($) |         |  | Revenue             | 
|Kose Corporation          |  |           | 344,935 |  |                     | 
|Zenithoptimedia Co., Ltd. |  |           | 177,649 |  |                     | 
|GuoShi Partners Co.       |  |           | 162,945 |  |                     | 



Employees



As of the date of this report, we have
103 employees, all of whom are full-time and are based in Taiwan. The breakdown of our employees based on departments is set forth
below:



|Department                 |  | Number of Employees
|-------------------------- |  | -------------------
|News                       |  | 52                 
|Sales and Marketing        |  | 32                 
|Innovation and Development |  | 9                  
|Finance                    |  | 2                  
|Administration             |  | 8                  



There are no collective
bargaining contracts covering any of our employees. We believe our relationship with our employees is satisfactory.



Regulation



Regulatory Authorities



We are subject to
the supervision of the National Communications Commission of Republic of China (the “NCC”). The NCC was established
in February 2006.



Permits, Licenses and Approvals



Pursuant to the Provisions
on Broadcasting and Television Program Supply, to obtain the permit to engage in broadcasting and TV program supply business, we
are required to meet two criteria: (i) minimum registered capital of NT$1,200,000 and (ii) minimum office area of approximately
377square feet. The operating permit should be obtained from Ministry of Culture before we apply for the business license for regular
companies. As of the date of this report, NOWnews Network has obtained the approval for (i) production and distribution of radio
and TV programs and (ii) radio and TV advertisement.



We believe we have all requisite permits, approvals
and licenses to conduct our businesses.



Rating of Internet Content



The Regulations for
the Rating of Internet Content was abolished by the NCC in 2012. At present, the rating of internet content is governed by Article
46 of the Protection of Children and Youths Welfare and Rights Act (last amended on December 16, 2015), which requires that all
internet platform providers adopt their own rules implementing “clear and practicable” protection measures in accordance
with the internet content supervisory institutions engaged by the NCC and other relevant authorities to prevent youth and children
from having access to harmful internet contents. An internet platform provider is required to restrict children and youths from
having access to internet content upon the relevant authority’s notification that such internet contents may be harmful or
that such internet platform provider failed to implement “clear and practicable” protection measures.



7







Personal Data Protection Act



On May 26, 2010, the
President of the Republic of China announced the amendment of the Personal Information Protection Act, or PIPA, which replaced
the former Computer-Processed Personal Data Protection Act, or CPPDPA, and became fully effective on October 1, 2012, except for
its Articles 6 and 54 that await further determination by the Executive Yuan. Under the PIPA, every individuals or governmental
or non-governmental agencies, including us, should be subject to certain requirements and restrictions for collecting, processing
or using personal data. The definition of “personal data” is extended to cover a broad scope, including name, birthday,
ID, special features, fingerprints, marriage status, family, education, occupation, medical records, medical history, generic information,
sex life, health examination report, criminal records, contact information, financial status, social activities, and any other
data which is sufficient to directly or indirectly identify a specific person. If we fail to comply with the PIPA, we may be subject
to serious punishment for civil claims, criminal offenses and administrative liabilities: the ceiling of the aggregate compensation
amount for damages payable in a single case will be up to NT$200 million or the actual value of loss arising from our violation
provided the amount of actual value of such loss is higher than NT$200 million; the defendant may be subject to an imprisonment
of up to five years; and the penalty for administrative liabilities will be up to NT$500,000 for each violation, and may be
imposed consecutively if such violation continues.



Foreign Investment



Pursuant to the provisions
of the Statute for Investment by Foreign Nationals, there are only a few industries where foreign investments are restricted. None
of the businesses of NOWnews Network fall under the restricted industries. Therefore, there is no restriction on foreign ownership
in NOWnews. However, Taiwan restricts investments by the PRC nationals. In accordance with the Rules on Investment Permit by Nationals
from the People’s Republic of China, only certain industries are open to the PRC nationals. The following businesses of NOWnews
Network are open to the PRC nationals: portal website operation, data processing, website management and related services.



News Regulation



As a news generator,
we are subject to regulations on contents of news. We are prohibited from creating or distributing certain news including but not
limited to the following:



News that damages people’s
reputation

News that invades people’s
privacy

News that involves
information on national defense

News that might influence
judicial proceedings



Depending on the circumstances,
in the event of violation of any of the foregoing restrictions, we may be subject to fines or criminal liabilities. In addition,
we need to comply with requirements on news regarding election, public polls, and pharmaceuticals, etc.



Regulation on Advertisement



Companies are prohibited
from using false or misleading advertising language and advertising agencies cannot help its clients design or create untrue or
misleading advertisements. Otherwise, the agencies may be subject to the same liabilities as their clients.



8







Foreign Exchange



Foreign exchange regulation
in Taiwan is primarily governed by the Ordinance of Foreign Exchange Administration, latest amended on April 29, 2009 (the “Foreign
Exchange Ordinance”). Under the Foreign Exchange Ordinance, foreign exchange refers to foreign currency, bills and marketable
securities. The authority managing the administration of foreign exchange is Ministry of Finance of Republic of China, while the
authority managing the practical operation of foreign exchange business is Central Bank of Republic of China. The Foreign Exchange
Ordinance also specifies the allocated power of Ministry of Finance and Central Bank, respectively. To the extent that any foreign
exchange receipts, payments or transactions reach the threshold of NT$500,000 ($16,869) or equivalent in foreign currency, it must
be reported to the Central Bank or its designated authorities. Upon incurrence of any of the following events, the State Council
of Republic of China may determine and announce that for a period of time, to close the foreign exchange market, suspend or restrict
all or partial foreign exchange payment, order a mandatory sale or deposit of all or partial foreign exchange into a designed bank,
or dispose in any other manner as it deems necessary:



the disorder in domestic
or international economy to the detriment of the stability of Taiwan’s economy; or Taiwan suffers serious trade deficit.



Tax



The current principal regulations governing
tax in Taiwan include the following:



Income Tax Law, latest
amended on February 7, 2018;

The Implementation
Rules of Income Tax Law, latest amended on September 30, 2014;

Value-Added and Non-Value-Added
Business Tax Law, latest amended on June 14, 2017; and

The Implementation
Rules of Value-Added and Non-Value-Added Business Tax Law, latest amended on May 1, 2017.



Under the Income Tax
Law, there are two kinds of income tax, comprehensive income tax for individuals and income tax for enterprises operating for profit,
respectively.



Individuals who have
income with a source within Taiwan must pay comprehensive income tax on their income sourced within Taiwan; while non-resident
individuals having income with a source within Taiwan, except otherwise provided in the Income Tax Law, shall pay tax based on
the amount attributable to the sources of their income.



The enterprise with
head office located in Taiwan shall pay profit-seeking income tax on its global income both within and outside Taiwan; while
the enterprises with head office outside Taiwan shall only pay profit-seeking income tax on its business income sourced from within
Taiwan.



Rate of Income Tax



The individual comprehensive
income tax exemption threshold is NT$60,000 ($2,024) per person per year. Any income beyond such exemption threshold is subject
to a progressive tax rate ranging from 5% to 40%.



With respect to enterprises
operating for profit, the exemption threshold is NT$120,000 ($4,048). Any income beyond such exemption threshold is subject to
20% tax rate on its taxable income.



Sale of goods or service,
import of goods in Taiwan are subject to a Value-Added or Non-Value-Added Business Tax. The Rate of business tax, except as otherwise
stipulated in the relevant tax law, ranges from 5% to 10% as determined by the State Council of Taiwan.



Enforceability of Judgments in Taiwan



All of our directors
and executive officers named in this report are residents of Taiwan and substantially all of our assets and the assets of those
persons are located in Taiwan. As a result, it may not be possible for investors to effect service of process upon us or those
persons outside of Taiwan, or to enforce against them judgments obtained in courts outside of Taiwan. Any final judgment obtained
against us in any court other than the courts of the Republic of China in connection with any legal suit or proceeding arising
out of or relating to our securities will be enforced by the courts of the Republic of China without further review of the merits
only if the court of the Republic of China in which enforcement is sought is satisfied that:



9







the court rendering
the judgment has jurisdiction over the subject matter according to the laws of the Republic of China;



the judgment and the
court procedure resulting in the judgment are not contrary to the public order or good morals of the Republic of China;



if the judgment was
rendered by default by the court rendering the judgment, we, or our officers and directors, were duly served within a reasonable
period of time in accordance with the laws and regulations of the jurisdiction of the court or process was served on us with judicial
assistance of the Republic of China; and



judgments at the courts
of the Republic of China are recognized and enforceable in the court rendering the judgment on a reciprocal basis.



A party seeking to
enforce a foreign judgment in the Republic of China would be required to obtain foreign exchange approval from the Central Bank
of the Republic of China (Taiwan) for the payment out of Taiwan of any amounts recovered in connection with the judgment denominated
in a currency other than NT dollars if a conversion from NT dollars to a foreign currency is involved.



Market Opportunities



Our current primary
focus is on the Taiwan market. The success of our business is tied to the size and vitality of Taiwan’s economy. According
to the International Monetary Fund, Taiwan’s gross domestic product in 2017 grew 2.84% year over year to $519.15 billion.



Taiwan has one of the
most advanced telecommunications networks in Asia. With excellent telecommunications infrastructure in place and the innovative
use of breakthrough information technologies, Taiwan continues to be well placed to drive both mobile and data communications services.



Competition



The market for Web
sites offering online content and services targeting the global Chinese community is competitive and we expect competition to increase
in the future. Many of the companies attempting to address this market offer portal, content and e-commerce services. The following
table lists the Chinese-language Web sites that we believe are currently our primary competitors in Taiwan:



udn.com

appledaily.com.tw

Chinatimes.com

ltn.com.tw

ettoday.net



As internet usage in
Mainland China, Hong Kong, Macau and Taiwan (collectively, the “Greater China”) increases and the Greater China market
becomes more attractive to advertisers and for conducting fee-based services, large global competitors, such as Facebook, LinkedIn,
Google, Twitter, Line, Kakao and WhatsApp, may increasingly focus their resources on the Greater China market. We cannot assure
you that we will succeed in competing against the established and emerging competitors in the market. The increased competition
could result in reduced traffic, loss of market share and revenues, and lower profit margins.



Our ability to compete
successfully depends on many factors, including the quality of our content, the breadth, depth and ease of use of our services,
our sales and marketing efforts and the performance of our technology.



10







Competitive Strength



We provide online content
and services for the global Chinese community with a focus on Taiwan, including but not limited to informational features, social
media and social networking services as well as other fee-based services. This industry can be characterized as highly competitive
and rapidly changing due to the fast growing market demand. Barriers to entry are relatively low, and current and new competitors
can launch new websites or services at a relatively low cost. Many companies offer various content and services targeting this
community that compete with us. Many of our competitors have greater financial resources, a longer history of providing online
services, a larger and more active user base, more established brand names and currently offer a greater breadth of products that
may be more popular than our online offerings. However, we believe that we possess the following competitive strengths that enable
us to compete effectively:



We have an outstanding
editorial team which produces hundreds of news on a daily basis, covering real-time diversified news including politics, finance,
life, technology, sport, entertainment, travel and others. Besides, we license our self-created news content to major portals and
corporate partners with a stable and extensive news network. We believe this is very critical to attract readers and increase traffic
volume of our website.



We have been focusing
on new media operations and interaction with its members and fans. We believe we are the first news media which opened official
accounts on LINE and WeChat, two very popular mobile messengers in Asia and created NOWnews Network fan group on Facebook.



With the growing popularity
of mobile devices, we are the first to develop applications on mobile devices offering users real-time news anywhere at any time.
The current daily traffic on our website exceeds 14 million and is mobile website has a daily traffic volume of approximately
4 million.



We have won many awards
and is highly recognized and rated among our peers. Recognition and awards include:



| | · | 10th among the top 100 websites in Taiwan in the survey
conducted by comScore
| | - | -----------------------------------------------------------------------------

| | · | 18th on the “Top 100 Hottest Websites in Taiwan”
and first among the original news websites by Digital Times in 2014
| | - | --------------------------------------------------------------------------------------------------------------------

| | · | 22th on the “Top 100 Most Popular Fan Clubs
in Taiwan” by Digital Times in 2013
| | - | -------------------------------------------------------------------------------

| | · | The Seventh and Eighth Quality Journalism Awards by
the Ministry of the Interior of Taiwan
| | - | ------------------------------------------------------------------------------------------

| | · | The 13th Cross-Strait News Reporting Award –
Citizen News
| | - | ---------------------------------------------------------

| | · | The 2011 Excellent Alliance Partners by Yahoo Shopping
Center
| | - | -------------------------------------------------------------



We have a very large
member base, which includes approximately 430,000 Facebook fans and 840,000 LINE subscribers and 100,000 WeChat subscribers. We
believe this member base will keep increasing and we will leverage this membership base to expand our business. PRC implements
strict control over the media. However, we are the only Taiwan internet media to which the PRC residents have full access –
this, we believe, provides us with access to a very large potential reader base and tremendous business opportunities. Currently,
approximately 9% of our traffic is from the PRC. Through our platform, we can build a cross-strait service system where we can
promote Taiwan’s services or products to readers in the PRC. However, PRC regulatory authorities may find the contents on
our website/mobile applications objectionable and block users in China from accessing our website and/or mobile applications.



Technology Infrastructure



Our operating infrastructure
is designed to serve and deliver hundreds of millions of page views a day to our users. This scalable infrastructure allows our
users to access our products and services quickly and efficiently, regardless of their geographical location. Our infrastructure
is also designed to provide high-speed access by forwarding queries to our Web hosting sites with greater resources or lower loads.
Our Web pages are generated, served and cached by servers hosted at various co-location Web hosting sites in Taiwan and the United
States.



11







Our servers run on
our own web-based platforms. These servers are maintained at Amazon in the United States and our offices in Taiwan. We believe
that our hosting partners provide significant operating advantages, including an enhanced ability to protect our systems from power
loss, break-ins and other potential external causes of service interruption. They provide continuous customer service, multiple
connections to the Internet and a continuous power supply to our systems. In addition, we conduct online monitoring of all our
systems for accessibility, load, system resources, network- server intrusion and timeliness of content.



Sales and Marketing



We enhance our brand
images and visibility through participating in various public events, exchanging resources with other companies, and establishing
partnership with other media companies. In addition, we focus on keyword marketing and search engine optimizing to increase the
search ranking of our news content.



Research and Development



Currently, we focus
on (i) developing the Drupal platform to host our website and (ii) using Drupal to build daily news from personal blogs and company
applications. Drupal is an open source content management platform powering millions of websites and applications. It’s built,
used, and supported by an active and diverse community of people around the world and has thousands of add-on modules and designs
available for us to build and improve our website.



Intellectual Property



We rely on a combination
of copyright, trademark, patent and trade secret laws and restrictions on disclosure to protect our intellectual property rights.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our
technology. Monitoring unauthorized use of our products is difficult and costly, and we cannot be certain that the steps we have
taken will prevent misappropriation of our technology, particularly in foreign countries where the laws may not protect our proprietary
rights as fully as in the United States. From time to time, we may have to resort to litigation to enforce our intellectual property
rights, which could result in substantial costs and diversion of our resources.



In addition, third
parties may initiate litigation against us alleging infringement of their proprietary rights. In the event of a successful claim
of infringement and our failure or inability to develop non-infringing technology or license the infringed or similar technology
on a timely basis, our business could be harmed. In addition, even if we are able to license the infringed or similar technology,
license fees could be substantial and may adversely affect our results of operations.



Patents



We have the following patents as of the
date of this report:



|Patent Name                                            |  | Type          |  | Jurisdiction |  | Valid Period                        |  | Certificate No.
|------------------------------------------------------ |  | ------------- |  | ------------ |  | ----------------------------------- |  | ---------------
|Portable multimedia sharing device                     |  | Utility Model |  | Taiwan       |  | May 11, 2011 – September 15, 2020   |  | M403695        
|Multimedia device with embedded multimedia information |  | Utility Model |  | Taiwan       |  | May 21, 2012 – September 26, 2021   |  | M429933        
|Information browsing system                            |  | Utility Model |  | Taiwan       |  | April 11, 2012 – September 29, 2021 |  | M426832        
|Multimedia file with embedded information              |  | Utility Model |  | The PRC      |  | May 11, 2011 – September 15, 2020   |  | 2495374        



12







Trademarks



As of the date of this
report, we have registered an aggregate of 17 trademarks in various categories and are in the process of applying for an additional
four trademarks in Taiwan and the PRC. Set forth below is a list of our trademarks:



|           |  |              |  | Valid Period |  |          
|---------- |  | ------------ |  | ------------ |  | ---------
|Trademarks |  | Jurisdiction |  | From         |  | To       
|           |  |              |  |              |  |          
|           |  | Taiwan       |  | 2/16/2007    |  | 1/31/2018
|           |  |              |  |             
|2/16/2008  |  | 2/15/2018    |  | 16, 35,42   



13







|           |          |              |           | Valid Period |    |           
|---------- | -------- | ------------ | --------- | ------------ | -- | ----------
|Trademarks |          | Jurisdiction |           | From         |    | To        
|           |          |              |           |              |    |           
|           |          | Taiwan       |           | 5/7/2007     |    | 2/15/2018 
|           |          | 5/7/2007     |           | 8/31/2018    |    | 9, 38, 41 
|           |          |              |           |              |    |           
|           |          | Taiwan       |           | 4/3/2008     |    | 12/15/2018
|           |          |              |           |              |    |           
|           |          | Taiwan       |           | 5/6/2009     |    | 4/15/2020 
|           |          | 5/6/2009     |           | 2/15/2020    |    | 38        
|           |          | 5/6/2009     |           | 2/15/2025    |    | 9         
|           |          |              |           |              |    |           
|           |          | Taiwan       |           | 6/30/2010    |    | 9/15/2021 
|           |          |              |           |              |    |           
|PRC        |          | 8/2/2010     |           | 12/23/2023   |    | 9         
|           | 8/2/2010 |              | 4/13/2022 |              | 16
|           | 8/2/2010 |              | 5/6/2024  |              | 35
|           |          | 8/2/2010     |           | 6/2/2024     |    | 41        
|           |          |              |           |              |    |           
|           |          | Taiwan       |           | 5/19/2010    |    | 1/31/2021 
|           |          |              |           |              |    |           
|           |          | Taiwan       |           | 5/6/2009     |    | 4/15/2020 
|           |          | 5/6/2009     |           | 2/15/2020    |    | 9, 38, 41 
|           |          |              |           |              |    |           
|           |          | Taiwan       |           | 2/1/2013     |    | 1/31/2023 



14







|           |  |              |  | Valid Period |  |          
|---------- |  | ------------ |  | ------------ |  | ---------
|Trademarks |  | Jurisdiction |  | From         |  | To       
|           |  |              |  |              |  |          
|           |  | Taiwan       |  | 8/18/2013    |  | 7/31/2023
|           |  | 11/16/2013   |  | 11/15/2023   |  | 35, 41   
|           |  |              |  |              |  |          
|           |  | Taiwan       |  | 11/2/2012    |  | 8/15/2023
|           |  |              |  |              |  |          
|           |  | PRC          |  | 4/7/2008     |  | 2/6/2022 



Item 1A. Risk Factors.



Not applicable.



Item 1B. Unresolved Staff Comments.



Not applicable.



