# EDGAR Filing Document

**Accession Number:** 0001927578
**File Stem:** 0001104659-23-037550
**Filing Date:** 2023-3
**Character Count:** 1274963
**Document Hash:** ae1049ac2f5108aa76164d3318aca404
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-037550.hdr.sgml**: 20230328

**ACCESSION NUMBER**: 0001104659-23-037550

**CONFORMED SUBMISSION TYPE**: F-1

**PUBLIC DOCUMENT COUNT**: 64

**FILED AS OF DATE**: 20230328

**DATE AS OF CHANGE**: 20230328

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NetClass Technology Inc
- **CENTRAL INDEX KEY:** 0001927578
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **IRS NUMBER:** 000000000

**FILING VALUES:**
- **FORM TYPE:** F-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-270897
- **FILM NUMBER:** 23767166

**BUSINESS ADDRESS:**
- **STREET 1:** 6F BUILDING A
- **STREET 2:** 1188 WAN RONG ROAD
- **CITY:** SHANGHAI
- **STATE:** F4
- **ZIP:** 200436
- **BUSINESS PHONE:** 02161806588

**MAIL ADDRESS:**
- **STREET 1:** 6F BUILDING A
- **STREET 2:** 1188 WAN RONG ROAD
- **CITY:** SHANGHAI
- **STATE:** F4
- **ZIP:** 200436

**As filed with the U.S. Securities and Exchange Commission on March 28, 2023.**

**Registration No. 333-[·]**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM F-1**

**REGISTRATION STATEMENT**

**UNDER**

**THE SECURITIES ACT OF 1933**

**NETCLASS TECHNOLOGY INC**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Cayman Islands** | **7372** | **Not Applicable** |
| (State or other jurisdiction of<br> incorporation or organization) | (Primary Standard Industrial<br> Classification Code Number) | (IRS. Employer<br> Identification Number) |

---

**6F, Building A**

**1188 Wan Rong Road**

**Shanghai, People's Republic of China 200436**

**+86-021-61806588—telephone**

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

**Cogency Global Inc.**

**122 E 42nd St., 18th Floor**

**New York, NY 10168**

**(212) 947-7200**

(Name, address, including zip code, and telephone number, including area code, of agent for service)

***With a Copy to:***

---

| | |
|:---|:---|
| **William S. Rosenstadt, Esq.**<br> **Mengyi "Jason" Ye, Esq.**<br> **Ortoli Rosenstadt LLP**<br> **366 Madison Avenue, 3rd Floor**<br> **New York, NY 10017**<br> **212-588-0022** | **David B. Manno, Esq.**<br> **Huan Lou, Esq.**<br> **Sichenzia Ross Ference LLP**<br> **1185 Avenue of the Americas, 31<sup>st</sup> Floor**<br> **New York, 10036**<br> **(212) 930-9700** |

---

**Approximate date of commencement of proposed sale to the public:** Promptly after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ⌧

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ◻

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ◻

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ◻

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933

Emerging growth company ⌧

If an emerging growth company that prepares its financial statements in accordance with US GAAP, 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 7(a)(2)(B) of the Securities Act. ◻

&nbsp;&nbsp;&nbsp;&nbsp;† The term
 "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board
 to its Accounting Standards Codification after April 5, 2012.

The information in this preliminary prospectus is not complete and may be changed. We may not sell the securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not soliciting any offer to buy these securities in any jurisdiction where such offer or sale is not permitted.

---

| | |
|:---|:---|
| **SUBJECT TO COMPLETION** | **PRELIMINARY PROSPECTUS DATED March 28, 2023** |

---

*3,750,000 Class A Ordinary Shares*

![](tm2224158d7_f1aimg01.jpg)

**NETCLASS TECHNOLOGY INC**

This is the initial public offering of our Class A ordinary shares of NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company, and we are offering 3,750,000 Class A ordinary shares, par value $0.00025 per share. The offering price of our Class A ordinary shares in this offering will be between US$4.00 and US$5.00 per share. Prior to this offering, there has been no public market for our Class A ordinary shares.

We have applied to list our Class A ordinary shares on the Nasdaq Capital Market, under the symbol "NTCL" At this time, Nasdaq Capital Market has not yet approved our application to list our Class A ordinary shares. The closing of this offering is conditioned upon Nasdaq Capital Market's final approval of our listing application, and there is no guarantee or assurance that our Class A ordinary shares will be approved for listing on Nasdaq Capital Market. We will not consummate and close this offering without a listing approval letter from Nasdaq Capital Market.

Our issued and outstanding share capital is a dual class structure consisting of Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares shall at all times vote together as one class on all matters submitted to a vote by the shareholders at any general meeting of the Company. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of our company and each Class B ordinary share shall entitle the holder thereof to fifteen (15) votes on all matters subject to vote at general meetings of our company. Also, each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof but Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

**Investing in our Class A ordinary shares involves a high degree of risk. Before buying any Class A ordinary shares, you should carefully read the discussion of material risks of investing in our Class A ordinary shares in "Risk Factors" beginning on page 19 of this prospectus.**

**NETCLASS TECHNOLOGY INC or NetClass, is a holding company incorporated in the Cayman Islands. As a holding company with no material operations, NetClass conducts a substantial majority of its operations through its subsidiaries established in the People's Republic of China, or the PRC or China. Investors in our Class A ordinary shares should be aware that they will not and may never directly hold equity interests in the PRC operating entities, but rather purchasing equity solely in NetClass, our Cayman Islands holding company. Furthermore, shareholders may face difficulties enforcing their legal rights under United States securities laws against our directors and officers who are located outside of the United States. See "*Risk Factors – Risks Related to Doing Business in China – Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us*" on page 31 and "*You may have difficulty enforcing judgments obtained against us*" on page 42*.***

**Because our subsidiaries operations are primarily located in the PRC, we are subject to certain legal and operational risks associated with our operations in China, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the United States, or Chinese or United States regulations may materially and adversely affect our business, financial condition and results of operations. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in our operations and the value of our Class A ordinary shares, or could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As confirmed by our PRC counsel, Grandall Law Firm, we will not be subject to cybersecurity review with the Cyberspace Administration of China, or the "CAC," after the Cybersecurity Review Measures became effective on February 15, 2022, since we currently do not have over one million users' personal information and do not anticipate that we will be collecting over one million users' personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures; we are also not subject to cybersecurity review by the CAC if the Draft Regulations on the Network Data Security Administration are enacted as proposed, since we currently do not have over one million users' personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users' personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the Security Administration Draft; besides, according to Article 2 of the Measures, a critical information infrastructure operator purchases network products and services, or a network platform operator carries out data processing activities, which affect or may affect national security, a Cybersecurity Review shall be conducted in accordance with these Measures. If neither the Company is identified as a critical information infrastructure operator nor its operations are deemed as "affecting or may affecting the national security", the Company will not be subject to cybersecurity review under Article 2 of the Measures. However, we might be required to conduct an annual data security assessment under the Draft Regulations on the Network Data Security Administration (the "Draft"). According to Article 32 of the Draft, "A data processor who processes important data or who is listed overseas shall complete an annual data security assessment either self-conducted or conducted by a data security service organization engaged, and before January 31 of each year, submit the annual data security assessment report of the previous year to the districted city-level cyberspace authority, which shall contain the following information: (1) the processing of any important data, if any, (2) any data security risks discovered and measures for their disposal, (3) the data security management system, data backup, encryption, access control and other security protection measures, and the implementation of the management system and the effectiveness of the protection measures, (4) the implementation of national data security laws, administrative regulations and standards, (5) any data security incidents that occurred and their disposal, (6) the security assessment of the sharing or trading of any important data with, or the contracting of processing or the provision of any important data to an overseas recipient, (7) data security-related complaints received and their solutions, and (8) other data security situations as specified by the national cyberspace authority and competent or regulatory authorities." Therefore, once the Company is listed on Nasdaq and the Draft is enacted as proposed, it will be required to conduct such annual data security assessment. The Company may also be subject to the assessment requirements under the Measures for Security Assessment for Cross-border Data Transfer. According to the Measures, a data processor shall apply to the competent cyberspace department for security assessment and clearance of the outbound data under any of the following circumstances: (i)outbound transfer of important data by a data processor; (ii)outbound transfer of personal information by an operator of critical information infrastructure or a data processor which has processed more than one million users' personal data; (iii)outbound transfer of personal information by a data processor which has made outbound transfers of more than one hundred thousand users' personal information or more than ten thousand users' sensitive personal information cumulatively since January 1 of the previous year, or (iv)such other circumstances where ex-ante security assessment and evaluation of cross-border data transfer is required by the CAC. As confirmed by the Company, the Company has not received any notice from relevant department that identifies the Company as "critical information infrastructure operator" and it processes far less than 1 million personal information. It is also confirmed that from January 1, 2022, the outbound transfers made by the Company is no more than one hundred thousand users' personal information and no more than ten thousand users' sensitive personal information cumulatively. Therefore, if neither the data the Company transfers is deemed "important" nor the CAC requires such assessment, the Company will not be subject to the assessment requirements under the Measures.**

**According to our PRC counsel, Grandall Law Firm, no relevant laws or regulations in the PRC explicitly require us to seek filing from the China Securities Regulatory Commission for our overseas listing plan. As of the date of this prospectus, we and our PRC subsidiaries have not received any inquiry, notice, warning, or sanctions regarding our planned overseas listing from the China Securities Regulatory Commission or any other PRC governmental authorities. However, on February 17, 2023, the China Securities Regulatory Commission ("CSRC") released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which will come into effect on March 31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC. Since these statements and regulatory actions by the PRC government are newly published and official guidance and related implementation rules have not been issued, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange. As the Trial Measures have not come into effect as of the date of this prospectus, under the currently effective PRC laws and regulations, we are not required to make filings to the CSRC, or any other PRC governmental authorities for our overseas listing plan, nor have we received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities as of the date of this prospectus. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. If it is determined that we are subject to the Trial Measures for our listing on the Nasdaq, we may fail to obtain required approval, complete required filing or meet such requirements in a timely manner or at all, or completion could be rescinded. In other words, although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly; our ability to offer, or continue to offer, securities to investors would be potentially hindered and the value of our securities might significantly decline or be worthless, by existing or future laws and regulations relating to its business or industry or by intervene or interruption by PRC governmental authorities, if we or our subsidiaries (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, or (iv) any intervention or interruption by PRC governmental with little advance notice. See "*Risk Factors – Risks Related to Doing Business in China – The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our subsidiaries or the holding company were required to obtain approval or filing requirements in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors"* on page 19.**

**In addition, our Class A ordinary shares may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting Oversight Board (United States) (the "PCAOB") is unable to inspect our auditors for three consecutive years beginning in 2021**. **Our auditor prior to September 29, 2022, Friedman LLP ("Friedman"), had been inspected by the PCAOB on a regular basis in the audit period, and our new auditor, Marcum Asia CPAs LLP ("Marcum Asia"), has been inspected by the PCAOB on a regular basis, with the last inspection in 2020. Neither Friedman nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Class A ordinary shares is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our Class A ordinary shares and trading in our Class A ordinary Shares could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act") was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCAA by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the "MOF"), and the PCAOB signed a Statement of Protocol (the "Protocol"), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the U.S. Securities and Exchange Commission (the "SEC"), the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination .HFCAA. See "*Risk Factors – Risks Related to Doing Business in China – The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering"* on page 30.**

**The structure of cash flows within our organization, and as summary of the applicable regulations, is as follows:**

**1. Our equity structure is a direct holding structure, that is, the overseas entity to be listed in the U.S., NETCLASS TECHNOLOGY INC, or NetClass, directly controls Dragonsoft Group (China) Limited, or NetClass HK, and other domestic operating entities through Shanghai Zhima information Technology Co., Ltd., or WOFE, and and** **Shanghai Netwide Enterprise Management Co., Ltd., or Shanghai Netwide, and NetClass or NetClass China. See "Corporate Structure" on page 69 for additional details.**

**2. Within our direct holding structure, the cross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the PRC. After foreign investors' funds enter NetClass at the close of this offering, the funds can be directly transferred to NetClass HK, and then transferred to subordinate operating entities through the WFOE.**

**If the Company intends to distribute dividends, Net China will transfer the dividends to WOFE, which then will transfer the dividends to NetClass HK in accordance with the laws and regulations of the PRC, and then NetClass HK will transfer the dividends to NetClass, and the dividends will be distributed from NetClass to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions.**

**3. In the reporting periods presented in this prospectus, no transfers, dividends, or distributions have been made to date between the holding company and its subsidiaries, or to investors. For the foreseeable future, the Company intends to use the earnings for research and development, to develop new products and to expand its operations. As a result, we do not expect to pay any cash dividends. Also, as of the date of this prospectus, no cash generated from one subsidiary is used to fund another subsidiary's operations and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries. We have not installed any cash management policies that dictate the amount of such funding.**

**4. Our PRC subsidiaries' ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable as cash dividends. See "Regulations Relating to Dividend Distributions" on page 80 for more information.**

To address persistent capital outflows and the RMB's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries' dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments.

Following the completion of this offering, our issued and outstanding share capital will consist of Class A ordinary shares and Class B ordinary shares. Mr. Jianbiao Dai, our chairman of the board of directors and our chief executive officer, will beneficially own [**·**]% of our total issued and outstanding Class A ordinary shares and [**·**]% of our total issued and outstanding Class B ordinary shares, representing [**·**]% of our total voting power in our issued and outstanding Class A and Class B ordinary shares, assuming that the underwriters do not exercise their over-allotment option. As a result, we will be a "controlled company" as defined under the Nasdaq Stock Market Rules. As a "controlled company," we are permitted to elect not to comply with certain corporate governance requirements We do not plan to rely on these exemptions, but may elect to do so after completing this offering. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting, transfer and conversion rights. Each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to fifteen votes and is convertible into one Class A ordinary share. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

**We are an "emerging growth company" under the federal securities laws and will be subject to reduced public company reporting requirements. See "Prospectus Summary — Implications of Being an Emerging Growth Company" on page 16 for additional information.**

---

| | | | |
|:---|:---|:---|:---|
|  | **Per <br> Share** | **Total <br> Without<br> Over-<br> Allotment<br> Option** | **Total <br> With <br> Over-<br> Allotment<br> Option** |
| **Initial public offering price<sup>(1)</sup>** | $4.50 | $16875000 | $19406250 |
| **Underwriter's discounts and commissions<sup>(2)</sup>** | $0.34 | $1265625 | $1455469 |
| **Proceeds to our company before expenses<sup>(3)</sup>** | $4.16 | $15609375 | $17950781 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Initial public offering
 price per share is assumed as $4.50 per share, which is the midpoint of the range set forth on the cover page of this prospectus.

(2) We have agreed to pay the underwriters a discount equal to 7.5% of the gross proceeds of the offering.
 We will also pay to the representative of the underwriters non-accountable expenses equal to 1% of the gross proceeds of the offering.
 We have also agreed to reimburse certain accountable expenses to the representative, including the Representative's legal fees,
 background check expenses and all other expenses related to the offering not to exceed the total amount of $250,000. In addition,
 we have agreed to issue, upon closing of this offering, warrants to Revere Securities, as representative of the several underwriters
 (the "Representative"), exercisable as of the date of issuance and for a five-year period after the date of commencement
 of sales of Class A rrdinary shares in this offering, entitling the representative to purchase 5% of the total number of Class A
 ordinary shares sold in this offering (including any ordinary shares sold as a result of the exercise of the underwriters'
 over-allotment option) at a per share price equal to 120% of the public offering price (the "Representative's Warrants").
 The registration statement of which this prospectus is a part also covers the Representative's Warrants and the Class A ordinary
 shares issuable upon the exercise thereof. For a description of other terms of the Representative Warrants and a description of the
 other compensation to be received by the Underwriter, see "Underwriting" beginning on page 120.

(3) Excludes fees and expenses
 payable to the Underwriter. The total amount of Underwriter's expenses related to this offering is set forth in the section
 entitled "Underwriting."

We expect our total cash expenses for this offering to be approximately $1,334,331, exclusive of the above discounts and expenses payable to the underwriters. In addition, we will pay additional items of value in connection with this offering that are viewed by the Financial Industry Regulatory Authority, or FINRA, as underwriting compensation. These payments will further reduce proceeds available to us before expenses. See "Underwriting" beginning on page 120.

This offering is being conducted on a firm commitment basis. The underwriters have agreed to purchase and pay for all of the Class A ordinary shares offered by this prospectus if they purchase any Class A ordinary shares.

If we complete this offering, net proceeds will be delivered to us on the applicable closing date. We will not be able to use such proceeds in China, however, until we complete capital contribution procedures that require prior approval from each of the respective local counterparts of China's Ministry of Commerce, the State Administration for Industry and Commerce, and the State Administration of Foreign Exchange. See remittance procedures described at page 24 in the risk factor, "*We must remit the offering proceeds to PRC before they may be used to benefit our business in the PRC, and this process may take several months*.".

The Underwriter expects to deliver the Class A ordinary shares against payment as set forth under "Underwriting", on page 121.

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of** **these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

![](tm2224158d7_f1aimg11.jpg)

Prospectus dated , 2023.

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| **[PROSPECTUS SUMMARY](#sp1_001)** | [1](#sp1_001) |
| **[SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](#sp2_001)** | [19](#sp2_001) |
| **[RISK FACTORS](#Kalai_010)** | [19](#Kalai_010) |
| **[USE OF PROCEEDS](#f1s4_001)** | [50](#f1s4_001) |
| **[DIVIDEND POLICY](#f1s4_002)** | [51](#f1s4_002) |
| **[CAPITALIZATION](#f1s4_003)** | [51](#f1s4_003) |
| **[DILUTION](#f1s4_004)** | [52](#f1s4_004) |
| **[MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#f1s4_005)** | [54](#f1s4_005) |
| **[BUSINESS](#f1s5_001)** | [60](#f1s5_001) |
| **[CHINESE LAWS AND REGULATIONS](#f1s6_001)** | [78](#f1s6_001) |
| **[MANAGEMENT](#Kalai_012)** | [89](#Kalai_012) |
| **[EXECUTIVE COMPENSATION](#Kalai_013)** | [93](#Kalai_013) |
| **[PRINCIPAL SHAREHOLDERS](#Kalai_014)** | [94](#Kalai_014) |
| **[RELATED PARTY TRANSACTIONS](#Kalai_015)** | [95](#Kalai_015) |
| **[DESCRIPTION OF SHARE CAPITAL](#Kalai_016)** | [97](#Kalai_016) |
| **[SHARES ELIGIBLE FOR FUTURE SALE](#sp8_001)** | [110](#sp8_001) |
| **[TAXATION](#sp8_002)** | [112](#sp8_002) |
| **[ENFORCEABILITY OF CIVIL LIABILITIES](#sp9_001)** | [118](#sp9_001) |
| **[UNDERWRITING](#sp9_002)** | [120](#sp9_002) |
| **[EXPENSES RELATING TO THIS OFFERING](#sp9_003)** | [129](#sp9_003) |
| **[LEGAL MATTERS](#sp9_004)** | [129](#sp9_004) |
| **[EXPERTS](#sp9_005)** | [129](#sp9_005) |
| **[WHERE YOU CAN FIND ADDITIONAL INFORMATION](#sp9_006)** | [129](#sp9_006) |
| **[INDEX TO FINANCIAL STATEMENTS](#sp9_007)** | [F-1](#sp9_007) |

---

Neither we nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, Class A ordinary share only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our Class A ordinary shares. Our business, financial condition, results of operations, and prospects may have changed since that date.

i

**PROSPECTUS SUMMARY**

*This summary highlights information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus carefully before making an investment in our Class A ordinary shares. You should carefully consider, among other things, our consolidated financial statements and the related notes and the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.*

**Prospectus Conventions**

&nbsp;&nbsp;&nbsp;&nbsp;• **"China" or the "PRC" refer to the People's Republic of China, excluding Taiwan for the purposes of this prospectus only;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"NetClass" or the "Company" refers to NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company incorporated on January 4, 2022;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"NetClass China" refers to Shanghai NetClass Information Technology Co., Ltd., incorporated on May 13, 2003 under the laws of the People's Republic of China. WFOE (defined below) owns 21.46% equity interest and Shanghai Netwide (defined below) owns 78.54% equity interest;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"NetClass Education" refers to Shanghai Chuangyuan Education Technology Co., Ltd., a wholly-owned subsidiary of NetClass China incorporated on April 14, 2004 under the laws of the People's Republic of China;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"** **NetClass HK " refers to Dragonsoft Group (China) Limited, a wholly-owned subsidiary of NetClass incorporated on October 2, 2009 under the laws of Hong Kong;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"NetClass HR" refers to Shanghai NetClass Human Resource Co., Ltd., a wholly-owned subsidiary of NetClass China incorporated on November 9, 2016 under the laws of the People's Republic of China;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"NetClass Management" refers to Shanghai NetClass Enterprise Management Co., Ltd., a wholly-owned subsidiary of NetClass China incorporated on August 29, 2016 under the laws of the People's Republic of China;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"NetClass Training " refers to NetClass Training (Shanghai) Co., Ltd., a wholly-owned subsidiary of NetClass China incorporated on August 9, 2016 under the laws of the People's Republic of China;** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"Shanghai Netwide" refers to Shanghai Netwide Enterprise Management Co., Ltd., a PR wholly-owned subsidiary of WFOE (defined below), incorporated on April 27, 2019 under the laws of the People's Republic of China; and** 

&nbsp;&nbsp;&nbsp;&nbsp;• **"** **WFOE " refers to Shanghai Zhima information Technology Co., Ltd. a wholly foreign-owned subsidiary of NetClass HK incorporated on May 5, 2019 under the laws of the People's Republic of China.** 

This prospectus contains translations of certain RMB amounts into US dollar amounts at specified rates solely for the convenience of the reader. All reference to "US dollars", "USD", "US$" or "$" are to United States dollars. The relevant exchange rates are listed below:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30,**<br> **2022** | **September 30,**<br> **2022** | **September 30,**<br> **2021** | **September 30,**<br> **2021** |
| Balance sheet items, except for equity accounts | US$1=RMB | 7.1135 | US$1=RMB | 6.4434 |
| Items in the statements of income and cash flows | US$1=RMB | 6.5532 | US$1=RMB | 6.5072 |

---

We have relied on statistics provided by a variety of publicly-available sources regarding China's expectations of growth. We did not directly or indirectly sponsor or participate in the publication of such materials, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus. We have sought to provide current information in this prospectus and believe that the statistics provided in this prospectus remain up-to-date and reliable, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus.

**Overview**

NETCLASS TECHNOLOGY INC was incorporated on January 4, 2022 under the laws of the Cayman Islands. We conduct business primarily through our wholly-owned subsidiaries, NetClass China, in the People's Republic of China, or the PRC. Our primary office is located in Shanghai, where we serve a large customer base throughout PRC. We are a B2B (Business-to-Business) smart education specialist, providing IT solutions to schools, training institutions, corporations, government agencies (mainly the Shanghai Municipal Education Commission), and other institutions or corporate customers. We offer SaaS subscription services and application software development. Our solutions modules include teaching management, campus management, online teaching, online examination, epidemic prevention and control, EDC (Education Chain) blockchain system, and lecturer evaluation services, etc. Our mission is to provide high-quality and reliable products to our customers to maintain sustainable business growth over the long term.

We believe we are one of the leading online education brands in China's online education software industry. We have advantages in customized design, easy-to-use interface, knowledge of the industry and market, and our experienced management. In addition, we believe we are the pioneer in applying blockchain technology to online education and related area. For more details, see "– Our Products and Services – EDC (Education Credit) blockchain system." Our B2B business revenues were $9,257,607 and $11,557,513 during the fiscal years ended September 30, 2022 and 2021, respectively.

**Corporate Structure**

Below is a chart illustrating our current corporate structure:

![](tm2224158d7_f1aimg12.jpg)

**Products and Services**

For the fiscal year ended September 30, 2022, SaaS subscription services and application development accounted for 63.5% and 36.5% of total revenues, respectively. For the fiscal year ended September 30, 2021, SaaS subscription services and application development accounted for 65.6% and 34.4% of total revenues, respectively.

**Competitive Strengths**

We are committed to offering our customers product diversity, quality, and reliability. We offer a diversified portfolio of products to satisfy our customers' specialized needs. We believe we have several competitive strengths that will enable us to maintain and increase our market position in the industry. Our competitive strengths include:

●  ***Customized and Secure Services to Customers.*** We have a team of professionals experienced in software design and the online education industry. NetClass leverages its competitive edge by the user-friendly designing and the quick response customized system. The R&D and service teams have 7+ years of experience with online training systems and they know exactly what the customers needs.

●  ***Unique technology innovation and application capability***  *.*** We focus on research, development, and innovation. The company owns 4 patents and 67 software copyrights in related technologies, and has been rated as a high-tech enterprise in Shanghai. In 2020, the company's technical team won the Excellent Solution Award of Shanghai smart city construction.

●  ***Diversified market and expanding territory.*** Our customers are involved in various industries, including education, finance, medicine, information technology, culture and arts. We believe the diversified customer base and product line can mitigate the impact of economic and industry cycles. Currently, most of our customers are in Shanghai. We are developing the Nanjing market, and we also plan to expand our business and promote our products and services throughout China.

●  ***Lower Cost Advantage.*** Compared to traditional education, we store the courseware and software codes we developed for customers and our research in our internal database for future reference, which significantly saves our time and monetary costs.

●  ***Experienced Management Team.*** Our management team has experience in the education and information technology industries. Additionally, we utilize a skilled and experienced R&D team and technical service team.

**Business Strategies**

We hope to be a go-to brand and promoter of the mobile lifestyle by offering high-quality power solution products. Our primary objective is to create value by sustaining growth in earnings and cash flows from operating activities over various economic cycles. To achieve this objective, we strive to improve our cost structure, provide high-quality service and products, expand our product offerings and increase our market share. We do the following to accomplish our objective:

●  ***Expanding Market Share*** 

●  ***Optimizing Our Products*** 

●  ***Growing User Base and Improve Customer Loyalty*** 

●  ***Focusing on efficient operations and cost management*** 

●  ***Maintain good relationships with suppliers*** 

**Coronavirus (COVID-19) Update**

In 2020, an ongoing outbreak of a novel strain of coronavirus (COVID-19) was first identified in China and has since spread rapidly globally. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities globally for the past few months. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Furthermore, the effects of a subvariant of the Omicron variant of COVID-19, which may spread faster than the original Omicron variant, as well as the effects of any new variants and subvariants which may develop, including any actions taken by governments, may have the effect of increasing the already-existing supply chain problems or slowing our sales. Moreover, China's policy of effecting closures to avoid infections, including the recent lockdown in many provinces and municipalities in China, could affect our results of operations.

Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of our business operations and workforce are in China, we believe there is a risk that our business, operations, and financial condition will be adversely affected. Potential impact to our results of operations will depend on future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or mitigate its impact, almost all of which are beyond our control.

The impact of COVID-19 on our business, financial condition, and results of operations include, but is not limited to, the following:

● The Coronavirus (COVID-19) will bring about an economic downturn, which will cause our customers to cut their budgets for information system and online training, and will also affect customers' ability to pay, bringing risks to the related business of our company.

● Due to the containment measures adopted by the government in response to COVID-19, the obstacles that these measures will bring to transportation, logistics, personnel communications, etc., will limit our service delivery capabilities, thereby bringing about negative impact on our service delivering, especially to the delivering of IT solutions services.

● The global stock markets have experienced and may continue to experience a significant decline from the COVID-19 outbreak. The price of our Class A ordinary shares may decline significantly after the consummation of this offering, in which case you may lose part or all of your investment.

Because of the uncertainty surrounding the COVID-19 outbreak, the business disruption and the financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated at this time. For a detailed description of the risks associated with the novel coronavirus, see "Risk Factors—Risks Related to Our Business and Industry—Our business could be materially harmed by the ongoing coronavirus (COVID-19) pandemic."

In response to COVID-19, we have timely implemented corresponding and comprehensive measures as follows:

The COVID-19 pandemic has caused disruptions to our operations starting in December 2019. During the first quarter of 2020, our operations were closed in February due to China government mandates and we moved quickly to transition our colleague base to a fully remote working environment in all our locations. At the beginning of March 2020, substantially all of our employees were back to work in our offices. The ongoing COVID-19 pandemic not only adversely impacted our operations but business of our customers. We experienced delayed customer payments and rescheduled customer orders in first half of 2020, which adversely impacts the Company's results of operations, cash flows and financial position. Since the COVID-19 pandemic has been gradually contained in China since May 2020, our revenue and gross margin for the year ended September 30, 2020 and 2021 has not been adversely affected. From 2020 to 2021, a COVID-19 vaccination program had been greatly promoted around the globe. However, several types of COVID-19 variants emerged in different parts of the world. The Company's sales continued to be affected by government actions relating to COVID-19 and COVID-19 variants. In March 2022, a new COVID-19 subvariant (Omicron) outbreak hit China, and spread faster and more easily than previous viruses. As a result, a new round of lockdown, quarantines or travel restrictions has been imposed to date upon different provinces or cities in China by the relevant local government authorities. We temporarily closed our Shanghai office and suspended our offline marketing activities since April 1, 2022 as required by the local authorities in Shanghai, and had our employees located in Shanghai work remotely. All marketing activities in Shanghai were accordingly changed to online meetings. Starting from June 1, 2022, we reopened our Shanghai office and resumed our offline marketing activities. On December 7, 2022, China announced 10 new rules that constitute a relaxation of almost all of its stringent COVID-19 pandemic control measures. Shortly after their announcement, additional mobility restrictions issued by local governments were also scrapped. While such measures effectively reopened business within China, COVID-19's continued existence may have significant and still not well-understood impacts on our industry.

The extent of the impact on our future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. The Company continues taking actions to help mitigate, as best we can, the impact of the COVID-19 pandemic on the health and well-being of our employees, the communities in which we operate and our partners, as well as the impact on our operations and business as a whole.

**Transfers of Cash to and from Our Subsidiaries**

NETCLASS TECHNOLOGY INC is a holding company with no operations of its own. We conduct our operations in China through our subsidiaries in China. We may rely on dividends to be paid by our PRC subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

NetClass is permitted under the Cayman Islands law to provide funding to our subsidiaries in Hong Kong and PRC through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements. NetClass HK is also permitted under the laws of Hong Kong to provide funding to NetClass through dividend distribution without restrictions on the amount of the funds. As of the date of this prospectus, there has been no distribution of dividends or assets among the holding company or the subsidiaries.

We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

Subject to the Companies Act (As Revised) of the Cayman Islands (the "Cayman Islands Companies Act") and our amended and restated memorandum and articles of association, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business immediately following the date on which the distribution or dividend is paid and our board of directors may declare and pay out of the funds of our company lawfully available for such purpose a distribution at a time and of an amount they think fit.