Item 2. Properties.



Our corporate headquarters
are located at 4F, No. 32, Ln. 407, Sec. 2, Tiding Road, Neihu District, Taipei City 114, Taiwan, where we lease approximately
7,117.35 square feet of office space under a lease that expires September 14, 2022. Our monthly lease payment for this office space
is approximately $9,296 (NT$275,520).



Our servers are primarily
maintained in Taiwan. We believe the leased premise is sufficient to meet the immediate needs of our business.



Item 3. Legal Proceedings.



We are currently not
involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations.
There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened
against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’
officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.



Item 4. Mine Safety Disclosures.



Not applicable.



15







PART II



Item 5. Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.



Market for Common Equity and Related Stockholder Matters



Our common stock is
currently quoted on the OTCQB under the symbol “NDMT.” There has not been any significant trading to date in the Company’s
common stock. The table below presents the high and low bid for our common stock for each quarter for the years ended December
31, 2017 and 2016. These prices reflect inter-dealer prices, without retail markup, markdown, or commission, and may not represent
actual transactions.



|                                                          |  | High |      |  | Low |  
|--------------------------------------------------------- |  | ---- | ---- |  | --- | -
|First Quarter of 2018 (for the period end March 31, 2018) |  | $    | 2.84 |  |     | $
|                                                          |  |      |      |  |     |  
|Year ended December 31, 2017                              |  |      |      |  |     |  
|1st Quarter                                               |  | $    | 4.80 |  |     | $
|2nd Quarter                                               |  | $    | 5.15 |  |     | $
|3rd Quarter                                               |  | $    | 5.00 |  |     | $
|4th Quarter                                               |  | $    | 3.90 |  |     | $
|                                                          |  |      |      |  |     |  
|Year ended December 31, 2016                              |  |      |      |  |     |  
|1st Quarter                                               |  | $    | 6.80 |  |     | $
|2nd Quarter                                               |  | $    | 6.10 |  |     | $
|3rd Quarter                                               |  | $    | 5.00 |  |     | $
|4th Quarter                                               |  | $    | 5.00 |  |     | $



As of April 16, 2018,
we had 23,072,000 shares of common stock outstanding and held of record by 537 stockholders.



Securities Authorized for Issuance under Equity Compensation
Plans.



None.



Stock Transfer Agent



Our stock transfer agent is Empire Stock
Transfer, 1859 Whitney Mesa Dr., Henderson, NV 89014.



Dividends



The Company has never
declared or paid any cash dividends on its common stock. The Company currently intends to retain future earnings, if any, to finance
the expansion of its business. As a result, the Company does not anticipate paying any cash dividends in the foreseeable future.



Repurchase of Equity Securities



None.



Recent Sales of Unregistered Securities



During the period covered by this annual
report on Form 10-K, there were no sales by us of unregistered securities except as noted below and as described in Note 9 to the
Audited Financial Statements.



On June 22, 2017, the Company entered into
a subscription agreement (the “Subscription Agreement”) with a Taiwanese investor (the “Investor”). Pursuant
to the Subscription Agreement, the Investor agreed to purchase 100,000 restricted shares (the “Subscription Shares”)
of common stock, par value $.001 of the Company (“Share Purchase”) for an aggregate price of $530,000 (the “Subscription
Price”). As of the date of this report, the Company has received the Subscription Price but not issued any Subscription Shares.



The
issuance of the Subscription Shares will be exempt from registration under Rule 903 of Regulation S of the Securities Act on the
basis that the transaction will be an “offshore transaction”, as defined in Rule 902(h) of Regulation S.



16







Item 6. Selected Financial Data.



Not applicable.



Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations .



This Management Discussion
and Analysis (“MD&A”) contains “forward-looking statements”, which represent our projections, estimates,
expectations or beliefs concerning among other things, financial items that relate to management’s future plans or objectives
or to our future economic and financial performance. In some cases, you can identify these statements by terminology such as “may”,
“should”, “plans”, “believe”, “will”, “anticipate”, “estimate”,
“expect” “project”, or “intend”, including their opposites or similar phrases or expressions.
You should be aware that these statements are projections or estimates as to future events and are subject to a number of factors
that may tend to influence the accuracy of the statements. These forward-looking statements should not be regarded as a representation
by the Company or any other person that the events or plans of the Company will be achieved. You should not unduly rely on these
forward-looking statements, which speak only as of the date of this MD&A. Except as may be required under applicable securities
laws, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the
date of this MD&A or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we
describe under “Risk Factors” in our reports filed with the Securities and Exchange Commission.  Actual results
may differ materially from any forward looking statement.



Overview



We were incorporated
as Forever Zen Ltd. on March 20, 2010 under the laws of the State of Nevada. On December 13, 2013, we changed our name to NowNews
Digital Media Technology Co Ltd. with the plan to enter into the business of internet media and news content. Prior to the Share
Exchange as defined below, we were a development stage company and had not yet realized any revenues from our planned operations.



On November 14, 2014,
we entered into and closed a share exchange agreement (the “Share Exchange Agreement”), with Worldwide Media Investments
Corp., an Anguilla corporation (“Worldwide”), the shareholders of Worldwide, and NOWnews Network Co., Ltd., a Taiwan
corporation (“NOWnews Network”). Pursuant to the Share Exchange Agreement, the Company issued an aggregate of 20,000,000
shares of common stock to the shareholders of Worldwide in exchange for all the issued and outstanding capital stock of Worldwide
(the “Share Exchange”). Worldwide, through its wholly owned subsidiary, Sky Media Investments Co., Ltd. (“Sky
Media”), owned 66% of all the issued and outstanding capital stock of NOWnews Network immediately following the Share Exchange.



As a result of the
consummation of the Share Exchange on November 14, 2014, NOWnews Network became, indirectly through Worldwide and Sky Media, a
majority-owned subsidiary of the Company. We are now, through NOWnews Network, engaged in creating, collecting and distributing
news and information through our website http://www.nownews.com/ and our applications on mobile phones or tablets.



We currently generate
revenue primarily from online advertising and marketing services and news content licensing. We historically had revenues from
online product sales in the E-commerce business and editing services for customers. Since our editing service was not profitable,
we ceased this service in December 2013. In addition, we also suspended our E-commerce business in April 2014 and eventually terminated
the E-commerce business at the end of 2015 due to the continuous loss from this business.



17











On August 5, 2015,
NOWnews Network, Sky Media, Mr. Alan Chen, the former Chairman of the Company, and Ms. Tu entered into a Stock Purchase Agreement
(the “Stock Purchase Agreement”) with Gamania Digital Entertainment Co. Ltd. (“Gamania Digital”) and Ta
Ya Venture Capital Co. Ltd. (“Ta Ya”), pursuant to which there were two phases of stock transfers. In Phase I, NOWnews
Network was committed to issue and sell to Gamania Digital and Ta Ya 1,250,000 and 400,000 shares of its outstanding shares at
a price of NT$10 per share, respectively. The share transfer of Phase I shall be completed sixty (60) days upon signing the agreement.
In Phase II, Gamania Digital and Ta Ya were expected, but not obligated, to purchase the same amount of shares from NOWnews Network,
and Mr. Chen and Ms. Tu, as in Phase I. On August 14, 2015, NOWnews Network has fulfilled its obligation of Phase I through the
issuance and sale of 1,250,000 and 400,000 shares at a price of NT$10 per share to Gamania Digital and Ta Ya for approximately
$388,803 (or NT$12.5 million) and $124,417 (or NT$4.0 million), respectively. On September 8, 2015, NOWnews Network issued and
sold additional 350,000 shares at a price of NT$10 per share to Gamania Digital for approximately $107,230 (or NT$3.5 million).
On November 30, 2016, NOWnews Network issued and sold additional 1,000,000 shares at a price of NT$10 per share to Gamania Digital
for approximately $313,283 (or NT$10 million). On March 16, 2017, NOWnews Network issued and sold additional 2,200,000 shares
at a price of NT$10 per share to Gamania Digital for approximately $711,054 (or NT $22,000,000). On March 31, 2017, Sky Media
purchased 1,065,000 shares of NOWnews Network held by Jin Hao Kang Marketing Co., Ltd for a purchase price of approximately US$30,930
(or NT$937,200). On October 2, 2017 and November 17, 2017, NOWnews Network issued and sold additional 1,114,100 and 600,000 shares
at a price of NT$10 per share to Gamania Digital for approximately $366,722 (or NT$11,141,000) and $199,667 (or NT$6,00,000),
respectively. On November 17, 2017, Sky Media also made capital contribution to NOWnews Network in cash of NT$10,000,000 (approximately
$332,779).  As a result of the above transactions, NOWnews Network remains the Company’s majority owned subsidiary
in which Company indirectly holds 50.36% of the equity interest at December 31, 2017.



On August 19, 2015,
we incorporated Dawnrain Media Co., Ltd. (“Dawnrain”) in the Republic of Seychelles (“Seychelles”). Dawnrain
is our wholly owned subsidiary. On August 27, 2015, Dawnrain incorporated New Taoyard Cultural Transmission Co., Ltd. (“New
Taoyard”) in Seychelles. On November 15, 2016, we incorporated Asia Well Ltd. in Seychelles. Dawnrain, New Taoyard,
and Asia Well are holding companies and have not carried out substantive business operations of their own.





On August 1, 2017,
New Taoyard entered into a share purchase agreement (the “Lovelife Agreement) with Shanghai Lovelife Trading Co., Ltd. (“Lovelife”),
a limited liability formed in the People’s Republic of China, and its sole shareholder and director. Pursuant to the Lovelife
Agreement, Lovelife shall transfer 100% of its equity interest to New Taoyard. As of the date of this report, Lovelife has a registered
capital of USD 160,000 but no capital has actually been paid to Lovelife.





Results of Operations for the Years Ended December 31,
2017 and 2016



|                                                                    |  | For The Years Ended |            |   |           |  
|------------------------------------------------------------------- |  | ------------------- | ---------- | - | --------- | -
|                                                                    |  | December 31,        |            |   | Change in |  
|                                                                    |  | 2017                |            |   | 2016      |  
|                                                                    |  |                     |            |   |           |  
|Net revenue                                                         |  | $                   | 3,750,894  |   |           | $
|Cost of revenue                                                     |  |                     | (3,116,151 | ) |           |  
|Gross profit                                                        |  |                     | 634,743    |   |           |  
|                                                                    |  |                     |            |   |           |  
|Selling expenses                                                    |  |                     | (1,127,259 | ) |           |  
|General and administrative expenses                                 |  |                     | (4,288,928 | ) |           |  
|Financial advisory service fee – related party                      |  |                     | -          |   |           |  
|Total operating expense                                             |  |                     | (5,416,187 | ) |           |  
|                                                                    |  |                     |            |   |           |  
|Operating loss                                                      |  |                     | (4,781,444 | ) |           |  
|                                                                    |  |                     |            |   |           |  
|Other income (expense)                                              |  |                     |            |   |           |  
|Interest income                                                     |  |                     | 757        |   |           |  
|Interest expense                                                    |  |                     | (248       | ) |           |  
|Other income, net                                                   |  |                     | 796        |   |           |  
|Total other income (expense)                                        |  |                     | 1,305      |   |           |  
|                                                                    |  |                     |            |   |           |  
|Loss from continuing operations before income taxes                 |  |                     | (4,780,139 | ) |           |  
|Income taxes                                                        |  |                     | -          |   |           |  
|Loss from continuing operations                                     |  |                     | (4,780,139 | ) |           |  
|Income (Loss) from discontinued operations, net of income taxes     |  |                     | 1          |   |           |  
|                                                                    |  |                     |            |   |           |  
|Net loss                                                            |  |                     | (4,780,138 | ) |           |  
|                                                                    |  |                     |            |   |           |  
|Net loss attributable to noncontrolling interests:                  |  |                     |            |   |           |  
|Net loss from continuing operations                                 |  |                     | 842,646    |   |           |  
|Net loss from discontinued operations                               |  |                     | (1         | ) |           |  
|Total net loss attributable to noncontrolling interest              |  |                     | 842,645    |   |           |  
|                                                                    |  |                     |            |   |           |  
|Net loss attributable to NowNews Digital Media Technology Co., Ltd. |  | $                   | (3,937,493 | ) |           | $



18







Net Revenue



Our
net revenue for the year ended December 31, 2017 was $3.75 million, an increase of $0.63 million or 20% from $3.12 million for
the year ended December 31, 2016. The increase was primarily due to the increase in advertisement revenue.



Advertising



Our
advertising avenue was $3.53 million for the year ended December 31, 2017, an increase of $0.67 million, or 23%, from $2.86 million
for the year ended December 31, 2016. We will continue focus on the internet advertising and marketing business.



Licensing and
Services



Our
revenue from content licensing was $0.23 million for the year ended December 31, 2017, a decrease of $0.03 million, or 14%,
from $0.26 million for the year ended December 31, 2016.



Cost of Revenue



Cost of revenue mainly
consists of advertisement costs, content licensing costs, copyright costs, website maintenance costs, and labor costs.



Cost of revenue was
$3.12 million for the year ended December 31, 2017, an increase of $0.95 million, or 43%, as compared to $2.17 million for the
year ended December 31, 2016. The increase was mainly due to the increase of $0.31 million in advertisement cost and $0.56 million
in labor cost.



Gross Profit



Gross profit decreased
approximately $0.31 million, or 33%, for the year ended December 31, 2017, as compared to the same period in 2016, due to the substantial
increase in cost of revenue. Gross profit margin was 17% for the year ended December 31, 2017 as compared to 30% for the same period
in 2016.



Selling Expenses



Total selling expenses
consist primarily of payroll, labor and health insurance, and advertisement expenses. The amount increased by $0.52 million, or
85%, from $0.61 million for the year ended December 31, 2016, to $1.13 million for the year ended December 31, 2017. The increase
in selling expenses was primarily due to the increase in labor costs resulting from the increase in the number of salespersons.



19







General and Administrative Expenses



General and administrative
expenses primarily consist of payroll, welfare, labor and health insurance, post-retirement benefits, office rent and management
fees, depreciation & amortization expenses, professional services, and expenses for other general corporate activities. General
and administrative expenses increased by approximately $3.22 million, or 300%, from $1.07 million for the year ended December 31,
2016 to $4.29 million for the year ended December 31, 2017. The increase in general and administration expenses was principally
due to the increase in the number of employees and the recognition of stock compensation cost awarded to directors and consultant
in a total of $2,239.250 during the year ended December 31, 2017.



Financial advisory service fee –
related party



Financial advisory
service fee increased by $2.97 million was due to the services provided by GIA Consultants Limited In resolution of the Company’s
outstanding obligations pertaining to the services that have been rendered to the Company as of August 12, 2016, the Company and
GIA Consultants Limited (“GIA”) entered into a Financial Advisory Service Recognition Agreement (the “Agreement”)
on September 20, 2016, pursuant to which the Company agrees to issue 660,000 shares of common stock, par value $0.001 per share,
to GIA in recognition of services that have been previously rendered to the Company as of August 12, 2016. The common stock price
was $4.50 per share as of closing on August 12, 2016, the closing price as of the last business day prior to August 15, 2016, totaling
an aggregate sum of $2,970,000. On October 4, 2016, the Company issued 660,000 shares of common stock to GIA Consultants Limited
to fulfill the Agreement signed on September 20, 2016. The Company did not receive financial
advisory service from GIA and was not obligated to pay financial advisory service fee for the year ended December 31, 2017.



Net Loss



As
a result of the above factors, we have net loss of approximately $4.78 million for the year ended December 31, 2017 as compared
to net loss of approximately $3.70 million for the year ended December 31, 2016, representing an increase of loss of approximately
$1.08 million, or approximately 29%.



Liquidity and Capital Resources



Our
consolidated financial statements are prepared using generally accepted accounting principles in the United States of America
applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal
course of business. We have incurred significant losses and have not demonstrated the ability to generate sufficient cash
flows from operations to satisfy its liabilities and sustain operations. We had accumulated deficits of $11,869,788 and $7,932,295,
and stockholders’ deficits of $2,115,848 and $1,380,173 as of December 31, 2017 and 2016, respectively. The net losses attributable
to common stockholders of $3,937,493 and $3,532,106 for the years ended December 31, 2017 and 2016, respectively. In addition,
current liabilities exceed current assets by $1,837,035 and $858,428 as of December 31, 2017 and 2016, respectively, representing
significant working capital deficits. These matters raise substantial doubt about our ability to continue as a going concern.  Our
ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until it becomes
profitable.  If we are unable to obtain adequate capital, it could be forced to cease operations. The accompanying
consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going
concern.



Management’s Plan to Continue
as a Going Concern



In
order to continue as a going concern, we will need, among other things, additional capital resources. Management’s plans
to obtain such resources for us include (1) obtaining capital from the sale of its equity securities, (2) sales of our services,
(3) short-term and long-term borrowings from banks, and (4) short-term borrowings from stockholders or other related party(ies)
when needed. However, management cannot provide any assurance that we will be successful in accomplishing any of its plans.



Our
ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in the preceding
paragraph and eventually to secure other sources of financing and attain profitable operations.



20







We believe that our
current levels of cash, cash flows from operations, and bank/related party borrowings, will be sufficient to meet our anticipated
cash needs for at least the next 12 months. However, we may need additional cash resources in the future if we experience changed
business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue
opportunities for investment, acquisition, strategic cooperation or other similar actions. If we ever determine that our cash requirements
exceed our amounts of cash and cash equivalents on hand, we may seek to issue debt or equity securities or obtain a credit facility.
Any future issuance of equity securities could cause dilution for our shareholders. Any incurrence of indebtedness could increase
our debt service obligations and cause us to be subject to restrictive operating and financial covenants. It is possible that,
when we need additional cash resources, financing will only be available to us in amounts or on terms that would not be acceptable
to us, if at all.



As
of December 31, 2017, we had working capital deficit of $1,837,035 as compared to working capital deficit of $858,428 as of December
31, 2016. We had cash and cash equivalents of $186,494 as of December 31, 2017, a decrease of $58,197, or 24% from $244,691 as
of December 31, 2016. Our principal sources and uses of funds were as follows:



|                                                            |  | For the Years Ended December 31, |           
|----------------------------------------------------------- |  | -------------------------------- | ----------
|                                                            |  | 2017                             |           
|Net cash used in operating activities                       |  | $                                | (2,326,964
|Net cash used in investing activities                       |  |                                  | (254,258  
|Net cash provided by financing activities                   |  |                                  | 2,502,153 
|Net cash used in discontinued operations                    |  |                                  | 4,275     
|Effect of exchange rate change on cash and cash equivalents |  |                                  | 16,597    
|Net decrease in cash and cash equivalents                   |  | $                                | (58,197   



Net
cash used in operating activities of continuing operations was approximately $2.33 million for the year ended December 31, 2017,
compared to net cash used in operating activities of approximately $0.65 million for the year ended December 31, 2016. The
increase of $1.68 million of cash used in operating activities was primarily due to the increase in net loss of $1.08 million,
security deposits of $0.04 million, and other current assets of $0.09 million, and the decrease in accounts payable of $0.19 million,
partially offset by the increase in accrued expenses of $0.34 million.



Net
cash used in investing activities of continuing operations was $254,258 for the year ended December 31, 2017, compared to $5,334
for the same period last year. We used $0.25 million in the addition of electronic equipment, computer equipment and office equipment
and furniture during the year ended December 31, 2017.