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. The laws and regulations of the PRC do not currently have any material impact on transfer of cash from NetClass to NetClass HK or from NetClass HK to NetClass. There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of HK dollar into foreign currencies and the remittance of currencies out of Hong Kong or across borders and to U.S investors.

Current PRC regulations permit our PRC subsidiaries to pay dividends to NetClass HK only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

To address persistent capital outflows and the RMB's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries' dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations, we may be unable to pay dividends on our Class A ordinary shares.

Cash dividends, if any, on our Class A ordinary shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.

In order for us to pay dividends to our shareholders, we will rely on payments made from our PRC subsidiaries, i.e. NetClass Education, NetClass Management and NetClass HR to WFOE, from WFOE to NetClass HK, from NetClass HK to NetClass. Certain payments from our PRC subsidiaries to NetClass HK are subject to PRC taxes, including business taxes and VAT. As of the date of this prospectus, our PRC subsidiaries have not made any transfers or distributions.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, NetClass HK. As of the date of this prospectus, WFOE currently does not have any plan to declare and pay dividends to NetClass HK and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. NetClass HK intends to apply for the tax resident certificate when WFOE plans to declare and pay dividends to NetClass HK. When WFOE plans to declare and pay dividends to NetClass HK and when we intend to apply for the tax resident certificate from the relevant Hong Kong tax authority, we plan to inform the investors through SEC filings, such as a current report on Form 6-K, prior to such actions. See "Risk Factors - *Risks Related to Our Corporate* Structure - *We are a holding company, and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Class A ordinary shares*" on page 44.

As of the date of this prospectus, no transfers, dividends, or distributions have been made to date between the holding company and its subsidiaries, or to investors. The Company does not expect to pay any cash dividends in the foreseeable future as it intends to use the earnings for research and development, to develop new products and to expand its operations.

**PRC Regulatory Permissions or Approvals**

We are not operating in an industry that prohibits or limits foreign investment. As a result, as advised by our PRC counsel, Grandall Law Firm, other than those requisite for a domestic company in China to engage in the businesses similar to ours, we are not required to obtain any permission from Chinese authorities, including the CSRC, Cyberspace Administration of China or any other governmental agency that is required to approve our operations. However, if we do not receive or maintain the approvals, or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may be subject to investigations by competent regulators, fines or penalties, ordered to suspend our relevant operations and rectify any non-compliance, prohibited from engaging in relevant business or conducting any offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

As of the date of this prospectus, we and our PRC subsidiaries have received from PRC authorities all requisite licenses, permissions or approvals needed to engage in the businesses currently conducted in China, and no permission or approval has been denied. The following table provides details on the permissions and approvals received by our PRC subsidiaries.

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| | | | |
|:---|:---|:---|:---|
| **Company** | **Permission/Approval** | **Issuing Authority** | **Validity** |
| Shanghai Zhima information Technology Co., Ltd. | Business License | Shanghai Municipal Administration for Market Regulation | Until April 29, 2029 |
| Shanghai Netwide Enterprise Management Co., Ltd. | Business License | Shanghai Municipal Administration for Market Regulation | Long-Term |
| Shanghai NetClass Information Technology Co., Ltd. | Business License | Shanghai Municipal Administration for Market Regulation | Long-Term |
| Shanghai Chuangyuan Education Technology Co., Ltd. | Business License | Shanghai Municipal Administration for Market Regulation | Until April 13, 2024 |
| Shanghai NetClass Human Resource Co., Ltd. | Business License | Shanghai Municipal Administration for Market Regulation | Until November 8, 2036 |
| Shanghai NetClass Enterprise Management Co., Ltd. | Business License | Shanghai Municipal Administration for Market Regulation | Until August 28, 2046 |
| NetClass Training (Shanghai) Co., Ltd. | Business License | Shanghai Municipal Administration for Market Regulation | Until August 18, 2036 |

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On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which will come into effect on March 31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC. On the same day, the CSRC held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges, such as completion of registration in the market of the United States, but have not completed the overseas listing; and (2) domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges on or prior to the effective date of the Trial Measures, may reasonably arrange the timing for submitting their filing applications with the CSRC, and shall complete the filing before completion of their overseas offering and listing.

As the Trial Measures have not come into effect as of the date of this prospectus, under the currently effective PRC laws and regulations, we are not required to make filings with the CSRC, or seek approval from any other PRC governmental authorities for our overseas listing plan, nor have we received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities as of the date of this prospectus. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. If it is determined that we are subject to the Trial Measures for our listing on the Nasdaq, we may fail to obtain required approval, complete required filing or meet such requirements in a timely manner or at all, or completion could be rescinded. If we do not receive or maintain the permissions and approvals, or we inadvertently conclude that such permissions and approvals are not required, or applicable laws, regulations, or interpretations change such that we are required to obtain permission and approval in the future, we may be subject to investigations by competent regulators, fines or penalties, ordered to suspend our relevant operations and rectify any non-compliance, prohibited from engaging in relevant business or conducting any offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See "*Risk Factors – Risks Related to Doing Business in China – The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our subsidiaries or the holding company were required to obtain approval or filing requirements in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors"* on page 19.

**Risk Factor Summary**

Investing in our Class A ordinary shares involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in our Class A ordinary shares. Below please find a summary of the significant risks we face, organized under relevant headings. These risks are discussed more fully in the section titled "Risk factors" on page 19.

***Risk of new regulations, significant new government oversight in China.*** As a business operating in China, we are subject to the laws and regulations of the PRC, which can change quickly with little advance notice. The PRC government has the power to exercise significant oversight and discretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to us or our shareholders. New regulations and policies, which may be adopted with little notice, could result in a material change in our operations and/or the value of our Class A ordinary shares. See "*Risk Factors – Risks Related to Doing Business in China – The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, making it more difficult for us to pursue growth through acquisitions in China* on page 27 and *Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us*" on page 31.

***Risk of additional future government oversight and control over foreign offerings of China-based companies.*** Recent statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China based issuers. Although our business is not of the type currently subject to government review in China prior to a foreign securities offering, any future action by the PRC government expanding the categories of industries and companies whose foreign securities offerings are subject to review by the PRC government could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless. See "*Risk Factors – Risks Related to Doing Business in China – The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, making it more difficult for us to pursue growth through acquisitions in China* on page 27 and *Substantial uncertainties exist with respect to the enactment timetable and final content of draft China Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations*" on page 23.

***Uncertainties with respect to the PRC legal system***. The PRC has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in the PRC. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. See "*Risk Factors – Risks Related to Doing Business in China **–** Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us*" on page 31.

***Permissions from and/or filing requirement with the PRC Authorities to Issue Our Class A Ordinary Shares to Foreign Investors***. The Chinese government exerts substantial influence over, and can intervene at any time in, the manner in which we must conduct our business activities and result in a material change in our operations or the value of the Class A ordinary shares we are registering for sale. As of the date of this prospectus, we and our PRC subsidiaries, (1) are not required to obtain permissions from any PRC authorities to operate or issue our ordinary to foreign investors, (2) are not subject to permission requirements from the China Securities Regulatory Commission (the "CSRC"), the Cyberspace Administration of China (the "CAC") or any other entity that is required to approve of our PRC subsidiaries' operations, and (3) have not received or were denied such permissions by any PRC authorities. Nevertheless, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Given the current PRC regulatory environment, it is uncertain when and whether we or our PRC subsidiaries, will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings, including this offering. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or other PRC governmental authorities. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities.

In addition, on February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which will come into effect on March 31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC. On the same day, the CSRC held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges, such as completion of registration in the market of the United States, but have not completed the overseas listing; and (2) domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges on or prior to the effective date of the Trial Measures, may reasonably arrange the timing for submitting their filing applications with the CSRC, and shall complete the filing before completion of their overseas offering and listing.

We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of filings or approvals, including on a retrospective basis, from the CSRC, the CAC or other PRC authorities with respect to this offering. As the Trial Measures have not come into effect as of the date of this prospectus, under the currently effective PRC laws and regulations, we are not required to make filings with the CSRC, or seek approval from any other PRC governmental authorities for our overseas listing plan, nor have we received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities as of the date of this prospectus. However, if any filings, approval, review or other procedure is in fact required, we are not able to guarantee that we will obtain such filings, approval or complete such review or other procedure timely or at all. For any approval that we may be able to obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and offerings relating to our securities. However, as the Trial Measures were newly published and haven't come into effect, if we are required to submit to the CRSC and complete the filing procedure of our overseas public offering and listing, we cannot be sure that we will be able to complete such filings in a timely manner. Any failure or perceived failure by us to comply with such filing requirements under the Trial Measures may result in forced corrections, warnings and fines against us, could materially hinder our ability to offer or continue to offer our securities and could cause the value of our securities to significantly decline or become worthless.See "*Risk Factors – Risks Related to Doing Business in China – The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our subsidiaries or the holding company were required to obtain approval or filing requirements in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors on* page 19. See also "PRC Regulation – Regulations Relating to Overseas Listings" on page 80*.*

***Risk of adverse Changes in China's economic, political or social conditions or government policies.*** Substantially all of our assets and operations are located in the PRC. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in the PRC generally. The Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures, or other economic, political, or social developments in China may cause decreased economic activity in the PRC, which may adversely affect our business, operating results and/or the value of the securities we are registering for sale; or may significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See "*Risk Factors – Risks Related to Doing Business in China – Changes in China's economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations*" on page 21.

***Uncertainties with respect to the PRC legal system.*** The PRC has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in the PRC. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect. See "*Risk Factors – Risks Related to Doing Business in China – Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us*" on page 31*.***

***Risks related to service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the prospectus based on foreign laws.*** We conduct substantially all of our operations in China, and substantially all of our assets are located in China. In addition, our current officers reside within China and are PRC nationals. As a result, it may be difficult for our shareholders to effect service of process upon us or those persons inside the PRC. In addition, the PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions. Therefore, recognition and enforcement in the PRC of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. See "*Risk Factors – Risks Related to Doing Business in China – Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us*" on page 31 and "*You may have difficulty enforcing judgments obtained against us*" on page 42*.*

***Risks related to PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion.*** Any funds we transfer to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in China. According to the relevant PRC regulations on foreign-invested enterprises, or FIEs, in China, capital contributions to our PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce, or MOFCOM or its local branches and registration with a local bank authorized by the State Administration of Foreign Exchange, or SAFE. In addition, any medium or long-term loan to be provided by us to our PRC operating subsidiaries, must be registered with certain authorities. If we fail to complete such registrations, our ability to use the proceeds of this offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

Further, regulations on the control of currency conversions, including SAFE Circular 19 and SAFE Circular 16, may significantly limit our ability to use Renminbi converted from the net proceeds of this offering to fund our PRC operating subsidiaries, to invest in or acquire any other PRC companies through our PRC Subsidiary, which may adversely affect our business, financial condition and results of operations. See "*Risk Factors – Risks Related to Doing Business in China – Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment*" on page 26.

***Risk of fluctuations in exchange rates.*** The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how long such appreciation of RMB against the U.S. dollar may last and when and how the relationship between the RMB and the U.S. dollar may change again. All of our revenues and substantially all of our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the common stock in U.S. dollars. See "*Risk Factors – Risks Related to Doing Business in China – Fluctuations in exchange rates could have a material adverse effect on our results of operations and the price of our Class A ordinary share**s***" on page 25.

***Risks related to governmental control of currency conversion.*** The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, we primarily rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the Class A ordinary shares. See "*Risk Factors – Risks Related to Doing Business in China – The PRC government may impose restrictions on our ability to transfer cash out of China and to U.S. investors*" on page 22.

***Risk that certain PRC regulations may make it more difficult for us to pursue growth through acquisitions.*** Among other things, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ("M&A Rules") and Anti-Monopoly Law of the People's Republic of China promulgated by the Standing Committee of the NPC which became effective in 2008 ("Anti-Monopoly Law"), established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from the MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. See "*Risk Factors – Risks Related to Doing Business in China – The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, making it more difficult for us to pursue growth through acquisitions in China*" on page 27.

***Risks related to PRC on the establishment of offshore special purpose companies by PRC residents.*** Current PRC regulations require PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. Some of our shareholders that we are aware of are subject to SAFE regulations, and we expect all of these shareholders will have completed all necessary registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. We cannot assure you, however, that all of these shareholders may continue to make required filings or updates in a timely manner, or at all. We can provide no assurance that we are or will in the future continue to be informed of identities of all PRC residents holding direct or indirect interest in our company. Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiaries' ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected. See "*Risk Factors – Risks Related to Doing Business in China – If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders*" on page 27 and "*The PRC government may impose restrictions on our ability to transfer cash out of China and to U.S. investors*" on page 22.

***Risks related to PRC regulations regarding registration requirements for employee stock incentive plans.*** Under current PRC law, PRC citizens and non-PRC citizens who reside in China for a continuous period of no less than one year who participate in any stock incentive plan of an overseas publicly listed company offered to the director, supervisor, senior management and other employees of, and any individual who has labor relationship with its domestic affiliated entities are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. Failure to complete the SAFE registrations for our employee incentive plans after our listing may subject our PRC resident personnel to fines and legal sanctions, and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law. See "*Risk Factors – Risks Related to Doing Business in China – Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions*" on page 33.

***Risks related to inability of U.S. regulatory bodies to conduct investigations or inspections of our operations in China.*** Any disclosure of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply with China's state secrecy laws, which broadly define the scope of "state secrets" to include matters involving economic interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by any of these regulators may be limited or prohibited. See "*Risk Factors – Risks Related to Doing Business in China – U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China*" on page 33.

***Risks related to potential classification as a PRC resident enterprise for PRC income tax purposes.*** Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with its "*de facto* management body" within the PRC is considered a "resident enterprise" and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules define the term "*de facto* management body" as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise. We believe our company is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "*de facto* management body." If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income tax purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we would be required to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders (including the common stockholders) may be subject to PRC tax on gains realized on the sale or other disposition of the common stock, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders (including the common stockholders) and any gain realized on the transfer of the Class A or Class B ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). See "*Risk Factors – Risks Related to Doing Business in China – If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders*" on page 27.

***Risks related to legal uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.*** Recent PRC regulations have extended PRC tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a foreign intermediate holding company. Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an "Indirect Transfer", the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who pays for the transfer is obligated to withhold the applicable taxes currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. Our company may be subject to filing obligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions. See "*Risk Factors – Risks Related to Doing Business in China – Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future*" on page 28.

***Risks related to a future determination that the Public Company Accounting Oversight Board (the "PCAOB") is unable to inspect or investigate our auditor completely.*** The audit report included in this prospectus was issued by Marcum Asia CPAs LLP, a U.S.-based accounting firm that is registered with the PCAOB and can be inspected by the PCAOB. The PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities. If it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors' audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. In addition, under the HFCAA, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could result in our Class A ordinary shares being delisted. In addition, our Class A ordinary shares may be prohibited from trading on a national exchange or over-the-counter under the HFCAA, if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021. Our auditor prior to September 29, 2022, Friedman, had been inspected by the PCAOB on a regular basis in the audit period, and our new auditor, Marcum Asia, has been inspected by the PCAOB on a regular basis, with the last inspection in 2020. Neither Friedman nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Class A ordinary shares is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our Class A ordinary shares and trading in our Class A ordinary Shares could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, the legislation entitled the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCAA by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination. See "*Risk Factors – Risks Related to Doing Business in China – If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, share price and reputation* on page 30 and *The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering*" on page 30.

***Risks related to transferring cash out of China or Hong Kong*** **.** The PRC government may impose impediments of transferring cash out of China or Hong Kong and that there can be no assurance that the PRC government will not intervene or impose restrictions on our ability to transfer or distribute cash within our organization or to foreign investors. See "*Risk Factors – Risks Related to Doing Business in China – The PRC government may impose restrictions on our ability to transfer cash out of China and to U.S. investors*" on page 22.

***Risks related to market adoption of online learning solutions.*** Our future success will depend in part on the growth, if any, in the demand for online learning solutions. While the COVID-19 pandemic has accelerated the market for online learning solutions, it is still less mature than the market for in-person learning and training, which many businesses currently utilize, and these businesses may be slow or unwilling to migrate from these legacy approaches. If the market for online learning solutions does not grow as we expect or our platform does not achieve widespread adoption, it could result in reduced customer spending, learner and partner attrition, and decreased revenue, any of which would adversely affect our business and results of operations. See "*Risk Factors – Risks Related to Our Business and Industry - Market adoption of online learning solutions is relatively new and may not grow as we expect, which may harm our business and results of operations"* on page 33.

***Risk related to consumer concentration.*** If any of our top 6 customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services or we could lose the customer. Any such development could have an adverse effect on our margins and financial position and would negatively affect our revenues and results of operations and/or trading price of our Class A ordinary shares. See "*Risk Factors – Risks Related to Our Business and Industry - We traditionally have had substantial customer concentration, with a limited number of customers accounting for a substantial portion of our revenues*" on page 34.

***Risk of Failure to effectively expand our sales and marketing capabilities.*** Our ability to broaden our customer base, particularly our Enterprise customer base, and achieve broader market acceptance of our platform, will depend to a significant extent on the ability of our sales and marketing organizations to work together to increase our sales pipeline and cultivate customer and partner relationships to drive revenue growth. The investments we make in our sales and marketing organization will occur in advance of experiencing benefits from such investments, making it difficult to determine in a timely manner if we are efficiently allocating our resources in these areas. See "*Risk Factors – Risks Related to Our Business and Industry - Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform*" on page 34.

***Risks of being unable to continue to attract course participants to enroll in our courses, or to charge our course participants competitive but profitable fees.*** The continued success and growth of our business depend primarily on offering online professional education software and related courseware. We may not be able to develop and offer additional software and related courseware on commercially reasonable terms and in a timely manner, or at all, to keep pace with changes in market requirements.. See "*Risk Factors – Risks Related to Our Business and Industry - If we are unable to continue to offer education software and related courseware, our revenues may decline and we may not be able to maintain profitability*" on page 34.

***Risks of failure of information security and privacy concerns.*** The internet industry is facing significant challenges regarding information security and privacy, including the storage, transmission and sharing of confidential information. If we are unable to protect our systems, hence the information stored in our systems, from unauthorized access, use, disclosure, disruption, modification or destruction, such problems or security breaches could cause loss or give rise to our liabilities to the owners of confidential information, such as our course participants; subject us to penalties imposed by administrative authorities; and disrupt our operations. In addition, complying with various laws and regulations could cause us to incur substantial costs or require us to change our business practices, including our data practices, in a manner adverse to our business. See "*Risk Factors – Risks Related to Our Business and Industry - Failure of information security and privacy concerns could subject us to penalties, damage our reputation and brand, and harm our business and results of operations*" on page 35.

***Risks of concerns about the security of our transaction systems and confidentiality of information on the Internet.*** We cannot assure you, however, that our current security measures will be adequate or sufficient to prevent any theft or misuse of personal data of our course participants. Further, security breaches could expose us to litigation and possible liability for failing to secure confidential customer information, and could harm our reputation and ability to attract or retain course participants. In addition, we do not have any cyber security insurance coverage for our operations, and any material cyber attack on our information technology systems and our online education websites could expose us to substantial costs and losses. See "*Risk Factors – Risks Related to Our Business and Industry - Concerns about the security of our transaction systems and confidentiality of information on the Internet may reduce use of our services and impede our growth*" on page 35.

***Risks of failure to develop and introduce new courses, services and products that meet our target course participants' expectations, or adopt new technologies important to our business.*** If we fail to anticipate and adapt to such technological changes, our market share and our business development could suffer, which in turn could have a material and adverse effect on our financial condition and results of operations. If we are unsuccessful in addressing any of the risks relating to new courses, services and products, our business may be materially and adversely affected. See "*Risk Factors – Risks Related to Our Business and Industry - If we fail to develop and introduce new courseware, services and products that meet our target course participants' expectations, or adopt new technologies important to our business, our competitive position and ability to generate revenues may be materially and adversely affected*" on page 36.

***Risks of losing market share and our profitability may be materially and adversely affected*** **.** We may face increased competition from international competitors that cooperate with local businesses to provide services based on the international competitors' technology and experience developed in their home markets. Our failure to compete effectively could erode our market share, result in fewer purchase of our software and related courseware, or lead to price reductions or increased spending for marketing and promotion of our software and related courseware, any of which may materially and adversely affect our profitability. See "*Risk Factors – Risks Related to Our Business and Industry - We may lose market share and our profitability may be materially and adversely affected, if we fail to compete effectively with our present and future competitors or to adjust effectively to changing market conditions and trends*" on page 36.

***Risk of failure to attract and retain qualified personnel and experienced senior management.*** Our continuing success is dependent, to a large extent, on our ability to attract and retain qualified personnel and experienced senior management. If one or more of our senior management team members are unable or unwilling to continue to work for us, we may not be able to replace them within a reasonable period of time or at all, and our business may be severely disrupted, our financial condition and results of operations may be materially and adversely affected and we may incur additional expenses in recruiting and training additional personnel. See "*Risk Factors – Risks Related to Our Business and Industry - Failure to attract and retain qualified personnel and experienced senior management could disrupt our operations and adversely affect our business and competitiveness*" on page 36.

***Risk of our internal controls.*** We cannot be certain that these measures will successfully remediate the material weakness or that other material weaknesses will not be discovered in the future. If our efforts are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our Class A ordinary shares to decline. See "*Risk Factors – Risks Related to Our Business and Industry - We have identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.*" on page 41.

***Risk of our ability to pay dividends may be limited.*** We may rely on dividends to be paid by our PRC subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. Restriction on currency exchange may also limit the ability of any one of our PRC subsidiaries to use its Renminbi revenues to pay dividends to us. See "*Risk Factors – Risks Related to Our Business and Industry – We are a holding company, and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Class A ordinary shares*" on page 44.

***Risks related to our dual class share structure.*** *The dual class structure of our ordinary shares has the effect of concentrating voting control with those ordinary shareholders who held our Class B ordinary shares. See "Risk Factors – Risks Related to This Offering and Our Class A Ordinary Shares –The dual class voting structure will concentrate a majority of voting power in our Chief Executive Officer, who will beneficially own [***·***]% of the aggregate power of our total issued and outstanding share capital following the completion of this offering and will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares may view as beneficial"* on page 44.

***Nasdaq listing.*** Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and insiders will hold a large portion of the company's listed securities. See "*Risk Factors – Risks Related to This Offering and Our Class A Ordinary Shares – Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and insiders will hold a large portion of the company's listed securities*" on page 47.

***Usages of the funds.*** Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Class A ordinary shares. See "*Risk Factors – Risks Related to This Offering and Our Class A Ordinary Shares – We have broad discretion in the use of the net proceeds from our public offering and may not use them effectively*" on page 48.

***Stock price volatility.*** Our Class A ordinary shares may experience extreme stock price run-ups and rapid price declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, which may make it difficult for prospective investors to assess the rapidly changing value of our Class A ordinary shares. See "*Risk Factors – Risks Related to This Offering and Our Class A Ordinary Shares – Certain recent initial public offerings of companies with public floats comparable to the anticipated public float of the Company have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Class A ordinary shares"* on page 48.

 

***No established public market for our shares prior to this offering.*** Prior to this initial public offering, there has been no public market for our Class A or Class B ordinary shares. Our Class B ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system. If an active trading market for the Class A ordinary shares does not develop after this offering, the market price and liquidity of the Class A ordinary shares will be materially and adversely affected. See "*Risk Factors –Risks Related to this Offering and our Class A Ordinary Shares – There may not be an active, liquid trading market for our Class A ordinary shares*" on page 49*.*

Neither we nor any of our subsidiaries are currently required to obtain approval from Chinese authorities to list on U.S. exchanges or to operate and issue securities to foreign investors. Furthermore, neither we nor any of our subsidiaries are covered by permissions requirements from any other entity that is required to approve our subsidiaries' operations. However, if our subsidiaries or the holding company were required to obtain approval from the CSRC or CAC in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on a U.S. exchange, which would materially affect the interest of the investors. It is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on a U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry. As of today, the Company has all requisite permissions and we have not been denied any permission.

**Holding Foreign Company Accountable Act**

U.S. laws and regulations, including the Holding Foreign Companies Accountable Act, or HFCAA, may restrict or eliminate our ability to complete a business combination with certain companies, particularly those acquisition candidates with substantial operations in China.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. An identified issuer will be required to comply with these rules if the SEC identifies it as having a "non-inspection" year under a process to be subsequently established by the SEC.

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

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

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

The lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firm's audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors in our Class A Ordinary Shares to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

Our auditor prior to September 29, 2022, Friedman, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, was registered with the PCAOB and had been inspected by the PCAOB on a regular basis in the audit period. Our new auditor, Marcum Asia, as an auditor of companies that are traded publicly in the U.S. and a firm registered with the PCAOB, is subject to laws in the U.S., pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Marcum Asia is headquartered in Manhattan, New York, and has been inspected by the PCAOB on a regular basis, with the last inspection in 2020. Neither Friedman nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021. However, the recent developments would add uncertainties to our offering and we cannot assure you whether the national securities exchange we apply to for listing or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditors' audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to our audit. In addition, the HFCA Act, which requires that the PCAOB be permitted to inspect an issuer's public accounting firm within three years, may result in the delisting of our Company or prohibition of trading in our Class A Ordinary Shares in the future if the PCAOB is unable to inspect our accounting firm at such future time. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading.

On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination.

. See "*Risk Factors – Risks Related to Doing Business in China – If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, share price and reputation* on page 30 and *The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering*" on page 30.

**Implications of Being an Emerging Growth Company**

We qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are generally applicable to public companies. These provisions include, but are not limited to:

● the ability to include only two years of audited financial statements and only two years of related management's discussion and analysis of financial condition and results of operations disclosure;

● an exemption from the auditor attestation requirement in assessing our internal control over financial reporting under the Sarbanes-Oxley Act of 2002.

● reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements, and registration statements; and

● a delay in adopting new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

We may take advantage of these provisions for up to five years or such an earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue, have more than $700 million in the market value of our Class A ordinary shares held by non-affiliates, or issue more than $1 billion of non-convertible debt over a three-year period.

**Implications of Being a Foreign Private Issuer**

We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:

● we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;

● for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;

● we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

● we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;

● we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and

● we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction.

We have taken advantage of certain reduced reporting and other requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold equity securities.

We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by US residents and any of the following three circumstances applies: (1) the majority of our executive officers or directors are US citizens or residents, (2) more than 50% of our assets are located in the United States, or (3) our business is administered principally in the United States.

**Implications of Being a Controlled Company**

Upon the completion of this offering, we will be a "controlled company" as defined under the Nasdaq Stock Market Rules because Jianbiao Dai, our chairman of the Board and chief executive officer, will beneficially own [**·**]% of our total issued and outstanding Class A ordinary shares and [**·**]% of our total issued and outstanding Class B ordinary shares, and will be able to exercise [**·**]% of the total voting power of our issued and outstanding share capital, assuming that the underwriters do not exercise their over-allotment option. For so long as we remain a "controlled company," we are permitted to elect not to comply with certain corporate governance requirements. If we rely on these exemptions, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

**Corporate Information**

Our principal executive office is located at 6F, Building A 1188 Wan Rong Road, Shanghai, People's Republic of China 200436. The telephone number of our principal executive offices is +86-021-61806588. Our registered office provider in Cayman Islands is Harneys Fiduciary (Cayman) Limited. Our registered office in Cayman Islands is located at 4th Floor, Harbour Place, 103 South Church Street, PO Box 10240, Grand Cayman, KY1-1002, Cayman Islands. Our registered agent in the United States is Cogency Global Inc. We maintain a corporate website at www.netclass.cn. We do not incorporate the information on our website into this prospectus and you should not consider any information on, or that can be accessed through, our website as part of this prospectus.

**THE OFFERING**

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| **Shares Offered** | 3,750,000 Class A ordinary shares (or 4,312,500 Class A ordinary shares if the underwriters exercise their over-allotment option in full) |

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| **Over-Allotment Option** | We have granted to the underwriters a 45-day option to purchase from us up to an additional 15% of the Class A ordinary shares sold in this offering, solely to cover over-allotments, if any, at the initial public offering price less the underwriting discounts. |
| **Ordinary shares outstanding prior to completion of this offering** | 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares |

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| **Ordinary shares outstanding immediately after this offering** | 16,750,000 Class A ordinary shares and 2,000,000 Class B ordinary shares, or 17,312,500 Class A ordinary shares if the Underwriter exercises the over-allotment option in full and 2,000,000 Class B ordinary shares, but excluding 187,500 Class A ordinary shares, assuming the over-allotment option is not exercised and 215,625 Class A ordinary shares, assuming the over-allotment option is exercised, issuable upon exercise of the Representative's Warrant. |

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| **Voting Rights:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of our company.<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Each Class B ordinary share shall entitle the holder thereof to fifteen (15) votes on all matters subject to vote at general meetings of our company.<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Holders of Class A ordinary shares and Class B ordinary shares will, at all times, vote together as a single class on all matters submitted to a vote by the shareholders at any general meeting of the Company.<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Mr. Jianbiao Dai, the Chairman of our Board of Directors and Chief Executive Officer, will beneficially own approximately [**·**]% of the aggregate voting power, assuming that the underwriters do not exercise their over-allotment option, of our issued and outstanding share capital following the completion of this offering and will have the considerable influence over matters such as decisions regarding mergers and consolidations, election of directors, and other significant corporate actions. See the sections titled "Principal Shareholders" and "Description of Share Capital" for additional information. |
| **Use of Proceeds** | We estimate that our net proceeds from this offering will be approximately $14.2 million, based on the assumed initial public offering price of $4.50 per Class A ordinary share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and advisory fee and estimated offering expenses and assuming no exercise of the over-allotment option granted to the underwriters. We intend to use the proceeds from this offering for courseware and online technology platform development, marketing and NetClass brand building, expansion of application development service and subscription services and working capital and for other general corporate purposes.. See "Use of Proceeds" for more information. |
| **Underwriters** | Revere Securities LLC |
| **Representative Warrants** | We have agreed to sell to the Representative warrants (the "Representative Warrants") to purchase up to a total of 187,500 Class A ordinary shares assuming the over-allotment option is not exercised and 215,625 Class A ordinary shares assuming the over-allotment option is exercised (equal to 5% of the aggregate number of Class A ordinary shares sold in the offering, including with respect to the over-allotment) at a price equal to 120% of the price of our Class A ordinary shares offered hereby. The Representative Warrants are exercisable after the date of issuance and for a five year period after the date of commencement of sales of the Class A ordinary shares. |
| **Listing** | We have applied to list our Class A ordinary shares on Nasdaq under the symbol "NTCL". At this time, Nasdaq Capital Market has not yet approved our application to list our Class A ordinary shares. The closing of this offering is conditioned upon Nasdaq Capital Market's final approval of our listing application, and there is no guarantee or assurance that our Class A ordinary shares will be approved for listing on Nasdaq Capital Market. We will not consummate and close this offering without a listing approval letter from Nasdaq Capital Market. |
| **Lock-up** | The company and each of our directors, officers and holders of 5% or more of Class A ordinary shares on a fully diluted basis immediately prior to the consummation of this offering has also entered into a similar lock-up agreement for a period of six (6) months from the date of this prospectus, subject to certain exceptions, with respect to our Class A ordinary shares and securities that are substantially similar to our Class A ordinary shares. See "Underwriting – Lock-Up Agreements" for more information. |
| **Transfer Agent** | VStock Transfer, LLC |
| **Risk Factors** | Investing in these securities involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the "Risk Factors" section of, and elsewhere in, this prospectus before deciding to invest in our Class A ordinary shares. |

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**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus contains forward-looking statements. All statements contained in this prospectus other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the "*<u>Risk Factors</u>*" section. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors 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 statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, we undertake no duty to update any of these forward-looking statements after the date of this prospectus or to conform these statements to actual results or revised expectations.