Net
cash provided by financing activities of continuing operations amounted to approximately $2.50 million for the year ended December
31, 2017, resulting an increase in net cash provided by financial activities of $1.91 million compared to approximately $0.59 million
cash provided for the year ended December 31, 2016. The increase was mainly due to the capital contributions of $0.98 million from
noncontrolling interest and the increase of $0.53 million from stock subscriptions received in advance during the year ended December
31, 2017.



Critical Accounting Policies



Basis of presentation:



The accompanying consolidated
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.
Since the Company, Worldwide, and NOWnews Network were entities under common control prior to the restructuring transaction. All
the assets and liabilities of Worldwide and NOWnews Network were transferred to the Company at their respective carrying amounts
on the date of transaction. The Company and Worldwide have recast prior period financial statements to reflect the conveyance of
NOWnews Network to Sky Media as if the restructuring transaction had occurred as of January 1, 2014. All significant intercompany
transactions and account balances have been eliminated. The nature of and effects on earnings per share (EPS) of nonrecurring intra-entity
transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include
the earnings (or losses) of the transferred net assets.



21







The functional currency
of NOWnews Network and NOWnews International is the New Taiwan dollars, however the accompanying consolidated financial statements
have been translated and presented in United States Dollars ($). In the accompanying consolidated financial statements and
notes, “$”, “US$” and “U.S. dollars” mean United States dollars, and “NT$” and
“NT dollars” mean New Taiwan dollars.



Use of estimates and assumptions:



The preparation of
the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses
during the reporting periods. Management makes these estimates using the best information available at the time the estimates are
made. However, actual results could differ materially from those results. The most significant estimates reflected in the consolidated
financial statements include depreciation, useful lives of property and equipment, deferred income taxes, useful life of intangible
assets and contingencies. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the
consolidated financial statements in the period they are determined to be necessary.



Cash and cash equivalents:



The Company considers all cash on hand and
in banks, certificates of deposit and other highly-liquid investments with original maturities of three months or less, when purchased,
to be cash and cash equivalents. As of December 31, 2017 and 2016, the Company has uninsured deposits in banks of $41,540 and $122,508,
respectively.



Accounts receivable:



The Company maintains
reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes
historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment
patterns to evaluate the adequacy of these reserves. As of December 31, 2017 and 2016, the Company assessed the allowance for doubtful
accounts of $10,345 and $9,464, respectively.



Property and equipment:



Property and equipment
are recorded at cost less accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the year of disposal.
The cost of improvements that extends the life of property and equipment are capitalized. These capitalized costs may include structural
improvements, equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred.



Depreciation for financial reporting purposes
is provided using the straight-line method over the estimated useful lives of the assets or lease term as follows:



|Electronic Equipment           | 3 to 5 years                                                           
|------------------------------ | -----------------------------------------------------------------------
|Computer Equipment             | 5 years                                                                
|Office Equipment and Furniture | 5 years                                                                
|Leasehold Improvement          | Lesser of term of the lease or the estimated useful lives of the assets



22







Long-lived assets:



The Company applies
the provisions of FASB ASC Topic 360 (ASC 360), “Property, Plant, and Equipment” which addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived
assets to be held and used in accordance with ASC 360, at least on an annual basis. ASC 360 requires the impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on
the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.



Intangible assets:



Intangible assets consist
of software, trademark, and copyrights (see Note 6). At least annually, the Company evaluates intangible assets for impairment
whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment
loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual
disposition are less than its carrying amount. Estimating future cash flows related to an intangible asset involves significant
estimates and assumptions. If the Company’s assumptions are not correct, there could be an impairment loss or, in the case
of a change in the estimated useful life of the asset, a change in amortization expense. There was no impairment of intangible
assets as of and for the years ended December 31, 2017 and 2016, respectively.



Leases:



Lease agreements are
evaluated to determine if they are capital leases meeting any of the following criteria at inception: (a) Transfer of ownership;
(b) Bargain purchase option; (c) The lease term is equal to 75 percent or more of the estimated economic life of the leased property;
(d) The present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments
representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon,
equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at lease inception over any related
investment tax credit retained by the lessor and expected to be realized by the lessor.



If at its inception a lease meets any of the four lease criteria
above, the lease is classified by the lessee as a capital lease; and if none of the four criteria are met, the lease is classified
by the lessee as an operating lease.



Fair Value Measurements:



FASB ASC 820, “Fair
Value Measurements” defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at
fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires
that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize
the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation
techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and
related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that
observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use
in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs
are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the
asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs
into three broad levels based on the reliability of the inputs as follows:



| | · | Level 1 – Inputs are quoted prices in active
markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these
instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are
readily and regularly available.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Level 2 – Inputs other than quoted prices in
active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23







| | · | Level 3 – Valuations based on inputs that are
unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using
pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant
would use in pricing the asset or liability.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The carrying values
of certain assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, due from related parties,
other current assets, accounts payable, accrued expenses, due to shareholders, and other current liabilities approximate fair value
due to their relatively short maturities.



Revenue recognition:



Product and service
revenue is recognized when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery
has occurred or the service has been performed, (iii) the Company’s price to the customer is fixed or determinable and (iv)
collection of the resulting accounts receivable is reasonably assured.  Payments received before satisfaction of all
of the relevant criteria for revenue recognition are recorded as unearned revenue. The Company recognizes revenue for product sales
upon transfer of title to the customer.  The Company recognizes revenue for services upon performance of the service.  Customer
purchase orders and/or contracts will generally be used to determine the existence of an arrangement.  Shipping documents
and the completion of any customer acceptance requirements, when applicable, will be used to verify product delivery or that services
have been rendered.  The Company will assess whether a price is fixed or determinable based upon the payment terms associated
with the transaction and whether the sales price is subject to refund or adjustment. The Company will record reductions to revenue
for estimated product returns and pricing adjustments in the same period that the related revenue is recorded.  These
estimates will be based on industry-based historical data, historical sales returns, if any, analysis of credit memo data, and
other factors known at the time.



Post-retirement and post-employment
benefits:



NOWnews Network adopted
the government mandated defined contribution plan pursuant to the Labor Pension Act (the “Act”) in Taiwan. Such labor
regulations require that the rate of contribution made by an employer to the Labor Pension Fund per month shall not be less than
6% of the worker's monthly salaries. Pursuant to the Act, NOWnews Network makes monthly contribution equal to 6% of employees’
salaries to the employees’ pension fund. NOWnews Network has no legal obligation for the benefits beyond the contributions
made. The total amounts for such employee benefits, which were expensed as incurred, were $118,375 and $78,327 for the years ended
December 31, 2017 and 2016, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment
benefits.



Stock-based Compensation:





The Company measures expense associated
with all employee stock-based compensation awards using a fair value method and recognizes such expense in the consolidated financial
statements on a straight-line basis over the requisite service period in accordance with ASC Topic 718 “Compensation-Stock
Compensation”. Total employee stock-based compensation expenses were $1,444,250 and $0 for the years ended December 31, 2017
and 2016, respectively.



The Company accounted
for stock-based compensation to non-employees in accordance with ASC Topic 505-50 “Equity-Based Payments to Non-Employees”
which requires that the cost of services received from non-employees is measured at fair value at the earlier of the performance
commitment date or the date service is completed and recognized over the period the service is provided. Total non-employee stock-based
compensation expenses were $795,000 and $0 for the years ended December 31, 2017 and 2016, respectively.



24







Foreign currency translation:



The Company uses the
United States dollar ("U.S. dollars") for financial reporting purposes. The Company maintains the books and records in
its functional currency, being the primary currency of the economic environment in which its operations are conducted. For reporting
purpose, the Company translates the assets and liabilities to U.S. dollars using the applicable exchange rates prevailing at the
balance sheet dates, and the statements of income are translated at average exchange rates during the reporting periods. Gain or
loss on foreign currency transactions are reflected on the income statement. Gain or loss on financial statement translation from
foreign currency are recorded as a separate component in the equity section of the balance sheet and is included as part of accumulated
other comprehensive income. The functional currency of the Company and its subsidiaries in Taiwan is New Taiwan Dollars.



Statement of cash flows:



In accordance with
FASB ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based
upon the local currencies, and translated to the reporting currency using an average foreign exchange rate for the reporting period.
As a result, amounts related to changes in assets and liabilities reported on the statement of cash flows will not necessarily
agree with changes in the corresponding balances on the balance sheets.



Income taxes:



Income taxes are accounted
for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will
not be realized. The deferred income tax assets were $0 as of both December 31, 2017 and 2016.



The Company applied
the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related
to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain
open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations
for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could
be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results
of operations for the given period. At December 31, 2017 and 2016, management considered that the Company had no uncertain tax
positions, and will continue to evaluate for uncertain positions in the future.



The Company is subject to the tax authority
in Taiwan for years since incorporated.



Earnings (Losses) per share (EPS):



Earnings (losses) per share is calculated
in accordance with ASC 260. Basic earnings per share is based upon the weighted average number of common shares outstanding. Diluted
earnings (losses) per share is based on the assumption that all dilutive convertible shares and stock instruments were converted
or exercised. Options and warrants are assumed to be exercised at the beginning of the period if the average stock price for the
period is greater than the exercise price of the warrants and options. For the years ended December 31, 2017 and 2016, no options
or warrants were issued or outstanding.



Discontinued operations



Results of the Company’s
discontinued entity have been presented in discontinued operations in the financial statements. See Note 1 and Note 12 for additional
information.



25







Reclassifications:



Certain classifications
have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no
impact on previously reported net loss or accumulated deficit.



Recent accounting pronouncements:



In February 2016, the
FASB issued ASU No. 2016-02, “Leases.” The core principle of the ASU is that a lessee should recognize the assets and
liabilities that arise from its leases other than those that meet the definition of a short-term lease. The ASU requires extensive
qualitative and quantitative disclosures, including with respect to significant judgments made by management. Subsequently, the
FASB issued ASU No. 2017-13, in September 2017 and ASU No. 2018-01, in January 2018, which amends and clarifies ASU 2016-02. The
ASU will be effective for the Company beginning January 1, 2019, including interim periods in the fiscal year 2019. Early adoption
is permitted. The Company is in the process of determining the method of adoption and assessing the impact of this ASU on its consolidated
results of operations, cash flows, financial position and disclosures.



In March 2016, the
FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue
Gross versus Net) . In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying
Performance Obligations and Licensing . In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic
606): Narrow-Scope Improvements and Practical Expedients and ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging
(Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements
at the March 3, 2016 EITF Meeting . In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic
606, Revenue from Contracts with Customers. In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue
from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). These amendments provide additional clarification
and implementation guidance on the previously issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments
in ASU 2016-08 clarify how an entity should identify the specified good or service for the principal versus agent evaluation and
how it should apply the control principle to certain types of arrangements. ASU 2016-10 clarifies the following two aspects of
ASU 2014-09: identifying performance obligations and licensing implementation guidance. ASU 2016-11 rescinds several SEC Staff
Announcements that are codified in Topic 605, including, among other items, guidance relating to accounting for consideration given
by a vendor to a customer, as well as accounting for shipping and handling fees and freight services. ASU 2016-12 provides clarification
to Topic 606 on how to assess collectability, present sales tax, treat noncash consideration, and account for completed and modified
contracts at the time of transition. ASU 2016-12 clarifies that an entity retrospectively applying the guidance in Topic 606 is
not required to disclose the effect of the accounting change in the period of adoption. Additionally, ASU 2016-20 clarifies certain
narrow aspects within Topic 606 including its scope, contract cost accounting, and disclosures. The new guidance requires enhanced
disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments
in measurement and recognition. The effective date and transition requirements for these amendments are the same as the effective
date and transition requirements of ASU 2014-09, which is effective for fiscal years, and for interim periods within those years,
beginning after December 15, 2017. The Company is currently evaluating the overall impact that ASU 2014-09 and its related amendments
will have on the Company’s financial statements.



On December 22, 2017,
the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the
Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies
to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects
of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income
tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate
to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial
statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before
the enactment of the Tax Act. While the Company is able to make reasonable estimates of the impact of the reduction in corporate
rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due to, among
other things, changes in our interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions
we may take. The Company is continuing to gather additional information to determine the final impact.



26







In February 2018, the
FASB issued Accounting Standards Update No. 2018-02 (ASU 2018-02), Income Statement - Reporting Comprehensive Income (Topic 220).
The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act
(the Tax Act) of 2017 from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective for fiscal years
beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard
will have on its Consolidated Financial Statements.



Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.



Not applicable.



27







Item 8. Financial Statements and Supplementary Data.



NOWNEWS DIGITAL MEDIA TECHNOLOGY CO.,
LTD. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                          | Page
|--------------------------------------------------------------------------------------------------------- | ----
|                                                                                                          |     
|Report of Independent Registered Public Accounting Firm                                                   | F-2 
|                                                                                                          |     
|Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016                                 | F-3 
|                                                                                                          |     
|Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2017 and 2016 | F-4 
|                                                                                                          |     
|Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016                      | F-6 
|                                                                                                          |     
|Notes to Consolidated Financial Statements                                                                | F-7 



F-1







| |  | Audit•
Tax• Consulting•  FinancialAdvisory
        Registered with Public Company Accounting
        Oversight Board (PCAOB)
| |  | ----------------------------------------------------------------------------------------------------------------------------



REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM



To the Board of Directors and Shareholders of

NowNews Digital Media Technology Co. Ltd. and Subsidiaries



Opinion on the Financial
Statements



We have audited the accompanying consolidated
balance sheets of NowNews Digital Media Technology Co. Ltd. and Subsidiaries ( “the Company”) as of December 31, 2017
and 2016, the related consolidated statement of income and comprehensive income, equity (deficit), and cash flows for the years
then ended, and the related notes (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31,
2017 and 2016, and the results of its operations and its cash flows for the years ended December 31, 2017 and 2016,
in conformity with the U.S. generally accepted accounting principles.



Basis for Opinion



These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on
our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) ("PCAOB")and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.



We conducted our audits in accordance
with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to
error or fraud.  Our audits included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation
of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



The accompanying consolidated financial
statements have been prepared assuming that NowNews Digital Media Technology Co. Ltd. and Subsidiaries will continue as a going
concern. As described in Note 2 to the consolidated financial statements, the Company has incurred losses from operations, has
a working capital deficit, and is in need of additional capital to grow its operations so that it can become profitable. These
factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with
regard to these matters are described in Note 2. The accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



|/s/ KCCW Accountancy Corp. | 
|-------------------------- | 





We have served as the Company’s auditor since 2014.

Diamond Bar, California

April 16, 2018

KCCW Accountancy Corp.

3333 S Brea Canyon Rd. #206,
Diamond Bar, CA 91765, USA

Tel: +1 909 348 7228 •
Fax: +1 909 895 4155 • info@kccwcpa.com





F-2







PART I –FINANCIAL INFORMATION



Item 1. Financial Statements



NOWNEWS DIGITAL MEDIA TECHNOLOGY CO.,
LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                 |  | December 31, |             |   | December 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----------- | - | ------------ | -
|                                                                                                                                                                                 |  | 2017         |             |   | 2016         |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Assets                                                                                                                                                                           |  |              |             |   |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Current Assets                                                                                                                                                                   |  |              |             |   |              |  
|Cash and cash equivalents                                                                                                                                                        |  | $            | 186,494     |   |              | $
|Accounts receivable, net                                                                                                                                                         |  |              | 687,362     |   |              |  
|Due from related parties                                                                                                                                                         |  |              | 26,051      |   |              |  
|Security deposits, current                                                                                                                                                       |  |              | -           |   |              |  
|Other current assets                                                                                                                                                             |  |              | 91,636      |   |              |  
|Current assets of discontinued operations                                                                                                                                        |  |              | 15          |   |              |  
|Total Current Assets                                                                                                                                                             |  |              | 991,558     |   |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Furniture, fixture, and equipment, net                                                                                                                                           |  |              | 276,059     |   |              |  
|Security deposits, non-current                                                                                                                                                   |  |              | 67,478      |   |              |  
|Intangible assets, net                                                                                                                                                           |  |              | 21,800      |   |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Total Assets                                                                                                                                                                     |  | $            | 1,356,895   |   |              | $
|                                                                                                                                                                                 |  |              |             |   |              |  
|Liabilities and Equity                                                                                                                                                           |  |              |             |   |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Current Liabilities                                                                                                                                                              |  |              |             |   |              |  
|Long-term obligation under capital lease, current                                                                                                                                |  | $            | 2,238       |   |              | $
|Accounts payable                                                                                                                                                                 |  |              | 144,849     |   |              |  
|Accrued expenses                                                                                                                                                                 |  |              | 957,956     |   |              |  
|Due to related parties                                                                                                                                                           |  |              | 1,612,260   |   |              |  
|Other current liabilities                                                                                                                                                        |  |              | 8,559       |   |              |  
|Current liabilities of discontinued operations                                                                                                                                   |  |              | 102,731     |   |              |  
|Total Current Liabilities                                                                                                                                                        |  |              | 2,828,593   |   |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Long-term obligation under capital lease                                                                                                                                         |  |              | 3,442       |   |              |  
|Total Liabilities                                                                                                                                                                |  |              | 2,832,035   |   |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Commitments and contingencies (Note 11)                                                                                                                                          |  |              |             |   |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Equity (Deficit)                                                                                                                                                                 |  |              |             |   |              |  
|Capital stock - $.001 par value                                                                                                                                                  |  |              |             |   |              |  
|Common Stock, $.001 par value, 50,000,000 shares authorized, 23,072,000 and 23,072,000 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively |  |              | 23,072      |   |              |  
|Additional paid-in capital                                                                                                                                                       |  |              | 9,184,634   |   |              |  
|Subscriptions received in advance                                                                                                                                                |  |              | 530,000     |   |              |  
|Accumulated deficit                                                                                                                                                              |  |              | (11,869,788 | ) |              |  
|Accumulated other comprehensive income                                                                                                                                           |  |              | 16,234      |   |              |  
|Total Stockholders' deficit                                                                                                                                                      |  |              | (2,115,848  | ) |              |  
|Noncontrolling Interests                                                                                                                                                         |  |              | 640,708     |   |              |  
|Total Deficit                                                                                                                                                                    |  |              | (1,475,140  | ) |              |  
|                                                                                                                                                                                 |  |              |             |   |              |  
|Total Liabilities and Equity (Deficit)                                                                                                                                           |  | $            | 1,356,895   |   |              | $



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



F-3







NOWNEWS DIGITAL MEDIA TECHNOLOGY CO.,
LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME





|                                                                             |  | For The Years Ended December 31, |           
|---------------------------------------------------------------------------- |  | -------------------------------- | ----------
|                                                                             |  | 2017                             |           
|                                                                             |  |                                  |           
|Net revenue                                                                  |  | $                                | 3,750,894 
|Cost of revenue                                                              |  |                                  | (3,116,151
|Gross profit                                                                 |  |                                  | 634,743   
|                                                                             |  |                                  |           
|Selling expenses                                                             |  |                                  | (1,127,259
|General and administrative expenses                                          |  |                                  | (4,288,928
|Financial advisory service fee – related party                               |  |                                  | -         
|Total operating expense                                                      |  |                                  | (5,416,187
|                                                                             |  |                                  |           
|Operating loss                                                               |  |                                  | (4,781,444
|                                                                             |  |                                  |           
|Other income (expense)                                                       |  |                                  |           
|Interest income                                                              |  |                                  | 757       
|Interest expense                                                             |  |                                  | (248      
|Other income, net                                                            |  |                                  | 796       
|Total other income (expense)                                                 |  |                                  | 1,305     
|                                                                             |  |                                  |           
|Loss from continuing operations before income taxes                          |  |                                  | (4,780,139
|Income taxes                                                                 |  |                                  | -         
|Loss from continuing operations                                              |  |                                  | (4,780,139
|Income from discontinued operations, net of income taxes                     |  |                                  | 1         
|                                                                             |  |                                  |           
|Net loss                                                                     |  |                                  | (4,780,138
|                                                                             |  |                                  |           
|Net loss attributable to noncontrolling interests:                           |  |                                  |           
|Net loss from continuing operations                                          |  |                                  | 842,646   
|Net (income) loss from discontinued operations                               |  |                                  | (1        
|Total net loss attributable to noncontrolling interest                       |  |                                  | 842,645   
|                                                                             |  |                                  |           
|Net loss attributable to NowNews Digital Media Technology Co. Ltd.           |  |                                  | (3,937,493
|                                                                             |  |                                  |           
|Foreign currency translation gain (loss)                                     |  |                                  | (2,666    
|Comprehensive loss                                                           |  |                                  | (3,940,159
|Other comprehensive loss attributable to noncontrolling interests            |  |                                  | (7,111)   
|Comprehensive loss attributable to NowNews Digital Media Technology Co. Ltd. |  | $                                | (3,947,270
|                                                                             |  |                                  |           
|Amount attributable to common stockholders:                                  |  |                                  |           
|Net loss from continuing operations, net of income taxes                     |  | $                                | (3,937,493
|Net loss from discontinued operations, net of income taxes                   |  |                                  | -         
|Net loss attributable to common stockholders                                 |  | $                                | (3,937,493
|                                                                             |  |                                  |           
|Net loss attributable to common stockholders - basic and diluted             |  |                                  |           
|Loss from continuing operations                                              |  | $                                | (0.17     
|Loss from discontinued operations                                            |  |                                  | -         
|Net loss attributable to common stockholders                                 |  | $                                | (0.17     
|                                                                             |  |                                  |           
|Weighted average shares outstanding, basic and diluted                       |  |                                  | 23,072,000





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



F-4







NOWNEWS DIGITAL MEDIA TECHNOLOGY CO.
LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS
OF EQUITY (DEFICIT)



|                                                                                              |  |                  |            |  |            |   |        |               |  |   |                |  |  | Accumulated   |         |  |                 |   |             |               | 
|--------------------------------------------------------------------------------------------- |  | ---------------- | ---------- |  | ---------- | - | ------ | ------------- |  | - | -------------- |  |  | ------------- | ------- |  | --------------- | - | ----------- | ------------- | 
|                                                                                              |  |                  |            |  | Additional |   |        | Subscriptions |  |   |                |  |  | Other         |         |  |                 |   |             | Total         | 
|                                                                                              |  | Common
    Stock |            |  | Paid-in    |   |        | Received      |  |   | Accumulated    |  |  | Comprehensive |         |  | Non-controlling |   |             | Stockholders' | 
|                                                                                              |  | Shares           |            |  | Amount     |   |        | Capital       |  |   | In
    Advance |  |  | Deficit       |         |  | Loss            |   |             | interest      | 
|Balance at December 31, 2015                                                                  |  |                  | 22,412,000 |  |            | $ | 22,412 |               |  | $ | 3,533,699      |  |  | $             | -       |  |                 | $ | (4,400,189  | )             | 
|Issuance of shares on Oct
    4, 2016 at $4.5 per share for service provided by related party |  |                  | 660,000    |  |            |   | 660    |               |  |   | 2,969,340      |  |  |               | -       |  |                 |   | -           |               | 
|Capital contribution by non-controlling interest                                              |  |                  | -          |  |            |   | -      |               |  |   | -              |  |  |               | -       |  |                 |   | -           |               | 
|Foreign currency translation                                                                  |  |                  | -          |  |            |   | -      |               |  |   | -              |  |  |               | -       |  |                 |   | -           |               | 
|Net loss for the period
    ended December 31, 2016                                           |  |                  | -          |  |            |   | -      |               |  |   | -              |  |  |               | -       |  |                 |   | (3,532,106  | )             | 
|Balance at December 31, 2016                                                                  |  |                  | 23,072,000 |  |            |   | 23,072 |               |  |   | 6,503,039      |  |  |               | -       |  |                 |   | (7,932,295  | )             | 
|Stock compensation cost                                                                       |  |                  |            |  |            |   |        |               |  |   | 2,239,250      |  |  |               | -       |  |                 |   | -           |               | 
|Capital contribution                                                                          |  |                  | -          |  |            |   | -      |               |  |   | 442,345        |  |  |               | 530,000 |  |                 |   | -           |               | 
|Foreign currency translation                                                                  |  |                  | -          |  |            |   | -      |               |  |   | -              |  |  |               | -       |  |                 |   | -           |               | 
|Net loss for the period
    ended December 31, 2017                                           |  |                  | -          |  |            |   | -      |               |  |   | -              |  |  |               | -       |  |                 |   | (3,937,493  | )             | 
|Balance at December 31, 2017                                                                  |  |                  | 23,072,000 |  |            | $ | 23,072 |               |  | $ | 9,184,634      |  |  | $             | 530,000 |  |                 | $ | (11,869,788 | )             | 



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



F-5







NOWNEWS DIGITAL MEDIA TECHNOLOGY CO.,
LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                |  | For the Years Ended |           
|------------------------------------------------------------------------------- |  | ------------------- | ----------
|                                                                                |  | December 31,        |           
|                                                                                |  | 2017                |           
|CASH FLOWS FROM OPERATING ACTIVITIES                                            |  |                     |           
|Net loss                                                                        |  | $                   | (4,780,138
|Income from discontinued operations                                             |  |                     | (1        
|Depreciation                                                                    |  |                     | 57,012    
|Amortization                                                                    |  |                     | 3,112     
|Financial advisory service fee paid to related party and contributed as capital |  |                     | -         
|Stock compensation cost                                                         |  |                     | 2,239,250 
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                     |           
|Increase in accounts receivable                                                 |  |                     | (45,657   
|Decrease in related-parties trade receivable                                    |  |                     | 38,437    
|Increase in security deposits                                                   |  |                     | (48,079   
|(Increase) decrease in other current assets                                     |  |                     | (84,132   
|(Decrease) increase in accounts payable                                         |  |                     | (94,531   
|Increase (decrease) in advance from customers                                   |  |                     | -         
|Increase in other accrued expenses                                              |  |                     | 383,580   
|Increase (decrease) in other current liabilities                                |  |                     | 4,182     
|Net cash used in continuing operating activities                                |  |                     | (2,326,965
|Net cash provided by discontinued operations                                    |  |                     | 1         
|Net cash used in operating activities                                           |  |                     | (2,326,964
|                                                                                |  |                     |           
|CASH FLOWS FROM INVESTING ACTIVITIES                                            |  |                     |           
|Additions to fixed assets                                                       |  |                     | (207,638  
|Acquisition of subsidiary equity interest                                       |  |                     | (30,957   
|Purchase of intangible assets                                                   |  |                     | (15,663   
|Net cash used in continuing investing activities                                |  |                     | (254,258  
|Net cash used in discontinued operations                                        |  |                     | -         
|Net cash used in investing activities                                           |  |                     | (254,258  
|                                                                                |  |                     |           
|CASH FLOWS FROM FINANCING ACTIVITIES                                            |  |                     |           
|Net proceeds from loans from related parties                                    |  |                     | 699,444   
|Proceeds from stock subscriptions received in advance                           |  |                     | 530,000   
|Payments of capital lease obligations                                           |  |                     | (10,480   
|Capital contributions from noncontrolling interest                              |  |                     | 1,287,465 
|Net cash provided by continuing financing activities                            |  |                     | 2,506,429 
|Net cash used in discontinued operations                                        |  |                     | (4,276    
|Net cash provided by financing activities                                       |  |                     | 2,502,153 
|                                                                                |  |                     |           
|EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS                     |  |                     | 16,597    
|                                                                                |  |                     |           
|NET DECREASE IN CASH & CASH EQUIVALENTS                                         |  |                     | (62,472   
|NET INCREASE IN CASH & CASH EQUIVALENTS FROM DISCONTINUED OPERATIONS            |  |                     | (4,275    
|NET DECREASE IN CASH & CASH EQUIVALENTS FROM CONTINUING OPERATIONS              |  |                     | (58,197   
|                                                                                |  |                     |           
|CASH & CASH EQUIVALENTS, BEGINNING BALANCE                                      |  |                     | 244,691   
|CASH & CASH EQUIVALENTS, ENDING BALANCE                                         |  | $                   | 186,494   
|                                                                                |  |                     |           
|SUPPLEMENTAL DISCLOSURES:                                                       |  |                     |           
|Income tax paid                                                                 |  | $                   | -         
|Interest paid                                                                   |  | $                   | 248       



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



F-6







NOWNEWS DIGITAL MEDIA TECHNOLOGY CO.,
LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1: NATURE OF OPERATIONS



NowNews Digital Media Technology Co., Ltd.
(Formerly Forever Zen Ltd.) (“NowNews” or “the Company”) was incorporated in Nevada on March 30, 2010.
On November 11, 2013, Pioneer Media Investments Co., Ltd. purchased 1,500,000 shares of the Company’s common stock for $135,000
in cash from two of the Company’s shareholders.  Those 1,500,000 shares of common stock represented 62% of the
Company’s issued and outstanding common stock immediately following the sale.  As a result of the transaction,
a change in control of the Company occurred and in connection therewith. Mr. Alan Chen was elected as the Company’s president
and sole director. Pioneer Media Investments Co., Ltd. is beneficially owned and controlled by Alan Chen.



Worldwide Media Investments Corp. (“Worldwide”)
was incorporated in Anguilla on June 4, 2013 under the Anguilla International Business Companies Act, 2000. Worldwide is a holding
company and has not carried out substantive business operations of its own. Mr. Alan Chen is the sole director and controlling
beneficiary shareholder of Worldwide.



NOWnews Network Co., Ltd, (“NOWnews
Network”) was incorporated in Taipei City, Taiwan on June 8, 2006. NOWnews Network is a media company with operations
in Taiwan. NOWnews Network operates a news website and generates revenue from fees paid by advertisers in connection with the display
of graphical and non-graphical advertisements. In addition, NOWnews Network provides editing services of news articles, pictures,
and videos, and sells the broadcasting rights of its news articles, pictures, and videos. Mr. Alan Chen is a director and former
Chairman of NOWnews Network.



In August 2013, NOWnews Network established
NOWnews International Marketing Co., Ltd (“NOWnews International”) as a 55% owned subsidiary. Mr. Shu-sen Chang, the
former Chairman and current director of NOWnews Network, and one other shareholder, own 10% and 35% of NOWnews International, respectively.
The primary business of NOWnews International is to sell advertisement spaces in its own newspapers.



On December 27, 2013, the Board of Directors
of NOWnews Network approved the termination of operations of NOWnews International. The results of NOWnews International have been
presented as discontinued operations in the consolidated statements of income and comprehensive income. NOWnews Network has reclassified
the assets and liabilities of the discontinued entity in the accompanied consolidated financial statements.



On June 4, 2013, Sky Media Investments,
Co., Ltd. (“Sky Media”), a company incorporated in Anguilla and a wholly-owned subsidiary of the Company, acquired
7,999,945 common shares (or 66.3%) of NOWnews Network from Mr. Alan Chen for $1,522,388 (or NT$45 million). Mr. Alan Chen owned
10,169,945 shares (or 84.3%) of common stock of NOWnews Network prior to the above transaction (the “Restructuring Transaction”).



On November 14, 2014, the Company entered
into and closed a share exchange agreement (the “Share Exchange Agreement”) with Worldwide, the shareholders of Worldwide,
and NOWnews Network. Pursuant to the Share Exchange Agreement, the Company issued an aggregate of 20,000,000 shares of common stock to
the shareholders of Worldwide in exchange for all the issued and outstanding capital stock of Worldwide. Immediately following
the closing of the Share Exchange, the Company had a total of 22,412,000 issued and outstanding shares of common stock, of which
6,262,400 shares were beneficially held by Alan Chen. As a result of the Share Exchange, Worldwide and Sky Media become the Company’s
wholly owned subsidiaries and NOWnews Network became the Company’s majority owned subsidiary in which Company indirectly
held 66% of the equity interest. Upon consummation of the Share Exchange, Company’s assumed the business of NOWnews Network
and ceased to be a shell company.





On August 5, 2015, NOWnews Network, Sky
Media, Mr. Alan Chen and Ms. Tu entered a Stock Purchase Agreement (the “Stock Purchase Agreement") with Gamania Digital
Entertainment Co. Ltd. (“Gamania Digital”) and Ta Ya Venture Capital Co. Ltd. (“Ta Ya”). Pursuant to the
Stock Purchase Agreement and addendums, NOWnews Network issued 1,650,000, 350,000, 1,000,000, 2,200,000, 1,114,100, and 600,000
shares to non-controlling shareholders on August 14, 2015, September 8, 2015, November 30, 2016, March 16, 2017, October 2, 2017,
and November 17, 2017, respectively (See Note 10). On February 22, 2017, Sky Media entered into a stock purchase agreement with
Jin Hao Kang Marketing Co., Ltd (“Jin Hao Kang”), pursuant to which Sky Media purchased 1,065,000 shares of NOWnews
Network held by Jin Hao Kang for a purchase price of NT $937,200 (approximately $30,930). The transaction was completed on March
31, 2017. On November 17, 2017, Sky Media also made capital contribution to NOWnews Network in cash of NT$10,000,000, equivalent
to $332,779. As a result of this purchase of stock, NOWnews Network remains the Company’s majority owned subsidiary in which
Company indirectly holds 50.36% of the equity interest (see Note 9) at December 31, 2017.



F-7







On August 19, 2015, the Company established
Dawnrain Media Co., Ltd. (“Dawnrain”) in the Republic of Seychelles (“Seychelles”) as a wholly owned subsidiary.
On August 27, 2015, Dawnrain incorporated New Taoyard Cultural Transmission Co., Ltd. (“New Taoyard”) in Seychelles.
On November 15, 2016, the Company established Asia Well Ltd.(“Asia Well”) in Seychelles as a wholly owned subsidiary.
Dawnrain, New Taoyard, and Asia Well are holding companies and have not carried out substantive business operations of their own.



On April 13, 2016, the Company entered
in a share exchange agreement (“NTY Ageement”) with the Company’s wholly owned subsidiary, Dawnrain Media Co.,
Ltd., a Seychelles limited liability company (“Dawnrain”), New Taoyard Advertising Co., Ltd., a Seychelles limited
liability company and Dawnrain’s wholly owned subsidiary (“NTY”), Beijing New Tong Ying Culture Media Co., Ltd.,
a limited liability formed in the People’s Republic of China (“BJNTY”), and BJNTY’s shareholders (the “BJNTY
Shareholders”). Pursuant to the NTY Agreement, the BJNTY Shareholders will acquire from the Company an aggregate of 1,600,000
shares of the Company’s common stock, par value $0.001 per share (Common Stock), in exchange of 80% of the capital interest
of BJNTY. In the event the Company fails to cause the Company’s common stock to be listed on NYSE by February 28, 2017, the
BJNTY Shareholders shall have the option to unwind the transaction contemplated in the NTY Agreement. As the date of this report,
the NTY Agreement has not been fulfilled by both parties and the BJNTY Shareholders has not informed the Company of their intention
to unwind the transaction contemplated in the NTY Agreement.



On October 4, 2016, the Company entered
into a share exchange agreement (the “MySongAgreement”) with MySong Industrial Co., Ltd. (“MySong”), a
limited liability company formed under the laws of Taiwan and both shareholders of MySong to acquire all the issued and outstanding
5,000 shares of common stock of MySong in exchange for 200,000 restricted shares of common stock (“Share Exchange”).
The closing of the transactions contemplated under the MySong Share Exchange is subject to the fulfillment of certain conditions,
or on such other date and time as all parties may mutually determine (the “Closing Date”). As the date of this report,
the Agreement has not been fulfilled by both parties.



On November 19, 2016, the Company entered
into a share exchange agreement (the “Lao Agreement”) with Lao Development Holding Limited (“Lao Development”),
a Seychelles company and each of the shareholders of Lao Development (the “Lao Shareholders”) to acquire all the issued
and outstanding shares of common stock of Lao Development in exchange for 2,137,500 restricted shares of Common Stock (“Lao
Share Exchange”). The closing of the transactions contemplated under the Lao Agreement is subject to the fulfillment of certain
conditions. The Lao Share Exchange is expected to close on November 19, 2017 or such other date and time as all parties may mutually
determine. As the date of this report, the Lao Agreement has not been fulfilled by both parties.





On August 1, 2017, New Taoyard entered
into a share purchase agreement (the “Lovelife Agreement) with Shanghai Lovelife Trading Co., Ltd. (the “Lovelife”),
a limited liability formed in the People’s Republic of China, and its sole shareholder and director. Pursuant to the Lovelife
Agreement, Lovelife shall transfer 100% of its equity interest to New Taoyard. As of the date of this report, Lovelife has a registered
capital of USD 160,000 but no capital has actually been paid into the Lovelife.



The Company’s fiscal year ends on December 31st.



F-8







NOTE 2: GOING CONCERN



The Company’s
consolidated financial statements are prepared using generally accepted accounting principles in the United States of America
applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal
course of business. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient
cash flows from operations to satisfy its liabilities and sustain operations. The Company had accumulated deficits of $11,869,788
and $7,932,295, and stockholders’ deficits of $2,115,848 and $1,380,173 as of December 31, 2017 and 2016, respectively.
The net losses attributable to common stockholders of $3,937,493 and $3,532,106 for the years ended December 31, 2017 and 2016,
respectively. In addition, current liabilities exceed current assets by $1,837,035 and $858,428 as of December 31, 2017 and 2016,
respectively, representing significant working capital deficits. These matters raise substantial doubt about the Company’s
ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the
Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to
obtain adequate capital, it could be forced to cease operations. The accompanying consolidated financial statements do not
include any adjustments that might be necessary if the Company is unable to continue as a going concern.



Management’s Plan to Continue
as a Going Concern



In order to continue
as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain
such resources for the Company include (1) obtaining capital from the sale of its equity securities, (2) sales of the Company’s
services, (3) short-term and long-term borrowings from banks, and (4) short-term borrowings from stockholders or other related
party(ies) when needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any
of its plans.



The ability of the Company to continue
as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and
eventually to secure other sources of financing and attain profitable operations.



NOTE 3: BASIS OF PRESENTATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES



Basis of presentation:



The accompanying consolidated financial
statements have been prepared in conformity with accounting principles generally accepted in the United States of America. Since
the Company, Worldwide, and NOWnews Network were entities under common control prior to the restructuring transaction. All the assets and liabilities of Worldwide and NOWnews Network were transferred to the Company at their
respective carrying amounts on the date of transaction. The Company
and Worldwide have recast prior period financial statements to reflect the conveyance of NOWnews Network to Sky Media as if the
restructuring transaction had occurred as of January 1, 2014. All significant intercompany transactions and account balances have
been eliminated. The nature of and effects on earnings per share (EPS) of nonrecurring intra-entity transactions
involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings
(or losses) of the transferred net assets.