**RISK FACTORS**

*Before you decide to purchase our Class A ordinary shares, you should understand the high degree of risk involved. You should consider carefully the following risks and other information in this prospectus, including our consolidated financial statements and related notes. If any of the following risks actually occur, our business, financial condition and operating results could be adversely affected. As a result, the trading price of our Class A ordinary shares could decline, perhaps significantly.*

**<u>Risks Related to Doing Business in China</u>**

***The Chinese government exerts substantial influence over the manner in which we must conduct our business activities*. *We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our subsidiaries or the holding company were required to obtain approval or filing requirements in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors.***

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Under the current government leadership, the government of the PRC has been pursuing reform policies which have adversely affected China-based operating companies whose securities are listed in the United States, with significant policies changes being made from time to time without notice. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance of our contractual arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

Given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies. As of the date of this prospectus, we have not received any inquiry, notice, warning, or sanctions from PRC government authorities in connection with the Opinions.

On June 10, 2021, the Standing Committee of the National People's Congress of China, or the SCNPC, promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

In early July 2021, regulatory authorities in China launched cybersecurity investigations with regard to several China-based companies that are listed in the United States. The Chinese cybersecurity regulator announced on July 2 that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company's app be removed from smartphone app stores. On July 5, 2021, the Chinese cybersecurity regulator launched the same investigation on two other Internet platforms, China's Full Truck Alliance of Full Truck Alliance Co. Ltd. (NYSE: YMM) and Boss of KANZHUN LIMITED (Nasdaq: BZ). On July 24, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education, pursuant to which foreign investment in such firms via mergers and acquisitions, franchise development, and variable interest entities are banned from this sector.

On August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure, or the Regulations, which took effect on September 1, 2021. The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others, that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect in November 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the Personal Information Protection Law provides, among others, that (i) an individual's consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking, (ii) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and impact on the individual's rights, and (iii) where personal information operators reject an individual's request to exercise his or her rights, the individual may file a lawsuit with a People's Court.

As such, the Company's business segments may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Additionally, the governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Furthermore, it is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry. Recent statements by the Chinese government indicating an intent, and the PRC government may take actions to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our PRC subsidiaries' operation, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or become worthless.

In addition, on December 28, 2021, the CAC, the National Development and Reform Commission ("NDRC"), and several other administrations jointly issued the revised Measures for Cybersecurity Review, or the Revised Review Measures, which became effective and has replaced the existing Measures for Cybersecurity Review on February 15, 2022. According to the Revised Review Measures, if an "online platform operator" that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Based on a set of Q&A published on the official website of the State Cipher Code Administration in connection with the issuance of the Revised Review Measures, an official of the said administration indicated that an online platform operator should apply for a cybersecurity review prior to the submission of its listing application with non-PRC securities regulators. Given the recency of the issuance of the Revised Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation. For example, it is unclear whether the requirement of cybersecurity review applies to follow-on offerings by an "online platform operator" that is in possession of personal data of more than one million users where the offshore holding company of such operator is already listed overseas. Furthermore, the CAC released the draft of the Regulations on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year. If the draft Regulations on Network Data Security Management are enacted in the current form, we, as an overseas listed company, will be required to carry out an annual data security review and comply with the relevant reporting obligations.

On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which will come into effect on March 31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC. On the same day, the CSRC held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges, such as completion of registration in the market of the United States, but have not completed the overseas listing; and (2) domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges on or prior to the effective date of the Trial Measures, may reasonably arrange the timing for submitting their filing applications with the CSRC, and shall complete the filing before completion of their overseas offering and listing.

Along with the Trial Measures, the Provisions on Strengthening Confidentiality and Archives Administration in Overseas Issuance and Listing of Securities by Domestic Enterprises (the "Archive Provisions") were promulgated on February 24, 2023, which applies to companies providing documents or materials involving State secrets or work secrets of State agencies. It is our understanding that the Provisions only apply to companies providing documents or materials involving State secrets or work secrets of State agencies. In that case, companies shall apply to the competent department with examination and approval authority for approval in accordance with the law. To our best knowledge, the documents the Company currently provides do not contain any State secrets or work secrets of State agencies. However, there remains uncertainty as to how relevant secrecy administrative department will define "involving State secrets or work secrets of State agencies". If such department recognize "State secrets" or "work secrets" are involved, the Company might be subject to the approval requirements of the Archive Provisions.

We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of filings or approvals, including on a retrospective basis, from the CSRC, the CAC or other PRC authorities with respect to this offering. As the Trial Measures have not come into effect as of the date of this prospectus, under the currently effective PRC laws and regulations, we are not required to make filings with the CSRC, or seek approval from any other PRC governmental authorities for our overseas listing plan, nor have we received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities as of the date of this prospectus. However, if any filings, approval, review or other procedure is in fact required, we are not able to guarantee that we will obtain such filings, approval or complete such review or other procedure timely or at all. For any approval that we may be able to obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and offerings relating to our securities. However, as the Trial Measures were newly published and haven't come into effect, if we are required to submit to the CRSC and complete the filing procedure of our overseas public offering and listing, we cannot be sure that we will be able to complete such filings in a timely manner. Any failure or perceived failure by us to comply with such filing requirements under the Trial Measures may result in forced corrections, warnings and fines against us, could materially hinder our ability to offer or continue to offer our securities and could cause the value of our securities to significantly decline or become worthless.

***Changes in China's economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations.***

Substantially all of our operations are located in China. Accordingly, our business, prospects, financial condition, and results of operations may be influenced significantly by political, economic, and social conditions in China generally and by continued economic growth in China as a whole.

The Chinese economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of the foreign exchange, and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over China's economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.

While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may harm us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past, the Chinese government has implemented certain measures, including interest rate increases, to control the pace of economic growth. These measures may cause decreased economic activity in China, and since 2012, China's economic growth has slowed down. Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materially and adversely affect our business and results of operations.

We may also decide to finance our PRC subsidiaries using capital contributions. The Ministry of Commerce ("MOC") or its local counterpart must approve these capital contributions. On March 30, 2015, the State Administration of Foreign Exchange, or SAFE, promulgated Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide. Circular 19 came into force and replaced previous Circular 142 and Circular 36 on June 1, 2015. On June 9, 2016, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or Circular 16, to further expand and strengthen such reform. Under Circular 19 and Circular 16, foreign-invested enterprises in the PRC are allowed to use their foreign exchange funds under capital accounts and RMB funds from exchange settlement for expenditure under current accounts within its business scope or expenditure under capital accounts permitted by laws and regulations, except that such funds shall not be used for (i) expenditure beyond the enterprise's business scope or expenditure prohibited by laws and regulations; (ii) investments in securities or other investments than principal-secured products issued by banks; (iii) granting loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) construction or purchase of real estate for purposes other than self-use (except for real estate enterprises). In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of a foreign-invested company. The use of such RMB capital may not be altered without SAFE's approval, and such RMB capital may not, in any case, be used to repay RMB loans if the proceeds of such loans have not been used. Violations of these circulars could result in severe monetary or other penalties. These circulars may significantly limit our ability to use RMB converted from the cash provided by our offshore financing activities to fund the establishment of new entities in China by our PRC subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiaries.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we expect to receive from our initial public offering to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business. These measures, or other economic, political, or social developments in China may cause decreased economic activity in the PRC, which may adversely affect our business, operating results and/or the value of the securities we are registering for sale; or may significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

***The PRC government may impose restrictions on our ability to transfer cash out of China and to U.S. investors.***

The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. To the extent that our income is received in Renminbi, shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange, or SAFE, as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions.

To address persistent capital outflows and the RMB's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China and the SAFE implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries' dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, there can be no assurance that the PRC government will not intervene or impose restrictions on our ability to transfer or distribute cash within our organization or to foreign investors, which could result in an inability or prohibition on making transfers or distributions outside of China or Hong Kong and adversely affect our business as well as your investment.

As of the date of this prospectus, we are not aware of other material restrictions and limitations on our ability to distribute earnings from our businesses, including our subsidiaries, to the parent company and U.S. investors or our ability to settle amounts owed, or on foreign exchange or our ability to transfer cash between entities within our group, across borders, or to U.S. investors.

***PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably.***

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

***Substantial uncertainties exist with respect to the enactment timetable and final content of draft China Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.***

The Chinese Ministry of Commerce ("MOFCOM") published a discussion draft of the proposed Foreign Investment Law in January 2015 (the "Draft FIL"). The Draft FIL embodies an expected Chinese regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.

Among other things, the Draft FIL expands the definition of foreign investment and introduces the principle of "actual control" in determining whether a company is considered a foreign-invested enterprise ("FIE"). The Draft FIL specifically provides that entities established in China but "controlled" by foreign investors will be treated as FIEs, whereas an entity set up in a foreign jurisdiction would nonetheless be, upon market entry clearance, treated as a Chinese domestic investor provided that the entity is "controlled" by Chinese entities and/or citizens. Once an entity is determined to be an FIE, it will be subject to the foreign investment restrictions or prohibitions set forth in a Negative List to be separately issued by the State Council later. Unless the underlying business of the FIE falls within the Negative List, which calls for market entry clearance, prior approval from the government authorities as mandated by the existing foreign investment legal regime would no longer be required for establishment of the FIE.

On December 27, 2021, the NDRC and MOFCOM, jointly issued the Special Administrative Measures for Entry of Foreign Investment (Negative List) (2021 Version), or the Negative List, which became effective and replaced the previous version on January 1, 2022. Pursuant to the Negative List, if a PRC company, which engages in any business where foreign investment is prohibited under the Negative List, or prohibited businesses, seeks an overseas offering or listing, it must obtain the approval from competent governmental authorities. Based on a set of Q&A published on the NDRC's official website, a NDRC official indicated that after a PRC company submits its application for overseas listing to the CSRC and where matters relating to prohibited businesses under the Negative List are implicated, the CSRC will consult the regulatory authorities having jurisdiction over the relevant industries and fields.

Because the Overseas Listing Rules are currently in draft form and given the novelty of the Negative List, there remain substantial uncertainties as to whether and what requirements, including filing requirements, will be imposed on a PRC company with respect to its listing and offerings overseas as well as with the interpretation and implementation of existing and future regulations in this regard. For example, it is unclear as to whether the approval requirement under the Negative List will apply to follow-on offerings by PRC companies engaged in prohibited businesses and whose offshore holding company is listed overseas. If such approval is in fact required and given the NDRC's indication of CSRC's involvement in the approval process, there is also a lack of clarity on the application procedure, requirement and timeline which may not be resolved until the Overseas Listing Rules, which provide for the filing procedures of the overseas offering and listing of a PRC company with the CSRC, is enacted. If the Overseas Listing Rules are enacted in the current form before the completion of this offering, we will be required to make a filing with the CSRC in connection with this offering within three business days after its completion. If the approval requirement under the Negative List applies to follow-on offerings by PRC companies whose offshore holding company is listed overseas, we may be required to obtain an approval for this offering or we may be required to relinquish our licenses pertaining to prohibited businesses. If we relinquish or are required to relinquish these licenses, while we do not expect our business operation to be materially adversely affected, we are uncertain whether or when the relevant procedures will be completed.

The development, manufacture and sales of construction materials products and manufacturing equipment are not currently subject to foreign investment restrictions set forth in the Catalogue of Industries for Guiding Foreign Investment (Amended in 2017), or the Catalogue, issued by the National Development and Reform Commission and the Ministry of Commerce on June 28, 2017 and became effective on July 28, 2017. The Draft FIL, if enacted as proposed, will not materially impact the viability of our current corporate structure, corporate governance and business operations in many aspects. However, should the development, manufacture and sales of construction materials products and manufacturing equipment become subject to foreign investment restrictions set forth in the Catalogue of Industries for Guiding Foreign Investment then the viability of our current corporate structure, corporate governance and business operations may be materially impacted in many aspects.

***There are uncertainties under the PRC laws relating to the procedures for U.S. regulators to investigate and collect evidence from companies located in the PRC.***

According to Article 177 of the newly amended PRC Securities Law which became effective in March 2020 (the "Article 177"), the securities regulatory authority of the PRC State Council may collaborate with securities regulatory authorities of other countries or regions in order to monitor and oversee cross border securities activities. Article 177 further provides that overseas securities regulatory authorities are not allowed to carry out investigation and evidence collection directly within the territory of the PRC, and that any Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to overseas agencies without prior consent of the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council.

Our PRC counsel, Grandall Law Firm, has advised us of their understanding that (i) the Article 177 is applicable in the limited circumstances related to direct investigation or evidence collection conducted by overseas authorities within the territory of the PRC (in such case, the foregoing activities are required to be conducted through collaboration with or by obtaining prior consent of competent Chinese authorities); (ii) the Article 177 does not limit or prohibit the Company, as an exempted company duly incorporated in the Cayman Islands and to be listed on Nasdaq, from providing the required documents or information to Nasdaq or the SEC pursuant to applicable Listing Rules and U.S. securities laws; and (iii) as the Article 177 is relatively new and there is no implementing rules or regulations which have been published regarding application of the Article 177, it remains unclear how the law will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other relevant government authorities. As of the date hereof, we are not aware of any implementing rules or regulations which have been published regarding application of Article 177. However, we cannot assure you that relevant PRC government agencies, including the securities regulatory authority of the PRC State Council, would reach the same conclusion as we do. As such, there are uncertainties as to the procedures and time requirement for the U.S. regulators to bring about investigations and evidence collection within the territory of the PRC.

Our principal business operation is conducted in the PRC. In the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority of the PRC.

***We rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our PRC subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.***

We are a holding company and rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. In the event that our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. In addition, the PRC tax authorities may require our PRC subsidiaries to adjust their taxable income in a manner that would materially and adversely affect their ability to pay dividends and other distributions to us.

Under PRC laws and regulations, our PRC subsidiaries, as wholly foreign-owned enterprises in China, may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve funds until the aggregate amount of such funds reaches 50% of its registered capital. At its discretion, a wholly foreign-owned enterprise may allocate a portion of its after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are not distributable as cash dividends.

In response to the persistent capital outflow and the Renminbi's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments, and shareholder loan repayments. The PRC government may continue to strengthen its capital controls, and our PRC subsidiaries' dividends and other distributions may be subjected to tighter scrutiny in the future. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

***Fluctuations in exchange rates could have a material adverse effect on our results of operations and the price of our ordinary shares.***

Substantially, our revenues and expenditures are denominated in RMB, whereas our reporting currency is the U.S. dollar. As a result, fluctuations in the exchange rate between the U.S. dollar and RMB will affect the relative purchasing power in RMB terms of our U.S. dollar assets and the proceeds from our initial public offering. Our reporting currency is the U.S. dollar, while the functional currency for our PRC subsidiaries is RMB. Gains and losses from the re-measurement of assets and liabilities receivable or payable in RMB are included in our consolidated statements of operations. The re-measurement has caused the U.S. dollar value of our results of operations to vary with exchange rate fluctuations, and the U.S. dollar value of our results of operations will continue to vary with exchange rate fluctuations. A fluctuation in the value of RMB relative to the U.S. dollar could reduce our profits from operations and the translated value of our net assets when reported in U.S. dollars in our financial statements. This change in value could negatively impact our business, financial condition, or results of operations as reported in U.S. dollars. In the event that we decide to convert our RMB into U.S. dollars to make payments for dividends on our Class A ordinary shares or for other business purposes, appreciation of the U.S. dollar against the RMB will harm the U.S. dollar amount available to us. In addition, fluctuations in currencies relative to the periods in which the earnings are generated may make it more difficult to perform period-to-period comparisons of our reported results of operations.

The value of the RMB against the U.S. dollar and other currencies is affected by, among other things, changes in China's political and economic conditions and China's foreign exchange policies. On July 21, 2005, the PRC government changed its decades-old policy of pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three years. However, the PBOC regularly intervenes in the foreign exchange market to limit fluctuations in RMB exchange rates and achieve policy goals. Between July 2008 and June 2010, the exchange rate between the RMB and the U.S. dollar had been stable and traded within a narrow range. Since June 2010, the RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. Since October 1, 2016, Renminbi has joined the International Monetary Fund (IMF)'s basket of currencies that make up the Special Drawing Right (SDR) and the U.S. dollar, the Euro, the Japanese yen, and the British pound. In the fourth quarter of 2016, the RMB has depreciated significantly in the backdrop of a surging U.S. dollar and persistent capital outflows of China. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may announce further changes to the exchange rate system. We cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.

There remains significant international pressure on the PRC government to adopt a flexible currency policy. Any significant appreciation or depreciation of the RMB may materially and adversely affect our revenues, earnings and financial position, and the value of, and any dividends payable on, our Class A ordinary shares in U.S. dollars. For example, to the extent that we need to convert U.S. dollars we receive from our initial public offering into RMB to pay our operating expenses, appreciation of the RMB against the U.S. dollar would adversely affect the RMB amount we would receive from the conversion. Conversely, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our ordinary shares.

Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited. We may not be able to hedge our exposure adequately. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on the price of our ordinary shares.

***PRC regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from making loans or additional capital contributions to our PRC operating subsidiaries and thereby prevent us from funding our business.***

As an offshore holding company with PRC subsidiaries, we may transfer funds to our PRC subsidiaries by means of loans or capital contributions. Any loans to these PRC subsidiaries, which are foreign-invested enterprises, cannot exceed statutory limits based on the difference between the amount of our investments and registered capital in such subsidiaries, and shall be registered with SAFE, or its local counterparts. Furthermore, any capital increase contributions we make to our PRC subsidiaries, which are foreign-invested enterprises, shall be approved by MOFCOM, or its local counterparts. We may not be able to obtain these government registrations or approvals on a timely basis, if at all. If we fail to receive such registrations or approvals, our ability to provide loans or capital to increase contributions to our PRC subsidiaries may be negatively affected, which could adversely affect their liquidity and our ability to fund and expand their business.

***Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment.***

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our net revenues in RMB. Under our current corporate structure, our company in the Cayman Islands relies on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment registrations by the beneficial owners of our company who are PRC residents. But approval from or registration with appropriate government authorities is required where RMB is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.

In light of China's flood of capital outflows in 2016 due to the weakening RMB, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movements. More restrictions and a substantial vetting process are put in place by SAFE to regulate cross-border transactions falling under the capital account. The PRC government may also, at its discretion, restrict access in the future to foreign currencies for current account transactions. In the event that the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders.

***We must remit the offering proceeds to PRC before they may be used to benefit our business in the PRC, and this process may take several months.***

The proceeds of this offering must be sent back to the PRC, and the process for sending such proceeds back to the PRC may take several months after the closing of this offering. We may be unable to use these proceeds to grow our business until we receive such proceeds in the PRC. To remit the offering proceeds to the PRC, we will take the following actions:

First, we will open a special foreign exchange account for capital account transactions. To open this account, we must submit to State Administration for Foreign Exchange ("SAFE") certain application forms, identity documents, transaction documents, a form of foreign exchange registration of overseas investments by domestic residents, and foreign exchange registration certificate of the invested company.

Second, we will remit the offering proceeds into this special foreign exchange account.

Third, we will apply for settlement of the foreign exchange. To do so, we must submit to SAFE certain application forms, identity documents, payment order to a designated person, and a tax certificate.

The timing of the process is difficult to estimate because the efficiencies of different SAFE branches can vary materially. Ordinarily, the process takes several months to complete but is required by law to be accomplished within 180 days of application. Until the abovementioned approvals, the proceeds of this offering will be maintained in an interest-bearing account maintained by us in the United States.

***Failure to make adequate contributions to various employee benefit plans required by PRC regulations may subject us to penalties.***

We are required under PRC laws and regulations to participate in various government-sponsored employee benefit plans, including certain social insurance, housing funds, and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the PRC law local government from time to time at locations where we operate our businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China, given the different levels of economic development in different locations. In the event that the local governments deem our contribution to be not sufficient, we may be subject to late contribution fees or fines in relation to any underpaid employee benefits, and our financial condition and results of operations may be adversely affected.

Currently, we are making contributions to the plans at a required rate based on actual employee salaries. However, PRC laws required such contributions to be based on the actual employee salaries up to a maximum amount specified by the local government. If we are subject to late contribution fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

***The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, making it more difficult for us to pursue growth through acquisitions in China.***

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that the MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance of any concentration of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by the MOC, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the MOC or its local counterparts, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

***PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.***

SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for overseas investment or financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions. SAFE Circular 37 is issued to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investments via Overseas Special Purpose. Vehicles, or SAFE Circular 75. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015, which took effect on June 1, 2015. This notice has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for overseas investment or financing.

In the event that our shareholders who are PRC residents or entities do not complete their registration as required, our PRC subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to us. We may be restricted in our ability to contribute additional capital to our PRC subsidiaries. Moreover, failure to comply with the SAFE registration described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.

However, we may not be informed of the identities of all the PRC residents or entities holding a direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. As a result, we cannot assure you that all of our shareholders or beneficial owners who are PRC residents or entities have complied with and will in the future make or obtain any applicable registrations or approvals required by SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries' ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.

***If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.***

Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a "de facto management body" within the PRC is considered a resident enterprise and will be subject to the enterprise income tax on its global income rate of 25%. The implementation rules define the term "de facto management body" as the body that exercises full and substantial control over and overall management of an enterprise's business, productions, personnel, accounts, and properties. In April 2009, the State Administration of Taxation issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the "de facto management body" of a PRC-controlled enterprise incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, the criteria set forth in the circular may reflect the State Administration of Taxation's general position on how the "de facto management body" test should be applied in determining the tax resident status of all offshore enterprises. According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its "de facto management body" in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise's financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise's primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.

We believe none of our entities outside of China is a PRC resident enterprise for PRC tax purposes. See "Taxation – People's Republic of China Enterprise Taxation" on page 112. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities, and uncertainties remain with respect to the interpretation of the term "de facto management body." As substantially all of our management members are based in China, it remains unclear how the tax residency rule will apply to our case. In the event that the PRC tax authorities determine that NetClass or any of our subsidiaries outside of China is a PRC resident enterprise for PRC enterprise income tax purposes, NetClass or such subsidiary could be subject to PRC tax at a rate of 25% on its worldwide income, which could materially reduce our net income. In addition, we will also be subject to PRC enterprise income tax reporting obligations.

Furthermore, if the PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, gains realized on the sale or other disposition of our Class A or Class B ordinary shares may be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC if we are treated as a PRC resident enterprise. Any such tax may reduce the returns on the investment in our Class A or Class B ordinary shares.

***We may not be able to obtain certain benefits under relevant tax treaties on dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiary.***

We are an exempted company incorporated under the laws of the Cayman Islands and, as such, rely on dividends and other distributions on equity from our PRC subsidiaries to satisfy part of our liquidity requirements. Pursuant to the PRC Enterprise Income Tax Law, a withholding tax rate of 10% currently applies to dividends paid by a PRC "resident enterprise" to a foreign enterprise investor, unless any such foreign investor's jurisdiction of incorporation has a tax treaty with China that provides for preferential tax treatment. Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, such withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC enterprise. Furthermore, the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties, which became effective in August 2015, require non-resident enterprises to determine whether they are qualified to enjoy the preferential tax treatment under the tax treaties and file relevant report and materials with the tax authorities. There are also other conditions for enjoying the reduced withholding tax rate according to other relevant tax rules and regulations. See "Taxation – People's Republic of China Enterprise Taxation" on page 112. As of September 30, 2021, and 2020, we did not record any withholding tax on the retained earnings of our subsidiaries in the PRC as we intended to re-invest all earnings generated from our PRC subsidiaries for the operation and expansion of our business in China, and we intend to continue this practice in the foreseeable future. Should our tax policy change to allow for offshore distribution of our earnings, we would be subject to a significant withholding tax. We cannot assure you that the relevant tax authority will not challenge our determination regarding our qualification to enjoy the preferential tax treatment. We cannot assure that we will be able to complete the necessary filings with the relevant tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiaries to HK Beach, our Hong Kong subsidiary.

***Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.***

The PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing Notice of the Ministry of Finance and the State Administration of Taxation on Several Issues Concerning the Enterprise Income Tax Treatment on Enterprise Reorganization (Circular 59) and Announcement No. 7 2015 of the State Administration of Taxation—Announcement on Several Issues concerning the Enterprise Income Tax on Income from the Indirect Transfer of Assets by Non-Resident Enterprises (Circular 7) which became effective in February 2015. Under Circular 7, where a non-resident enterprise conducts an "indirect transfer" by transferring the equity interests of a PRC "resident enterprise" indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial purposes. Circular 7 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.

Circular 7 extends its tax jurisdiction to indirect transfers and transactions involving the transfer of other taxable assets through the offshore transfer of a foreign intermediate holding company. In addition, Circular 7 provides clear criteria on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an "indirect transfer" by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacked a reasonable commercial purpose and was established for the purpose of reducing, avoiding, or deferring PRC tax.

According to the "Enterprise Income Tax Law of the People's Republic of China" (adopted on March 16, 2007, first amended on February 24, 2017, and second amended on December 29, 2018), if the business dealings between an enterprise and its affiliated parties do not conform to the principle of independent transactions and thus reduce the taxable income or income of the enterprise or its affiliated parties, the tax authorities have the right to adjust in accordance with reasonable methods. The cost incurred by an enterprise and its related parties in developing and accepting intangible assets or providing and receiving labor services together shall be apportioned according to the principle of independent transaction when calculating taxable income.

If a resident enterprise or an enterprise controlled by a resident enterprise and a Chinese resident and established in a country (region) whose actual tax burden is significantly lower than the tax rate level of China's enterprise income tax, does not allocate or reduce its profits due to reasonable business needs, the portion of the above profits that should belong to the resident enterprise shall be included in the current income of the resident enterprise.

Interest expenses incurred when the ratio of creditor's rights investment to equity investment accepted by an enterprise from its affiliated parties exceeds the prescribed standard shall not be deducted in the calculation of taxable income.

If an enterprise reduces its taxable income or income by implementing other arrangements without reasonable commercial purposes, tax authorities have the right to adjust them in accordance with reasonable methods.

We face uncertainties on the reporting and consequences on future private equity financing transactions, share exchange, or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises. The PRC tax authorities may pursue such non-resident enterprises with respect to a filing or the transferees with respect to withholding obligation and request our PRC subsidiaries to assist in the filing. As a result, non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed under Circular 59 and Circular 7. They may be required to expend valuable resources to comply with Circular 59and Circular 7 or establish that our non-resident enterprises should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results from operations.

The PRC tax authorities have the discretion under SAT Circular 59 and Circular 7 to make adjustments to the taxable capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment. Although we currently have no plans to pursue any acquisitions in China or elsewhere in the world, we may pursue acquisitions in the future that may involve complex corporate structures. If we are considered a non-resident enterprise under the PRC Enterprise Income Tax Law and if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59 and Circular 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations.

***If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, share price and reputation.***

U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism, and negative publicity by investors, financial commentators, and regulatory agencies, such as the SEC. Much of the scrutiny, criticism, and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. On December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China, reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting accounting firms and audit work papers in China and higher risks of fraud in emerging markets and the difficulty of bringing and enforcing SEC, Department of Justice and other U.S., including in instances of fraud, in emerging markets generally. As a result of this scrutiny, criticism, and negative publicity, the publicly traded stock of many U.S.-listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our business, and our share price. In the event that we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming and distract our management from developing our growth. In the event that such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our share.

***The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.***

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in "Restrictive Market", (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company's auditors.

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act, or the HFCAA, requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company's auditors for three consecutive years, the issuer's securities are prohibited to trade on a U.S. stock exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.

On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the registrant's annual report regarding the audit arrangements of, and governmental influence on, such a registrant.

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

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

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

The lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firm's audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause investors and potential investors in our Class A Ordinary Shares to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

Our auditor prior to September 29, 2022, Friedman, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, was registered with the PCAOB and had been inspected by the PCAOB on a regular basis in the audit period. Our new auditor, Marcum Asia, as an auditor of companies that are traded publicly in the U.S. and a firm registered with the PCAOB, is subject to laws in the U.S., pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Marcum Asia is headquartered in Manhattan, New York, and has been inspected by the PCAOB on a regular basis, with the last inspection in 2020. Neither Friedman nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021. However, the recent developments would add uncertainties to our offering and we cannot assure you whether the national securities exchange we apply to for listing or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditors' audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to our audit. In addition, the HFCA Act, which requires that the PCAOB be permitted to inspect an issuer's public accounting firm within three years, may result in the delisting of our Company or prohibition of trading in our Class A Ordinary Shares in the future if the PCAOB is unable to inspect our accounting firm at such future time. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading.

On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination.

On June 22, 2021, United States Senate has passed the Accelerating Holding Foreign Companies Accountable Act, which was signed into law on December 29, 2022, amending the HFCAA and requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years, which could reduce the time before our securities may be prohibited from trading or delisted should it be later determined that the PCAOB is unable to inspect or investigate our auditor completely.

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

Our ability to retain an auditor subject to PCAOB inspection and investigation, including but not limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese regulators. MarcumAsia's audit working papers related to us are located in China. With respect to audits of companies with operations in China, such as the Company, there are uncertainties about the ability of our auditor to fully cooperate with a request by the PCAOB for audit working papers in China without the approval of Chinese authorities. Such lack of inspection could cause trading in the Company's securities to be prohibited under the HFCAA ultimately result in a determination by a securities exchange to delist the Company's securities or being required to engage a new audit firm, which would require significant expense and management time and the value of our securities may significantly decline or become worthless.

***Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us.***

The PRC legal system is based on written statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the legal system in China, including risks and uncertainties regarding the enforcement of laws and that rules and regulations in China can change quickly with little advance notice, and the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties.

Therefore, these risks may result in a material change in business operations, significant depreciation of the value of our Class A ordinary shares, or a complete hinderance of our ability to offer or continue to offer our securities to investors. Recently, the Chinese government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange.