The functional currency of NOWnews Network
and NOWnews International is the New Taiwan dollars, however the accompanying consolidated financial statements have been translated
and presented in United States Dollars ($). In the accompanying consolidated financial statements and notes, “$”,
“US$” and “U.S. dollars” mean United States dollars, and “NT$” and “NT dollars”
mean New Taiwan dollars.



Use of estimates and assumptions:



The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management
makes these estimates using the best information available at the time the estimates are made. However, actual results could differ
materially from those results. The most significant estimates reflected in the consolidated financial statements include depreciation,
useful lives of property and equipment, deferred income taxes, useful life of intangible assets and contingencies. Estimates and
assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the
period they are determined to be necessary.



Cash and cash equivalents:



The Company considers all cash on hand
and in banks, certificates of deposit and other highly-liquid investments with original maturities of three months or less, when
purchased, to be cash and cash equivalents. As of December 31, 2017 and 2016, the Company has uninsured deposits in banks of $41,540
and $122,508, respectively.



F-9







Accounts receivable:



The Company maintains reserves for potential
credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts,
customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate
the adequacy of these reserves. As of December 31, 2017 and 2016, the Company assessed the allowance for doubtful accounts of $10,345
and $9,464, respectively.



Property and equipment:



Property and equipment are recorded at
cost less accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The cost
of improvements that extends the life of property and equipment are capitalized. These capitalized costs may include structural
improvements, equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred.



Depreciation for financial reporting purposes is provided using
the straight-line method over the estimated useful lives of the assets or lease term as follows:



|Electronic Equipment           | 3 to 5 years                                                           
|------------------------------ | -----------------------------------------------------------------------
|Computer Equipment             | 5 years                                                                
|Office Equipment and Furniture | 5 years                                                                
|Leasehold Improvement          | Lesser of term of the lease or the estimated useful lives of the assets



Long-lived assets:



The Company applies the provisions of FASB
ASC Topic 360 (ASC 360), “Property, Plant, and Equipment” which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held
and used in accordance with ASC 360, at least on an annual basis. ASC 360 requires the impairment losses to be recorded on long-lived
assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by
those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which
the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined
in a similar manner, except that fair market values are reduced for the cost of disposal.



Intangible assets:



Intangible assets consist of software, trademark, and copyrights
(see Note 6). At least annually, the Company evaluates intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted
future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount.
Estimating future cash flows related to an intangible asset involves significant estimates and assumptions. If the Company’s
assumptions are not correct, there could be an impairment loss or, in the case of a change in the estimated useful life of the
asset, a change in amortization expense. There was no impairment of intangible assets as of and for the years ended December 31,
2017 and 2016, respectively.



Leases:



Lease agreements are evaluated to determine
if they are capital leases meeting any of the following criteria at inception: (a) Transfer of ownership; (b) Bargain purchase
option; (c) The lease term is equal to 75 percent or more of the estimated economic life of the leased property; (d) The present
value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory
costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent
of the excess of the fair value of the leased property to the lessor at lease inception over any related investment tax credit
retained by the lessor and expected to be realized by the lessor.



If at its inception a lease meets any of
the four lease criteria above, the lease is classified by the lessee as a capital lease; and if none of the four criteria are met,
the lease is classified by the lessee as an operating lease.



Fair Value Measurements:



FASB ASC 820, “Fair Value Measurements”
defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a
framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its
financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable
inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure
fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing
the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available.
Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based
on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s
own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best
information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability
of the inputs as follows:



| | · | Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                    
| | · | Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                    
| | · | Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.                                          



The carrying values of certain assets and
liabilities of the Company, such as cash and cash equivalents, accounts receivable, due from related parties, other current assets,
accounts payable, accrued expenses, due to shareholders, and other current liabilities approximate fair value due to their relatively
short maturities.



Revenue recognition:



Product and service revenue is recognized
when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or
the service has been performed, (iii) the Company’s price to the customer is fixed or determinable and (iv) collection of
the resulting accounts receivable is reasonably assured.  Payments received before satisfaction of all of the relevant
criteria for revenue recognition are recorded as unearned revenue. The Company recognizes revenue for product sales upon transfer
of title to the customer.  The Company recognizes revenue for services upon performance of the service.  Customer
purchase orders and/or contracts will generally be used to determine the existence of an arrangement.  Shipping documents
and the completion of any customer acceptance requirements, when applicable, will be used to verify product delivery or that services
have been rendered.  The Company will assess whether a price is fixed or determinable based upon the payment terms associated
with the transaction and whether the sales price is subject to refund or adjustment. The Company will record reductions to revenue
for estimated product returns and pricing adjustments in the same period that the related revenue is recorded.  These
estimates will be based on industry-based historical data, historical sales returns, if any, analysis of credit memo data, and
other factors known at the time.



F-10







Post-retirement and post-employment
benefits:



NOWnews Network adopted the government mandated defined contribution
plan pursuant to the Labor Pension Act (the “Act”) in Taiwan. Such labor regulations require that the rate of contribution
made by an employer to the Labor Pension Fund per month shall not be less than 6% of the worker's monthly salaries. Pursuant to
the Act, NOWnews Network makes monthly contribution equal to 6% of employees’ salaries to the employees’ pension fund.
NOWnews Network has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits,
which were expensed as incurred, were $118,375 and $78,327 for the years ended December 31, 2017 and 2016, respectively. Other
than the above, the Company does not provide any other post-retirement or post-employment benefits.



Stock-based Compensation:



The Company measures expense associated
with all employee stock-based compensation awards using a fair value method and recognizes such expense in the consolidated financial
statements on a straight-line basis over the requisite service period in accordance with ASC Topic 718 “Compensation-Stock
Compensation”. Total employee stock-based compensation expenses were $$1,444,250 and $0 for the years ended December 31,
2017 and 2016, respectively.



The Company accounted for stock-based compensation to non-employees in accordance with ASC Topic 505-50
“Equity-Based Payments to Non-Employees” which requires that the cost of services received from non-employees is measured
at fair value at the earlier of the performance commitment date or the date service is completed and recognized over the period
the service is provided. Total non-employee stock-based compensation expenses were $795,000 and $0 for the years ended December
31, 2017 and 2016, respectively.



Foreign currency translation:



The Company uses the United States dollar
("U.S. dollars") for financial reporting purposes. The Company maintains the books and records in its functional currency,
being the primary currency of the economic environment in which its operations are conducted. For reporting purpose, the Company
translates the assets and liabilities to U.S. dollars using the applicable exchange rates prevailing at the balance sheet dates,
and the statements of income are translated at average exchange rates during the reporting periods. Gain or loss on foreign currency
transactions are reflected on the income statement. Gain or loss on financial statement translation from foreign currency are recorded
as a separate component in the equity section of the balance sheet and is included as part of accumulated other
comprehensive income. The functional currency of the Company and its subsidiaries in Taiwan is New Taiwan Dollars.



Statement of cash flows:



In accordance with FASB ASC Topic 230, “Statement of Cash
Flows,” cash flows from the Company’s operations are calculated based upon the local currencies, and translated to
the reporting currency using an average foreign exchange rate for the reporting period. As a result, amounts related to changes
in assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding
balances on the balance sheets.



Income taxes:



Income taxes are accounted for under the
asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will
not be realized. The deferred income tax assets were $0 as of both December 31, 2017 and 2016.



The Company applied the provisions of ASC
740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated
with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until
the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit
period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to
the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations
for the given period. At December 31, 2017 and 2016, management considered that the Company had no uncertain tax positions, and
will continue to evaluate for uncertain positions in the future.



The Company is subject to the tax authority
in Taiwan for years since incorporated.



Earnings (Losses) per share (EPS):



Earnings (losses) per share is calculated in accordance
with ASC 260. Basic earnings per share is based upon the weighted average number of common shares outstanding. Diluted earnings (losses)
per share is based on the assumption that all dilutive convertible shares and stock instruments were converted or exercised. Options
and warrants are assumed to be exercised at the beginning of the period if the average stock price for the period is greater than
the exercise price of the warrants and options. For the years ended December 31, 2017 and 2016, no options or warrants were issued
or outstanding.



F-11







Discontinued operations



Results of the Company’s discontinued
entity have been presented in discontinued operations in the financial statements. See Note 1 and Note 12 for additional information.



Reclassifications:



Certain classifications have been made
to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously
reported net loss or accumulated deficit.



Recent accounting pronouncements:



In February 2016, the FASB issued ASU No.
2016-02, “Leases.” The core principle of the ASU is that a lessee should recognize the assets and liabilities that
arise from its leases other than those that meet the definition of a short-term lease. The ASU requires extensive qualitative and
quantitative disclosures, including with respect to significant judgments made by management. Subsequently, the FASB issued ASU
No. 2017-13, in September 2017 and ASU No. 2018-01, in January 2018, which amends and clarifies ASU 2016-02. The ASU will be effective
for the Company beginning January 1, 2019, including interim periods in the fiscal year 2019. Early adoption is permitted. The
Company is in the process of determining the method of adoption and assessing the impact of this ASU on its consolidated results
of operations, cash flows, financial position and disclosures.



In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal
versus Agent Considerations (Reporting Revenue Gross versus Net) . In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts
with Customers (Topic 606): Identifying Performance Obligations and Licensing . In May 2016, the FASB issued ASU 2016-12, Revenue
from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients and ASU 2016-11, Revenue Recognition
(Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09
and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting . In December 2016, the FASB issued ASU 2016-20,
Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. In September 2017, the FASB issued
ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases
(Topic 842). These amendments provide additional clarification and implementation guidance on the previously issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2016-08 clarify how an entity should identify the specified
good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements.
ASU 2016-10 clarifies the following two aspects of ASU 2014-09: identifying performance obligations and licensing implementation
guidance. ASU 2016-11 rescinds several SEC Staff Announcements that are codified in Topic 605, including, among other items, guidance
relating to accounting for consideration given by a vendor to a customer, as well as accounting for shipping and handling fees
and freight services. ASU 2016-12 provides clarification to Topic 606 on how to assess collectability, present sales tax, treat
noncash consideration, and account for completed and modified contracts at the time of transition. ASU 2016-12 clarifies that an
entity retrospectively applying the guidance in Topic 606 is not required to disclose the effect of the accounting change in the
period of adoption. Additionally, ASU 2016-20 clarifies certain narrow aspects within Topic 606 including its scope, contract cost
accounting, and disclosures. The new guidance requires enhanced disclosures, including revenue recognition policies to identify
performance obligations to customers and significant judgments in measurement and recognition. The effective date and transition
requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09, which is effective
for fiscal years, and for interim periods within those years, beginning after December 15, 2017. The Company is currently evaluating
the overall impact that ASU 2014-09 and its related amendments will have on the Company’s financial statements.





F-12







On December 22, 2017,
the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the
Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies
to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects
of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income
tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate
to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial
statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately
before the enactment of the Tax Act. While the Company is able to make reasonable estimates of the impact of the reduction in
corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due
to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the I.R.S.,
and actions we may take. The Company is continuing to gather additional information to determine the final impact.



In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (ASU 2018-02), Income Statement
- Reporting Comprehensive Income (Topic 220). The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded
tax effects related to the Tax Cuts and Jobs Act (the Tax Act) of 2017 from accumulated other comprehensive income into retained
earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company
is currently evaluating the effect this standard will have on its Consolidated Financial Statements.



F-13







NOTE 4: ACCOUNTS RECEIVABLE



Accounts receivable consist of the following:



|                                      |  | December 31, 2017 |         |   | December 31, 2016 |  
|------------------------------------- |  | ----------------- | ------- | - | ----------------- | -
|Accounts receivable                   |  | $                 | 697,707 |   |                   | $
|Less: Allowance for doubtful accounts |  |                   | (10,345 | ) |                   |  
|Accounts receivable, net              |  | $                 | 687,362 |   |                   | $



NOTE 5: PROPERTY AND EQUIPMENT, NET



Property and equipment consist of the following:



|                               |  | December 31, |          |   | December 31, |  
|------------------------------ |  | ------------ | -------- | - | ------------ | -
|                               |  | 2017         |          |   | 2016         |  
|Capital Lease                  |  | $            | 178,334  |   |              | $
|Leasehold improvement          |  |              | 149,508  |   |              |  
|Computer equipment             |  |              | 56,367   |   |              |  
|Office equipment and furniture |  |              | 23,883   |   |              |  
|Electronic equipment           |  |              | 13,855   |   |              |  
|                               |  |              | 421,947  |   |              |  
|Less: Accumulated depreciation |  |              | (145,888 | ) |              |  
|                               |  | $            | 276,059  |   |              | $



As of December 31, 2017, assets under capital
lease of $178,334 represented server equipment (see Note 11). Depreciation expense for the years ended December 31, 2017 and
2016 was $57,012 and $54,762, respectively.



F-14







NOTE 6: INTANGIBLE ASSETS, NET



Intangible assets consist of the following:



|                         |  | December 31, |           |   | December 31, |  
|------------------------ |  | ------------ | --------- | - | ------------ | -
|                         |  | 2017         |           |   | 2016         |  
|Copyrights               |  | $            | 954,280   |   |              | $
|Software                 |  |              | 37,570    |   |              |  
|Trademark                |  |              | 7,085     |   |              |  
|Patent                   |  |              | 170       |   |              |  
|Others                   |  |              | 16,066    |   |              |  
|                         |  |              | 1,015,171 |   |              |  
|Accumulated amortization |  |              | (993,371  | ) |              |  
|Intangible assets, net   |  | $            | 21,800    |   |              | $



Copyrights



Copyrights mainly include the
copyrights of multiple films and pictures acquired from June 2007 to October 2009, and during the year ended December 31,
2013, with the total purchase amount of NT$28,284,903 (equivalent to $954,281). Copyrights are amortized based on their
determined useful life, and tested annually for impairment. The amortization period ranges from 5 to 10 years. As of December
31, 2017, the cost for purchased copyrights has been fully amortized. Amortization expense related to copyrights was $0 for
the years ended December 31, 2017 and 2016, respectively.



For the years ended December 31, 2017 and
2016, total amortization expense amounted to $3,112 and $6,103, respectively.



Estimated amortization for the next five years and thereafter
is as follows:



|As of December 31, |  | Amount |       
|------------------ |  | ------ | ------
|2018               |  | $      | 7,800 
|2019               |  |        | 7,391 
|2020               |  |        | 6,609 
|                   |  | $      | 21,800



NOTE 7: ACCRUED EXPENSES



Accrued expenses consist of the following:



|                                               |  | December 31, |         |  | December 31, |  
|---------------------------------------------- |  | ------------ | ------- |  | ------------ | -
|                                               |  | 2017         |         |  | 2016         |  
|Accrued bonus                                  |  | $            | 427,486 |  |              | $
|Accrued payroll                                |  |              | 179,094 |  |              |  
|Accrued professional fees                      |  |              | 164,309 |  |              |  
|Accrued employee benefits and pension expenses |  |              | 108,884 |  |              |  
|Accrued sales taxes                            |  |              | 12,677  |  |              |  
|Other                                          |  |              | 65,506  |  |              |  
|Total                                          |  | $            | 957,956 |  |              | $



F-15







NOTE 8: INCOME TAX



United States



The Company is incorporated in the United
States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company
has no taxable income for the period. The applicable income tax rate for the Company was 35% for the years ended December 31, 2017
and 2016. No tax benefit has been realized since a 100 % valuation allowance has offset deferred tax asset resulting from the net
operating losses.



On December 22, 2017
H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant changes
to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”)
from 35% to 21% effective January 1, 2018. The 21% Federal Tax Rate will apply to earnings reported for the full 2018 fiscal year.
In addition, the Company must re-measure its net deferred tax assets and liabilities using the Federal Tax Rate that will apply
when these amounts are expected to reverse. As of December 31, 2017, the Company can determine a reasonable estimate for certain
effects of tax reform and is recording that estimate as a provisional amount. The provisional remeasurement of the deferred tax
assets and allowance valuation of deferred tax assets at December 31, 2017 resulted in a net effect of $0 discrete tax expenses
(benefit) which lowered the effective tax rate by 13% for the year ended December 31, 2017. The provisional remeasurement amount
is anticipated to change as data becomes available allowing more accurate scheduling of the deferred tax assets and liabilities
primarily related to net operating loss carryover.





Anguilla



Worldwide Media Investments Corp. and Sky
Media are incorporated in Anguilla, which does not tax income.



Seychelles



Dawnrain Media Co., Ltd., New Taoyard Cultural
Transmission Co., Ltd., and Asia Well Ltd. are incorporated in Seychelles, which does not tax income.





Taiwan



NOWnews Network and NOWnews International
are incorporated in Taiwan. The Taiwan Income Tax Law imposes a unified enterprise income tax rate of 20% on all enterprises with
taxable income greater than approximately $4,048 (NT$120,000). No income tax liabilities existed as of December 31, 2017 and 2016
due to the Company’s continuing operating losses.



Provision for income tax consists of the
following:



|                                                             |  | For the Years Ended |         
|------------------------------------------------------------ |  | ------------------- | --------
|                                                             |  | December 31,        |         
|                                                             |  | 2017                |         
|Current                                                      |  |                     |         
|USA                                                          |  | $                   | -       
|Taiwan                                                       |  |                     | -       
|                                                             |  |                     |         
|Deferred                                                     |  |                     |         
|USA                                                          |  |                     |         
|Deferred tax assets for NOL carryforwards                    |  |                     | (570,223
|Valuation allowance                                          |  |                     | 570,223 
|Net changes in deferred income tax under non-current portion |  |                     | -       
|                                                             |  |                     |         
|Taiwan                                                       |  |                     |         
|Noncurrent portion                                           |  |                     |         
|NOL carryforwards                                            |  |                     | (823,444
|Valuation allowance                                          |  |                     | 823,444 
|Net changes in deferred income tax under non-current portion |  |                     | -       
|                                                             |  |                     |         
|Total provision for income tax                               |  | $                   | -       



The following is a reconciliation of the statutory tax rate
to the effective tax rate:



|                                                   |  | For the Years Ended  December 31, |      
|-------------------------------------------------- |  | --------------------------------- | -----
|                                                   |  | 2017                              |      
|                                                   |  |                                   |      
|U.S. statutory income tax rate                     |  |                                   | 35.0 
|Foreign statutory income tax rate difference       |  |                                   | (18.0
|Provisional remeasurement of deferred taxes (U.S.) |  |                                   | (13.0
|Changes in valuation allowance                     |  |                                   | (4.0 
|Effective income tax rate                          |  |                                   | 0.0  



F-16







Significant components of the Company’s deferred taxes
as of December 31, 2017 and 2016 were as follows:



|                                 |  | December 31, |            |   | December 31, |  
|-------------------------------- |  | ------------ | ---------- | - | ------------ | -
|                                 |  | 2017         |            |   | 2016         |  
|Deferred tax assets:             |  |              |            |   |              |  
|Net operating loss carryforwards |  | $            | 4,564,623  |   |              | $
|Less: Valuation allowance        |  |              | (4,564,623 | ) |              |  
|Deferred tax assets, net         |  | $            | -          |   |              | $



In assessing the realizability of deferred
tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not
be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the
periods in which the net operating losses and temporary differences become deductible. Management considered projected future taxable
income and tax planning strategies in making this assessment. As of December 31, 2017 and 2016, the Company accrued 100% valuation
allowance against its deferred tax assets based on the assessment of the probability of future realization.