Although we have taken measures to comply with the laws and regulations that are applicable to our business operations, including the regulatory principles raised by the CBRC, and avoiding conducting any activities that may be deemed as illegal fund-raising, forming capital pool or providing guarantee to investors under the current applicable laws and regulations, the PRC government authority may promulgate new laws and regulations regulating the direct lending service industry in the future. We cannot assure you that our practices would not be deemed to violate any PRC laws or regulations relating to illegal fund-raising, forming capital pools or the provision of credit enhancement services. Moreover, we cannot rule out the possibility that the PRC government will institute a license requirement covering our industry at some point in the future. If such a licensing regime were introduced, we cannot assure you that we would be able to obtain any newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability to continue our operations.

From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy, than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, could materially and adversely affect our business and impede our ability to continue our operations.

***We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.***

The PRC government extensively regulates the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations.

The evolving PRC regulatory system for the internet industry may lead to the establishment of new regulatory agencies. For example, in May 2011, the State Council announced the establishment of a new department, the State Internet Information Office (with the involvement of the State Council Information Office, the MITT, and the Ministry of Public Security). The primary role of this new agency is to facilitate the policy-making and legislative development in this field, to direct and coordinate with the relevant departments in connection with online content administration and to deal with cross-ministry regulatory matters in relation to the internet industry.

The Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business, issued by the MITT in July 2006, prohibits domestic telecommunication service providers from leasing, transferring or selling telecommunications business operating licenses to any foreign investor in any form, or providing any resources, sites or facilities to any foreign investor for their illegal operation of a telecommunications business in China. According to this circular, either the holder of a value-added telecommunication services operation permit or its shareholders must directly own the domain names and trademarks used by such license holders in their provision of value-added telecommunication services. The circular also requires each license holder to have the necessary facilities, including servers, for its approved business operations and to maintain such facilities in the regions covered by its license. If an ICP License holder fails to comply with the requirements and also fails to remedy such non-compliance within a specified period of time, the MITT or its local counterparts have the discretion to take administrative measures against such license holder, including revoking its ICP License.

The interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, internet businesses in China, including our business. We cannot assure you that we have obtained all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain new ones. If the PRC government considers that we were operating without the proper approvals, licenses or permits or promulgates new laws and regulations that require additional approvals or licenses or imposes additional restrictions on the operation of any part of our business, it has the power, among other things, to levy fines, confiscate our income, revoke our business licenses, and require us to discontinue our relevant business or impose restrictions on the affected portion of our business. Any of these actions by the PRC government may have a material adverse effect on our business and results of operations.

***Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.***

Pursuant to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, promulgated by SAFE in 2012, or SAFE Notices No. 7, PRC citizens and non-PRC citizens who reside in China for a continuous period of no less than one year who participate in any stock incentive plan of an overseas publicly listed company offered to the director, supervisor, senior management and other employees of, and any individual who has labor relationship with its domestic affiliated entities are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our directors, executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of no less than one year and who have been granted stock options will be subject to these regulations when our company becomes an overseas listed company upon the completion of this offering. Failure to complete the SAFE registrations for our employee incentive plans after our listing may subject them to fines and legal sanctions, and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.

In addition, the State Administration of Taxation, or SAT, has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, our employees working in China who exercise stock options or are granted restricted shares will be subject to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee stock options or restricted shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options or are granted with restricted shares. If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities.

***U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.***

Any disclosure of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply with China's state secrecy laws, which broadly define the scope of "state secrets" to include matters involving economic interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by any of these regulators may be limited or prohibited.

**<u>Risks Related to Our Business and Industry</u>**

***Market adoption of online learning solutions is relatively new and may not grow as we expect, which may harm our business and results of operations.***

Our future success will depend in part on the growth, if any, in the demand for online learning solutions. While the COVID-19 pandemic has accelerated the market for online learning solutions, it is still less mature than the market for in-person learning and training, which many businesses currently utilize, and these businesses may be slow or unwilling to migrate from these legacy approaches. As COVID-19 vaccines and treatment options have become more widely available, many educational institutions have re-opened their campuses and businesses have reversed or materially limited remote work policies, which may slow demand for online learning solutions. As such, it is difficult to predict learner or partner demand for our platform, learner or partner adoption and renewal, the rate at which existing learners and partners expand their engagement with our platform, the size and growth rate of the market for our platform, the entry of competitive offerings into the market, or the success of existing competitive offerings. Furthermore, even if educators and enterprises want to adopt an online learning solution, it may take them a substantial amount of time and resources to fully transition to this type of learning solution or they could be delayed due to budget constraints, weakening economic conditions, or other factors. Even if market demand for online learning solutions generally increases, we cannot assure you that adoption of our platform will also increase. If the market for online learning solutions does not grow as we expect or our platform does not achieve widespread adoption, it could result in reduced customer spending, learner and partner attrition, and decreased revenue, any of which would adversely affect our business and results of operations.

***We traditionally have had substantial customer concentration, with a limited number of customers accounting for a substantial portion of our revenues.***

For the year ended September 30, 2022, three customers accounted for 14.1%, 11.7% and 11.3% of total revenues, respectively. For the years ended September 30, 2021, two customers accounted for 28.5% and 12.3% of total revenues. As of September 30, 2022, four customers accounted for 17.0%, 14.7%, 12.9% and 12.3% of total accounts receivable, respectively. As of September 30, 2021, four customers accounted for 31.6%, 20.0%, 12.6% and 11.1% of total accounts receivable, respectively. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by these customers or the future demand for the products and services of these customers in the end-user marketplace. In addition, revenues from our top three customers may fluctuate from time to time based on the commencement and completion of projects, the timing of which may be affected by market conditions or other factors, some of which may be outside of our control. Further, some of our contracts with our top five customers permit them to terminate our services at any time (subject to notice and certain other provisions). If any of our top three customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services or we could lose the customer. Any such development could have an adverse effect on our margins and financial position and would negatively affect our revenues and results of operations and/or trading price of our Class A ordinary shares.

***Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform.***

Our ability to broaden our customer base, particularly our Enterprise customer base, and achieve broader market acceptance of our platform, will depend to a significant extent on the ability of our sales and marketing organizations to work together to increase our sales pipeline and cultivate customer and partner relationships to drive revenue growth. Our marketing efforts include the use of search engine optimization, paid search, and custom website development and deployment.

We have invested in and plan to continue expanding our sales and marketing organizations, both domestically and internationally. Identifying, recruiting, and training sales personnel requires significant time, expense, and attention. If we are unable to hire, develop, and retain talented sales or marketing personnel, if our new sales or marketing personnel are unable to achieve desired productivity levels in a reasonable period of time (including as a result of working remotely in connection with the COVID-19 pandemic), or if our sales and marketing programs are not effective, or if expected sales and marketing programs by our partners do not materialize or are not effective, our ability to broaden our customer base and achieve broader market acceptance of our platform could be harmed. In addition, the investments we make in our sales and marketing organization will occur in advance of experiencing benefits from such investments, making it difficult to determine in a timely manner if we are efficiently allocating our resources in these areas.

***If we are unable to continue to offer*** ***education software and related courseware, our revenues may decline and we may not be able to maintain profitability.***

The continued success and growth of our business depend primarily on offering online professional education software and related courseware. This in turn will depend on several factors, including our ability to develop new education software and improve existing courseware to respond to changes in market trends and demands of course participants, to effectively market our courseware to a broader base of prospective course participants In addition, the expansion of education software, services and products in terms of the types of offerings may not succeed due to competition, our failure to effectively market our new education software, services and products or to maintain their quality and consistency, or other factors. Furthermore, we may not be able to develop and offer additional software and related courseware on commercially reasonable terms and in a timely manner, or at all, to keep pace with changes in market requirements.

***Failure of information security and privacy concerns could subject us to penalties, damage our reputation and brand, and harm our business and results of operations.***

The internet industry is facing significant challenges regarding information security and privacy, including the storage, transmission and sharing of confidential information. We transmit and store over our systems confidential and private information of our course participants such as personal information, including names, identity card numbers, user IDs and passwords, telephone numbers and correspondence addresses, and payment or transaction related information. We are required by PRC law to ensure the confidentiality, integrity, availability and authenticity of the information of our course participants, which is also essential to maintain their confidence in our online products and services. We have deployed hardware-software combined measures to protect information security. However, advances in technology, increased level of expertise of hackers, new discoveries in the field of cryptography or others could still result in a compromise or breach of the measures that we use. On December 28, 2012, SCNPC promulgated the Decision to Strengthen the Protection of Internet Information, or the Information Protection Decision, to strengthen the protection of personal information on the Internet. The Information Protection Decision provides that Internet content providers must expressly inform their users of the purpose, manner to collect and use the users' personal information and the scope of the information to be collected and used by the provider. In addition, Internet content providers can collect and use the user's personal information only with the consent of users and only within the scope of such consent. On July 16, 2013, China's Ministry of Industry and Information Technology, or MIIT, promulgated the Provisions on the Protection of Personal Information of Telecommunication and Internet Users, which defines "Personal Information" as the information that can be used individually or in combination with other information to identify the users, including but not limited to the name, birth date, ID No., address, telephone number and account number and the information about when and where the user uses such telecommunication and internet service. On November 7, 2016, the SCNPC promulgated the PRC Cyber Security Law, which took effect on June 1, 2017. Pursuant to the Cyber Security Law, any individual or organization using the network must comply with the constitution and the applicable laws, follow the public order and respect social moralities; and must not endanger cyber security, or engage in activities by making use of the network that endanger the national security, honor and interests, or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others. The Cyber Security Law sets forth various security protection obligations for network operators, which are defined as "owners and administrators of networks and network service providers", including, among others, complying with a series of requirements of tiered cyber protection systems; verifying users' real identity; localizing the personal information and important data gathered and produced by critical information infrastructure operators during operations within the PRC; and providing assistance and support to government authorities where necessary for protecting national security and investigating crimes. However, the effect of these laws on curbing hacking and other illegal online activities still remains to be seen. Significant capital, managerial and human resources are required to comply with legal requirements, enhance information security and to address any issues caused by security failures. If we are unable to protect our systems, hence the information stored in our systems, from unauthorized access, use, disclosure, disruption, modification or destruction, such problems or security breaches could cause loss or give rise to our liabilities to the owners of confidential information, such as our course participants; subject us to penalties imposed by administrative authorities; and disrupt our operations. In addition, complying with various laws and regulations could cause us to incur substantial costs or require us to change our business practices, including our data practices, in a manner adverse to our business.

Furthermore, course participants and others may have concerns about whether our products, services or processes could compromise the privacy of users and others. Concerns about our practices with regard to the collection, use, disclosure, or security of personal information or other privacy related matters, and any negative publicity on our information safety or privacy protection mechanism and policy, even if unfounded, could damage our reputation and brand and adversely affect our business and results of operations.

***Concerns about the security of our transaction systems and confidentiality of information on the Internet may reduce use of our services and impede our growth.***

Public concerns over the security and privacy of electronic settlement, online transmittal and communications have to some extent constrained the rapid development and expansion of online transactions. If these concerns are not adequately addressed, they will restrict the growth of value-added telecommunications services generally and in particular the use of the Internet as a means of conducting commercial transactions. If a well-publicized breach of security were to occur, general usage of value-added telecommunications services could decline, which could reduce our visitor traffic and the number of course participants, and impede our growth. We are continuously vigilant about protecting and improving our cyber security and have not experienced any material cyber attacks on our information technology systems. We cannot assure you, however, that our current security measures will be adequate or sufficient to prevent any theft or misuse of personal data of our course participants. Further, security breaches could expose us to litigation and possible liability for failing to secure confidential customer information, and could harm our reputation and ability to attract or retain course participants. In addition, we do not have any cyber security insurance coverage for our operations, and any material cyber attack on our information technology systems and our online education websites could expose us to substantial costs and losses.

***If we fail to develop and introduce new course*** ***ware, services and products that meet our target course participants' expectations, or adopt new technologies important to our business, our competitive position and ability to generate revenues may be materially and adversely affected.***

Historically, our B2B business focuses on offering online professional education software and related courseware. Through our software, our customers can provide online training in different areas such as the business management, information technology, healthcare, engineering & construction, law and other industries. We intend to continue developing new courseware, services and products. The timing of the introduction of new courses, services and products is subject to risks and uncertainties.

Unexpected technical, operational, logistical, regulatory or other problems, including but not limiting to the defects in the products or equipment provided by our supplier, could delay or prevent the introduction of one or more of new courseware, services or products and have material impact on our operation. Moreover, we cannot assure you that any of these courseware, products and services will match the quality or popularity of those developed by our competitors, achieve widespread market acceptance or generate the desired level of income.

Technology standards in Internet and value-added telecommunications services and products in general, and in online education services in particular, may change over time. If we fail to anticipate and adapt to such technological changes, our market share and our business development could suffer, which in turn could have a material and adverse effect on our financial condition and results of operations. If we are unsuccessful in addressing any of the risks relating to new courses, services and products, our business may be materially and adversely affected.

***We may lose market share and our profitability may be materially and adversely affected, if we fail to compete effectively with our present and future competitors or to adjust effectively to changing market conditions and trends.***

We face competition from providers of online education software services and expect to face increasing competition from existing competitors and new market entrants in the online professional education and test preparation markets. Specifically, due to low barriers to entry for Internet-based businesses, we expect to face increasing competition from both existing domestic competitors and new entrants to the online education market. We may face increased competition from international competitors that cooperate with local businesses to provide services based on the international competitors' technology and experience developed in their home markets.

Our present and future competitors may have longer operating histories, and greater financial, technical, marketing and other resources. They may be able to devote more resources to the development and promotion of their courses and services, and may be able to react more quickly to changing course participant requirements and demands, deliver competitive services at lower prices or respond to new technologies, trends or user preferences more effectively than we can. They may be able to offer services and products with better performance and prices than ours with the result that their services and products may gain greater market acceptance than ours. They may also offer free promotional services and products in connection with their marketing campaigns or significantly lower the prices for their services and products in order to attract course participants and capture additional market share. There is no assurance that we will be able to compete effectively with such present and future competitors or to adjust effectively to changing market conditions and trends. Our failure to compete effectively could erode our market share, result in fewer purchase of our software and related courseware, or lead to price reductions or increased spending for marketing and promotion of our software and related courseware any of which may materially and adversely affect our profitability.

***Failure to attract and retain qualified personnel and experienced senior management could disrupt our operations and adversely affect our business and competitiveness.***

Our continuing success is dependent, to a large extent, on our ability to attract and retain qualified personnel and experienced senior management. If one or more of our senior management team members are unable or unwilling to continue to work for us, we may not be able to replace them within a reasonable period of time or at all, and our business may be severely disrupted, our financial condition and results of operations may be materially and adversely affected and we may incur additional expenses in recruiting and training additional personnel. Although our senior management members are subject to certain non-compete restrictions during their employment and for a period of two years thereafter, we cannot assure you that such restrictions will be enforced under PRC law. If any of our senior management joins a competitor or forms a competing business, our business may be severely disrupted. We have no key man insurance with respect to our key personnel that would provide insurance coverage payable to us for loss of their employment due to death or otherwise.

***We will require substantial additional funding in the future. There is no assurance that additional financing will be available to us*** *.***

We have been dependent upon bank loans and proceeds received from shareholders' equity contributions to meet our capital requirements in the past. We may require substantial additional funding in the future to meet our capital requirements for our generator products and high-end product development and to maintain operations and improve financial performance; however, we cannot assure you that we will be able to obtain capital in the future. In the event that we were unable to meet our future funding requirements for working capital and for general business purposes, we could experience operating losses and limit our marketing efforts and decrease or eliminate capital expenditures. In addition, our operating results, our business results, and our financial position would be adversely affected. In the event that adequate additional financing is not available on reasonable terms, we may not be able to undertake our expansion plan or purchase additional equipment for our operations, and we would have to modify our business plans accordingly.

***A rapid expansion could significantly strain our resources, management, and operational infrastructure, impairing our ability to meet increased demand for our products and hurt our business results.***

To accommodate our anticipated growth, we will need to expend capital resources and dedicate personnel to implement and upgrade our accounting, operational and internal management systems and enhance our record-keeping and contract tracking system. Such measures will require us to dedicate additional financial resources and personnel to optimize our operational infrastructure and to recruit more personnel to train and manage our growing employee base. In the event that we cannot successfully implement these measures efficiently and cost-effectively, we will be unable to satisfy the demand for our products, which will impair our revenue growth and hurt our overall financial performance.

***We may encounter problems related to our operational and financial systems and controls during any growth, including quality control and delivery and production capacities.***

Any significant growth in the market for our products or our entry into new markets may require additional employees for managerial, operational, financial, and other purposes. As of the date of this prospectus, we have 41 employees. We would also need to continue to expand, train and manage our employees. Continued future growth will impose significant added responsibilities upon our management to identify, recruit, maintain, integrate, and motivate new employees.

***We may encounter a working capital shortage, as we may need additional funds to finance the purchase of materials and supplies, develop new products, and hire additional employees.***

We will be required to continue improving our operations, management, and financial systems and controls for effective growth management. Our failure to manage growth effectively may lead to operational and financial inefficiencies, which will negatively affect our profitability. We cannot assure investors that we will be able to timely and effectively meet increased demand and maintain the quality standards required by our existing and potential customers.

***We cannot assure you that our internal growth strategy will be successful, which may negatively impact our growth, financial condition, results of operations, and cash flow.***

One of our strategies is to grow internally through increasing the development of new products and improve the quality of existing products. However, many obstacles to this expansion exist, including, but not limited to: increased competition from similar businesses; our ability to improve our products and product mix to realize the benefits of our research and development efforts; international trade and tariff barriers; unexpected costs; costs associated with marketing efforts abroad and maintaining attractive foreign exchange rates. Therefore, we cannot assure you that we will be able to successfully overcome such obstacles and establish our products in any additional markets. Our inability to implement this internal growth strategy successfully may negatively impact our growth, future financial condition, results of operations, or cash flows.

***Our business is substantially dependent upon our key research and development personnel who possess valuable skills in our industry, and we may have to compete for their services actively.***

We compete for qualified personnel with other power solution products manufacturing companies. Intense competition for personnel could cause our compensation costs to increase, which could have a material adverse effect on our operations and financial performance results. Our future success and ability to grow our business will depend in part on the continued service of these individuals and our ability to identify, hire and retain additional qualified personnel. If we cannot attract and retain qualified employees, we may not be able to meet our business and financial goals.

***If we fail to protect our intellectual property rights, it could harm our business and competitive position.***

We rely on a combination of patent, trademark, and domain name laws and non-disclosure agreements, and other methods to protect our intellectual property rights. Our Chinese subsidiaries own 4 patents and 22 trademarks. All 4 patents and 22 trademarks have been registered with regulatory agencies such as the State Intellectual Property Office and Trademark Office of China's State Administration for Industry and Commerce ("SAIC"). One trademark has been registered with the United States Patent and Trademark Office ("USPTO") and the Intellectual Property Office of the United Kingdom, effective in Great Britain and Northern Ireland.

The process of seeking patent protection can be lengthy and expensive, and our existing and future patents may be insufficient to provide us with meaningful protection or commercial advantage. Our patents and patent applications may also be challenged, invalidated, or circumvented.

In accordance with Chinese intellectual property laws and regulations, we will have to renew our trademarks once the terms expire. However, patents are not renewable. Our 3 design patents have only 20 years of protection. Once these patents expire, our products may lose some market share if our competitors copy them. Then, our business revenue might suffer some loss as well.

Implementation of PRC intellectual property laws and regulations has historically been lacking, primarily because of ambiguities in the PRC laws and enforcement difficulties. Accordingly, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other western countries. Furthermore, policing unauthorized use of proprietary technology is difficult and expensive. We may need to resort to litigation to enforce or defend patents issued to us or to determine the enforceability, scope, and validity of our proprietary rights or those of others. Such litigation and an adverse determination in any such litigation, if any, could result in substantial costs and diversion of resources and management attention, which could harm our business and competitive position.

***Our financial and operating performance may be adversely affected by epidemics, natural disasters, and other catastrophes.***

Our business, financial and operating performance could be materially and adversely affected by the outbreak of epidemics or pandemics, including but not limited to the 2019 novel coronavirus (COVID-19), swine influenza, avian influenza, middle east respiratory syndrome (MERS-CoV), and severe acute respiratory syndrome (SARS-CoV). As a result of the ongoing COVID-19 pandemic, we expect our operation to experience slowdown or temporary suspension in production. Our business could be materially and adversely affected if the slowdown or suspension continues for a long period. During such an epidemic outbreak, China may adopt certain hygiene measures, including quarantining visitors from places where any contagious diseases were rampant. Those restrictive measures adversely affected and slowed down the national economic development during that period. Any prolonged restrictive measures to control the contagious disease or other adverse public health developments in China or our targeted markets may have a material and adverse effect on our business operations.

Similarly, natural disasters, wars (including the potential of war), terrorist activity (including threats of terrorist activity), social unrest and heightened travel security measures instituted in response, and travel-related accidents, as well as geopolitical uncertainty and international conflict, will affect travel volume and may, in turn, have a material adverse effect on our business and results of operations. In addition, we may not be adequately prepared in contingency planning or recovery capability in relation to a major incident or crisis. As a result, our operational continuity may be adversely and materially affected, which in turn may harm our reputation.

***Our business could be materially harmed by the ongoing coronavirus (COVID-19) pandemic.***

Recently, a global pandemic of a novel strain of coronavirus (COVID-19) first emerged in China in December 2019 and has spread globally. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in China for the first half of 2020. In March 2020, the World Health Organization declared COVID-19 as a global pandemic. Furthermore, the effects of a subvariant of the Omicron variant of COVID-19, which may spread faster than the original Omicron variant, as well as the effects of any new variants and subvariants which may develop, including any actions taken by governments, may have the effect of increasing the already-existing supply chain problems or slowing our sales. Moreover, China's policy of effecting closures to avoid infections, including the recent lockdown in many provinces and municipalities in China, could affect our results of operations.

Given the rapidly expanding nature of the COVID-19 pandemic in China and globally, we believe there is a substantial risk that our business, results of operations, and financial condition will be adversely affected. Potential impact on our operations will also depend on future developments and new information that may emerge regarding the duration and severity of COVID-19 and the actions taken by government authorities and other entities to contain COVID-19 or mitigate its impact, almost all of which are beyond our control.

The COVID-19 pandemic has caused disruptions to our operations starting in December 2019. During the first quarter of 2020, our operations were closed in February due to China government mandates and we moved quickly to transition our colleague base to a fully remote working environment in all our locations. At the beginning of March 2020, substantially all of our employee were back to work in our offices. The ongoing COVID-19 pandemic not only adversely impacted our operations but business of our customers. We experienced delayed customer payments and rescheduled customer orders in first half of 2020, which adversely impacts the Company's results of operations, cash flows and financial position. Since the COVID-19 pandemic has been gradually contained in China since May 2020, our revenue and gross margin for the years ended September 30, 2020 and 2021 has not been adversely affected. From 2020 to 2021, a COVID-19 vaccination program had been greatly promoted around the globe. However, several types of COVID-19 variants emerged in different parts of the world. The Company's sales continued to be affected by government actions relating to COVID-19 and COVID-19 variants. In March 2022, a new COVID-19 subvariant (Omicron) outbreak hit China, and spread faster and more easily than previous viruses. As a result, a new round of lockdown, quarantines or travel restrictions has been imposed to date upon different provinces or cities in China by the relevant local government authorities. We temporarily closed our Shanghai office and suspended our offline marketing activities since April 1, 2022 as required by the local authorities in Shanghai, and had our employees located in Shanghai work remotely. All marketing activities in Shanghai were accordingly changed to online meetings. Starting from June 1, 2022, we reopened our Shanghai office and resumed our offline marketing activities. On December 7, 2022, China announced 10 new rules that constitute a relaxation of almost all of its stringent COVID-19 pandemic control measures. Shortly after their announcement, additional mobility restrictions issued by local governments were also scrapped. While such measures effectively reopened business within China, COVID-19's continued existence may have significant and still not well-understood impacts on our industry.

The impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following: the Coronavirus (COVID-19) will bring about an economic downturn, which will cause our customers to cut their budgets for information system and online training, and will also affect customers' ability to pay, bringing risks to the related business of our company. Due to the containment measures adopted by the government in response to COVID-19, the obstacles that these measures will bring to transportation, logistics, personnel communications, etc., will limit our service delivery capabilities, thereby bringing about negative impact on our service delivering, especially to the delivering of IT solutions services.

The global stock markets have experienced and may continue to experience a significant decline from the COVID-19 outbreak. The price of our Class A ordinary shares may decline significantly after the consummation of this offering, in which case you may lose your investment. Because of the uncertainty surrounding the COVID-19 outbreak, the business disruption and the related financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated at this time.

***If we cannot continue to innovate or fail to adapt to changes in our industry, our business, financial condition, and results of operations would be materially and adversely affected.***

The subscription service and application development service industry has trends of developing high-end and high-tech products to fulfill the changing customers' demands. Furthermore, our competitors are constantly developing innovations in different generator products to enhance customers' experience. We continue to invest significant resources in our infrastructure, research and development, and other areas to enhance our existing products and introduce new products that will attract more participants to our marketplaces. The changes and developments in our industry may also require us to re-evaluate our business model and adopt significant changes to our long-term strategies and business plan. Our failure to innovate and adapt to these changes would have a material adverse effect on our business, financial condition, and results of operations.

***If we fail to promote and maintain our brand effectively and cost-efficient, our business and results of operations may be harmed.***

We believe that developing and maintaining awareness of our brand effectively is critical to attracting new and retaining existing clients. Successful promotion of our brand and our ability to attract clients depend largely on the effectiveness of our marketing efforts and the success of the channels we use to promote our products. Currently, we promote our brand through print media advertising, video advertising, billboard advertising, and internet promotions. Our future marketing efforts will likely require us to incur significant additional expenses. These efforts may not result in increased revenues in the immediate future or at all, and, even if they do, any increases in revenues may not offset the expenses incurred. If we fail to promote and maintain our brand while incurring substantial expenses successfully, our results of operations and financial condition would be adversely affected, which may impair our ability to grow our business.

***New lines of business or new products may subject us to additional risks.***

From time to time, we may implement new lines of business or offer new products within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly when the markets are not fully developed. In developing and marketing new lines of business and/or new products, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products may not be achieved, and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product. Furthermore, any new line of business and/or new products could significantly impact the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or new products could have a material adverse effect on our business, results of operations, and financial condition.

***Government policy changes on blockchain may pose risks***

Blockchain technology is a feature of our company. The Chinese government actively encourages the application of blockchain technology and supports the company's education blockchain platform. However, there is a risk of changes in this policy in the future. On January 10, 2019, China's cyberspace information regulator, the Cyberspace Administration of China ("CAC"), issued the Administrative Provisions on Blockchain Information Services ("Provisions"), a set of rules governing blockchain-based information services. The Provisions took effect on February 15, 2019.. The Provisions regulate blockchain-based information services provided in China. The Provisions prohibit blockchain information service providers and users from using the services to engage in activities prohibited by laws or administrative regulations that endanger national security, disturb social order, or infringe the legitimate rights and interests of others. They must not generate, copy, publish, or disseminate information content prohibited by laws and administrative regulations. Currently, NetClass has neither generated, copied, published, or disseminated information content prohibited by laws and administrative regulations nor violated other Provisions. However, because of environmental-impact concerns related to the potential high demand for electricity to support of applying blockchain and online learning activity, political concerns, and for other reasons, we may be required to cease operations in China without much or any prior notice by a national or local government's formal or informal requirement or because of the anticipation of an impending requirement.

***We will be a "controlled company" within the meaning of the Nasdaq Stock Market Rules and Nasdaq Capital Market rules if, after this offering, our insiders continue to beneficially own more than 50% of our outstanding Class A and Class B ordinary shares.***

Upon the completion of this Offering, our Chairman Mr. Jianbiao Dai is deemed to beneficially own [·] Class A ordinary shares through Dragonsoft Holding Limited, a British Virgin Islands business company, holding [·] Class B ordinary shares, which represent all of our issued and outstanding shares. Accordingly, Mr. Jianbiao Dai has the sole voting and dispositive power of [·]% of our issued and outstanding shares. Accordingly, the Company is a "controlled company" under applicable Nasdaq listing standards, and we expect to continue to be a controlled company after the Offering. We will rely on certain exemptions from corporate governance rules, on including an exemption from the rule that a majority of our board of directors must be independent directors. Although we currently do not intend to rely on the "controlled company" exemption under the Nasdaq listing rules, we could elect to rely on this exemption in the future. In the event that we elected to rely on the "controlled company" exemption, a majority of the members of our board of directors might not be independent directors, and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Our status as a controlled company could cause our Class A ordinary shares to look less attractive to certain investors or otherwise harm our trading price. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

In addition, even if we cease to be a controlled company, we may still rely on exemptions available to foreign private issuers, including being able to adopt home country practices in relation to corporate governance matters.

***We may evaluate and potentially consummate strategic investments or acquisitions from time to time, which could require significant management attention, disrupt our business, and adversely affect our financial results.***

We may evaluate and consider strategic investments, combinations, acquisitions, or alliances to further increase the value of our products and better serve our clients. These transactions could be material to our financial condition and results of operations if consummated. Even if we can identify an appropriate business opportunity, there is no guarantee that we may be able to consummate the transaction successfully. Even if we do consummate such a transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such a transaction.

Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including:

● difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products, and services of the acquired business;

● the inability of the acquired technologies, products, or businesses to achieve expected levels of revenue, profitability, productivity, or other benefits;

● difficulties in retaining, training, motivating, and integrating key personnel;

● diversion of management's time and resources from our normal daily operations;

● difficulties in successfully incorporating licensed or acquired technology and rights into our products;

● difficulties in maintaining uniform standards, controls, procedures, and policies within the combined organizations;

● difficulties in retaining relationships with clients, employees, and suppliers of the acquired business;

● risks of entering markets in which we have limited or no prior experience;

● regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business;

● assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;

● failure to successfully further develop the acquired technology;

● liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; and

● potential disruptions to our ongoing businesses.

We may not make any investments or acquisitions. Furthermore, our future investments or acquisitions may not be successful, benefit our business strategy, generate sufficient revenues to offset the associated acquisition costs, or otherwise result in the intended benefits. In addition, we cannot assure you that any future investment in or acquisition of new businesses or technology will lead to the successful development of new or enhanced products or that any new or enhanced products, if developed, will achieve market acceptance or prove to be profitable.

***We may be exposed to liabilities under the Foreign Corrupt Practices Act. Any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.***

We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute to obtain or retain business. We will have operations, agreements with third parties, and sales in South-East Asia, which may experience corruption. Our existing business in Asia creates the risk of unauthorized payments or offers of payments by one of our company's employees, consultants, or sales agents because these parties are not always subject to our control. It will be our policy to implement safeguards to discourage these practices by our employees. Also, our existing safeguards and any future improvements may prove to be less than effective. The employees, consultants, or sales agents of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions. We may be subject to other liabilities, which could negatively affect our business, operating results, and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

***We have identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.***

In connection with audits of our financial statements for the fiscal years ended September 30, 2022 and 2021, our management identified below material weaknesses in the design and operation of our internal controls:

● The Company lacked the key monitoring mechanisms such as an internal control department to oversee and monitor the Company's risk management, business strategies and financial reporting procedure. We also did not have adequately designed and documented management review controls to properly detect and prevent certain accounting errors and omitted disclosures in the footnotes to the consolidated financial statements; and

● The Company lacked sufficient resources and expertise with U.S GAAP and the SEC reporting experiences in the accounting department to provide accurate information in a timely manner.