NOTE 9: STOCKHOLDERS’ EQUITY



As of December 31, 2017, the Company was
authorized to issue a total of 50,000,000 shares of common stock, par value $0.001 per share.



On June 4, 2013, Worldwide issued 17,000,000
common shares to Mr. Alan Chen as founder’s shares for no consideration exchanged. As a result, a discount on capital of
$17,000,000 was recorded. On the same date, Mr. Chen conveyed 1,000,000 shares, 8,548,000 shares, 3,816,000 shares, and 3,636,000
shares to Legend Media Investments Co., Ltd., Pioneer Media Investments Co., Ltd., Intelligent Media Investments Co., Ltd., and
Core Winner Investment Limited, respectively (collectively, the “Recipients”). All of the recipients are entities under
Mr. Chen’s common control. During the year 2014, Mr. Chen transferred 2,847,725, 410,000, and 11,687,600 shares to Ms. Chiu-li
Tu, the Company’s employees, and other non-related parties, respectively. Mr. Chen and Ms. Tu are husband and wife. Prior
to November 14, 2014, Mr. Chen holds 2,054,675 shares of Worldwide.



On September 16, 2013, Worldwide entered
into a written Definitive Agreement with GIA Investments Corp. (“GIA”), (the “Definitive Agreement”).
Pursuant to the provisions of the Definitive Agreement, Worldwide would acquire NOWnews Network pursuant to a stock purchase agreement,
and Worldwide will fund the operations of NOWnews Network for a period of approximately 8 months. Additionally, Worldwide desires
to be acquired by an unidentified company (defined in the Definitive Agreement as “Company A”), pursuant to a stock
exchange agreement, and Company A will be a participant in the OTCQB. As specified in the Definitive Agreement, GIA intends to
acquire 15% of the issued and outstanding shares of Company A’s common stock for $3,000,000, and Worldwide intends that its
existing shareholders will acquire 84% of the issued and outstanding shares of Company A’s common stock.



Pursuant to the Definitive Agreement, during
September through December 2013, GIA funded an aggregate of $1,522,388 to Worldwide, which was recorded as “Subscriptions
received in advance” on Worldwide’s consolidated balance sheet as of December 31, 2013. On May 23, 2014, Worldwide
issued 3,000,000 common shares to GIA for the proceeds received.



During September through December 2013,
Sky Media, the wholly-owned subsidiary of Worldwide, acquired 7,999,945 common shares (or 66.3%) of NOWnews Network from Mr. Alan
Chen for $1,522,388 (or NT$45 million). Mr. Alan Chen owned 10,169,945 shares (or 84.3%) of common stock of NOWnews Network prior
to the above transaction. Since Worldwide and NOWnews Network were both entities under Mr. Chen’s common control prior to
the transaction, it was deemed a restructuring transaction (the “Restructuring Transaction”) and the $1,522,388 disbursed
from Sky Media to Mr. Chen was recorded as a return of capital.



Pursuant to the Share Exchange Agreement
entered on November 14, 2014 (see Note 1), the Company issued an aggregate of 20,000,000 shares of common stock to the shareholders
of Worldwide in exchange for all the issued and outstanding capital stock of Worldwide. Immediately following the closing of the
Share Exchange, the Company had a total of 22,412,000 issued and outstanding shares of common stock.



In February, 2015, Ms. Chiu-li Tu paid
off the bank loans obtained by NOWnews Network, amounted to approximately $809,343 as of December 31, 2014, on behalf of NOWnews
Network. Immediately after the repayment, Ms. Tu and NOWnews Network entered an agreement that such repayment will be a shareholder
contribution to NOWnews Network. This transaction was treated as a related party transaction. The Company has recorded additional
paid-in capital of approximately $817,104 as of December 31, 2015 for this shareholder contribution.



F-17







On July 31, 2015, NOWnews Network entered
an agreement with Alan Chen and Ms. Chiu-li Tu, pursuant to which, Alan Chen and Ms. Tu agreed to forgive to their debt due from
NOWnews Network in the amount of approximately $116,255 (or NT$3.7 million) and $367,808 (or NT$11.6 million), respectively, as
shareholder contribution to NOWnews Network. This transaction was treated as a related party transaction, and such shareholder
contribution has been recorded as additional paid-in capital.









On August 5, 2015, NOWnews Network, Sky
Media, Mr. Alan Chen and Ms. Tu entered a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Gamania Digital
Entertainment Co. Ltd. (“Gamania Digital”) and Ta Ya Venture Capital Co. Ltd. (“Ta Ya”), in which there
are two phases of stock transfers. In Phase I, NOWnews Network is committed to sell to Gamania Digital and Ta Ya 1,250,000 and
400,000 shares of outstanding shares of NOWnews Network at NT$10 per share, respectively, through new issuance. The share transfer
of Phase I shall be completed sixty (60) days upon signing the agreement. In Phase II, Gamania Digital and Ta Ya are expected,
but not obligated, to purchase the same amount of shares from NOWnews Network, and Mr. Chen and Ms. Tu, as Phase I. On August
14, 2015, NOWnews Network has fulfilled its obligation of Phase I through issuance of 1,250,000 and 400,000 shares at NT$10 per
share to Gamania Digital and Ta Ya for approximately $388,803 (or NT$12.5 million) and $124,417 (or NT$4.0 million), respectively.
On September 8, 2015, NOWnews Network issued additional 350,000 shares at NT$10 per share to Gamania Digital for approximately
$107,230 (or NT$3.5 million). On November 30, 2016, NOWnews Network issued additional 1,000,000 shares at NT$10 per share to Gamania
Digital for approximately $313,283 (or NT$10 million). On March 16, 2017, NOWnews Network issued additional 2,200,000 shares at
NT$10 per share to Gamania Digital for approximately $711,054 (or NT $22,000,000). On March 31, 2017, Sky Media purchased 1,065,000
shares of NOWnews Network held by Jin Hao Kang Marketing Co., Ltd for a purchase price of approximately US$30,930 (or NT$937,200).
). On October 2, 2017 and November 17, 2017, NOWnews Network issued additional 1,114,100 and 600,000 shares at NT$10 per share
to Gamania Digital for approximately $366,722 (or NT$11,141,000) and $199,667 (or NT$6,000,000), respectively. On November 17,
2017, Sky Media also made capital contribution to NOWnews Network in cash of NT$10,000,000, equivalent to $332,779. As a result
of this purchase of stock, NOWnews Network remains the Company’s majority owned subsidiary in which Company indirectly holds
50.36% of the equity interest at December 31, 2017.





On October 4, 2016, the Company issued
660,000 shares of common stock to GIA Consultants Limited to fulfill the Financial Advisory Service Recognition Agreement (the
“Agreement”) signed on September 20, 2016.In resolution of the Company’s outstanding obligations pertaining to
the financial advisory services that have been rendered to the Company as of August 12, 2016, the Company and GIA Consultants Limited
(“GIA”) entered into a Financial Advisory Service Recognition Agreement (the “Agreement”) on September
20, 2016, pursuant to which the Company agrees to issue 660,000 shares of common stock, par value $0.001 per share, to GIA in recognition
of services that have been previously rendered to the Company as of August 12, 2016. The common stock price was $4.50 per share
as of closing on August 12, 2016, totaling a sum of $2,970,000.



Dawnrain and New Taoyard had 30,000,000
issued and outstanding shares with a par value of $1 per share. Asia Well had 2,250,000 issued and outstanding shares with a par
value of $1 per share. On May 16, 2017, the Company has completed the amendment of share registry to reduce the amount of the issued
and outstanding shares to 10 shares of Dawnrain, 10 shares of New Taoyard, and 100 shares of Asia Well. Accordingly, the capital
of $10, $10, and $100 has been paid to Dawnrain, New Taoyard, and Asia Well, respectively.



On June 22, 2017, the Company entered into
a subscription agreement (the “Agreement”) with Wei Su Technology Holdings Co., Ltd. (the “Wei Su”). Wei
Su was incorporated in September 2001 under the laws of Taiwan. Pursuant to the Agreement, Wei Su agreed to purchase 100,000 restricted
shares of common stock, par value $.001 of the Company (“Share Purchase”) for an aggregate price of $530,000 (the “Subscription
Price”). The Agreement contains a buy-back clause whereby Wei Su will have an option to have the Company buy back the shares
issued to Wei Su under the Agreement at a price of $5.8 per share one year after Wei Su pays the full Subscription Price. The closing
of the transactions contemplated under the Agreement is subject to the fulfillment of certain conditions, or on such other date
and time as all parties may mutually determine (the “Closing Date”). As of December 31, 2017, the
Company has not issued 100,000 shares to Wei Su.





On March 17, 2017, the Company entered
into a consulting agreement (the “EMCC Agreement”) with EMCC International Consultancy Co., Ltd. (“EMCC”)
for the maintenance of the listing in the U.S. stock exchange market. At December 31, 2017, the Company recognized non-employee
stock based compensation cost of $795,000 (300, 000 shares of the Company’s common stock at $2.65 per share based on the
closing price at December 31, 2017 of the Company’s common stocks traded on the U.S. OTC Markets) in connection with the
terms in the EMCC Agreement. As of the date of this report, the Company is in process of issuance of common stock of the Company
to EMCC.



On
December 1, 2017, the Board of Directors and the majority beneficiary shareholders of the Company approved to award bonus to current
four directors and Mr. Alan Chen, the former Chairman, in an aggregate of 545,000 shares of the Company’s common stockat
$2.65 per share based on the closing price on December 29, 2017 of the Company’s common stocks traded on the U.S. OTC Markets).
Accordingly, the Company recorded stock compensation costs of $1,444,250 at December 31, 2017. As of the date of this report,
the Company is in process of issuance of common stock of the Company to the four directors and Mr. Alan Chen.



F-18







NOTE 10: NON-CONTROLLING INTEREST



In August 2013, NOWnews Network established
NOWnews International as a 55% owned subsidiary. Mr. Shu-sen Chang, the former Chairman and current director of NOWnews Network,
and one other shareholder, owns 10% and 35% of NOWnews International, respectively.



During September through December 2013,
Sky Media acquired 66% of NOWnews Network from Mr. Alan Chen. Mr. Chen owned 84.3% of common stock of NOWnews Network prior to
the Restructuring Transaction.



On August 14 and September 8, 2015, NOWnews
Network issued additional 1,650,000 and 350,000 shares of common stock to non-controlling shareholders, respectively, pursuant
to the Stock Purchase Agreement (see Note 9).



On each of November 30, 2016, March
16, 2017, October 2, 2017, and November 17, 2017, NOWnews Network respectively issued additional 1,000,000, 2,200,000, 1,114,100, and 600,000
shares of common stock to non-controlling shareholders, pursuant to the Stock Purchase Agreement (see Note 9). As a result,
Sky Media owned 50.36% of NOWnews Network.



Non-controlling interest consisted of the
following:



|                                                                  |  | December 31, |          |   | December 31, |  
|----------------------------------------------------------------- |  | ------------ | -------- | - | ------------ | -
|                                                                  |  | 2017         |          |   | 2016         |  
|Beginning balance                                                 |  | $            | 641,118  |   |              | $
|Capital contribution by non-controlling interest                  |  |              | 835,124  |   |              |  
|Net loss attributed to non-controlling interest                   |  |              | (842,645 | ) |              |  
|Other comprehensive loss attributable to non-controlling interest |  |              | 7,111    |   |              |  
|Ending balance                                                    |  | $            | 640,708  |   |              | $



F-19







NOTE 11: COMMITMENTS AND CONTINGENCIES



(1) Lease commitments



Capital Lease



From April, 2015, NOWnews Network entered
into various capital lease agreements with Nextlink Technology Co., Ltd. (“Nextlink”), pursuant to which NOWNews
Network agreed to lease multiple servers from Nextlink for the period ranges from sixteen months to two years. At the end of each
contract and upon fulfillment of the lease obligations, the title of these servers and ownership shall be transferred to NOWnews
Network. Because NOWnews Network takes ownership of the equipment at the completion of the lease contract, NOWnews Network determined
that the arrangement represents a capital lease for the equipment. The Company recorded $171,417 as a capital lease for the equipment
and began depreciating the equipment on a straight line basis over five years.



On June 21, 2017, NOWnews Network entered
into another capital lease agreement with High Performance Information Co., Ltd. (“HPI”), pursuant to which NOWNews
Network agreed to lease the Network Attached Storage (“NAS”) servers from HPI for three years with maturity date on
May 31, 2020. At the end of this contract and upon fulfillment of the lease obligations, the title of these servers and ownership
shall be transferred to NOWnews Network. Because NOWnews Network takes ownership of the equipment at the completion of the lease
contract, NOWnews Network determined that the arrangement represents a capital lease for the equipment. The Company recorded $6,917
as a capital lease for the equipment and began depreciating the equipment on a straight line basis over three years.



Depreciation expense of those equipment
under capital lease was $45,051 and $35,833 for the years ended December 31, 2017 and 2016, respectively.  Interest expense
resulted from capital leases amounted to $248 and $870 for the years ended December 31, 2017 and 2016, respectively.



Operating Lease



Operating lease commitments consist of
leases for office space and copy machines under various operating lease agreements which expire in June, 2021. Operating lease
agreements generally contain renewal options that may be exercised at the Company’s discretion after the completion of the
terms.



The Company's obligations under capital
and operating leases are as follows:



|As of December 31,     |  | Capital Leases Amount |       |  | Operating Leases Amount |  
|---------------------- |  | --------------------- | ----- |  | ----------------------- | -
|2018                   |  | $                     | 2,238 |  |                         | $
|2019                   |  |                       | 2,395 |  |                         |  
|2020                   |  |                       | 1,047 |  |                         |  
|2021                   |  |                       |       |  |                         |  
|2022                   |  |                       | -     |  |                         |  
|Total minimum payments |  | $                     | 5,680 |  |                         | $



The Company incurred rent expenses of $207,937
and $84,932 for the years ended December 31, 2017 and 2016, respectively.



(2) Litigation



Defamation and General Matters



From time to time, the Company is subject
to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of copyrights and
other intellectual property rights and other claims alleging defamation, invasion of privacy, or similar claims arising in connection
with the news articles, pictures, and other contents published on the Company’s website.



Lai Matter



On July 11, 2014, Ms. Xiu-qing Lai filed
a claim against NOWnews Network and five other companies (the “Five Companies”) who are unrelated to the Company, in
the Taiwan Tainan District Court (the “Tainan District Court”) in connection to a news article edited by NOWnews Network
and published on July 19, 2012 on the website of NOWnews Network and five other websites owned by the Five Companies, respectively.
Ms. Lai claims that the news article contained a false statement that harms the reputation of Ms. Lai. Ms. Lai seeks approximately
$18,556 (NT$550,000) in compensatory damages from NOWnews Network, $59,042 (NT$1,750,000) in aggregate from the Five Companies,
and newspaper apologies from NOWnews Network and the Five Companies. Based on the agreements entered by NOWnews Network and the
Five Companies, if any news content provided by NOWnews Network violates any regulations or infringes on any copyrights, NOWnews
Network shall be responsible for any losses that may occur.



F-20







On January 6, 2015, the plaintiff agreed
to settle this legal matter with NOWnews Network outside of court. NOWnews Network agreed to pay the plaintiff $13,495 (NT$400,000)
in compensatory damages, and the plaintiff agreed to revoke the claim against NOWnews Network and the Five Companies. NOWnews Network
has accrued $13,495 (NT$400,000) of contingent loss in connection to this lawsuit settlement during the year ended December 31,
2014. As of December 31, 2016, NOWnews Network has made payment of approximately $13,495 (NT$400,000) and this action is closed.



(3) Shares to be issued



On August 5, 2015, NOWnews Network, Sky
Media, Mr. Alan Chen and Ms. Tu entered a Stock Purchase Agreement with Gamania Digital, and Ta Ya, in which NOWnews Network is
committed to sell to Gamania Digital, and Ta Ya of its outstanding shares through two Phases (see Note 9). As of December 31,
2017, the sale of Phase I has been completed. As of the date of this report, NOWnews Network has issued in an aggregate of 4,914,100
common stock shares to Gamania Digital in exchange for approximately $1,621,960 (or NT$49,141,000) in the sale of Phase II, which
shall terminate on September 21, 2018 pursuant to the Stock Purchase Agreement and addendums.



NOTE 12: DISCONTINUED OPERATIONS



On December 27, 2013, NOWnews Network’s
Board of Directors approved the termination of operations of NOWnews Network’s 55% owned subsidiary, NOWnews International
(see Note 1). The results of the subsidiary have been presented as a discontinued operation in the statements of income and comprehensive
income. There was no revenue, cost of sales, operating expenses, or any income taxes incurred from the discontinued entity during
the years ended December 31, 2017.



Net income of discontinued operations during
the years ended December 31, 2017 was as follows:



|                                              |  | For The  Years Ended |  
|--------------------------------------------- |  | -------------------- | -
|                                              |  | December 31, 2017    |  
|Net revenue                                   |  | $                    | -
|Cost of goods sold                            |  |                      | -
|Selling, general, and administrative expenses |  |                      | -
|Other income                                  |  |                      | 1
|Income before income taxes                    |  |                      | 1
|Income taxes                                  |  |                      | -
|Net income                                    |  | $                    | 1



Net assets of discontinued operations as of December 31, 2017
were as follows:



Net assets:



|                        |  | As of December 31, 2017 |        
|----------------------- |  | ----------------------- | -------
|Cash & cash equivalents |  | $                       | 14     
|Other Current assets    |  |                         | 1      
|Current assets          |  | $                       | 15     
|Accounts payable        |  | $                       | 177    
|Accrued expenses        |  |                         | 420    
|Due to related parties  |  |                         | 102,134
|Current liabilities     |  | $                       | 102,731



F-21







NOTE 13: RELATED PARTY TRANSACTIONS



The related parties of the company with
whom transactions are reported in these financial statements are as follows:



|Name of entity or Individual                     |  | Relationship with the Company and its subsidiaries                                     
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------
|Jin Hao Kang Marketing Co., Ltd.                 |  | Mr. Alan Chen is the Director of this entity.                                          
|Mega Media Investments Co., Ltd. (Taiwan Branch) |  | Entity controlled by Mr. Alan Chen                                                     
|GASH Co., Ltd.                                   |  | Entity controlled by Gamania Digital.                                                  
|Jollywiz Digital Technology Co., Ltd.            |  | Entity controlled by Gamania Digital.                                                  
|Digicentre Co., Ltd.                             |  | Entity controlled by Gamania Digital.                                                  
|WeBackers Co., Ltd.                              |  | Entity controlled by Gamania Digital.                                                  
|GASH Media Digital Marketing Co., Ltd            |  | Entity controlled by GASH Co., Ltd.                                                    
|Chunghwa Wideband Best Network Co., Ltd.         |  | Mr. Alan Chen is the Chairman and legal representative of this entity.                 
|Mr. Alan Chen                                    |  | Controlling beneficiary shareholder of the Company. Former Chairman of NOWnews Network.