As defined under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

In addition, in order to address the material weakness in internal control over financial reporting of the Company, we have: (a) hired an experienced outside consultant with adequate experience with U.S GAAP and the SEC reporting and compliance requirements; (b) continued our efforts to provide ongoing training courses in U.S GAAP to existing personnel, including our Chief Financial Officer; (c) continued our efforts to setup the internal audit department, and enhance the effectiveness of the internal control system; and (d) continued our efforts to implement necessary review and controls at related levels and the submission of all important documents and contracts to the office of our Chief Executive Officer for retention.

All internal control systems, no matter how well designed, have inherent limitations including the possibility of human error and the circumvention or overriding of controls. Further, because of changes in conditions, the effectiveness of internal controls may vary over time. 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 or procedures may deteriorate. Accordingly, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

We cannot be certain that these measures will successfully remediate the material weakness or that other material weaknesses will not be discovered in the future. If our efforts are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our Class A ordinary shares to decline. In addition, it could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our securities. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods. Because of our status as an emerging growth company, you will not be able to depend on any attestation from our independent registered public accountants as to our internal control over financial reporting for the foreseeable future.

***You may have difficulty enforcing judgments obtained against us.***

We are an exempted company incorporated under the laws of the Cayman Islands, and substantially all of our assets are located outside of the United States. Virtually all of our assets and a substantial portion of our current business operations are conducted in the PRC. In addition, almost all of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to bring an action against these individuals within the United States. It may also be difficult for you to enforce the U.S. courts judgments obtained in U.S. courts, including judgments based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, many of whom are not residents in the United States, and whose significant part of assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC, respectively, would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state. In addition, it is uncertain whether the Cayman Islands or PRC courts would entertain original actions brought in the courts of the Cayman Islands or the PRC against us or such persons predicated upon the securities laws of the United States or any state.

***Potential disruptions in the capital and credit markets may adversely affect our business, including the availability and cost of short-term funds for liquidity requirements, which could adversely affect our results of operations, cash flows, and financial condition.***

Potential changes in the global economy may affect the availability of business and customer credit. We may need to rely on the credit markets, particularly for short-term borrowings from banks in China, as well as the capital markets, to meet our financial commitments and short-term liquidity needs if internal funds from our operations are not available to be allocated to such purposes. Disruptions in the credit and capital markets could adversely affect our ability to draw on such short-term bank facilities. Our access to funds under such credit facilities depends on the banks' ability that are parties to those facilities to meet their funding commitments, which may be dependent on governmental economic policies in China. Those banks may not meet their funding commitments to us if they experience shortages of capital and liquidity or experience excessive volumes of borrowing requests from other borrowers and us within a short period of time.

Long-term disruptions in the credit and capital markets could result from uncertainty, changing or increased regulations, reduced alternatives, or failures of financial institutions that could adversely affect our access to the liquidity needed for our business. Any disruption could require us to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. Such measures may include deferring capital expenditures and reducing or eliminating discretionary uses of cash. These events would adversely impact our results of operations, cash flows, and financial position.

***We are subject to governmental regulations and other legal obligations related to privacy, information security, and data protection, and any security breaches, and our failure to comply with our legal obligations could harm our reputation and business.***

Our business involves collecting and retaining certain internal and customer data. For example, we collect data in the ordinary course of business, including consumer profile data, behavioral data, purchase data, and pricing data. Our data engineers and technology specialists then utilize these data to feed our proprietary algorithms that provide us relevant, comprehensive, and practical insights. These insights inform our decision-making in connection with product development, business operations, and marketing and distribution. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information. We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.

Unauthorized access to our proprietary internal and customer data may be obtained through break-ins, sabotage, breach of our secure network by an unauthorized party, computer viruses, computer denial-of-service attacks, employee theft or misuse, breach of the security of the networks of our third-party service providers, or other misconduct. Because the techniques used by computer programmers who may attempt to penetrate and sabotage our proprietary internal and customer data change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques.

Unauthorized access to our proprietary internal and customer data may also be obtained through inadequate use of security controls. Any of such incidents may harm our reputation and adversely affect our business and results of operations. In addition, we may be subject to negative publicity about our security and privacy policies, systems, or measurements. Any failure to prevent or mitigate security breaches, cyber-attacks or other unauthorized access to our systems or disclosure of our customers' data, including their personal information, could result in loss or misuse of such data, interruptions to our service system, diminished customer experience, loss of customer confidence and trust, impairment of our technology infrastructure, and harm our reputation and business, resulting in significant legal and financial exposure and potential lawsuits.

***A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition.***

China's economic growth has slowed down since 2012 and such slowdown may continue. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world's leading economies, including the United States and China. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility in oil and other markets, and over the conflicts involving Ukraine and Syria. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.

The recent outbreak of war in Ukraine has already affected global economic markets, and the uncertain resolution of this conflict could result in protracted and/or severe damage to the global economy. Russia's recent military interventions in Ukraine have led to, and may lead to, additional sanctions being levied by the United States, European Union and other countries against Russia. Russia's military incursion and the resulting sanctions could adversely affect global energy and financial markets and thus could affect our customers' business and our business, even though we do not have any direct exposure to Russia or the adjoining geographic regions. The extent and duration of the military action, sanctions, and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions caused by Russian military action or resulting sanctions may magnify the impact of other risks described in this section. We cannot predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing and beyond their control. Prolonged unrest, intensified military activities, or more extensive sanctions impacting the region could have a material adverse effect on the global economy, and such effect could in turn have a material adverse effect on the operations, results of operations, financial condition, liquidity and business outlook of our business.

In addition, continued turbulence in the international markets may adversely affect our ability to access capital markets to meet liquidity needs.

**<u>Risks Related to this Offering and our Class A Ordinary Shares</u>**

***We are a holding company, and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Class A ordinary shares.***

We are a Cayman Islands holding company and conduct substantially all of our business through our subsidiaries in China. We may rely on dividends to be paid by our PRC subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict our PRC subsidiaries' ability to pay dividends or make other distributions to us.

Under PRC laws and regulations, our PRC subsidiaries may pay dividends only out of their accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned enterprises are required to set aside at least 10% of their accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital.

Our PRC subsidiaries generate primarily all of their revenue in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of any one of our PRC subsidiaries to use its Renminbi revenues to pay dividends to us. The PRC government may continue to strengthen its capital controls, and more restrictions and substantial vetting process may be put forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC subsidiary to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

In addition, the Enterprise Income Tax Law, or EIT, and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. Any limitation on the ability of our PRC subsidiary to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, NetClass HK. As of the date of this prospectus, WOFE currently does not have plan to declare and pay dividends to NetClass HK and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. NetClass HK intends to apply for the tax resident certificate when WOFE plans to declare and pay dividends to NetClass HK. When WOFE plans to declare and pay dividends to NetClass HK and when we intend to apply for the tax resident certificate from the relevant Hong Kong tax authority, we plan to inform the investors through SEC filings, such as a current report on Form 6-K, prior to such actions.

***The dual class voting structure will concentrate a majority of voting power in our Chief Executive Officer, who will beneficially own [***·***]% of the aggregate power of our total issued and outstanding share capital following the completion of this offering and will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares may view as beneficial.***

Our authorized share capital is divided into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares shall, at all times, vote together as one class on all matters submitted to a vote by the shareholders at any general meeting of the Company. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of our company and each Class B ordinary share shall entitle the holder thereof to fifteen (15) votes on all matters subject to vote at general meetings of our company. Each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

Upon the completion of this offering, Mr. Dai will beneficially own approximately [·]% of the aggregate voting power of our total issued and outstanding share capital immediately after the completion of this offering due to the disparate voting powers associated with our dual-class share structure, assuming the underwriters do not exercise their over-allotment option. Because of the dual-class share structure and the concentration of ownership, Mr. Dai will continue to control a majority of the aggregate voting power of our total issued and outstanding share capital and therefore have considerable influence over matters such as decisions regarding mergers and consolidations, election of directors, and other significant corporate actions so long as the holders of Class B ordinary shares own at least [·]% of the aggregate voting power of all issued and outstanding Class A and Class B ordinary shares. This concentrated control will limit the ability of holders of Class A ordinary shares to influence corporate matters for the foreseeable future and could discourage others from pursuing any potential merger, takeover, or other change of control transactions that holders of Class A ordinary shares may view as beneficial. Furthermore, should the Company decide to issue additional Class B ordinary shares in the future, the fifteen-to-one voting ratio between the Class B ordinary shares and Class A our ordinary shares will result in further dilutive effect on the voting power of holders of Class A ordinary shares.

As a result, for so long as Mr. Jianbiao Dai, owns a controlling or significant voting power in our issued and outstanding Class A and Class B ordinary shares, he generally will be able to control or significantly influence, directly or indirectly and subject to applicable law, all matters affecting us, including:

● the election of directors;

● determinations with respect to our business direction and policies, including the appointment and removal of officers;

● determinations with respect to corporate transactions, such as mergers, business combinations, change in control transactions or the acquisition or the disposition of assets;

● our financing and dividend policy;

● determinations with respect to our tax returns; and

● compensation and benefits programs and other human resources policy decisions.

Even if Jianbiao Dai intends to dispose of certain Class B ordinary shares such that he would control less than a majority of the voting power of our issued and outstanding Class A and Class B ordinary shares, he may be able to influence the outcome of corporate actions so long as he retains Class B ordinary shares. During the period of Mr. Jianbiao Dai's controlling or significant ownership of our Class A and Class B our ordinary shares, investors in this offering may not be able to affect the outcome of such corporate actions.

Mr. Jianbiao Dai may have interests that differ from yours and may vote in a way with which you disagree, and which may be averse to your interests. Corporate actions might be taken even if other shareholders, including those who purchase shares in this offering, oppose them. This concentration of ownership and voting power may have the effect of delaying, preventing or deterring a change of control or other liquidity event of our Company, which could deprive our other shareholders of an opportunity to receive a premium for their shares as part of a sale of our Company and might ultimately affect the market price of our Class A ordinary shares.

Furthermore, we cannot predict whether our dual-class structure will result in a lower or more volatile market price of our Class A ordinary shares or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. In July 2017, FTSE Russell and S&P Dow Jones announced that they would cease to allow most newly public companies utilizing dual-class capital structures to be included in their indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of dual-class structures and temporarily barred new dual-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities "with unequal voting structures" in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under the announced policies, our dual-class capital structure makes us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices are not expected to invest in our stock. These policies are still fairly new and it is as of yet unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations compared to those of other similar companies that are included. Because of our multi-class structure, we will likely be excluded from certain of these indexes and we cannot assure you that other stock indexes will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A ordinary shares less attractive to other investors. As a result, the market price of our Class A ordinary shares could be adversely affected.

***We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Class A ordinary shares less attractive to investors.***

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. The JOBS Act provides that we would cease to be an "emerging growth company" at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act occurred, if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our Class A ordinary shares held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period. We cannot predict if investors will find our Class A ordinary shares less attractive because we may rely on these exemptions. If some investors find our Class A ordinary shares less attractive as a result, there may be a less active trading market for our Class A ordinary shares, and our stock price may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until those standards apply to private companies. We have elected to avail our company of this exemption from new or revised accounting standards and, therefore, will be subject to accounting standards that are available to emerging growth companies.

***We are a "foreign private issuer," and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or provide information at different times, making it more difficult for you to evaluate our performance and prospects.***

We are a foreign private issuer, and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act. They will not be subject to the insider short-swing profit disclosure and recovery regime. As a foreign private issuer, we will also be exempt from Regulation FD (Fair Disclosure) requirements, which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

***Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.***

Nasdaq Listing Rule requires listed companies to have, among other things, a majority of its board members be independent. However, as a foreign private issuer, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests of the Company, it is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of our company may decrease as a result. In addition, the Nasdaq Listing Rules also require U.S. domestic issuers to have a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign private issuer, are not subject to these requirements. The Nasdaq Listing Rules may require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, certain ordinary share issuances. We intend to comply with the requirements of Nasdaq Listing Rules in determining whether shareholder approval is required on such matters and to appoint a nominating and corporate governance committee. However, we may consider following home country practice in lieu of the requirements under Nasdaq Listing Rules with respect to certain corporate governance standards, which may afford less protection to investors.

***You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited because we are incorporated under Cayman Islands law.***

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, the Cayman Islands Companies Act, and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders, and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law may not be as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have the standing to initiate a shareholder derivative action in a federal court of the United States.

***Certain judgments obtained against us by our shareholders may not be enforceable.***

We are a Cayman Islands exempted company, and substantially all of our assets are located outside of the United States. In addition, a majority of our current directors and officers are nationals and/or residents of countries other than the United States. All or a substantial portion of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands and the PRC, see "Enforceability of Civil Liabilities" on page 118.

***Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and insiders will hold a large portion of the company's listed securities.***

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by the Public Company Accounting Oversight Board ("PCAOB"), an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company's audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company's listed securities. Nasdaq was concerned that the offering size was insufficient to establish the company's initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Our public offering will be relatively small, and our company's insiders will hold a large portion of the company's listed securities. Nasdaq might apply the additional and more stringent criteria for our initial and continued listing, which might cause delay or even denial of our listing application.

***If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq Capital Market, although we exempt from certain corporate governance standards applicable to US issuers as a Foreign Private Issuer, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them.***

We will seek to have our securities approved for listing on the Nasdaq Capital Market upon consummation of this offering. We cannot assure you that we will be able to meet those initial listing requirements at that time. Even if our securities are listed on the Nasdaq Capital Market, we cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market.

In addition, following this offering, in order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum stockholders' equity, minimum share price, and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.

If the Nasdaq Capital Market does not list our securities or subsequently delists our securities from trading, we could face significant consequences, including:

● limited availability for market quotations for our securities;

● reduced liquidity with respect to our securities;

● a determination that our Ordinary Share is a "penny stock," which will require brokers trading in our Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Share;

● limited amount of news and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

***The market price of our Class A ordinary shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.***

The public offering price for our Class A ordinary shares will be determined through negotiations between the underwriters and us and may vary from the market price of our Class A ordinary shares following our public offering. If you purchase our Class A ordinary shares in our public offering, you may not be able to resell those shares at or above the public offering price. We cannot assure you that the public offering price of our Class A ordinary shares, or the market price following our public offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our public offering. The market price of our Class A ordinary shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

● actual or anticipated fluctuations in our revenue and other operating results;

● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

● actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

● announcements by us or our competitors of significant services or features, technical innovations, acquisitions, strategic relationships, joint ventures, or capital commitments;

● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

● lawsuits threatened or filed against us; and

● other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

● In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. In the event that we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

***Certain recent initial public offerings of companies with public floats comparable to the anticipated public float of the Company have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Class A ordinary shares.***

In addition to the risks addressed above in "— The market price of our Class A ordinary shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price," our Class A ordinary shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company's underlying performance. Although the specific cause of such volatility is unclear, our anticipated public float may amplify the impact the actions taken by a few stockholders have on the price of our stock, which may cause our Class A ordinary shares to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. Should our Class A ordinary shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Class A ordinary shares. In addition, investors of our Class A ordinary shares may experience losses, which may be material, if the price of our Class A ordinary shares declines after this offering or if such investors purchase shares of Class A ordinary shares prior to any price decline.

 ****

***We have broad discretion in the use of the net proceeds from our public offering and may not use them effectively.***

To the extent (i) we raise more money than required for the purposes explained in the section titled "Use of Proceeds" or (ii) we determine that the proposed uses set forth in that section are no longer in the best interests of our Company, we cannot specify with any certainty the particular uses of such net proceeds that we will receive from our public offering. Our management will have broad discretion in the application of such net proceeds, including working capital, possible acquisitions, and other general corporate purposes, and we may spend or invest these proceeds in a way with which our stockholders disagree. The failure by our management to apply these funds effectively could harm our business and financial condition. Pending their use, we may invest the net proceeds from our public offering in a manner that does not produce income or that loses value. As of the date of this Prospectus, Management has not determined the types of businesses that the Company will target or the terms of any potential acquisition.

***We do not intend to pay dividends for the foreseeable future.***

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A ordinary shares if the market price of our Class A ordinary shares increases.

***There may not be an active, liquid trading market for our Class A ordinary shares.***

Prior to this offering, there has been no public market for our Class A and Class B ordinary shares. An active trading market for our Class A ordinary shares may not develop or be sustained following this offering. You may not be able to sell your shares at the market price, if at all, if trading in our shares is not active. The public offering price was determined by negotiations between us and the underwriters based upon a number of factors. The public offering price may not be indicative of prices that will prevail in the trading market.

***Shares eligible for future sale may adversely affect the market price of our Class A ordinary shares, as the future sale of a substantial amount of outstanding Class A ordinary shares in the public marketplace could reduce the price of our Class A ordinary shares.***

The market price of our shares could decline as a result of sales of substantial amounts of our shares in the public market or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of our Class A ordinary shares. 20,000,000 ordinary shares, consisting of 18,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares will be outstanding immediately after this offering if the firm commitment is completed and the underwriters do not exercise their over-allotment option and shares if exercised in full. All of the shares sold in the offering will be freely transferable without restriction or further registration under the Securities Act. The remaining shares will be "restricted securities" as defined in Rule 144. These shares may be sold in the future without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities Act. See "Shares Eligible for Future Sale" on page 110.

***You will experience immediate and substantial dilution.***

The public offering price of our shares is substantially higher than the pro forma net tangible book value per Class A ordinary shares. Assuming the completion of the firm commitment offering and no exercise of the over-allotment option by the underwriters, if you purchase shares in this offering, you will incur immediate dilution of approximately $3.63 (or dilution of $3.54 per share in the event of full exercise of over-allotment option) in the pro forma net tangible book value per Class A ordinary share from the price per Class A ordinary share that you pay for the shares. Accordingly, you will incur immediate and substantial dilution of your investment if you purchase shares in this offering. See "Dilution" on page 52.

***We will incur additional costs as a result of becoming a public company, which could negatively impact our net income and liquidity.***

Upon completion of this offering, we will become a public company in the United States. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, Sarbanes-Oxley and rules and regulations implemented by the SEC and the Nasdaq Capital Market require significantly heightened corporate governance practices for public companies. We expect that these rules and regulations will increase our legal, accounting and financial compliance costs and will make many corporate activities more time-consuming and costly.

We do not expect to incur materially greater costs as a result of becoming a public company than those incurred by similarly sized U.S. public companies. In the event that we fail to comply with these rules and regulations, we could become the subject of a governmental enforcement action, investors may lose confidence in us and the market price of our Class A ordinary shares could decline.

***The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.***

Upon completion of this offering, we will be a publicly listed company in the United States. As a publicly listed company, we will be required to file annual reports with the Securities and Exchange Commission. In some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we will be governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could affect our results of operations.

**USE OF PROCEEDS**

After deducting the underwriting discount and estimated offering expenses payable by us, we expect to receive net proceeds of approximately $14.2 million from this offering, assuming the offering price is $4.5, the midpoint of the range set forth on the cover page of this prospectus, and assuming the over-allotment option is not exercised.

In utilizing the proceeds of this Offering, we are permitted under PRC laws and regulations to provide funding to our PRC subsidiary and branches only through loans or capital contributions. The net proceeds from this offering will be remitted to China before we will be able to use the funds to grow our business. For a detailed description of how funds are transferred through the Company, please see "Transfers of Cash to and from Our Subsidiaries" in the Prospectus Summary. We intend to use the net proceeds of this offering as follows after we complete the remittance process, and the specific uses of proceeds are arranged below in order of priority.

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| | | |
|:---|:---|:---|
| **Description of Use** | **Estimated**<br> **Amount**<br> **of Net**<br> **Proceeds**<br> **(US $)** | **%** |
| Courseware and online technology platform development | $5691462 | 40% |
| Marketing and NetClass brand building | $2134298 | 15% |
| Expansion of application development service and subscription services | $4268597 | 30% |
| Working capital and for other general corporate purposes. | $2134298 | 15% |
| **Total** | $14228655 | 100% |

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This expected use of the net proceeds from this offering represents our intentions based upon our current plans and prevailing business conditions, which could change in the future as our plans and prevailing business conditions evolve. Predicting the cost necessary to develop product candidates can be difficult and the amounts and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, although the management has not yet determined the types of business that it will target or the terms of any potential acquisitions, we will retain broad discretion over the allocation of the net proceeds from this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

The remittance procedures are as follows:

First, we will open a special foreign exchange account for capital account transactions. To open this account, we must submit to State Administration for Foreign Exchange ("SAFE") certain application forms, identity documents, transaction documents, a form of foreign exchange registration of overseas investments by domestic residents, and foreign exchange registration certificate of the invested company.

Second, we will remit the offering proceeds into this special foreign exchange account.

Third, we will apply for settlement of the foreign exchange. To do so, we must submit to SAFE certain application forms, identity documents, payment order to a designated person, and a tax certificate.

The timing of the process is difficult to estimate because the efficiencies of different SAFE branches can vary materially. Ordinarily, the process takes several months to complete but is required by law to be accomplished within 180 days of application. Until the above mentioned approvals, the proceeds of this offering will be maintained in an interest-bearing account maintained by us in the United States or Hong Kong.

According to the relevant PRC laws and regulations, in terms of capital contributions, it typically takes about eight weeks to complete the relevant filings and registrations. In terms of loans, the SAFE registration process typically takes about four weeks to complete, provided that all the necessary procedures could be successfully consummated by the relevant PRC subsidiary, as case may be, and/or our company. While we currently see no material obstacles to completing the filing and registration procedures with respect to future capital contributions and loans to our PRC subsidiary, we cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all. For further information, see the following risk factor at page 24: "*We must remit the offering proceeds to PRC before they may be used to benefit our business in the PRC, and this process may take several months*."

**DIVIDEND POLICY**

We intend to keep any future earnings to finance the expansion of our business. We do not anticipate that any cash dividends will be paid in the foreseeable future.

Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business immediately following the date on which the distribution or dividend is paid.

If we determine to pay dividends on any of our Class A ordinary shares in the future, as a holding company, we will depend on receipt of funds from our Hong Kong subsidiary, NetClass HK.

Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to NetClass HK only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries and affiliates in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments.

Cash dividends, if any, on our Class A ordinary shares will be paid in U.S. dollars. NetClass HK may be considered a non-resident enterprise for tax purposes. Any dividends WFOE pays to NetClass HK may be regarded as China-sourced income and may be subject to PRC withholding tax at a rate of up to 10%. See "Taxation—People's Republic of China Enterprise Taxation" on page 112.

In order for us to pay dividends to our shareholders, we will rely on payments made from PRC operating subsidiaries to NetClass WFOE, and the distribution of such payments to NetClass HK as dividends from WFOE. Certain payments from PRC operating subsidiaries to WFOE are subject to PRC taxes, including VAT, urban maintenance and construction tax, educational surcharges. In addition, if PRC operating subsidiaries or its subsidiaries or branches incur debt on their own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends.

**CAPITALIZATION**

The following table sets forth our capitalization as of September 30, 2022 on:

● an actual basis; and

● a pro forma basis to give effect to the sale of 3,750,000 Class A ordinary shares in this offering at the assumed initial public offering price of $4.5 per ordinary share, which is the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discounts and estimated offering expenses payable by us.

You should read this information together with our audited consolidated financial statements appearing elsewhere in this prospectus and the information set forth under the sections titled "Selected Consolidated Financial Data," "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

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| | | | |
|:---|:---|:---|:---|
|  | **September 30, 2022** | **September 30, 2022** | **September 30, 2022** |
|  | **Actual** | **Total Without<br> Over-<br> Allotment<br> Option (1)** | **Total With**<br> **Over-Allotment<br> Option** |
|  | **US$** | **US$** | **US$** |
| **<u>Shareholders' Equity</u>** |  |  |  |
| Ordinary shares, 200,000,000 shares authorized, consisting of 190,000,000 Class A ordinary shares of $0.00025 par value per share and 10,000,000 Class B ordinary shares of $0.00025 par value per share, 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares issued and outstanding; 16,750,000 Class A ordinary shares and 2,000,000 Class B ordinary shares issued and outstanding pro forma (2) |  |  |  |
| Class A ordinary shares | 3250 | 4188 | 4328 |
| Class B ordinary shares | 500 | 500 | 500 |
| Additional paid-in capital | 2922182 | 16927539 | 19243492 |
| Statutory reserves | 35448 | 35448 | 35448 |
| Accumulated deficit | (327038) | (327038) | (327038) |
| Accumulated other comprehensive loss | (223313) | (223313) | (223313) |
| Total shareholders' equity | **2411029** | 16417324 | 18733417 |
| Total capitalization | 2411029 | 16417324 | 18733417 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Reflects the sale of Class A
 ordinary shares in this offering (excluding any Class A ordinary shares that may be sold
 as a result of the Underwriter exercising its over-allotment option and excluding the Class A
 ordinary shares issuable upon exercise of the Representative's Warrant) at an assumed initial
 public offering price of $4.5 per share, and after deducting the estimated underwriting
 discounts and estimated offering expenses payable by us. The pro forma information is illustrative only, and
 we will adjust this information based on the actual initial public offering price and other
 terms of this offering determined at pricing. Additional paid-in capital reflects the net
 proceeds we expect to receive, after deducting the underwriting discounts, estimated offering expenses
 payable by us and advisory fees. We estimate that such net proceeds will be approximately
 $14.2 million.

(2) The number of our ordinary shares had been adjusted retrospectively
 to reflect the increase in share capital, and the illustrative pro forma shares outstanding excludes any Class A ordinary shares
 that may be sold as a result of the Underwriters exercising its over-allotment option.. See "Description of Share Capital" for more
 details.

Each $1.00 increase (decrease) in the assumed initial public offering price of $4.5 per ordinary share would increase (decrease) the pro forma amount of total capitalization by approximately $3.4 million, assuming that the number of ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and estimated offering expenses payable by us. An increase (decrease) of 1 million in the number of Class A ordinary shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma amount of total capitalization by approximately $4.1 million, assuming no change in the assumed initial public offering price per Class A ordinary share as set forth on the cover page of this prospectus.

**DILUTION**

If you invest in our Class A ordinary shares in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per Class A ordinary share in this offering and the net tangible book value per ordinary share after this offering. Dilution results from the fact that the initial public offering price per Class A ordinary share is substantially in excess of the net tangible book value per ordinary share. As of September 30, 2022 we had a historical net tangible book value of $2,003,883, or $0.13 per ordinary share (based on the number of shares issued and outstanding as of September 30, 2022. Our net tangible book value per share represents total tangible assets less total liabilities and deferred issuance costs, all divided by the number of ordinary shares outstanding.

After giving effect to the sale of 3,750,000 Class A ordinary shares in this offering at the assumed initial public offering price of $4.5 per ordinary share, and after deducting the underwriting discounts and estimated offering expenses payable by us, our pro forma net tangible book value as of September 30, 2022 would have been $16,232,539, or $0.87 per ordinary share. This represents an immediate increase in pro forma net tangible book value of $0.74 per ordinary share to existing investors and immediate dilution of $3.63 per ordinary share to new investors. The following table illustrates this dilution to new investors purchasing ordinary share in this offering:

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| | | |
|:---|:---|:---|
|  | **Offering**<br> **without**<br> **Over-**<br> **allotment**<br> **Option**  | **Offering**<br> **with**<br> **Full**<br> **Exercise of**<br> **Over-**<br> **allotment**<br> **Option** |
| Assumed initial public offering price per ordinary shares | $4.50 | $4.50 |
| Net tangible book value per ordinary share as of September 30, 2022 | $0.13 | $0.13 |
| Increase in pro forma net tangible book value per ordinary share attributable to new investors purchasing Class A ordinary shares in this offering | $0.74 | $0.83 |
| Pro forma net tangible book value per ordinary share after this offering | $0.87 | $0.96 |
| Dilution per ordinary share to new investors in this offering | $3.63 | $3.54 |

---

If the underwriter exercises its over-allotment option in full, the pro forma net tangible book value per ordinary share after the offering would be $0.96 per ordinary share, the increase in net tangible book value per ordinary share to existing shareholders would be $0.83 per ordinary share, and the immediate dilution in net tangible book value per ordinary share to new investors in this offering would be $3.54 per ordinary share.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND**

**RESULTS OF OPERATIONS**

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in this prospectus. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in "Risk Factors." All amounts included herein with respect to the fiscal years ended September 30, 2022 and 2021 are derived from our audited consolidated financial statements included elsewhere in this prospectus. Our consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.*

**Overview**

We are a holding company incorporated as an exempted company on January 4, 2022 under the laws of the Cayman Islands. As a holding company with no material operations of our own, we conduct substantially all of our operations through our subsidiaries in China.

We are a provider of subscription service and application development service. All of our customers are located in China. We currently generate most of our revenues from subscription service from customers accessing our Software-as-a-Service ("SaaS"), which represent approximately 63.5% and 65.6% of our total revenue for the years ended September 30, 2022 and 2021 respectively. We also generate revenue from application development services, which represent approximately 36.5% and 34.4% of our total revenue for the years ended September 30, 2022 and 2021, respectively. For the years ended September 30, 2022 and 2021, our total revenues were approximately $9.3 million and $11.6 million, respectively.

***Coronavirus ("COVID-19") updates***

Beginning in late 2019, an outbreak of a novel strain of coronavirus ("COVID-19") first emerged in China and has spread globally. In March 2020, the World Health Organization ("WHO") declared the COVID-19 as a pandemic. Governments in affected countries are imposing travel bans, quarantines and other emergency public health measures, which have caused material disruption to businesses globally resulting in an economic slowdown. These measures, though intended to be temporary in nature, may continue and increase depending on developments in the COVID-19 outbreak or any reoccurr ence of an outbreak. From 2020 to 2021, a COVID-19 vaccination program had been greatly promoted around the globe. However, several types of COVID-19 variants emerged in different parts of the world. The Company's sales continued to be affected by government actions relating to COVID-19 and COVID-19 variants. In March 2022, a new COVID-19 subvariant (omicron) outbreak hit China, and spread faster and more easily than previous viruses. As a result, a new round of lockdown, quarantines or travel restrictions has been imposed to date upon different provinces or cities in China by the relevant local government authorities. We temporarily closed our Shanghai office and suspended our offline marketing activities since April 1, 2022 as required by the local authorities in Shanghai, and had our employees located in Shanghai work remotely. All marketing activities in Shanghai were accordingly changed to online meetings. Starting from June 1, 2022, we reopened our Shanghai office and resumed our offline marketing activities. On December 7, 2022, China announced 10 new rules that constitute a relaxation of almost all of its stringent COVID-19 pandemic control measures. Shortly after their announcement, additional mobility restrictions issued by local governments were also scrapped. While such measures effectively reopened business within China, COVID-19's continued existence may have significant and still not well-understood impacts on our industry.

The extent of the impact on our future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. The Company continues taking actions to help mitigate, as best we can, the impact of the COVID-19 pandemic on the health and well-being of our employees, the communities in which we operate and our partners, as well as the impact on our operations and business as a whole.

**Key Factors that Affect Operating Results**

We currently derive a majority of revenues from our application development services and subscription services. We intend to continually enhance our services and cross-sell new services to our existing customers and acquire new customers by increasing our market penetration with a deeper market coverage and a broader geographical reach. Our ability to maintain and expand our customer base with our application development services and subscription services significantly affects our operating results.

We intend to expand the scope of our offerings to service existing customers and acquire new customers by continuous investment in sales marketing activities as well as remaining our efforts in research and development ("R&D") to increase our subscription revenue and profit. Our ability to drive increased customer adoption and usage of our SaaS services affects our operating results. Our R&D spending could vary depending on the availability of our R&D human capital, the priority setting and the timeframes required for the R&D projects. Our ability to attract, train and retain a cost-effective pool of qualified R&D professionals, including our ability to leverage and expand our proprietary database of qualified R&D professionals and their job satisfaction, affects our financial performance.

**Results of Operations**

***For the years ended September 30, 2022 and 2021***

The following table summarizes the results of our operations for the years ended September 30, 2022 and 2021, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years Ended** | **For the years Ended** | | |
|  | **September 30,** | **September 30,** | | |
|  | **2022** | **2021** |<br>**Change** |<br>**% Change** |
| REVENUES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Application development services | $3380284 | $3977071 | $(596787) | (15.0)% |
| &nbsp;&nbsp;&nbsp;Subscription services | 5877323 | 7580442 | (1703119) | (22.5)% |
| &nbsp;&nbsp;&nbsp;Total revenues | 9257607 | 11557513 | (2299906) | (19.9)% |
| COST OF REVENUES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Application development services | 2538029 | 3143389 | (605360) | (19.3)% |
| &nbsp;&nbsp;&nbsp;Subscription services | 3678745 | 4436778 | (758033) | (17.1)% |
| &nbsp;&nbsp;&nbsp;Total cost of revenues | 6216774 | 7580167 | (1363393) | (18.0)% |
| GROSS PROFIT | 3040833 | 3977346 | (936513) | (23.5)% |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling expenses | 1298462 | 1776667 | (478205) | (26.9)% |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 865690 | 586314 | 279376 | 47.6% |
| &nbsp;&nbsp;&nbsp;Research and development expenses | 828311 | 406754 | 421557 | 103.6% |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 2992463 | 2769735 | 222728 | 8.0% |
| **Income from operations** | 48370 | 1207611 | (1159241) | (96.0)% |
| OTHER INCOME (EXPENSES) |  |  |  |  |
| Interest income | 1111 | 1286 | (175) | (13.6)% |
| Interest expenses | (9683) | (13197) | 3514 | (26.6)% |
| Other income, net | 24353 | 34286 | (9933) | (29.0)% |
| Total other income, net | 15781 | 22375 | (6594) | (29.5)% |
| INCOME BEFORE INCOME TAXES | 64151 | 1229986 | (1165835) | (94.8)% |
| Income tax provision (benefit) | (68536) | 163481 | (232017) | (141.9)% |
| NET INCOME | 132687 | 1066505 | (933818) | (87.6)% |
| **Other comprehensive income (loss)** | (248101) | 84190 | (332291) | (394.7)% |
| COMPREHENSIVE INCOME (LOSS) | $(115414) | $1150695 | $(1266109) | (110.0)% |

---

*Revenues*

We derive revenues from two sources: (1) revenue from application development services, and (2) revenue from subscription services.

The Company is focusing on developing applications and solutions equipped with the Company's new technology in SaaS platform and enlarging our subscription user base. For the years ended September 30, 2022, our total revenue was approximately $9.3 million as compared to approximately $11.6 million for the years ended September 30, 2021. The Company's total revenue decreased by approximately $2.3 million, or 19.9%. The overall decrease in total revenue was primarily attributable to approximately $1.7 million decrease in revenue from subscription services.

*<u>Revenue from application development services</u>*

The Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers' specific needs. All application development contract are completed within three months. Revenue from application development service is recognized at a point of time by customer acceptance.

For the year ended September 30, 2022, our application development service revenue was approximately $3.4 million as compared to approximately $4.0 million for the year ended September 30, 2021. The decrease in application development service revenue was approximately $0.6 million or 15.0% due to less contracts completed for the year ended September 30, 2022 since the Company is shifting its focus to SaaS subscription service.

*<u>Revenue from subscription services</u>*

Revenue from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications. The Company's monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers. The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.

Our subscription service revenue decreased by approximately $1.7 million, or 22.5%, from approximately $7.6 million for the year ended September 30, 2021 to approximately $5.9 million for the year ended September 30, 2022. In March 2022, a new COVID-19 subvariant (omicron) outbreak hit China, and spread faster and more easily than previous viruses. As a result, we temporarily closed our Shanghai office and suspended our offline marketing activities from April 1, 2022 to June 1, 2022. This affected our Shanghai-based clients as well and had a negative impact on our subscription services.

*Cost of Revenues*

Our cost of revenues mainly consists of compensation benefit expenses for our professionals, material costs and outsourcing costs. For the year ended September 30, 2022, our total cost was approximately $6.2 million as compared to approximately $7.6 million for the year ended September 30, 2021. The Company's total cost decreased by approximately $1.4 million, or 18.0%. The overall decrease in total cost of revenues was primarily attributable to approximately $0.6 million decrease in cost of providing application development services and $0.8 million decrease in cost of providing subscription services.

Our cost of application development services was approximately $2.5 million for the year ended September 30, 2022, representing a decrease of approximately $0.6 million from approximately $3.1 million for the year ended September 30, 2021, which is in line with the decreased application development service revenue.

Our cost of subscription services was approximately $3.7 million for the year ended September 30, 2022, representing an decrease of approximately $0.8 million from approximately $4.4 million for the year ended September 30, 2021, which was in line with the decrease in subscription services revenue. Meanwhile, we have established a stable SaaS development and services team, which has reduced outsourcing costs.

***Gross profit***

 ****

 ****

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years Ended** | **For the years Ended** | **For the years Ended** | **For the years Ended** | **Change** | **% of**<br> **Change** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** | | |
|  | **2022** | **2022** | **2021** | **2021** | | |
| **GROSS PROFIT** | **Gross**<br> **Profit** | **Gross**<br> **Margin** | **Gross**<br> **Profit** | **Gross**<br> **Margin** |  |  |
| Application development services | $842255 | 24.9% | $833682 | 21.0% | $8573 | 1.0% |
| Subscription services | 2198578 | 37.4% | 3143664 | 41.5% | (945086) | (30.1)% |
| Total gross profit | $3040833 | 32.8% | $3977346 | 34.4% | $(936513) | (23.5)% |

---

 ****

Our gross profit decreased by approximately $0.9 million or 23.5% from approximately $4.0 million for the year ended September 30, 2021 to approximately $3.0 million for the year ended September 30, 2022. Gross margin as a percent of overall revenue for the years ended September 30, 2022 and 2021 was approximately 32.8% and 34.4%, respectively.

Gross profit for application development services increased by approximately $0.01 million or 1.0% from approximately $0.83 million for the year ended September 30, 2021 to approximately $0.84 million for the year ended September 30, 2022. Gross profit margin for the years ended September 30, 2022 and 2021 was approximately 24.9% and 21.0%, respectively. The increase in gross profit margin was due to less IT equipment sales with lower gross profit margin were included in current year's revenue.

Gross profit for subscription services decreased by appproximatley $0.9 million or 30.1% from approximately $3.1 million for the year ended September 30, 2021 to approximately $2.2 million for the year ended September 30, 2022. Gross profit margin was approximately 37.4% and 41.5% for the years ended September 30, 2022 and 2021, respectively. The slight decrease of gross profit margin was due to we need to keep competitive price for customers despite cost increase.

*Operating Expenses*

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years Ended** | **For the years Ended** | | |
|  | **September 30,** | **September 30,** | | |
|  | **2022** | **2021** |<br>**Change** |<br>**% Change** |
| OPERATING EXPENSES: |  |  |  |  |
| Selling expenses | $1298462 | $1776667 | $(478205) | (26.9)% |
| General and administrative expenses | 865690 | 586314 | 279376 | 47.6% |
| Research and development expenses | 828311 | 406754 | 421557 | 103.6% |
| Total operating expenses | $2992463 | $2769735 | $222728 | 8.0% |

---

Our operating expenses consist of selling, general and administrative and research and development ("R&D") expenses. Operating expenses increased by approximately $0.2 million, or 8.0%, from approximately $2.8 million for the year ended September 30, 2021 to approximately $3.0 million for the year ended September 30, 2022. The increase in our operating expenses was primarily due to approximately $0.3 million increase in general and administrative expenses and approximately $0.4 million increase in research and development expenses, offset by approximately $0.5 million decrease in selling expenses.

Selling expenses primarily consisted of salary and compensation expenses relating to our sales personnel, advertising expenses, promotional service fee, travel and other expenses relating to our sales activities. Selling expenses decreased by approximately $0.5 million or 26.9% from approximately $1.8 million for the year ended September 30, 2021 to approximately $1.3 million for the year ended September 30, 2022 due to an approximately $0.4 million decrease in advertising expenses as a result of temporary close of our Shanghai office and suspension of our offline marketing activities from April 1, 2022 to June 1, 2022.

General and administrative expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive office personnel, and included rental expenses, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation costs. General and administrative expenses increased by approximately $0.3 million or 47.6% from approximately $0.6 million for the year ended September 30, 2021 to approximately $0.9 million for the year ended September 30, 2022, due to an approximately $0.3 million increase in audit fees since the Company engaged U.S accounting firm to perform its PCAOB audis for its IPO; there were no related audit fees recorded for the year ended September 30, 2021.

R&D expenses primarily consisted of compensation and benefit expenses relating to our R&D personnel as well as office overhead and other expenses relating to our R&D activities. R&D expenses increased by approximately $0.4 million or 103.6% from approximately $0.4 million for the year ended September 30, 2021 to approximately $0.8 million for the year ended September 30, 2022, We will remain our efforts in R&D in future, which allows us to maintain a technical advantage in the market.

*Other Income (Expense)*

Other income (expense) primarily consists of interest income, interest expense and other income. Our net other income amounted to $15,781 for the year ended September 30, 2022, decreased by $6,594 or appxoimatley 29.5% from $22,375 for the year ended September 30, 2021, due to higher government grant received and less interest expense recorded.

*Income tax provision (benefit)*

Income tax (benefit) provision was $(68,536) and $163,481 for the years ended September 30, 2022 and 2021, respectively. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary Shanghai NetClass Information Technology Co., Ltd. enjoys a preferential tax rate of 15%. The rest of our subsidiaries in PRC are subject to income tax rate of 25%. After the additional R&D tax deduction, we had taxble loss and accordingly recorded income tax benefit and deferred tax assets.

*Net Income*

As a result of the foregoing, our net income decreased by approximately $0.9 million, or 87.6%, from approximately $1.1 million for the year ended September 30, 2021 to approximately $0.1 million for the year ended September 30, 2022. The decrease of net income is attributed to approximately $0.9 million decrease in gross profit and an increase of approximately $0.2 million in operating expenses.

*Other comprehensive income (loss)*

Foreign currency translation adjustments amounted to $(248,101) and $84,190 for the years ended September 30, 2022 and 2021, respectively. The balance sheet amounts with the exception of equity as of September 30, 2022 were translated at RMB7.1135 to USD1.00 as compared to RMB6.4434 to USD1.00 as of September 30, 2021. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the years ended September 30, 2022 and 2021 were RMB6.5532 to USD1.00 and RMB6.5072 to USD1.00, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S, dollar terms without giving effect to any underlying change in our business or results of operation.

**Liquidity and Capital Resources**

Substantially all of our operations are conducted in China and all of our revenue, expenses, and cash are denominated in RMB. RMB is subject to the exchange control regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC exchange control regulations that restrict our ability to convert RMB into U.S. dollars. As of September 30, 2022 and September 30, 2021, the aggregate amount of cash of $301,067 and $1,041,937 respectively, was held at major financial institutions in PRC.

The Cayman Islands holding company is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiary in China. As a result, the Company's ability to pay dividends depends upon dividends paid by our subsidiary. Our subsidiary in China are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, our subsidiary is required to set aside at least 10% of its after-tax profits each year based on PRC accounting standards, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. The statutory reserve funds are not distributable as cash dividends. Remittance of dividends by our subsidiary out of China is subject to examination by the banks designated by SAFE. Our subsidiary has not paid dividends and will not be able to pay dividends until it generates accumulated profits and meet the requirements for statutory reserve funds. In addition, we would need to accrue and pay withholding taxes if we were to distribute funds from our subsidiary in China to us. We do not intend to repatriate such funds in the foreseeable future, as we plan to use existing cash balance in PRC for general corporate purposes.

As of September 30, 2022, the Company had working capital of approximately $2.1 million and generated a net income of approximately $0.1 million. For the year ended September 30, 2022, the Company had net cash used in operating activities of approximately $0.6 million. The net cash outflow was mainly due to increased accounts receivable. For the year ended September 30, 2021, the Company had working capital of approximately $2.1 million and generated a net income of approximately $1.1 million. For fiscal 2021, the Company had net cash provided by operating activities of approximately $0.7 million. The Company has historically funded its working capital needs primarily from operations, bank loans, advance payments from customers and shareholders. The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on customer contracts, and the timing of accounts receivable collections.

In assessing its liquidity, the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the future and its operating and capital expenditure commitments. As of September 30, 2022, the Company had cash and restricted cash of approximately $0.3 million. The Company believes that its cash on hand and operating cash flows will be sufficient to fund its operations over at least the next 12 months from the date of this report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments, and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company's amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.

***For the years ended September 30, 2022 and 2021***

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| | | |
|:---|:---|:---|
|  | **For the Years Ended**<br> **September 30,** | **For the Years Ended**<br> **September 30,** |
|  | **2022** | **2021** |
| Net cash (used in) provided by operating activities | $(571449) | $745803 |
| Net cash provided by investing activities |  | 19573 |
| Net cash used in financing activities | (125578) | (30228) |
| Effect of exchange rate change on cash | (43205) | 329 |
| Net (decrease) increase in cash and restricted cash | $(740232) | $735477 |

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***Operating Activities***

Net cash used in operating activities was approximately $0.6 million for the year ended September 30, 2022. Net cash used in operating activities for the year ended September 30, 2022 consisted of approximately $0.1 million of net income, adjustment of $45,563 non-cash items, a decrease in inventory of approximately $0.2 million, an increase of approximately $0.1 million in accounts payable, an increase of approximately $0.1 million in due to a related party, an increase of approximately $0.1 million in accrued expenses and other liabilities, offset by an increase of approximately $1.2 million in accounts receivable and a decrease of approximatel $0.1 million in advance from customers.

Net cash provided by operating activities was approximately $0.7 million for the year ended September 30, 2021. Net cash provided by operating activities for the year ended September 30, 2021 mainly consisted of approximately $1.1 million of net income, adjustment of $0.3 million non-cash items, a decrease in inventory of approximately $0.5 million, a decrease in advance to vendors of approximately $0.4 million, a decrease in prepayments and other assets of approximately $0.1 million offset by an increase of approximately $0.7 million in accounts receivable, a decrease of approximately $0.5 million in advance from customers and a decrease of approximately $0.5 million in accounts payable.

***Investing Activities***

Net cash provided by investing activities was $nil for fiscal 2022.

Net cash provided by investing activities was $19,573 for fiscal 2021, mainly consisted of $3,482 purchases of property and equipment, offset by $23,055 proceeds from disposition of intangible assets

***Financing Activities***

Net cash used in financing activities was $125,578 for fiscal 2022, mainly consisted proceeds from bank loan of $177,642, repayment of bank loans of $132,429 and $170,791 payment for deferred issuance costs in connection with this offering.

Net cash used in financing activities was $30,228 for fiscal 2021, mainly consisted of $67,372 net proceeds from related parties and $97,600 repayment to bank loans.

**Capital Expenditures**

The Company made capital expenditures of $nil and $3,482 for the years ended September 30, 2022 and 2021, respectively. In these periods, our capital expenditures were mainly used for purchases of property and equipment. The Company will continue to make capital expenditures to meet the expected growth of its business.

**Contractual Obligations**

The Company had an outstanding bank loan of $130,938 and $98,552 as of September 30, 2022 and 2021, respectively. The Company has also entered into non-cancellable operating lease agreements for several offices. The leases are expiring through December 31, 2023.

The following table sets forth our contractual obligations and commercial commitments as of September 30, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|  | **Total** | **Less than**<br> **1 Year** | **1 – 3 Years** | **3 – 5 Years** | **More than**<br> **5 Years** |
| Operating lease arrangements | $55831 | $44665 | $11166 | $- | $- |
| Bank loans | 130938 | 130938 | - | - | - |
| Total | $186769 | $175603 | $11166 | $- | $- |

---

The following table sets forth our contractual obligations and commercial commitments as of September 30, 2021:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|  | **Total** | **Less than**<br> **1 Year** | **1 – 3 Years** | **3 – 5 Years** | **More than**<br> **5 Years** |
| Operating lease arrangements | $194683 | $86526 | $108157 | $- | $- |
| Bank loans | 98552 | 98552 | - | - | - |
| Total | $293235 | $185078 | $108157 | $- | $- |

---

**Off-Balance Sheet Arrangements**

There were no off-balance sheet arrangements for the years ended September 30, 2022 and 2021 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.

**Critical Accounting Estimates**

We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates and assumptions on ourown historical data and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates and assumptions on an ongoing basis.

Our expectations regardine the future are based on avaible information and assumptions that we believe to be reasonable and accurate, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

The critical accounting policies, judgments and estimates that we believe to have the most significant impact on our consolidated financial statements are described below, which should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this prospectus. When reviewing our financial statements, you should consider.

&nbsp;&nbsp;&nbsp;&nbsp;· our
 selection of critical accounting policies;

&nbsp;&nbsp;&nbsp;&nbsp;· the
 judgments and other uncertainties affecting the application of such policies;

&nbsp;&nbsp;&nbsp;&nbsp;· the
 sensitivity of reported results to changes in conditions and assumptions;

Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) accounts receivable, net; and (iii) income taxes. See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We consider our critical accounting estimates include (i) allowance for doubtful accounts for accounts receivable and (ii) valuation allowance of deferred tax assets.

***Allowance for doubtful accounts for accounts receivable***

Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management's best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Allowance for doubtful accounts amounted to $694,257 and $736,725 as of September 30, 2022 and September 30, 2021.

***Valuation of deferred tax assets***

Deferred income taxes are provided using assets and liabilities method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized to the extent that these assets are more likely than not to be realized. In making such a determination, the management consider all positive and negative evidence, including future reversals of projected future taxable income and results of recent operation. Deferred tax assets are then reduced by a valuation allowance through a charge to income tax expense when, in the opinion of management, it is more likely than not that a portion of 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 those temporary differences become deductible. Recovery of substantially all of the Company's deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as September 30, 2022 and September 30, 2021. However, since the deferred tax assets related to operating loss has a limited window of use, to be conservative, management decided to record a partial valuation allowance. Valuation allowance amounted to $133,333 and $178,259 as of September 30, 2022 and 2021, respectively. While we consider the facts above, our projections of future income qualified tax-planning strategies may be changed due to the macroeconomic conditions and our business development. The DTAs could be utilized in the future years if we make profits in the future, the valuation allowance shall be reversed.

<u>Recently issued accounting pronouncements</u>

A list of recent relevant accounting pronouncements is included in Note 2 "Summary of Principal Accounting Policies" of our Consolidated Financial Statements.

**BUSINESS**

**Overview**

We are a B2B (Business-to-Business) smart education specialist, providing IT solutions to schools, training institutions, corporations, public agencies (, and other institutions or corporate customers. We offer SaaS subscription service and, application development. Our solutions modules include teaching management, campus management, online teaching, online examination, epidemic prevention and control, EDC (Education Credit) blockchain system, and lecturer evaluation services. Our mission is to provide high-quality and reliable products to our customers to maintain sustainable business growth over the long term.

We believe we are one of the better known online education brands in China's online education software industry. We have advantages in customized design, an easy-to-use interface, knowledge of the industry and market, and our experienced management. In addition, we believe we are the first to incorporate blockchain technology in online education. For more details, see "– Our Products and Services – EDC (Education Credit) blockchain system." Our B2B business revenues were $9,257,607 and $11,557,513 during the fiscal years ended September 30, 2022 and 2021, respectively.

Our main products and services are as follows:

***Smart Campus***  ***Solutions***

Smart Campus is information systems designed for schools that includes the basic network infrastructure and the digital education resources management. Smart Campus can help schools and teachers improve teaching efficiency, and help students and parents boost learning participation and engagement. For example, a smart campus can include systems that manage classrooms, students, teachers, curriculum, transcript, safety, property, environment and energy, etc. Depending on the customer's needs, we can design an integrated smart campus that includes several modules or we can provide services based on a single module. Examples of Smart Campus customers include Shanghai Open University, East China Normal University Jinan Experimental School, Shanghai Pudong Education Development Research Institute, etc.

Smart Campus systems collect and analysis the studying data and related information provided by school, teachers and students. The system processes the data and generate feedback and alerts to schools for offering better teaching and management service to students, and for the safety of students. Since the beginning of 2021, NetClass China has been working with Shanghai Municipal Education Commission, Shanghai Lifelong Education Credit Bank and Shanghai Open University in terms of smart campus services. This information helps schools and Shanghai Municipal Education Commission to manage their operation.

Our IT solutions in building a smart campus include (1) management system of teaching resource like facilities, courseware, teaching data, environmental energy data; (2) providing online course registration, curriculum management, transcript management, course evaluation; (3) classroom e-learning large screen and interactive learning system, and intelligent grading technology to help teachers grade exams and keep record; (4) monitoring attendance and enhancing campus safety through surveillance cameras on campus and face recognition technology; (5) through our epidemic prevention and control system, providing COVID-19 data tracking such as the health code and vaccination records.

During the fiscal years ended September 30, 2022 and 2021, revenue from Smart Campus Solutions related sales accounted for 34.0% and 26.6% of our total revenue, respectively.

***NetClass Mobile Learning Platforms***

NetClass mobile learning platforms are designed for online leaning. Traditional in-person trainings may be limited by space, costs, and travel restrictions as a result of the COVID-19 pandemic. The NetClass mobile learning platforms allow users to watch video, manage courses, and ask questions at a time and place that best fit their schedule. We can provide a curated selection of courseware based on a customer's need and keep record of the learning process. NetClass mobile learning system can also support learners to study on desktop computers. The platform also organizes such data into charts and information that is valuable to the customer to evaluate and improve the efficiency of their trainings. Generally, the customers provide the topics of trainings and sometimes provide course material themselves. If the customers do not have course material ready to use, we will either purchase the courseware from third parties or work with the customer to create course materials.

(Picture: NetClass Mobile Learning)

![](tm2224158d7_f1aimg02.jpg)

![](tm2224158d7_f1aimg03.jpg)

During the fiscal years ended September 30, 2022 and 2021, revenue from online learning platforms and related services and development accounted for 83.7% and 65.9% of our total revenue, respectively.

***EDC*** ***(Education Credit) Blockchain System***

The EDC (Education Credit) blockchain system facilitates record keeping that ensures secure, traceable, verifiable, and non-fungible exchange of data such as education credits, education coupons and certificates among institutions in the education ecosystem.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Store and track learning data** 

The EDC system awards one EDC credit to the student who completes one hour of the training course. Such EDC credits create records for awarding academic certificates upon completing certain amount of training courses. The EDC credits and certificates earned by the student are not changeable and cannot be rewritten, which creates a digital academic credential that is readily accessible and permanent that accompanies the student for a lifetime. The EDC system also awards digital certificate of coupons and rewards in the form of tokens upon completion of one course.The EDC blockchain system has generated no revenue since it was launched in 2018.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Digital art gallery** 

To showcase the artworks by young artists at different art schools, our R&D team built a website and designed a digital art gallery to demonstrate artworks digitally for long-term educational purpose including organizing artworks, hosting exhibition and attracting young talents and art lovers, free of any charge at http://yage.org.cn/. The digital art gallery is a website that allows afterschool art institutions and their students to upload their artwork electronically, access and edit basic artists and artworks information including name, age, biography and upload date of the artwork on their respective main page via the webpage. The digital art gallery is also open to the public online. Any online viewers can view all the artworks and click the "like" button for any of the artworks. The digital art gallery will demonstrate the artworks in an order based on the number of "likes" from viewers.

Currently, more than a hundred art students uploaded their artworks to the website and hundreds of people have accessed the digital art gallery to leave their "likes". Though in the early stage of development, our R&D team will continue to improve the digital art gallery software system to make the digital art gallery more accessible and user-friendly. We have not generated revenue from the digital art gallery since it is free of charge. In the future, we plan to cooperate with more art schools and institutions so we can offer digital recording and online artwork management system and a better art platform for up and coming young artists in China. Currently the digital art gallery is free of charge, but we may charge a fixed servicefee to end users, if the user base increases to a bigger scale.

The EDC blockchain system has been operating stably and safely since its first launch in 2018. It has been recognized by the Shanghai Municipal Commission of Economy and Informatization. We have completed demonstrations with Shanghai Opening University, Jing'an Professional Education Group, and Zhucai Beijing Technology Training Co., Ltd. We have also established a strategic partnership with Shanghai Computer Software Technology Center to promote blockchain applications in training institutions. The EDC system is currently one of the few successful practice cases in this field. NetClass China is also one of the few companies that have filed with the Office of the Central Cyberspace Affairs Commission of China to certify educational blockchain.

The following shows an example of the data on the EDC system:

(Figure: Education Blockchain Platform)

![](tm2224158d7_f1aimg04.jpg)

In many cases, our EDC blockchain services are provided to our customers together with smart campus projects and online learning platform projects.

***NetClass Online Examination System***

***NetClass Epidemic Prevention and Control System***

Our epidemic prevention and control system provides an integrated solution for the health management of schools during the COVID-19 Pandemic. The epidemic prevention and control system records the user's information including body temperature, ID card verification, face recognition, travel code, COVID-19 test result, and vaccination records. Because of its identity authentication function, the system is also applicable to different scenarios such as temporary passes at work, student identity verification at school, etc. All the data and information obtained on epidemic prevention and control are accessible nationwide through one code. Therefore it provides our customers with an easier solution to health management.

***Online Lecturer Evaluation Services***

The online lecturer evaluation services target customers seeking online teaching certificates. The training materials are based on the evaluation standards and guidelines of the associations issuing such certificates. Currently, the online lecturer evaluation services are designed for China General Chamber of Commerce. Its online teaching certificate requires applicant to be tested based on comprehensive teaching ability, knowledge of online education policies and norms, and proficiency in using online education tools. As of the date of this prospectus, 176 applicants have participated and 20 has passed the online lecturer evaluation. For applicants who passed the evaluation, China General Chamber of Commerce will issue the certificates, and we will provide the digital blockchain-based certificate as well.

***Application Development Services***

The application development service contracts include technical service agreements and software service and development sales agreements. Shanghai NetClass Information Technology Co., Ltd. entered into application development service contracts with Shanghai Municipal Education Commission, Shanghai Open University, Shanghai Herocheer Technology Co., Ltd., etc. Technical service agreements usually have a term of one to three years. Generally, the agreements will also state that the services shall be delivered within a certain period of time. Either party has a right to terminate with advance notice to the other party. The agreements can also be terminated if performance is impossible due to a violation of laws or force majeure. The agreements usually also prohibit us from assigning the rights and obligations under the agreement without prior written consent of the customer. Software service and development sales agreements usually state that the services shall be delivered within a certain period of time. Because delivery under these agreements usually happens shortly after signing, the agreements do not necessarily include a termination clause. For more details of technical service agreements and software service and development sales agreements, see "– Customers and Suppliers – Major Customers." Revenue from application development service is recognized at customer acceptance. For the fiscal year ended September 30, 2022, our application development service revenue was approximately $3.4 million as compared to approximately $4.0 million for the year ended September 30, 2021. The decrease in application development service revenue was approximately $0.6 million or 15.0% due to less contracts completed for the year ended September 30, 2022 since the Company is shifting its focus to SaaS subscription service. For the year ended September 30, 2021, our application development service revenue was approximately $4.0 million as compared to $1.9 million for the year ended September 30, 2020. The increase in application development service revenue was approximately $2.1 million or 106.5% due to more contracts completed in fiscal 2021.

**Industry Overview**

*All the information and data presented in this part have been derived from the research reports of Shanghai Association for Informatization Development Research (SAIDER), as well as some public reports from the Chinese government website which we will specifically declare. SAIDER has advised us that the statistical and graphical information contained herein is drawn from its database and other sources and research reports of SAIDER were prepared for use in connection with the offering. The following discussion contains projections for future growth, which may not occur at the rates that are projected or at all.*

**Industry Background: Online Education is the Future of Education**

An online education platform is a software system that supports online teaching and learning activities. In the 21st century, also known as the digital age, the modern distance education marked by online education comes to the fore. Online education is a new form of education produced by the application of modern information technology in educational fields. The key to online education implementation is to create a network learning environment that encourages active learning. The learning activities in the network learning environment are impractical without an online education platform. The online education platform in a broad sense includes hardware facilities and software systems supporting online teaching. The online education platform in a narrow sense is a general term for the software system that is built on the basis of the Internet and provides comprehensive support services for online teaching. Relying on the Internet business model, online education institutions attract viewers through education platforms, products and services, and convert such traffic into revenues for further investment in their marketing and product creation, eventually forming a closed-loop Internet business.

With the development of Internet technology and the maturity of application software, Software-as-a-Service ("SaaS") is a completely innovative software application mode that arises in the 21st century. Under the traditional model, the vendor deploys the software product to multiple customer terminals within the enterprise through the License to achieve the delivery. SaaS defines a new way of delivery and makes the software further embody its essence of service. The enterprise deploys informatization software for its own operation and management services. The appearance of software is the informatization of business processes, but its essence is still a service mode. SaaS changes the way of providing traditional software services, reduces a lot of upfront investment required for local deployment, and further highlights the service attributes of informatization software. Therefore, SaaS may become the mainstream delivery model in the future informatization software market.