Transactions



|                                                          |  | For the Years Ended December 31, |        
|--------------------------------------------------------- |  | -------------------------------- | -------
|                                                          |  | 2017                             |        
|Sales to Mega Media Investments Co., Ltd. (Taiwan Branch) |  | $                                | 64,992 
|Sales to GASH Co., Ltd.                                   |  |                                  | 37,953 
|Sales to GASH Media Digital Marketing Co., Ltd.           |  |                                  | 21,258 
|Sales to Jin Hao Kang Marketing Co., Ltd.                 |  |                                  | -      
|Sales to WeBackers Co., Ltd.                              |  |                                  | -      
|Sales to Digicentre Co., Ltd.                             |  |                                  | -      
|Sales to Jollywiz Digital Technology Co., Ltd.            |  |                                  | -      
|Total                                                     |  | $                                | 124,203



The primary services provided by NOWnews
Network to these related parties was advertisement space on NOWnews Network’s website.



F-22







Due from related parties



|                                                                       |  | December 31, |        |  | December 31, |  
|---------------------------------------------------------------------- |  | ------------ | ------ |  | ------------ | -
|                                                                       |  | 2017         |        |  | 2016         |  
|Trade receivable from GASH Co., Ltd.                                   |  | $            | 19,698 |  |              | $
|Trade receivable from GASH Media Digital Marketing Co., Ltd.           |  |              | 6,353  |  |              |  
|Trade receivable from Mega Media Investments Co., Ltd. (Taiwan Branch) |  |              | -      |  |              |  
|Trade receivable from WeBackers Co., Ltd.                              |  |              | -      |  |              |  
|Trade receivable from Jin Hao Kang Marketing Co., Ltd.                 |  |              | -      |  |              |  
|Total                                                                  |  | $            | 26,051 |  |              | $



Due to related parties



|                                                        |  | December 31, |           |  | December 31, |  
|------------------------------------------------------- |  | ------------ | --------- |  | ------------ | -
|                                                        |  | 2017         |           |  | 2016         |  
|Due to Mr. Alan Chen                                    |  | $            | 1,573,618 |  |              | $
|Due to Jollywiz Digital Technology Co., Ltd.            |  |              | 33,340    |  |              |  
|Due to Mega Media Investments Co., Ltd. (Taiwan Branch) |  |              | 5,302     |  |              |  
|Due to GASH Media Digital Marketing Co., Ltd.           |  |              | -         |  |              |  
|Due to Digicentre Co., Ltd.                             |  |              | -         |  |              |  
|Due to Chunghwa Wideband Best Network Co., Ltd.         |  |              | -         |  |              |  
|Total                                                   |  | $            | 1,612,260 |  |              | $



Due to related parties were unsecured,
had no written agreement, due on demand with no maturity date, and bearing no interest.



NOTE 14: SUBSEQUENT EVENT



Management has evaluated subsequent
events through April 16, 2018, the date which the financial statements were available to be issued. All subsequent events requiring
recognition as of December 31, 2017 have been incorporated into these consolidated financial statements and there are no subsequent
events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”.



F-23







Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.



None.



Item 9A. Controls and Procedures.



Evaluation of Disclosure Controls and Procedures



The Company maintains
a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the
reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified
by the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated
and communicated to the Company's management, including the Company's chief executive officer and chief financial officer, as appropriate,
to allow timely decisions regarding required disclosure.



Pursuant to Rule 13a-15(b)
under the Exchange Act, the Company carried out an evaluation with the participation of the Company’s management, the Company’s
chief executive officer and chief financial officer, of the effectiveness of the Company’s disclosure controls and procedures
(as defined under Rule 13a-15(e) under the Exchange Act) as of the fiscal year ended December 31, 2017. Based upon that evaluation,
the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls
and procedures were effective.



Management’s Annual Report on Internal Control over
Financial Reporting



The Company’s
management is responsible for establishing and maintaining adequate internal control over our financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. The Company’s management is also required to assess and
report on the effectiveness of the Company’s internal control over financial reporting in accordance with Section 404 of
the Sarbanes-Oxley Act of 2002 (“Section 404”). Internal control over financial reporting is a process to provide reasonable
assurance regarding the reliability of the Company’s financial reporting for external purposes in accordance with generally
accepted accounting principles. Internal control over financial reporting includes policies and procedures that: (i) pertain to
maintaining records that in reasonable detail accurately and fairly reflect the Company’s transactions; (ii) provide
reasonable assurance that transactions are recorded as necessary for preparation of the Company’s financial statements and
that receipts and expenditures of company assets are made in accordance with management authorization; and (iii) provide reasonable
assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial
statements would be prevented or detected on a timely basis.



Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies and procedures may deteriorate.



The Company’s
management assessed the effectiveness of our internal control over financial reporting as of December 31, 2017. In making this
assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control—Integrated Framework. This evaluation was conducted by Shuo-Wei Shih, the Company’s chief executive officer,
and Chi-Yuan Chang, the Company’s interim chief financial officer. Based on our evaluation, we determined that, as of December
31, 2017, our internal control over financial reporting was effective.



28







This Annual Report
does not include an attestation report of the Company’s registered accounting firm regarding internal control over financial
reporting. The management’s report was not subject to attestation by the Company’s registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission.



Changes in Internal Controls over Financial Reporting



We regularly review
our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase
efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing
new, more efficient systems, consolidating activities, and migrating processes.



There have been no
changes in our internal control over financial reporting during the last fiscal quarter of 2017 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.



Limitations on Controls



Management does not
expect that the Company's disclosure controls and procedures or the Company's internal control over financial reporting will prevent
or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions
and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of
fraud, if any, within the Company have been detected. The Company's disclosure controls and procedures are designed to provide
reasonable assurance of achieving their objectives and the Company's chief executive officer and chief financial officer have concluded
that the Company's disclosure controls and procedures are effective at that reasonable assurance level.



Item 9B. Other Information.



None.



PART III



Item 10. Directors, Executive Officers and Corporate Governance.



Below are the names
and certain information regarding the Company’s executive officers and directors as of the date of this Annual Report.



|Name              |  | Age |  | Position                            
|----------------- |  | --- |  | ------------------------------------
|Shuo-Wei Shih     |  | 49  |  | Chief Executive Officer and Director
|Chi-Yuan Chang    |  | 43  |  | Interim Chief Financial Officer     
|En Ming Tseng     |  | 62  |  | Director                            
|Shang-Hong Lin    |  | 44  |  | Director                            
|Yuhao AixinjueLuo |  | 49  |  | Director                            



Shuo-Wei Shih
Mr. Shih, age 49, was appointed Chief Executive Officer of the Company on March 25, 2016 and a director on June 24. Before joining
the Company, Mr. Shih has been a director of GIA Investment, a consulting firm in finance, operation and marketing in Taiwan since
October 2014. From 2007 to 2012, Mr. Shih was the founder of Sunrise Global Solar Energy Ltd, which engages in the design, manufacture,
and marketing of photovoltaic solar energy products for residential, commercial and utility-scale power plant clients worldwide.
Mr. Shih was responsible for business development, financing as well as cooperation with Australian scientists. In 2012, under
Mr. Shih’s supervision, Sunrise Global Solar Energy Ltd was acquired by Sino-American Silicon Products Inc.(TSEC:5483), a
manufacturer of solar wafer listed in Taiwan. In 2012, he was selected by Council for Industrial and Commercial Development of
Taiwan as a director responsible for resource integration and providing of financial advice. Mr. Shih started his professional
career as an associate researcher with the Industrial Technology Research Institute in Taiwan. He was certified as an Industrial
Technologist by National Association of Industrial Technology (USA) in 1997. Mr. Shih graduated from Southern Illinois University
with a BS degree focusing on industrial technology in 1994 and received his MS degree from Indiana State University in 1996.



29







Chi-Yuan Chang.
Mr. Chang, age 43, was appointed as the Company’s Interim Chief Financial Officer on September 18, 2017 to replace Mr. Tsung-Chien
Chiang. Mr. Chang has been working with us since January 2015 as Financial Manager. Prior to joining us, from February 2009 to
July 2014, Mr. Chang served as Supervisor at Mercedes-Benz Financial Services Taiwan Ltd. Mr. Chang received his Bachelor degree
in Accounting from National Cheng Kung University in 1998 and his Master degree in Accounting from Yuan Ze University in 2001.



En Ming Tseng.
Mr. Tseng was appointed a director on November 14, 2014. He has been serving as Chairman of St John’s University since December
2009 and Chairman of Digivast Co, Ltd., a mobile application company, since January 2012. Prior to that, he served on the board
of directors of Heima Vista Co. Ltd., an internet application solutions company from August 2004 through July 2014. He also served
on the board of directors of St John’s University from September 2010 through May 2013. From July 2011 to December 2013,
Mr. Tseng was a managing consultant at Jucheng Group, a training and consulting company. Mr. Tseng holds a bachelor’s degree
in shipping and transportation management from National Taiwan Ocean University, an MBA from Bloomsburg University of Pennsylvania
and a PhD in industrial training from University of Northern Iowa. We believe Mr. Tseng bring to the Board extensive industry experience
and in-depth knowledge of internet and mobile application business.



Shang-Hong Lin.
Mr. Lin was appointed a director on November 14, 2014 and has been serving as the chief science officer of Chunghwa United Group
since May 2014. Mr. Lin was an adviser of Chunghwa Wideband Best Network Co., Ltd. from May 2013 to April 2014. Prior to that,
he served as sales director at Zinwell Homepage Co., Ltd. from October 2008 to April 2014 and Interactive Video Technology Co.,
Ltd. from October 2005 to October 2013. Mr. Lin graduated from Chinese Culture University with a master’s degree in Sociolinguistics.



Dr. Yuhao Aixinjueluo,Dr. Aixinjueluo is a banking veteran with solid expertise and extensive experience in the banking industry. In addition to
holding numerous professional certifications such as Financial Risk Manager, Certified International Investment Analyst, Chartered
Financial Analyst, and Certified Financial Planner, he retains important positions at many major international financial institutions.
He was once the UN Messenger of Peace of the United Nations International Week of Science and Peace in 2007, the president of the
Lao Economic Development Committee, the chairman of the supervisory at Lao Construction Bank, the chairman of the supervisory at
Lao World Trade Center, and the chairman of the board of directors of Laos Loto Group.



Our directors will
serve until the annual meeting of stockholders and until his respective successors have been elected and have qualified, or until
his earlier resignation, removal or death.



We are not required
to have any independent members of the Board of Directors. Our Board of Directors has determined that En Ming Tseng is independent
under applicable SEC rules. As we do not have any board committees, the Board as a whole carries out the functions of audit, nominating
and compensation committees.



Compensation Committee Interlocks and Insider Participation



None of our executive
officers serves as a member of the Board of Directors or compensation committee of any other entity that has one or more of its
executive officers serving as a member of our Board of Directors.



Material Changes to the Procedures by which Security Holders
May Recommend Nominees to the Board of Directors



There have been no
material changes to the procedures by which security holders may recommend nominees to the Board of Directors.



Code of Ethics



As of the date of this
report, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons performing similar functions. We plan to adopt a code
of ethics as we develop our business.



30







Board Leadership Structure and Role in Risk Oversight



Since November 14,
2014, we have separated the roles of Chairman of the Board and Chief Executive Officer. Although the separation of roles has been
appropriate for us during that time period, in the view of the Board of Directors, the advisability of the separation of these
roles depends upon the specific circumstances and dynamics of our leadership.



Chairman of the Board
will serve as the primary liaison between the CEO and the Board and provide strategic input and counseling to the CEO. With input
from other members of the Board of Directors and management, Chairman will preside over meetings of the Board of Directors. The
Board of Directors has not had a Chairman since Mr. Chen resigned on October 9, 2017. The Board of Directors is actively interviewing
the replacement and believes that it will be able to appoint a new qualified chairman within the near future.



The Board of Directors,
as a unified body and through committee participation, organizes the execution of its monitoring and oversight roles and does not
expect its Chairman to organize those functions. Our primary rationale for separating the positions of Board Chairman and the CEO
is the recognition of the time commitments and activities required to function effectively as Chairman and as the CEO of a company
with a relatively flat management structure. The separation of roles has also permitted the Board of Directors to recruit senior
executives into the CEO position with skills and experience that meet the board of director’s planning for the position who
may not have extensive public company board experience.



Risk is inherent with
every business, and how well a business manages risk can ultimately determine its success. Management is responsible for the day-to-day
management of risks the company faces, while the Board of Directors, as a whole and through its committees, has responsibility
for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself
that the risk management processes designed and implemented by management are adequate and functioning as designed.



The Board of Directors
believes that establishing the right “tone at the top” and that full and open communication between executive management
and the Board of Directors are essential for effective risk management and oversight. Our CEO communicates frequently with members
of the board to discuss strategy and challenges facing the company.



Section 16(a) Beneficial Ownership Reporting Compliance



Section 16(a) of the
Securities Exchange Act of 1934 requires our officers and directors, and persons who own more than 10% of a registered class of
our equity securities, to file reports of ownership and changes in ownership with the SEC. These persons are required by regulation
to furnish us with copies of all Section 16(a) reports that they file. Based solely on our review of copies of such reports and
representations from the reporting persons, we believe that during the fiscal year ended December 31, 2017:





| | · | Alan Chen, the former Chairman of the Board of Directors of the Company,
failed to timely file one Form 3 to report his acquisition of 3,379,700 shares of common stock on November 14, 2014.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | GIA Investments Corp., a ten percent shareholder of the Company, failed
to timely file one Form 3 to report its acquisition of 3,000,000 shares of common stock on November 14, 2014.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | En-Ming Tseng, a director of the Company, failed to timely file one
Form 3 to report his acquisition of 6,000 shares of common stock on June 16, 2014.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Shang-Hong Lin, a director of the Company, failed to timely file one
Form 3 to report his acquisition of 10,000 shares of common stock on November 14, 2014.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Yuhao Aixinjueluo, a director of the Company, failed to timely file
one Form 3 to report his acquisition of 500,000 shares of common stock on November 16, 2016;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



Other than Mr. Chi-Yuan
Chang, the Company’s interim CFO, none of the officers, directors and greater than ten percent shareholders have filed a
Form 3, but they plan to file their Forms 3 as soon as possible.



Item 11. Executive Compensation.



The following table
sets forth all compensation paid to our principal executive officers for the fiscal years ended December 31, 2017 and 2016. No
other executive officer or former executive officer received more than $100,000 in compensation in the periods indicated except
reported below.



31







SUMMARY COMPENSATION TABLE



|                                |  |                   |  |        |        |  |       |  |         | Stock  |  |  | Stock  |  | Option |  |  | All other    |   |  |       | 
|------------------------------- |  | ----------------- |  | ------ | ------ |  | ----- |  | ------- | ------ |  |  | ------ |  | ------ |  |  | ------------ | - |  | ----- | 
|Name and                        |  |                   |  | Salary |        |  | Bonus |  |         | awards |  |  | awards |  | awards |  |  | compensation |   |  | Total | 
|principal position              |  | Year              |  | ($)    |        |  | ($)   |  |         | ($)    |  |  | ($)    |  | ($)    |  |  | ($)          |   |  | ($)   | 
|Yih-Jong Shy                    |  |                   |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|Chief Executive Officer         |  | Year Ended        |  |        | 1,355  |  |       |  | -       |        |  |  | -      |  |        |  |  |              | - |  |       | 
|and director (1)                |  | December 31, 2016 |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|                                |  |                   |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|Shuo-Wei Shih                   |  | Year Ended        |  |        | 99,100 |  |       |  | 523,375 |        |  |  | -      |  |        |  |  |              | - |  |       | 
|Chief Executive Officer         |  | December 31, 2017 |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|and director (2)                |  | Year Ended        |  |        | 4,645  |  |       |  | -       |        |  |  | -      |  |        |  |  |              | - |  |       | 
|                                |  | December 31, 2016 |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|Tsung-Chien Chiang              |  | Year Ended        |  |        | 4,300  |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|Chief Financial Officer         |  | December 31, 2017 |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|(3)                             |  | Year Ended        |  |        | 6,000  |  |       |  | -       |        |  |  | -      |  |        |  |  |              | - |  |       | 
|                                |  | December 31, 2016 |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|Chi-Yuan Chang                  |  |                   |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|Interim Chief Financial Officer |  | Year Ended        |  |        |        |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 
|(4)                             |  | December 31, 2017 |  |        | 6,000  |  |       |  |         |        |  |  |        |  |        |  |  |              |   |  |       | 





(1) On March 25,
2016, Mr. Yih-Jong Shy resigned as the Chief Executive Officer. On June 24, 2016, Mr. Shy resigned as a director of the Company.
Mr. Shih was awarded 197,500 shares of common stock of the Company and each share of the common stock was valued at $2.65, the
closing price on December 29, 2017 of the Company’s common stocks quoted on the OTCQB.





(2) On March 25, 2016,
Mr. Shuo-Wei Shih was appointed as the Chief Executive Officer and on June 24, 2016, he was appointed as a director of the Company.



(3) On September 18,
2017, Mr. Tsung-Chien Chiang resigned as the Chief Financial Officer of the Company.



(4) On September 18,
2017, Mr. Chi-Yuan Chang was appointed as the Interim Chief Financial Officer of the Company.



Employment Agreement



Shuo-Wei Shih



Pursuant to the employment
agreement that the Company and Mr. Shih entered into on March 25, 2016, Mr. Shih will be entitled to an annual salary of $6,000
for his services as Chief Executive Officer of the Company. The employment agreement has an initial term (the “Initial Term”)
commencing as of March 25, 2016 and expiring on December 31, 2016, and continuing on a year-to-year basis thereafter unless terminated
by either party on not less than thirty days’ notice prior to the expiration of the Initial Term or any one-year extension.
In addition, Mr. Shih will be entitled to receive a stock option to purchase up to 15,000 shares of common stock of the Company
if the Company reports a net income of $500,000 for the year ending December 31, 2016 (the “Performance Target”). All
the shares underlying the options will vest immediately upon the Board of Director’s confirmation of the attaining of the
Performance Target.



32







Chi-Yuan Chang





The Company did not
enter into an employment agreement with Mr. Chang in connection with his appointment as the interim CFO of the Company.



Tsung-Chien Chiang



Pursuant to the employment
agreement that the Company and Mr. Chiang entered into on November 14, 2014, Mr. Chiang will be entitled to an annual salary of
$6,000 for his services as Chief Financial Officer of the Company. The employment agreement has an initial term (the “Initial
Term”) commencing as of November 14, 2014 and expiring on December 31, 2015, and continuing on a year-to-year basis thereafter
unless terminated by either party on not less than thirty days’ notice prior to the expiration of the Initial Term or any
one-year extension. In addition, Mr. Chiang will be entitled to receive a stock option to purchase up to 15,000 shares of common
stock of the Company if the Performance Target is met. All the shares underlying the options will vest immediately upon the Board
of Director’s confirmation of the attaining of the Performance Target. Mr. Chiang resigned as the Company’s Chief Financial
Officer on September 18, 2017.