Economic Environment

As the first country to recover its economy since the COVID-19 Pandemic, China has increased financial investment and introduced preferential policies for online education. The increase in residents' disposable income has built a solid economic foundation for the development of the online education software platform industry. Over the past decade, China's GDP and per capita income have increased continuously. In 2020, the total investment in education nationwide exceeded 5 trillion yuan, up 5.69% year on year. Over the past five years, China's per capita disposable income has increased and grown steadily, establishing a solid economic foundation for online education consumption.

Social Environment

The acceptance of online education in China is increasing year by year, which leads to high demand for online education software platforms from B-side customers and C-side customers. For example, China faces a huge talent gap in the manufacturing industry, which gives rise to the importance of improving vocational skills and receiving vocational education, so more and more manufacturing enterprises use online education software platforms to build enterprise training platforms.

Technological Environment

With the support of technologies such as artificial intelligence, big data and cloud computing, China's online education software platform industry is growing. Since 2016, the emerging business in China has been growing rapidly, including data center business, cloud computing business and big data business, which grew by 18.4%, 91.5% and 35.5% respectively in 2020. China's artificial intelligence industry is in transition from the development stage to the mature stage. The scale of the core artificial intelligence industry is expected to reach 247.6 billion yuan in 2022 and exceed 600 billion yuan in 2026.

Industry Market

The Covid-19 epidemic that began in 2020 forced the conversion of teaching scenarios from offline to online, prompting users to migrate from offline to online, changing users' study habits to a certain extent, and improving users' awareness and understanding of online education. In recent years, the scale of China's online education market has maintained growth. In 2019, the scale of China's online education market was RMB404.1 billion, with a growth rate of 20.2%; in 2020, the epidemic has become a watershed in the online education industry, and the penetration rate of online education has increased significantly available at *https://bg.qianzhan.com/report/detail/300/211126-7df0a186.html* and https://www.chinanews.com.cn/cj/2018/04-19/8495560.shtml. Driven by favorable policies and mature technology, the online education market is expected to reach RMB559.6 billion in 2021.

The following graphs provide data on the market size and CAGR of China's online education industry as of 2021.

![](tm2224158d7_f1aimg05.jpg)

*Source: SAIDER*

 

China online education software industry has a broad market prospect, it provides different scenarios for business training, e-learning and exam preparation, etc. Chinas online education software platform market is viewed as an incremental market, not a stock market. Therefore, we expect to expand new business markets to small towns, rural areas, and overseas markets.

China education informatization market.

Basically education informatization includes smart campus solutions and construction, application software development, IT system integration and related IT equipment. With the development of the economy, China's investment in the field of education informatization is also increasing. Under the strong policy support, China's education informatization market has entered a stage of rapid growth from 2017 to 2020, and the total industry revenue has increased from 325.1 billion RMB to 427.8 billion RMB, the CAGR was 9.6%. In 2020, there is still a growth trend. The total revenue of China's education informatization market is expected to grow at a CAGR of 9.4% from 2020 to 2022. In 2022, the total revenue will reach 527.7 billion RMB. The education informatization market has huge development potential. The following graphic shows the market size of China education information in recent years estimate to the date end of 2022.

![](tm2224158d7_f1aimg06.jpg)

*Source: SAIDER*

Industry Chain

There are many participants and a complete industrial structure in China's online education software industry. Specifically, upstream participants include cloud computing services and other technical service providers, midstream participants include China's online education software platforms, and downstream participants include corporate clients, training institutes and individual consumers. In addition, as a midstream company, we have strong bargaining power. This is because the midstream enterprises have strong commercialization power and therefore are able to guide the users to a large extent, and because there are few market players, the market is concentrated and the midstream enterprises have the market power, especially the bargaining power.

Industry Supply and Demand

Currently, while the supply of the industry is steadily growing, it is still unable to meet customers' demand. From 2015 to 2022, the number of online education software platform companies in China keeps growing. However, the existing platforms are not able to meet the high demand of the industry. The customers are primarily enterprises clients and training and career development institutes. In particular, the enterprises clients are primarily from the real estate, information technology, manufacturing and finance industries.

The industry is at the high point of the business cycle for the next 10 years, and the number of financing activities and volume in China is growing rapidly. In addition, the prosperity trend of China's online education software platform industry over the next few years will be similar to the boom in China's consumer Internet industry from 2012 to 2015. Therefore, it is a good opportunity now to invest in this industry.

The following graph provides data regarding the financing events and financing amount of China's online education industry in recent years as the date end of 2020.

![](tm2224158d7_f1aimg07.jpg)

*Source: SAIDER*

**Industry Status**

According to the "Digital China Development Report (2021)" issued by the State Internet Information Office and the "China Digital Economy Development Report (2022)" issued by the China Academy of Information and Communications Technology, China's digital economy scale increased from RMB 27.2 trillion in 2017 to RMB 45.5 trillion in 2021 and its CAGR is larger than that of China's GDP in the past 3 years indicating the digital transformation trend cannot be reversed. SaaS penetration rate is gradually increasing in various industries such as finance, e-commerce, and healthcare in China, indicating SaaS has high business value and digitalization is an irreversible growing trend. See more information available at *<u>http://www.saider.org.cn/h-nd-109.html?fromMid=382&fromColId=120</u>;* the official state press agency of the People's Republic of China, Xinhua News Agency, available at *<u>http://www.xinhuanet.com/2022-08/01/c_1128879891.htm</u>* and *http://www.xinhuanet.com/tech/20220711/4c3a9c73ae7f4331ba09088ea61ce69d/c.html*.

![](tm2224158d7_f1aimg08.jpg)

*Source: SAIDER*

The 5G network provides new opportunity for online learning. Online learning platforms can utilize the 5G technology to enrich the teaching environment and create a fully engaging teaching method, incentivizing students' understanding of the teaching materials. The 5G technology resolves online learning problems, including interruption of internet, low quality of audio, unclear video and weak connection. By adopting the 5G technology in combination with AR/VR full background projection, it creates a highly-interactive, high-quality and constantly improving teaching environment.

The birth of new business scenarios, expansion of new markets, and the increase in repurchase rates make the industry an incremental market. Also, CAGR of the industry remains over 15%, indicating promising market prospects. Covid-19 raised people's online learning awareness, and there is ample market space for the development of online learning.

**Corporate Structure**

Below is a chart illustrating our current corporate structure:

![](tm2224158d7_f1aimg09.jpg)

NetClass is a Cayman Islands exempted company incorporated on January 4, 2022. We conduct our business in China through our subsidiaries. The consolidation of our Company and our subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

NetClass HK was incorporated on December 12, 2006, under the law of Hong Kong SAR and acquired by NetClass on February 24<sup>,</sup> 2022. NetClass HK is a wholly-owned subsidiary of NetClass and is not currently engaging in any active business and merely acting as a holding company.

WFOE was incorporated on May 5, 2019, under the laws of the People's Republic of China. It is a wholly-owned subsidiary of NetClass HK and a wholly foreign-owned entity under the PRC laws. It is not currently engaging in any active business and merely acting as a holding company.

NetClass incorporated Shanghai Netwide on April 27, 2022 under the laws of the People's Republic of China. Shanghai Netwide is a wholly owned subsidiary of WFOE and is not currently engaging in any active business and merely acting as a holding company.

NetClass China was incorporated on May 13, 2003, under the laws of the People's Republic of China. WOFE owns 21.46% equity interest and Shanghai Netwide owns 78.54% equity interest of NetClass China. NetClass China mainly engages in information technology including digital IT product and service, software development, platform development, Smart Campus, Mobile Learning Platforms development and big data cloud computing service.

NetClass Education, a wholly-owned subsidiary of NetClass China, was incorporated on April 14, 2004 under the laws of the People's Republic of China. NetClass Education mainly engages in an online-training service, "Part-time Assistant" remote project for long-term development of personal credential and future career.

NetClass HR, a wholly-owned subsidiary of NetClass China, was incorporated on November 9, 2016 under the laws of the People's Republic of China. NetClass HR is not currently engaging in any active business.

NetClass Management a wholly-owned subsidiary of NetClass China, was incorporated on August 29, 2016 under the laws of the People's Republic of China. NetClass Management is not currently engaging in any active business.

NetClass Training, a wholly-owned subsidiary of NetClass China, was incorporated on August 19, 2016 under the laws of the People's Republic of China. NetClass Training mainly engages in online-training and related technology and courseware service.

**Competition**

We face competition from providers of online education software services and expect to face increasing competition from existing competitors and new market entrants in the online professional education and test preparation markets. Specifically, due to low barriers to entry for Internet-based businesses, we expect to face increasing competition from both existing domestic competitors and new entrants to the online education market. We may face increased competition from international competitors that cooperate with local businesses to provide services based on the international competitors' technology and experience developed in their home markets.

**Customers and Suppliers**

***Major Customers***

We have a B2B business model and we mainly serve enterprise/institutional customers, including: enterprises (including in-house on-job training department), educational institutions (including schools and training companies) and government agencies (mainly Shanghai Municipal Education Commission). The categories of our customers and the ratio to revenue are as follows:

For the fiscal year ended September 30, 2022, we had three customers Zhucai Technilcal Training (Beijing) Co., Ltd, Shanghai Lingjiang Electronic Technology Co., Ltd and Shanghai Yiqilai Culture Communication Co., Ltd, who each accounted for more than 10% of the total revenue and collectively accounted for 37.1% of the total revenue.

For the fiscal year ended September 30, 2021, we had two customers: Shanghai Lingjiang Electronic Co., Ltd and Shanghai Yiqilai Cultural Co., Ltd, who each accounted for more than 10% of the total revenue and collectively accounted for 40.8% of the total revenue.

The application development service contracts including technical service agreements and software service and development sales agreements with major customers contain terms regarding scope of services, effective period, fees and settlement, inspection and quality assurance, termination, and liabilities for breach of contract, etc.

Technical service agreements usually have a term of one to three years. Generally, the agreements will also state that the services shall be delivered within a certain period of time. Either party has a right to terminate with advance notice to the other party. The agreements can also be terminated if performance is impossible due to a violation of laws or force majeure. The agreements usually also prohibit us from assigning the rights and obligations under the agreement without prior written consent of the customer.

Software service and development sales agreements usually state that the services shall be delivered within a certain period of time. Because delivery under these agreements usually happens shortly after signing, the agreements do not necessarily include a termination clause.

***Major Suppliers***

Our suppliers include software suppliers, equipment suppliers and advertisers, who mainly provide us with application software, project equipment, advertising services, consulting services and other products or services. We have long-term cooperation with three suppliers:Shanghai Keping Information Technology Co., Ltd, Shanghai Thrive Information Technology Co., Ltd and Shanghai Xuanping Information Technology Co., Ltd. Even though we have suppliers that each accounts for more than 10% of the total cost, we are not dependent on any suppliers. We maintain good relationships and close liaison with various high quality suppliers to ensure adequate and timely supply of products and services.

For the year ended September 30, 2022, Shanghai Keping Information Tech. Co., Ltd, Shanghai Thrive Information Tech. Co., Ltd, Shanghai Xuanping Information Tech. Co., Ltd, and Shanghai Chunshen Saihua Intelligent Technology Co., Ltd accounted for approximately 39.8%, 14.5%, 11.6% and 10.8% of total purchases, respectively. For the year ended September 30, 2021, four suppliers: Shanghai Keping Information Tech. Co., Ltd, Shanghai Thrive Information Tech. Co., Ltd, Shanghai Xuanping Information Tech. Co., Ltd and Shanghai Cirong Computer Tech. Co., Ltd accounted for approximately 30.5%, 13.4%, 11.2% and 10.1% of total purchases, respectively. As of September 30, 2022, three suppliers: Shanghai Keping Information Tech. Co., Ltd, Shanghai Chunshen Saihua Intelligent Technology Co., Ltd and Shanghai Thrive Information Tech. Co.,Ltd accounted for approximately 55.9%, 23.1% and 10.7% of total accounts payable. As of September 30, 2021, three suppliers: Shanghai Keping Information Tech. Co., Ltd, Shanghai Thrive Information Tech. Co.,Ltd, and Shanghai Jintong Intelligent Tech. Co., Ltd accounted for approximately 33.4%, 31.6% and 18.5% of total accounts payable.

The contracts with our suppliers are primarily on a fixed-price basis, which require the supplier to provide us with application software, project equipment and application platform maintenance service. Either party has a right to terminate with advance notice to the other party. The agreements can also be terminated if performance is impossible due to a violation of laws or force majeure. The agreements usually allow us to have a right to inspect the product or equipment provided by suppliers while suppliers have a right to cure the defect. Unexpected technical, operational, logistical, regulatory or other problems, including but not limiting to the defects in the products or equipment provided by our supplier, could delay or prevent the introduction of one or more of new courseware, services or products and have material impact on our operation. See "*Risk Factors – Risks Related to Our Business and Industry - If we fail to develop and introduce new coursewares, services and products that meet our target course participants' expectations, or adopt new technologies important to our business, our competitive position and ability to generate revenues may be materially and adversely affected*" on page 36.

Considering that the performance of our suppliers may have an adverse impact on our operating results, financial condition, business and prospects, in order to manage the performance risk by suppliers, the agreement with such major suppliers usually specify in detail the scope of services, terms of rescission or termination, prohibition of performance by third parties and non-competition.

**Competitive Strength**

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

***Customized and Secure Services to Customers***

We have a team of professionals experienced in software design and the online education industry. We also have knowledge in the industry and market from data collected during the ordinary course of our business. We offer products that are customized and built to order, or B2B, to meet its customers' unique demands. Unlike the B2C model, the company's business adopts the B2B model, which is a more stable market strategy that will ensure the company's business can continue to grow steadily in the long run. NetClass leverages its competitive edge through the user-friendly designing and the quick response customized system. The R&D and service teams have more than seven years of experience with online training systems and they know exactly what the customer needs. Therefore, we can create customized solutions based on customers' needs. In addition, our online learning platform has been certified on its network security level by the Shanghai Software Technology Development Center, proving we can provide our customers with secure and reliable services.

***Unique technology innovation and application capability***

We focus on research, development, and innovation. As a blockchain-based education software pioneer, we believe our proprietary and patented blockchain technologies make us stand out from the competition. Our data analysis team has extensive experience and strong technical background in processing learning data, teaching data, consumer profile data, behavioral data, purchase data. Our data engineers and technology specialists can utilize these data to feed our proprietary algorithms that provide our customer relevant, comprehensive, and practical insights. These insights inform our decision-making in connection with product development, business operations, and marketing and distribution. We believe the data-driven approach will improve our ability to meet customers' demands.

***Diversified market and expanding territory***

Our customers are involved in various industries, including education, finance, medicine, information technology, culture and arts. We believe our diversified customer base and product line can mitigate the impact of economic and industry cycles. Currently, most of our customers are in Shanghai. We are developing the Nanjing market, and we also plan to expand our business and promote our products and services throughout China. We believe the continued expansion in new industries and new markets helps us mitigate risks of economic downturns in one or more particular industry or market.

***Lower Cost Advantage***

Compared to traditional education, we store the software codes we develop for customers and our research in our internal database for future reference, which significantly saves our time and monetary costs. As we create more solutions for customers, we believe the cost per project will decrease, and the profitability will improve over time.

***Experienced Management Team***

Our team has years of experience in technology and management in IT, blockchain, software, and big data. Our chairman of the board of directors, Mr. Dai Jianbiao, has more than twenty years of experience in the information technology industry. Our members of our management team has more than twelve years of experience in market management, more than twenty years of experience in education and more than ten years of professional experience in relevant technology research and development.

**Business Strategies**

***Expanding Market Share***

We believe our most compelling strength is to maintain our market position through developing competitive products by applying leading technologies. We plan to develop new markets and products by partnering with more schools, corporations, and associations and exploring new marketing channels. We believe this would allow us to build our brand awareness, enhance market penetration, and expand our market share.

***Optimizing Our Products***

We will continue to provide easy-to-use and flexible products through product design and technology innovation. We will also focus on applying information technology to different scenarios and developing more specialized product features to provide our customers with diversified products and services.

***Growing User Base and Improving Customer Loyalty***

We will continue to leverage our knowledge and data about the industry and market to develop precise target marketing strategies to grow our customer base. We also plan to explore and develop additional value-added services to better serve the customers and to improve customer loyalty.

***Focusing on efficient operations and cost management***

We plan to reduce the operation cost through technical innovation and provide customers with more competitive prices and higher quality products.

***Maintain good relationships with suppliers***

We will continue to maintain long-term cooperation with key suppliers to help them better understand and serve us. To reduce supplier concentration risk, we will continue to maintain good relationships and close liaison with various high quality suppliers to ensure an adequate and timely supply of products and services.

**Products and Services**

For the fiscal year ended September 30, 2022, SaaS subscription services and application development services accounted for 63.5% and 36.5%, of total revenues, respectively. For the fiscal year ended September 30, 2021, SaaS subscription services and application development services accounted for 65.6% and 34.4%, of total revenues, respectively.

**Sales and Marketing**

Currently, our main market is in Shanghai, China. During the fiscal years ended September 30, 2022 and 2021, our sales revenue from the Shanghai market accounted for 73.8% and 86.6% of the total sales revenue, respectively. We have also been developing the market in Beijing. For the fiscal year ended September 30, 2022 and 2021, the sales revenue from the Beijing market accounted for 14.4% and 5.2% of the total sales revenue, respectively.

We market our products through customer referrals, recommendations from industry associations, advertisements, WeChat official accounts, cold calls and other methods. For example, we have promoted our products and services to member companies when participating in various professional technology associations in the IT industry, and we have publicized our products and services through our company website and WeChat official accounts. WeChat users can subscribe to WeChat official accounts and access latest information on these accounts every day. The Company publishes articles on its' WeChat official account and subscribers including our employees, employees' family and friends can share these articles to their personal networkon WeChat. We allow the WeChat account to grow organically without other external marketing effort. As of the date of this prospectus, our WeChat official account has 910 subscribers and the number of subscribers are increasing each year. We have in total 4,318 and 3,913 article views as of September 30, 2022 and 2021, respectively. As the date of this prospectus, we have more than 10,382 article views.

We believe the market demands for online educational technology services, specially for our subscription service, will continue to grow, driven by the rapid growth in the China online education market. Our revenue from subscription services accounted for 63.5% and 65.6% of our total revenue for the years ended September 30, 2022 and 2021. Since we operate in a highly competitive market, brand maintenance and enhancement directly affect our ability to improve our market position. In order to create and maintain brand awareness and customer loyalty, to retain existing and attract new customers, we substantially increased our marketing expenditures in subscription service market. Our marketing expense was $1,202,430 and $1,570,875 for the years ended September 30, 2022 and 2021, repectively. Our marketing expenses accounted for 92.6% and 88.4% of the total selling and marketing expenses for the years ended September 30, 2022 and 2021, respectively.

We plan to further increase brand awareness and market share by (i) promoting our products and services in different industries, (ii) engaging marketing partners to expand market reach, and (iii) explore new marketing channels, especially internet and social media marketing.

**Research and Development**

Our research and development activities are an important part of how we operate and are key to our competitive advantage and growth strategy. As of September 30, 2022, our R&D team consists of 21 employees. During the fiscal years ended September 30, 2022 and 2021, we invested $828,311 and $406,754 in research and development, and we expect to continue investing in ourselves.

As of the date of this prospectus, we have registered four patents, three of them in China and one in the United States. We have also applied for two additional patents in China. In addition, we have registered 67 software copyrights in China, all developed in-house.

We continue to explore ways to better serve to our customers and increase customer loyalty by anticipating customers' needs and improving the enterprise internal training platform to address those potential needs. In the future, we plan to leverage our pioneering position in blockchain technologies to optimize its utility.

**Our Employees**

As of September 30, 2022 and 2021, we had a total of 35 and 41 employees, repectively in the following departments:

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| | | |
|:---|:---|:---|
|  | ***As of***<br> ***September 30,***<br> ***2022***  | ***As of***<br> ***September 30,***<br> ***2021*** |
| Marketing & Sales | *5* | *5* |
| Administration | 4 | 5 |
| Research and Development | 21 | 26 |
| Management | 3 | 3 |
| Finance | 2 | 2 |
| Total | 35 | 41 |

---

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We believe that we maintain a good working relationship with our employees, and we have not experienced any significant labor disputes. We are required under PRC law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses, and certain allowances of our employees, up to a maximum amount specified by the local government from time to time. As required by regulations in China, we participate in various employee social securities plans that local governments organize. We believe we have covered housing provident fund and all five types of social insurance, including, pension insurance, medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance. During the fiscal year ended September 30, 2022, the Company paid a total of RMB 1,352,002 or $206,312, with an average monthly payment of RMB 112,667 or $9,389. During the fiscal year ended September 30, 2021, the company paid a total of RMB 519,653.9 or $79,858, with an average monthly payment of RMB 43,304.5 or $6,654.

**Description of Property**

**Our Properties and Facilities**

*Equipment*

Our production relies on a wide variety of equipment, including equipment for office use and factory equipment, facilitating a complete production cycle. As of September 30, 2022 and 2021, our equipment's total current value is RMB 1,034,642 ($145,470) and RMB 1,811,601 $281,161), respectively.

Our equipment consists of electronic devices and office furniture and equipment. The above is devoted to offering online professional education platform and related courseware.

*Lease commitment*

NetClass China and Shanghai Wanrong Investment Management Co., Ltd. have entered into a 5-year lease agreement and a supplementary agreement with a lease term from January 1, 2018 to December 31, 2023 for the leased property located at 1198 Wanrong Road, Rooms 601B, 601C, 601D, 601E, 601F and 602. The construction area of the premises was 200 square meters and the rent was RMB 17,739 per month from January 1, 2021 to December 31, 2021. The leased construction area of the premises changed to 550 square meters from January 1, 2022 to August 31. 2022 and the rent was RMB 33,451 per month. The leased construction area of the premise changed to 421 square meters from September 1, 2022 to December 31, 2023 and the rent is RMB 25,605 per month.

NetClass Education and Shanghai Wanrong Investment Management Co., Ltd. have entered into a 5-year lease agreement and a supplementary agreement with a lease term from January 1, 2018 to December 31, 2023 for the leased property located at Rooms 601A and 603B, 1198 Wanrong Road. The construction area of the premises was 350 square meters and the rent was RMB 31,043.25 per month from January 1, 2021 to December 31, 2021 and no further lease since then.

*Intellectual Property*

We rely on a combination of trademark, patent, and proprietary technology and contractual restrictions on disclosure to protect our intellectual property rights. We enter into relevant confidentiality agreements or provisions with our employees and certain customers and suppliers and rely on confidentiality agreements or provisions and other protections of our technical know-how to maintain our technical advantages in our products and design.

Protection of our intellectual property is a strategic priority for our business. We rely on a combination of patent, trademark, and trade secret laws, as well as confidentiality agreements to establish and protect our proprietary rights. We do not rely on third-party licenses of intellectual property for use in our business.

*Patent*

NetClass China has three Chinese patents and one USA patents issued and are to expire at various times from March 2035 through January 2039. As for our other products and the related manufacturing processes, since the technical information has been published and is in the public domain, we believe we can utilize such technical information without obtaining any patent license. We do not believe that we are violating the existing patent rights of any other party.

The following table briefly describes NetClass China's registered patents, including their respective publication numbers, application filing date, issue date, expiration date, and title.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| ***Number*** | ***Patent Name*** | ***Claimant*** | ***Patent Number*** | ***Issue***<br> ***Country*** | ***Filing Date*** | ***Pub. Date*** | ***Expiration***<br> ***Date*** |
| 1 | Digital education record mechanism based on blockchain token technology | NetClass China | 201810415091.3 | China | May 3, 2018 | Augugst 14, 2020 | May 3, 2038 |
| 2 | Digital education record management method Based on blockchain token technology | NetClass China | US10666425B2 | USA | June 4, 2018 | November 7, 2019 | June 4, 2038 |
| 3 | An Intelligent Teaching Platform For Electronic Commerce | NetClass China | 201610605092.5 | China | January 23, 2019 | March 12, 2019 | Jan 23, 2049 |
| 4 | Internet Atomic Word Touch Learning Machine | NetClass China | 201510147131.7 | China | March 31, 2015 | February 1, 2017 | March 31, 2035 |

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\* Patent expiration dates are routinely subject to dispute in patent infringement actions. No assurance can be given that third parties infringing our patents will not dispute the expiration dates of our patents or that we will be successful in defending against such disputes.

*Trademark*

The following table sets forth a brief description of NetClass China and NetClass Education's trademarks, including their respective publication numbers, application filing date, issue date, expiration date and title.

**\*** U.S. trademarks do not expire after a set period of time. Trademarks will persist so long as the owner continues to use the trademark. Once the United States Patent and Trademark Office (USPTO), grants a registered trademark, the owner must continue to use the trademark in ordinary commerce.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ***Number*** | *Registrant* | ***Trademark*** | ***Pub. Number*** | ***Filing Date*** | ***Issue Date*** | ***Expiration Date*** |
| 1 | NetClass China | ![](tm2224158d7_f1aimg13.jpg) | 12718822 | 2013-06-06 | 2014-10-21 | 2024-10-20 |
| 2 | NetClass China | ![](tm2224158d7_f1aimg14.jpg) | 12718844 | 2013-06-06 | 2014-10-21 | 2024-10-20 |
| 3 | NetClass China | ![](tm2224158d7_f1aimg15.jpg) | 8496223 | 2010-07-20 | 2011-08-14 | 2031-08-13 |
| 4 | NetClass China | ![](tm2224158d7_f1aimg16.jpg) | 8496258 | 2010-07-20 | 2011-07-28 | 2031-07-27 |
| 5 | NetClass China | ![](tm2224158d7_f1aimg17.jpg) | 16445491 | 2015-03-05 | 2016-05-28 | 2026-05-27 |
| 6 | NetClass China | ![](tm2224158d7_f1aimg18.jpg) | 16445542 | 2015-03-05 | 2016-05-28 | 2026-05-27 |
| 7 | NetClass China | ![](tm2224158d7_f1aimg19.jpg) | 16445550 | 2015-03-05 | 2016-09-28 | 2026-09-27 |
| 8 | NetClass China | ![](tm2224158d7_f1aimg22.jpg) | 16609874 | 2015-03-31 | 2016-05-21 | 2026-05-20 |
| 9 | NetClass China | ![](tm2224158d7_f1aimg23.jpg) | 16609931 | 2015-03-31 | 2016-05-21 | 2026-05-20 |
| 10 | NetClass China | ![](tm2224158d7_f1aimg24.jpg) | 16629718 | 2015-04-02 | 2017-05-14 | 2027-05-13 |
| 11 | NetClass China | ![](tm2224158d7_f1aimg22.jpg) | 16629585 | 2015-04-02 | 2017-05-14 | 2027-05-13 |
| 12 | NetClass China | ![](tm2224158d7_f1aimg21.jpg) | 22365701 | 2016-12-22 | 2018-04-07 | 2028-04-06 |
| 13 | NetClass China | ![](tm2224158d7_f1aimg20.jpg) | 19328367 | 2017-03-21 | 2017-04-21 | 2027-04-20 |
| 14 | NetClass China | ![](tm2224158d7_f1aimg25.jpg) | 19209750 | 2017-06-07 | 2017-07-07 | 2027-07-06 |
| 15 | NetClass China | ![](tm2224158d7_f1aimg26.jpg) | 22123040 | 2018-02-01 | 2018-02-14 | 2028-02-13 |
| 16 | NetClass China | ![](tm2224158d7_f1aimg27.jpg) | 30123644 | 2018-04-09 | 2019-02-07 | 2029-02-06 |

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*Domain*

NetClass China and NetClass Education have the right to use the following domain registration issued in the PRC.