Outstanding Equity Awards at Fiscal Year-End







On December 1, 2017,
the Board of Directors approved to award stock bonus to certain current and previous directors, including the Company’s CEO,
Mr. Shuo-Wei Shih. The Company is currently in the process of issuing the shares. The following table contains information concerning
the stocks that have not issued as of December 31, 2017 with respect to the executive officers named in the Summary Compensation
Table:







Outstanding Equity Awards at Fiscal Year-End





|                                |  | Option Awards                                                                   |   |  | Stock Awards                                                                      | 
|------------------------------- |  | ------------------------------------------------------------------------------- | - |  | --------------------------------------------------------------------------------- | 
|Name and Principal Position     |  | Number of Securities Underlying Unexercised
        Options
        Exercisable |   |  | Number of Securities Underlying Unexercised
        Options
        Unexercisable | 
|                                |  |                                                                                 |   |  |                                                                                   | 
|Shuo-Wei Shih (1)               |  |                                                                                 | - |  |                                                                                   | 
|Chief Executive Officer         |  |                                                                                 |   |  |                                                                                   | 
|                                |  |                                                                                 |   |  |                                                                                   | 
|Chi-Yuan Chang (2)              |  |                                                                                 | - |  |                                                                                   | 
|Interim Chief Financial Officer |  |                                                                                 |   |  |                                                                                   | 
|                                |  |                                                                                 |   |  |                                                                                   | 
|Tsung-Chien Chiang (3)          |  |                                                                                 | - |  |                                                                                   | 
|Chief Financial Officer         |  |                                                                                 |   |  |                                                                                   | 
|                                |  |                                                                                 |   |  |                                                                                   | 
|Yih-Jong Shy (4)                |  |                                                                                 | - |  |                                                                                   | 
|Chief Executive Officer         |  |                                                                                 |   |  |                                                                                   | 







| | (1) | On March 25, 2016, Mr. Shuo-Wei Shih was appointed as the Chief Executive Officer and on June 24, 2016, he was appointed as a director of the Company. Mr. Shih was awarded 197,500 shares of common stock of the Company and each share of the common stock was valued at $2.65, the closing price on December 29, 2017 of the Company’s common stocks quoted on the OTCQB.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (2) | On September 18, 2017, Mr. Chi-Yuan Chang was appointed
as the Interim Chief Financial Officer of the Company.
| | --- | --------------------------------------------------------------------------------------------------------------



| | (3) | On September 18, 2017, Mr. Tsung-Chien Chiang resigned
as the Chief Financial Officer of the Company.
| | --- | -----------------------------------------------------------------------------------------------------



| | (4) | On March 25, 2016, Mr. Yih-Jong Shy resigned as the Chief
Executive Officer. On June 24, 2016, Mr. Shy resigned as a director of the Company
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------







33







Director Compensation







As discussed above,
on December 1, 2017, the Board of Directors approved to award stock bonus to certain current and previous directors. The Company
is currently in the process of issuing shares to those directors. The following table sets forth certain information regarding
such stock bonus awarded to our directors during the fiscal year ended December 31, 2017:





Director Compensation



|Name                  |  | Fees earned or cash paid |   |  | Stock Awards |   |         | Option Awards |  |  | All other compensation |  |  | Total |  
|--------------------- |  | ------------------------ | - |  | ------------ | - | ------- | ------------- |  |  | ---------------------- |  |  | ----- | -
|                      |  |                          |   |  |              |   |         |               |  |  |                        |  |  |       |  
|Alan Chen (1)         |  | $                        | - |  |              | $ | 238,500 |               |  |  | -                      |  |  |       | -
|En Ming Tseng (2)     |  | $                        | - |  |              | $ | 251,750 |               |  |  | -                      |  |  |       | -
|Shang-Hong Lin (3)    |  | $                        | - |  |              | $ | 251,750 |               |  |  | -                      |  |  |       | -
|Yuhao Aixinjueluo (4) |  | $                        | - |  |              | $ | 178,875 |               |  |  | -                      |  |  |       | -
|Shuo-Wei Shih (5)     |  | $                        | - |  |              | $ | 523,375 |               |  |  | -                      |  |  |       | -



| | (1) | Mr. Chen resigned as the Chairman of the Board of Directors on October 9, 2017. He was awarded 90,000 shares of common stock
of the Company and each share of the common stock was valued at $2.65, the closing price on December 29, 2017 of the Company’s
common stocks quoted on the OTCQB.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Mr. Tseng was awarded 95,000 shares of common stock of the Company and each share of the common stock was valued at $2.65,
the closing price on December 29, 2017 of the Company’s common stocks quoted on the OTCQB.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Mr.  Lin was awarded 95,000 shares of common stock of the Company and each share of the common stock was valued at
                                                                 $2.65, the closing price on December 29, 2017 of the Company’s common stocks quoted on the OTCQB.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Mr. Aixinjueluo was awarded 67,500 shares of common stock of the Company and each share of the common stock was valued at $2.65,
the closing price on December 29, 2017 of the Company’s common stocks quoted on the OTCQB.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Mr. Shih was awarded 197,500 shares of common stock of the Company and each share of the common stock was valued at $2.65,
the closing price on December 29, 2017 of the Company’s common stocks quoted on the OTCQB.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters.



The following table
sets forth certain information, as of the date of filing of this report, with respect to the beneficial ownership of the outstanding
common stock by (i) any holder of more than five (5%) percent; (ii) each of the Company’s executive officers and directors;
and (iii) the Company’s directors and executive officers as a group. Except as otherwise indicated, each of the stockholders
listed below has sole voting and investment power over the shares beneficially owned.



|                                                |  | Amount of shares  of common stock |           |     |            | 
|----------------------------------------------- |  | --------------------------------- | --------- | --- | ---------- | 
|                                                |  | Beneficially Owned                |           |     | Percent Of | 
|Name of Beneficial Owner                        |  | (1)                               |           |     | Class (2)  | 
|Chi-Yuan Chang                                  |  |                                   | 0         |     |            | 
|En Ming Tseng                                   |  |                                   | 6,000     | (5) |            | 
|Shang-Hong Lin                                  |  |                                   | 10,000    |     |            | 
|Shuo-Wei Shih                                   |  |                                   | 0         |     |            | 
|Yuhao Aixinjue Luo                              |  |                                   | 500,000   |     |            | 
|All Executive Officers and Directors as a Group |  |                                   | 516,000   |     |            | 
|(five persons)                                  |  |                                   |           |     |            | 
|Greater than 5% Shareholders                    |  |                                   |           |     |            | 
|GIA Investments Corp. (3)                       |  |                                   | 3,000,000 |     |            | 
|Alan Chen (4)                                   |  |                                   | 3,379,700 | (4) |            | 



34







| | * | Represents less than one percent.
| | - | ---------------------------------



| | (1) | Under Rule 13d-3 of
the Exchange Act of 1934, as amended (the “Exchange Act”), a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: (i) voting
power, which includes the power to vote or to direct the voting of shares; and (ii) investment power, which includes the
power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person
(if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within
60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of
shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason
of these acquisition rights.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Calculated based on
23,072,000 shares of Common Stock outstanding as of April 16, 2018.
| | --- | ---------------------------------------------------------------------------------------



| | (3) | Heer Hsiao holds the
voting and dispositive power over the securities held by GIA Investments Corp.
| | --- | ---------------------------------------------------------------------------------------------------



| | (4) | This number includes
(i) 1,130,000 shares of Common Stock held by Pioneer; (ii) 395,100 shares of Common Stock held by Social Cloud Co., Ltd.
(“Social”); (iii) 350,000 shares of Common Stock held by Legend Media Investments (“Legend”);
(iv) 419,575 shares of Common Stock held by Trophy Access Limited (“Trophy”); (v) 445,000 shares of Common Stock
held by Core Winner Investment Limited (“Core”); (vi) 445,000 shares of Common Stock held by Intelligent Media
Investments (“Intelligent”); and (vii) 195,025 shares of Common Stock held by his spouse. As such, Mr. Chen is
deemed to have the voting and dispositive power over shares of Common Stock held by these entities and his spouse.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Includes (i) 6,000 shares
of Common Stock held directly by Mr. Tseng and (ii)100,000 shares of Common Stock held by Prime Chance Limited of which his wife,
Tsung-Mei Luo, is the sole director and member.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 13. Certain Relationships and Related Transactions,
and Director Independence.



Related Party Transactions



The table below sets forth our sales to
the related parties during the years ended December 31, 2017 and 2016:



|                                                          |  | For the Years Ended |        
|--------------------------------------------------------- |  | ------------------- | -------
|                                                          |  | December 31,        |        
|                                                          |  | 2017                |        
|Sales to Mega Media Investments Co., Ltd. (Taiwan Branch) |  | $                   | 64,992 
|Sales to GASH Co., Ltd.                                   |  |                     | 37,953 
|Sales to GASH Media Digital Marketing Co., Ltd.           |  |                     | 21,258 
|Sales to Jin Hao Kang Marketing Co., Ltd.                 |  |                     | -      
|Sales to WeBackers Co., Ltd.                              |  |                     | -      
|Sales to Digicentre Co., Ltd.                             |  |                     | -      
|Sales to Jollywiz Digital Technology Co., Ltd.            |  |                     | -      
|Total                                                     |  | $                   | 124,203



The primary services
provided by NOWnews Network to these related parties was advertisement space on NOWnews Network’s website.





35







Due from Related Parties



The table below sets
forth due from related parties for the fiscal years ended December 31, 2017 and 2016:



|                                                                       |  | December 31, |        |  | December 31, |  
|---------------------------------------------------------------------- |  | ------------ | ------ |  | ------------ | -
|                                                                       |  | 2017         |        |  | 2016         |  
|Trade receivable from GASH Co., Ltd.                                   |  | $            | 19,698 |  |              | $
|Trade receivable from GASH Media Digital Marketing Co., Ltd.           |  |              | 6,353  |  |              |  
|Trade receivable from Mega Media Investments Co., Ltd. (Taiwan Branch) |  |              | -      |  |              |  
|Trade receivable from WeBackers Co., Ltd.                              |  |              | -      |  |              |  
|Trade receivable from Jin Hao Kang Marketing Co., Ltd.                 |  |              | -      |  |              |  
|Total                                                                  |  | $            | 26,051 |  |              | $



Due to Related Parties



The table below sets
forth due to related parties for the fiscal years ended December 31, 2017 and 2016:



|                                                        |  | December 31, |           |  | December 31, |  
|------------------------------------------------------- |  | ------------ | --------- |  | ------------ | -
|                                                        |  | 2017         |           |  | 2016         |  
|Due to Mr. Alan Chen                                    |  | $            | 1,573,618 |  |              | $
|Due to Jollywiz Digital Technology Co., Ltd.            |  |              | 33,340    |  |              |  
|Due to Mega Media Investments Co., Ltd. (Taiwan Branch) |  |              | 5,302     |  |              |  
|Due to GASH Media Digital Marketing Co., Ltd.           |  |              | -         |  |              |  
|Due to Digicentre Co., Ltd.                             |  |              | -         |  |              |  
|Due to Chunghwa Wideband Best Network Co., Ltd.         |  |              | -         |  |              |  
|                                                        |  | $            | 1,612,260 |  |              | $



Due to related parties were unsecured,
had no written agreement, due on demand with no maturity date, and bearing no interest.



The table below explains how the aforementioned
parties are related to the Company.



|Name of Entity or Individual                     |  | Relationship with the Company and its subsidiaries                                     
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------
|Jin Hao Kang Marketing Co., Ltd.                 |  | Mr. Alan Chen is the Director of this entity.                                          
|Mega Media Investments Co., Ltd. (Taiwan Branch) |  | Entity controlled by Mr. Alan Chen                                                     
|GASH Co., Ltd.                                   |  | Entity controlled by Gamania Digital.                                                  
|Jollywiz Digital Technology Co., Ltd.            |  | Entity controlled by Gamania Digital.                                                  
|Digicentre Co., Ltd.                             |  | Entity controlled by Gamania Digital.                                                  
|WeBackers Co., Ltd.                              |  | Entity controlled by Gamania Digital.                                                  
|GASH Media Digital Marketing Co., Ltd            |  | Entity controlled by GASH Co., Ltd.                                                    
|Chunghwa Wideband Best Network Co., Ltd.         |  | Mr. Alan Chen is the Chairman and legal representative of this entity.                 
|Mr. Alan Chen                                    |  | Controlling beneficiary shareholder of the Company. Former Chairman of NOWnews Network.



We have not adopted
written policies and procedures specifically for related person transactions. Our Board of Directors is responsible to approve
all related party transactions.



Item 14. Principal Accounting Fees and Services.



The following is a
summary of fees for professional services rendered by our registered independent public accounting firm for the years ended December
31, 2017 and 2016:



|                   |  | Year Ended December 31, 2017 |         |  | Year Ended December 31, 2016 |  
|------------------ |  | ---------------------------- | ------- |  | ---------------------------- | -
|Audit Fees         |  | $                            | 105,000 |  |                              | $
|Audit Related Fees |  |                              | -       |  |                              |  
|Tax Fees           |  |                              | 3,000   |  |                              |  
|All Other Fees     |  |                              | -       |  |                              |  
|Total Fees         |  | $                            | 108,000 |  |                              | $



36







Pre-Approval Policies and Procedures



The Board of Directors
pre-approves all audit and non-audit services performed by the Company’s auditor and the fees to be paid in connection with
such services in order to assure that the provision of such services does not impair the auditor’s independence.



PART IV



Item 15. Exhibits, Financial Statement Schedules.



|Exhibit |  |                                                                                                                                                                                                              
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |  | Description                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                              
|3.1     |  | Articles of Incorporation of the Company (1)                                                                                                                                                                 
|        |  |                                                                                                                                                                                                              
|3.2     |  | Certificate of Amendment of the Company (2)                                                                                                                                                                  
|        |  |                                                                                                                                                                                                              
|3.3     |  | Bylaws of the Company (1)                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                              
|10. 1   |  | Share Exchange Agreement, dated November14, 2014, by and among the Company, Worldwide Media Investments Corp, NOWnews Network Co., Ltd., and the shareholders of Worldwide Media Investments Corp (4)        
|        |  |                                                                                                                                                                                                              
|10.2    |  | Personal Guarantee, dated November 14, 2014, by Alan Chen and Chiu-Li Tu (3)                                                                                                                                 
|        |  |                                                                                                                                                                                                              
|10.3    |  | NOWnews Office Lease Agreement dated March 3, 2015, by and between the Company and Yiqiu International Department Store Co., Ltd. (5)                                                                        
|        |  |                                                                                                                                                                                                              
|10.4    |  | Lease Termination Agreement, dated March 15, 2015, by and between the Company and Shin Kong Life Insurance Co., Ltd. (5)                                                                                     
|        |  |                                                                                                                                                                                                              
|10.5    |  | Share Exchange Agreement, dated April 13, 2016, by and among the Company, Dawnrain Media Co., Ltd., New Taoyard Advertising Co., Ltd., Beijing New Tong Ying Culture Media Co., Ltd. and its shareholders (6)
|        |  |                                                                                                                                                                                                              
|10.6    |  | Financial Advisory Service Recognition Agreement, dated September 20, 2016, by and between the Company, and GIA Investments Corp. (7)                                                                        
|        |  |                                                                                                                                                                                                              
|10.7    |  | Share Exchange Agreement, dated October 4, 2016, by and among the Company, MySong Industrial Co., Ltd. and its shareholders. (8)                                                                             
|        |  |                                                                                                                                                                                                              
|10.8    |  | Share Exchange Agreement, dated November 19, 2016, by and among the Company, Lao Development Holding Limited and its shareholders (9)                                                                        
|        |  |                                                                                                                                                                                                              
|10.9    |  | Cooperation Agreement, dated January 14, 2017, by and between the Company and Earl International Development Sdn. Bhd. (10)                                                                                  
|        |  |                                                                                                                                                                                                              
|10.10   |  | Subscription Agreement, dated June 22, 2017, by and between the Company and an Taiwanese investor (11)                                                                                                       
|        |  |                                                                                                                                                                                                              
|21.1    |  | List of Subsidiaries*                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                              
|31.1    |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                     



37







|31.2 |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                         
|32.1 |  | Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
|     |  |                                                                                                                                                         
|32.2 |  | Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**



|101.INS |  | XBRL Instance Document***                              
|------- |  | -------------------------------------------------------
|        |  |                                                        
|101.SCH |  | XBRL Taxonomy Extension Schema Document***             
|        |  |                                                        
|101.CAL |  | XBRL Taxonomy Calculation Linkbase Document***         
|        |  |                                                        
|101.DEF |  | XBRL Taxonomy Extension Definition Linkbase Document***
|        |  |                                                        
|101.LAB |  | XBRL Taxonomy Label Linkbase Document***               
|        |  |                                                        
|101.PRE |  | XBRL Taxonomy Presentation Linkbase Document***        



*Filed herewith.

**Furnished herewith.

***To be filed by amendment.





|(1)  | Incorporated by reference herein the exhibits to the Company’s Form S-1 filed on January 11, 2011.      
|---- | --------------------------------------------------------------------------------------------------------
|(2)  | Incorporated by reference the exhibit to the Company’s Form 10-K filed on November 12, 2014.            
|(3)  | Incorporated by reference the exhibit to the Company’s Form 8-K filed on November 14, 2014.             
|(4)  | Incorporated by reference the exhibit to the Company’s Form 8-K/A filed on January 9, 2015.             
|(5)  | Incorporated by reference the exhibits 10.6 and 10.7 to the Company’s Form 10-K filed on March 31, 2015.
|(6)  | Incorporated by reference the exhibits 10.1 to the Company’s Form 8-K filed on April 15, 2016           
|(7)  | Incorporated by reference the exhibits 10.1 to the Company’s Form 8-K filed on September 21, 2016       
|(8)  | Incorporated by reference the exhibits 10.1 to the Company’s Form 8-K filed on October 7, 2016          
|(9)  | Incorporated by reference the exhibits 10.1 to the Company’s Form 8-K filed on November 23, 2016        
|(10) | Incorporated by reference the exhibits 10.1 to the Company’s Form 8-K filed on January 18, 2017         
|(11) | Incorporated by reference the exhibits 10.1 to the Company’s Form 8-K filed on  June 27, 2017           



38







SIGNATURES



Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.



|                     | NOWNEWS DIGITAL MEDIA TECHNOLOGY CO. LTD.
|-------------------- | -----------------------------------------
|                     |                                          
|Date: April 17, 2018 | By:                                      
|                     |                                          
|                     |                                          
|                     |                                          
|                     |                                          
|Date: April 17, 2018 | By:                                      
|                     |                                          
|                     |                                          
|                     |                                          



Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.



|Signature             |  | Title                                 |  | Date          
|--------------------- |  | ------------------------------------- |  | --------------
|                      |  |                                       |  |               
|/s/ Shuo-Wei Shih     |  | Chief Executive Officer  and Director |  | April 17, 2018
|Shuo-Wei Shih         |  | (Principal Executive Officer)         |  |               
|                      |  |                                       |  |               
|/s/ Shang-Hong Lin    |  | Director                              |  | April 17, 2018
|Shang-Hong Lin        |  |                                       |  |               
|                      |  |                                       |  |               
|/s/ En Ming Tseng     |  | Director                              |  | April 17, 2018
|En Ming Tseng         |  |                                       |  |               
|                      |  |                                       |  |               
|/s/ Yuhao Aixinjueluo |  | Director                              |  | April 17, 2018
|Yuhao Aixinjueluo     |  |                                       |  |               



39