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| | | |
|:---|:---|:---|
| ***Number*** | ***Domain Name*** | ***Claimant*** |
| 1 | NetClass.cn | NetClass China |
| 2 | NetClass.com.cn | NetClass China |
| 3 | NetClass.tech | NetClass China |
| 4 | Educhain.org.cn | NetClass China |
| 5 | Edc.org.cn | NetClass China |
| 6 | netban.cn | NetClass China |
| 7 | netban.com.cn | NetClass China |
| 8 | qianbei.org.cn | NetClass China |
| 9 | 51pta.cn | NetClass China |
| 10 | shpeixun.org.cn | NetClass China |
| 11 | wangpeishi.com | NetClass China |
| 12 | wangpeishi.org.cn | NetClass China |
| 13 | wangpeishi.cn | NetClass China |
| 14 | 51offerpta.com | NetClass China |
| 15 | yage.org.cn | NetClass China |
| 16 | teacher365.cn | NetClass Education |

---

*Copyright*

The following table sets forth a brief description of NetClass China and NetClass Education's copyright in China, including their respective publication numbers, application filing date, issue date, expiration date and title.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***Number*** | ***Copyright Name*** | ***Claimant*** | ***CopyrightNumber*** | ***Filing Date*** | ***Issue Date*** |
| 1 | NetClass Phone Internet Location Tracking Software V1.0 | NetClass China | 2018SR916474 | 2010-01-01 | 2011-09-28 |
| 2 | NetClass Video Surveillance Facial Pattern Recognition Camera Software | NetClass China | 2011SR070829 | 2010-01-29 | 2011-09-28 |
| 3 | NetClass Wisdom classroom software V1.0 | NetClass China | 2013SR074112 | 2012-08-10 | 2013-07-26 |
| 4 | WXT Micro School Online Learning Platform Software | NetClass China | 2014SR153169 | 2014-05-28 | 2014-10-28 |
| 5 | Smart classroom ring screen remote control software | NetClass China | 2015SR057335 | 2014-10-20 | 2015-03-31 |
| 6 | Open Teaching Digital Laboratory Software | NetClass China | 2015SR063828 | 2014-09-14 | 2015-04-16 |
| 7 | NetClass Micro-school mobile online learning platform software | NetClass China | 2015SR151950 | 2015-01-18 | 2015-08-06 |
| 8 | NetClass Smart Classroom Cloud Education Platform Software | NetClass China | 2015SR162202 | 2015-03-25 | 2015-08-21 |
| 9 | NetClass Show Education Software | NetClass China | 2016SR208251 | 2016-04-25 | 2016-08-08 |
| 10 | NetClass Palm Party School Learning Software | NetClass China | 2016SR208205 | 2016-05-14 | 2016-08-08 |
| 11 | NetClass Professional Evaluation Software | NetClass China | 2016SR213579 | 2016-05-18 | 2016-08-11 |
| 12 | NetClass Extracurricular Learning Software | NetClass China | 2016SR214377 | 2016-04-18 | 2016-08-11 |
| 13 | NetClass Worry-Free Teacher Learning Software | NetClass China | 2016SR214381 | 2016-05-25 | 2016-08-11 |
| 14 | NetClass Business Sales Settlement Management Software | NetClass China | 2016SR213556 | 2016-01-20 | 2016-08-11 |
| 15 | NetClass Ielts Free Travel Learning Software | NetClass China | 2016SR215538 | 2016-04-11 | 2016-08-12 |
| 16 | NetClass smart wristband Education Software | NetClass China | 2017SR064206 | 2016-11-18 | 2017-03-02 |
| 17 | NetClass smart wristband Education Software back end | NetClass China | 2017SR064556 | 2016-11-24 | 2017-03-02 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| 18 | NetClass VR tourism display system | NetClass China | 2017SR024956 | 2016-03-09 | 2017-01-24 |
| 19 | Hotel Teaching VR Demonstration System | NetClass China | 2017SR024954 | 2016-02-18 | 2017-01-24 |
| 20 | Interior decoration VR display system | NetClass China | 2017SR024730 | 2016-06-10 | 2017-01-24 |
| 21 | Interior Design VR Teaching Management Platform | NetClass China | 2017SR024740 | 2016-01-01 | 2017-01-24 |
| 22 | VR virtual reality teaching management system | NetClass China | 2017SR024798 | 2016-09-23 | 2017-01-24 |
| 23 | Etiquette training software | NetClass China | 2017SR065811 | 2017-02-01 | 2017-03-03 |
| 24 | School Campus Management Office Automation System | NetClass China | 2017SR111877 | 2017-02-13 | 2017-04-12 |
| 25 | Mobile Internet Innovation Micro-Lesson Education Platform Software | NetClass China | 2018SR161005 | 2017-10-25 | 2018-03-12 |
| 26 | Exhibition resource cloud platform software | NetClass China | 2018SR283142 | 2018-01-02 | 2018-04-25 |
| 27 | Exhibition resource automatic import tool platform software | NetClass China | 2018SR284377 | 2018-01-11 | 2018-04-26 |
| 28 | New energy vehicle design teaching software | NetClass China | 2018SR282176 | 2018-01-18 | 2018-04-25 |
| 29 | New energy vehicle professional resource service platform | NetClass China | 2018SR281909 | 2018-01-31 | 2018-04-25 |
| 30 | Exhibition resource construction platform software | NetClass China | 2018SR281803 | 2018-03-01 | 2018-04-25 |
| 31 | Exhibition quality course construction platform software | NetClass China | 2018SR282802 | 2018-02-13 | 2018-04-25 |
| 32 | OA office management platform software | NetClass China | 2018SR281566 | 2018-02-19 | 2018-04-25 |
| 33 | Storage Virtualization Engine System | NetClass China | 2018SR242508 | 2018-03-20 | 2018-04-11 |
| 34 | Server virtualization software | NetClass China | 2018SR242501 | 2018-03-23 | 2018-04-11 |
| 35 | Computer Vulnerability Scanning System | NetClass China | 2018SR242493 | 2018-03-28 | 2018-04-11 |
| 36 | Exhibition resource automatic import tool platform software | NetClass China | 2018SR284377 | 2018-01-11 | 2018-04-26 |
| 37 | EDC education chain learning record software | NetClass China | 2018SR607410 | 2018-07-17 | 2018-08-01 |
| 38 | Exhibition teaching quality assurance software | NetClass China | 2018SR281572 | 2018-02-22 | 2018-04-25 |
| 39 | Functional home network control system | NetClass China | 2019SR0077634 | 2019-01-11 | 2019-01-22 |
| 40 | Smart home network control system | NetClass China | 2019SR0681908 | 2019-04-12 | 2019-07-02 |
| 41 | Intelligent Talent Evaluation System | NetClass China | 2019SR0262392 | 2019-01-24 | 2019-03-19 |
| 42 | AI intelligent knowledge sharing system | NetClass China | 2019SR0262386 | 2019-01-18 | 2019-03-19 |
| 43 | Netban Intelligent monitoring track analysis system | NetClass China | 2019SR0579781 | 2018-12-11 | 2019-06-06 |
| 44 | Netban Intelligent monitoring behavior analysis system | NetClass China | 2019SR0583659 | 2019-02-20 | 2019-06-06 |
| 45 | Netban Face Recognition Visitor Management System | NetClass China | 2019SR0583543 | 2019-03-22 | 2019-06-06 |
| 46 | Netban Intelligent security integrated management system | NetClass China | 2019SR0586987 | 2019-01-16 | 2019-06-10 |
| 47 | Artificial Intelligence Facial Feature Recognition System | NetClass China | 2019SR0677465 | 2018-11-19 | 2019-07-02 |
| 48 | Artificial Intelligence Maker Teaching System | NetClass China | 2019SR0679381 | 2018-10-17 | 2019-07-02 |
| 49 | Smart education service platform based on big data technology | NetClass China | 2020SR1786228 | 2020-10-27 | 2020-12-10 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| 50 | Education Modernization Digital Campus Software | NetClass China | 2020SR1771851 | 2020-10-27 | 2020-12-09 |
| 51 | Integrated Management System for Training Institutions | NetClass China | 2020SR1775452 | 2020-10-27 | 2020-12-09 |
| 52 | Video interactive classroom teaching cloud platform software | NetClass China | 2020SR1795347 | 2020-10-27 | 2020-12-11 |
| 53 | High-quality resources to build and share cloud platform software | NetClass China | 2020SR1786229 | 2020-10-27 | 2020-12-10 |
| 54 | High-quality resource application collection system software | NetClass China | 2020SR1795348 | 2020-10-27 | 2020-12-11 |
| 55 | Intelligent Invigilation System | NetClass China | 2020SR1775444 | 2020-10-27 | 2020-12-09 |
| 56 | Intelligent course scheduling management software | NetClass China | 2020SR1786230 | 2020-10-27 | 2020-12-10 |
| 57 | Online trainer ability evaluation system | NetClass China | 2021SR0264104 | 2020-12-01 | 2021-02-20 |
| 58 | VR teaching management system V1.0 | NetClass China | 2022SR0256279 | 2021-12-01 | 2022-02-22 |
| 59 | Epidemic Prevention Management Platform V1.0 | NetClass China | 2022SR0256243 | 2021-12-01 | 2022-02-22 |
| 60 | Precision teaching system based on AI technology V1.0 | NetClass China | 2022SR0256280 | 2021-12-01 | 2022-02-22 |
| 61 | Unified Identity Authentication Service System V1.0 | NetClass China | 2022SR0256276 | 2021-12-01 | 2022-02-22 |
| 62 | Learner User Profile Visualization Representation System V1.0 | NetClass China | 2022SR0264552 | 2021-12-01 | 2022-02-23 |
| 63 | Mobile event release and registration software | NetClass Education | 2015SR070084 | 2014-10-18 | 2015-04-28 |
| 64 | Interactive Questionnaire for Smarter Classroom | NetClass Education | 2015SR072479 | 2014-10-18 | 2015-04-30 |
| 65 | Online classroom teaching service system | NetClass Training | 2021SR1269780 | 2021-06-18 | 2021-08-26 |
| 66 | Blockchain-based learning record management system | NetClass Training | 2021SR1269781 | 2021-06-18 | 2021-08-26 |
| 67 | Online Internship Management System | NetClass Training | 2021SR1269782 | 2021-06-18 | 2021-08-26 |

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**Legal Proceedings**

From time to time, we are subject to legal proceedings, investigations and claims incidental to the conduct of our business. We record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the past, we have been subject to legal proceedings, which have since been resolved. The inherent uncertainty of litigation exists and could produce adverse results in these and other matters. Except as contemplated below, there are no pending legal proceedings in which we are currently involved.

NetClass China has a contract dispute with Shenzhen Guotai'an Education Technology Co., Ltd., who sued NetClass China on September 28, 2021 in connection with an sales and purchase agreement between NetClass China and the plaintiff in Shenzhen Nanshan District People's Court. The plaintiff claimed that NetClass China owed payment in the amount of RMB 665,000 ($103,208) for purchasing online teaching products and software development services from the plaintiff.. NetClass China argued that the plaintiff's claim was baseless because the plaintiff only delivered defective online teaching products on December 13, 2017 and failed to deliver software development services. NetClass China also notified the plaintiff to terminate the agreement on March 9, 2018 and July 13, 2020. On July 19, 2022, Shenzhen Nanshan District People's Court denied the plaintiff's claim due to lack of evidence. The plaintiff appealed the case to Shenzhen Intermediate People's Court. We do not believe the legal proceeding will have any material adverse effect on our operation.

**CHINESE LAWS AND REGULATIONS**

***Regulations on Foreign Currency Exchange***

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, most recently amended in August 2008. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions, interest payments, and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is converted into foreign currency and remitted out of China to pay capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments, and investments in securities outside of China.

In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special-purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds derived by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated another circular in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC must be conducted by way of registration and banks must process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches. On February 13, 2015, SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Notice 13. After SAFE Notice 13 became effective on June 1, 2015, instead of applying for approvals regarding foreign exchange registrations of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations from qualified banks. Under the supervision of SAFE, the qualified banks may directly review the applications and conduct the registration.

On March 30, 2015, SAFE promulgated Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide. Circular 19 came into force and replaced both previous Circular 142 and Circular 36 on June 1, 2015. On June 9, 2016, SAFE promulgated Circular 16 to further expand and strengthen such reform. Under Circular 19 and Circular 16, foreign-invested enterprises in the PRC are allowed to use their foreign exchange funds under capital accounts and RMB funds from exchange settlement for expenditure under current accounts within its business scope or expenditure under capital accounts permitted by laws and regulations, except that such funds shall not be used for (i) expenditure beyond the enterprise's business scope or expenditure prohibited by laws and regulations; (ii) investments in securities or other investments than banks' principal-secured products; (iii) granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) construction or purchase of real estate for purposes other than self-use (except for real estate enterprises).

In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, or SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (ii) domestic entities shall hold income to account for previous years' losses before remitting the profits. Further, according to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment.

***Regulations on Foreign Exchange Registration of Overseas Investment by PRC Residents***

SAFE issued SAFE Circular on Relevant Issues Relating to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, that became effective in July 2014, replacing the previous SAFE Circular 75. SAFE Circular 37 regulates foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing or conduct round trip investment in China. Under SAFE Circular 37, an SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or entities to seek offshore financing or make an offshore investment, using legitimate onshore or offshore assets or interests. An "round trip investment" refers to direct investment in China by PRC residents or entities through SPVs, establishing foreign-invested enterprises to obtain ownership, control rights, and management rights. SAFE Circular 37 provides that, before contributing to an SPV, PRC residents or entities must complete foreign exchange registration with SAFE or its local branch. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015, which took effect on June 1, 2015. This notice has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for overseas investment or financing.

PRC residents or entities who had contributed legitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of the SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks. An amendment to the registration is required if there is a material change with respect to the SPV registered, such as any change of basic information (including change of the PRC residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, and mergers or divisions. Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation on or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations.

We are aware that our PRC resident beneficial owners subject to these registration requirements have registered with the Beijing SAFE branch and/or qualified banks to reflect the recent changes to our corporate structure.

**Regulations Relating to Dividend Distributions**

According to the PRC Company Law and Foreign Investment Law, each of our PRC subsidiaries, as a foreign invested enterprise, or FIE, are required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, under the EIT Law, which became effective in January 2008, the maximum tax rate for the withholding tax imposed on dividend payments from PRC foreign invested companies to their overseas investors that are not regarded as "resident" for tax purposes is 20%. The rate was reduced to 10% under the Implementing Regulations for the EIT Law issued by the State Council. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, such as tax rate of 5% in the case of Hong Kong companies that holds at least 25% of the equity interests in the foreign-invested enterprise, and certain requirements specified by PRC tax authorities are satisfied.

Under our current corporate structure, NetClass may rely on dividend payments from NetClass Education, NetClass Management, NetClass Training and NetClass HR, which is a wholly foreign-owned enterprise incorporated in China, to fund any cash and financing requirements we may have. Under Foreign Investment Law, wholly foreign-owned enterprises in China may freely make remittance inward and outward in RMB or foreign exchange of capital contribution, profits, capital yield, income from asset disposal, intellectual property licensing fees, indemnity obtained according to law or income from compensation and liquidation. Wholly foreign-owned companies may, at their discretion, allocate a portion of their after-tax profits based on PRC accounting standards to optional reserve funds. After making up the losses and allocating reserve funds, the remaining after-tax profits of wholly foreign-owned enterprises may be distributed to the shareholders.

**Regulations Relating to Overseas Listings**

In August 2006, six PRC regulatory authorities, including the CSRC, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, amended in June 2009. The M&A Rules, among other things, require that if an overseas company established or controlled by PRC companies or individuals, or PRC Citizens, intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC Citizens, such acquisition must be submitted to the MOFCOM for approval. The M&A Rules also require that an Overseas SPV formed for overseas listing purposes and controlled directly or indirectly by the PRC Citizens shall obtain the approval of the CSRC prior to overseas listing and trading of such Overseas SPV's securities on an overseas stock exchange.

Our PRC legal counsel, Grandall Law Firm, has advised us that, based on its understanding of the current PRC laws and regulations, our corporate structure and arrangements are not subject to the M&A Rules and CSRC's approval may not be required for the listing and trading of our Class A ordinary shares on the Nasdaq in the context of this offering. However, our PRC legal counsel, Grandall Law Firm, has further advised us that there are substantial uncertainties as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.

On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which will come into effect on March 31, 2023. According to the Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC; (2) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer's audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for initial public offering and listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.

On the same day, the CSRC held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges, such as completion of registration in the market of the United States, but have not completed the overseas listing; and (2) domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges on or prior to the effective date of the Trial Measures, may reasonably arrange the timing for submitting their filing applications with the CSRC, and shall complete the filing before the completion of their overseas offering and listing.

Along with the Trial Measures, the Provisions on Strengthening Confidentiality and Archives Administration in Overseas Issuance and Listing of Securities by Domestic Enterprises (the "Archive Provisions") were promulgated on February 24, 2023, which applies to companies providing documents or materials involving State secrets or work secrets of State agencies. It is our understanding that the Provisions only apply to companies providing documents or materials involving State secrets or work secrets of State agencies. In that case, companies shall apply to the competent department with examination and approval authority for approval in accordance with the law. To our best knowledge, the documents the Company currently provides do not contain any State secrets or work secrets of State agencies. However, there remains uncertainty as to how relevant secrecy administrative department will define "involving State secrets or work secrets of State agencies". If such department recognize "State secrets" or "work secrets" are involved, the Company might be subject to the approval requirements of the Archive Provisions.

We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of filings or approvals, including on a retrospective basis, from the CSRC, the CAC or other PRC authorities with respect to this offering. As the Trial Measures have not come into effect as of the date of this prospectus, under the currently effective PRC laws and regulations, we are not required to seek approval from or make filings to the CSRC, or any other PRC governmental authorities for our overseas listing plan, nor have we received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities as of the date of this prospectus. However, if any filings, approval, review or other procedure is in fact required, we are not able to guarantee that we will obtain such filings, approval or complete such review or other procedure timely or at all. For any approval that we may be able to obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and offerings relating to our securities. As the Trial Measures have not come into effect as of the date of this prospectus, under the currently effective PRC laws and regulations, we are not required to seek approval from or make filings to the CSRC, or any other PRC governmental authorities for our overseas listing plan, nor have we received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities as of the date of this prospectus. See "*Risk Factors – Risks Related to Doing Business in China – The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our subsidiaries or the holding company were required to obtain approval or filing requirements in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors"* on page 19.

**Regulations Relating to Employment**

The PRC Labor Law, promulgated by the NPC in July 1994 and revised in August 2009 and December 2018, and the Labor Contract Law, promulgated by the SCNPC in June 2007 and amended in December 2012 and effective in July 2013, require that employers must execute written employment contracts with full-time employees. In the event that an employer fails to enter into a written employment contract with an employee within one year from the date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment contract with the employee and pay the employee twice the employee's salary for the period from the day following the lapse of one month from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract. All employers must compensate their employees with wages equal to at least the local minimum wage standards. Violations of the PRC Labor Law and the Labor Contract Law may result in the imposition of fines and other administrative sanctions, and serious violations may result in criminal liabilities.

Enterprises in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located.

The Social Insurance Law of the PRC, which was promulgated by the SCNPC on October 28, 2010, and amended on December 29, 2018, governs the PRC social insurance system. According to the Social Insurance Law of the PRC, the Regulations on Occupational Injury Insurance effective as of January 1, 2004 and as amended on December 20, 2010, the Interim Measures concerning the Maternity Insurance for Enterprise Employees effective as of January 1, 1995, the Interim Regulations concerning the Levy of Social Insurance effective as of January 22, 1999 and most recently amended on March 24, 2019, employers and/or employees (as the case may be) to register social insurance with competent authorities and contribute required amount of social insurance funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance and maternity insurance. Employers who fail to complete social security registration shall be ordered by the social security administrative authorities to rectify within a stipulated period. If rectification is not made within the stipulated period, such employer shall be subject to a fine ranging from one to three times the amount of the social security premiums payable, and the directly accountable person(s)-in-charge and other directly accountable personnel shall be subject to a fine ranging from RMB500 to RMB3,000. Employers who fail to promptly contribute social security premiums in full amount shall be ordered by the social security premium collection agency to make such contributions or make up the difference within a stipulated period and be subject to a late payment fine of 0.05% of the overdue payment from the payment due date. If such overdue payment is not made within the stipulated period, the relevant administrative authorities shall impose a fine ranging from one to three times the amount of the amount in arrears.

Under the Regulations on the Administration of Housing Provident Fund, which was promulgated by the State Council on April 3, 1999, and most recently amended on March 24, 2019, an employer shall make contribution registration with the housing provident fund management and complete the formalities of opening housing provident fund accounts for its employees. If an employer fails to undertake the registration or fails to go through the formalities of opening housing provident fund accounts for its employees, the housing provident fund management center shall order such employer to go through the formalities within a prescribed time limit. Employers who fail to do so within the time limit shall be subject to a fine ranging from RMB10,000 to RMB50,000. If an employer fails to make timely contributions to the housing provident fund in the full amount, the housing provident fund management center shall order such employer to make such contributions or make up the difference within a prescribed time limit. If employers fail to comply within the prescribed time limit, the housing provident fund management center may submit an application to a people's court for compulsory enforcement.

Currently, we are making contributions to the plans based on the minimum standards although the PRC laws required such contributions to be based on the actual employee salaries up to a maximum amount specified by the local government. Therefore, in our consolidated financial statements, we have made an estimate and accrued a provision in relation to the potential make-up of our contributions for these plans as well as to pay late contribution fees and fines. If we are subject to late contribution fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. See "*Risk Factors — Risks Related to Doing Business in China — Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.*"

**Regulations Related to Foreign Investment**

The establishment, operation, and management of companies in China are mainly governed by the PRC Company Law, as most recently amended in 2018, which applies to both PRC domestic companies and foreign-invested companies. On March 15, 2019, the National People's Congress approved the Foreign Investment Law, and on December 26, 2019, the State Council promulgated the Implementing Rules of the PRC Foreign Investment Law, or the Implementing Rules, to further clarify and elaborate the relevant provisions of the Foreign Investment Law. The Foreign Investment Law and the Implementing Rules both took effect on January 1, 2020. They replaced three previous major laws on foreign investments in China, namely, the Sino-foreign Equity Joint Venture Law, the Sino-foreign Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise Law, together with their respective implementing rules. Pursuant to the Foreign Investment Law, "foreign investments" refer to investment activities conducted by foreign investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC, which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or jointly with other investors, (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and interests of enterprises within the PRC, (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors, and (iv) investment in other methods as specified in laws, administrative regulations, or as stipulated by the State Council. The Implementing Rules introduce a see-through principle and further provide that foreign-invested enterprises that invest in the PRC shall also be governed by the Foreign Investment Law and the Implementing Rules.

The Foreign Investment Law and the Implementing Rules provide that a system of pre-entry national treatment and negative list shall be applied for the administration of foreign investment. "Pre-entry national treatment" means that the treatment given to foreign investors and their investments at market access stage is no less favorable than that given to domestic investors and their investments. "Negative list" means the special administrative measures for foreign investment's access to specific fields or industries, which will be proposed by the competent investment department of the State Council in conjunction with the competent commerce department of the State Council and other relevant departments, and be reported to the State Council for promulgation, or be promulgated by the competent investment department or competent commerce department of the State Council after being reported to the State Council for approval. Foreign investment beyond the negative list will be granted national treatment. Foreign investors shall not invest in the prohibited fields as specified in the negative list, and foreign investors who invest in the restricted fields shall comply with the special requirements on the shareholding, senior management personnel, etc. In the meantime, relevant competent government departments will formulate a catalog of industries for which foreign investments are encouraged according to the needs for national economic and social development, to list the specific industries, fields, and regions in which foreign investors are encouraged and guided to invest.

Investment activities in the PRC by foreign investors were principally governed by the Catalogue for the Guidance of Foreign Investment Industries, or the Catalogue, which was promulgated and is amended from time to time by the MOFCOM and the NDRC. Industries listed in the Catalogue were divided into three categories: encouraged, restricted and prohibited. Industries not listed in the Catalogue were generally deemed as constituting a fourth "permitted" category. The Catalog was replaced by the Special Administrative Measures for Access of Foreign Investment (Negative List) and the Catalogue of Industries for Encouraging Foreign Investment in 2018 and 2019, respectively. On December 27, 2021, the NDRC and MOFCOM issued the latest Special Administrative Measures for Access of Foreign Investment (Negative List) (2021 Edition) (the "Negative List 2021"), which came into effect on January 1, 2022. The Negative List 2021 sets out the areas where foreign investment is prohibited and the areas where foreign investment is allowed only on certain conditions. Foreign investment in areas not listed in the Negative List 2021 is treated equally with domestic investment and the relevant provisions of the Negative List for Market Access shall apply to domestic and foreign investors on a unified basis. Moreover, according to Negative List 2021, PRC entities which engage in any field forbidden by the Negative List 2021 for access of foreign investment shall be approved by competent PRC authorities when they seek listing offshore, and foreign investors shall not participate in operation and management and their shareholding ration shall be in compliance with PRC laws.

According to the Implementing Rules, the registration of foreign-invested enterprises shall be handled by the State Administration for Market Regulation ("SAMR") or its authorized local counterparts. Where a foreign investor invests in an industry or field subject to licensing in accordance with laws, the relevant competent government department responsible for granting such license shall review the license application of the foreign investor in accordance with the same conditions and procedures applicable to PRC domestic investors unless it is stipulated otherwise by the laws and administrative regulations, and the competent government department shall not impose discriminatory requirements on the foreign investor in terms of licensing conditions, application materials, reviewing steps and deadlines, etc. However, the relevant competent government departments shall not grant the license or permit enterprise registration if the foreign investor intends to invest in the industries or fields as specified in the negative list without satisfying the relevant requirements. In the event that a foreign investor invests in a prohibited field or industry as specified in the negative list, the relevant competent government department shall order the foreign investor to stop the investment activities, dispose of the shares or assets or take other necessary measures within a specified time limit, and restore to the status before the occurrence of the investment described above. The illegal gains, if any, shall be confiscated. In the event that the investment activities of a foreign investor violate the special administration measures for access restrictions on foreign investments as stipulated in the negative list, the relevant competent government department shall order the investor to make corrections within the specified time limit and take necessary measures to meet the relevant requirements. In the event that the foreign investor fails to make corrections within the specified time limit, the provisions above regarding the circumstance that a foreign investor invests in the prohibited field or industry shall apply.

Pursuant to the Foreign Investment Law and the Implementing Rules, and the Information Reporting Measures for Foreign Investment jointly promulgated by the MOFCOM and the SAMR, which took effect on January 1, 2020, a foreign investment information reporting system shall be established and foreign investors or foreign-invested enterprises shall report investment information to competent commerce departments of the government through the enterprise registration system and the enterprise credit information publicity system, and the administration for market regulation shall forward the above investment information to the competent commerce departments in a timely manner. In addition, the MOFCOM shall set up a foreign investment information reporting system to receive and handle the investment information and inter-departmentally shared information forwarded by the administration for market regulation in a timely manner. The foreign investors or foreign-invested enterprises shall report the investment information by submitting reports including initial reports, change reports, deregistration reports and annual reports.

Furthermore, the Foreign Investment Law provides that foreign-invested enterprises established according to the previous laws regulating foreign investment prior to the implementation of the Foreign Investment Law may maintain their structure and corporate governance within five years after the implementation of the Foreign Investment Law. The Implementing Rules further clarify that such foreign-invested enterprises established prior to the implementation of the Foreign Investment Law may either adjust their organizational forms or organizational structures pursuant to the Company Law or the Partnership Law or maintain their current structure and corporate governance within five years upon the implementation of the Foreign Investment Law. Since January 1, 2025, if a foreign-invested enterprise fails to adjust its organizational form or structure according to applicable laws and go through the applicable registrations, the relevant administration for market regulation shall not handle other registrations for changes and shall publicize the relevant circumstances. However, after the organizational forms or structures have been adjusted, the original parties to the Sino-foreign equity or cooperative joint ventures may continue to process matters such as equity interest transfer, income distribution, or surplus assets as agreed in the relevant contracts.

In addition, the Foreign Investment Law and the Implementing Rules also specify other protective rules and principles for foreign investors and their investments in the PRC, including, among others, that local governments shall abide by their commitments to the foreign investors; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; mandatory technology transfer is prohibited, etc.

**Regulations Relating to Internet Information Security and Privacy Protection**

*Several Provisions on Regulating the Market Order of Internet Information Services*

The MIIT issued the Several Provisions on Regulating the Market Order of Internet Information Services, or the Several Provisions, in December 2011, which became effective in March 2012. Pursuant to the Several Provisions, internet information service providers may not collect any users' personal information or provide any such information to third parties without the consent of the user.

An internet information service provider shall expressly inform the users of the method, content and purpose of the collection and processing of such users' personal information and may only collect information necessary for the provision of its services. An internet information service provider is also required to properly maintain the users' personal information, and in case of any leak or likely leak of the users' personal information, the internet information service provider must take immediate remedial measures and, in severe circumstances, immediately report to the telecommunications authority.

*Decision of the SCNPC on Strengthening Internet Information Protection*

 

The SCNPC has issued the Decision on Strengthening Internet Information Protection in December 2012. Pursuant to this decision, the State protects the electronic information that can identify the personal identity of citizens and that involves privacy of citizens. No organization or individual may obtain the personal electronic information of citizens by steal or other illegal means, nor sell or illegally provide certain information others. The Decision further set out the requirement for the internet service providers.

When collecting or using the personal electronic information of citizens in their business activities, the internet service providers shall follow the principle of lawfulness, properness and necessity, explicitly disclose their purposes, methods and scopes for collection and use of the information, and, upon consent of the information providers, may collect or use information without violation of the provisions of the laws and regulations and the agreement of both parties. Where the internet service providers collect and use the personal electronic information of citizens, they shall disclose the rules for such collection and use.

The network service providers as well as their personnel must keep in strict confidence of the personal electronic information of citizens collected in their business activities. They shall not divulge, distort or damage such information, or shall not sell or illegally provide certain information to others. Furthermore, the network service provider shall take technical measures and other necessary measures to ensure information security and prevent the disclosure, damage or loss of any personal electronic information of citizens collected in their business activities. In case of occurrence or possible occurrence of such disclosure, damage or loss of information, remedial measures shall be immediately taken.

*Cyber Security Law*

 

The SCNPC promulgated the Cyber Security Law in November 2016, which became effective in June 2017, to protect cyberspace security and order. Pursuant to the Cyber Security Law, any individual or organization using the network must comply with the Constitution and the applicable laws, follow the public order and respect social moralities, and must not endanger cyber security, or engage in activities by making use of the network that endanger the national security, honor and interests, or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others.

The Cyber Security Law sets forth various security protection obligations for network operators, which are defined as "owners and administrators of networks and network service providers", including, among others, complying with a series of requirements of tiered cyber protection systems, verifying users' real identity, localizing the personal information and important data gathered and produced by critical information infrastructure operators during operations within the China and providing assistance and support to government authorities where necessary for protecting national security and investigating crimes.

*Data Security Law*

 

The Data Security Law of the PRC, which was promulgated by the SCNPC in June 2021 and took effect in September 2021, provides that China shall establish a data classification and grading protection system, formulate the important data catalogs to enhance the protection of important data. Processors of important data shall specify the person responsible for data security and management agencies to implement data security protection responsibilities. Relevant authorities will establish the measures for the cross-border transfer of important data. If any company violates the Data Security Law of the PRC to provide important data outside China, such company may be punished by administration sanctions, including penalties, fines, and/or suspension of relevant business or revocation of the business license.

On July 7, 2022, the CAC promulgated the Measures for Security Assessment for Cross-border Data Transfer (the "Measures"), which took effect on September 1, 2022. According to the Measures, a data processor shall apply to the competent cyberspace department for security assessment and clearance of the outbound data under any of the following circumstances: (i) outbound transfer of important data by a data processor; (ii) outbound transfer of personal information by an operator of critical information infrastructure or a data processor which has processed more than one million users' personal data; (iii) outbound transfer of personal information by a data processor which has made outbound transfers of more than one hundred thousand users' personal information or more than ten thousand users' sensitive personal information cumulatively since January 1 of the previous year, or (iv) such other circumstances where ex-ante security assessment and evaluation of cross-border data transfer is required by the CAC. A data processor shall, before applying for the security assessment of an outbound data transfer, conduct a self-assessment of the risks involved in the outbound data transfer.

*Personal Information Protection Law*

 ****

In August 2021, the SCNPC promulgated the Personal Information Protection Law, which became effective on November 1, 2021. The Personal Information Protection Law specifies the rules for processing sensitive personal information, which means personal information that, once leaked or illegally used, may easily cause harm to the dignity of natural persons or grave harm to personal or property security, including, but not limited to, information on biometric characteristics, financial accounts, and individual location tracking, as well as the personal information of minors under the age of 14. Personal information processors shall bear responsibility for their personal information handling activities and adopt the necessary measures to safeguard the security of the personal information they process. Otherwise, the personal information processors will be ordered to correct or suspend or terminate the provision of services and be subject to confiscation of illegal income, fines or other penalties.

**Regulations Relating to Intellectual Property**

China has adopted comprehensive legislation governing intellectual property rights, including copyrights, trademarks, patents and domain names. China is a signatory to the primary international conventions on intellectual property rights and has been a member of the Agreement on Trade Related Aspects of Intellectual Property Rights since its accession to the World Trade Organization in December 2001.

***Copyright***

On September 7, 1990, the SCNPC promulgated the Copyright Law of the People's Republic of China, or the Copyright Law, effective on June 1, 1991 and amended on October 27, 2001, February 26, 2010, and November 11, 2020, respectively. The amended Copyright Law extends copyright protection to internet activities, products disseminated over the Internet and software products. In addition, there is a voluntary registration system administered by the Copyright Protection Center of China.

Under the Regulations on the Protection of the Right to Network Dissemination of Information that took effect on July 1, 2006 and was amended on January 30, 2013, it is further provided that an Internet information service provider may be held liable under various situations, including that if it knows or should reasonably have known a copyright infringement through the Internet and the service provider fails to take measures to remove or block or disconnect links to the relevant content, or, although not aware of the infringement, the Internet information service provider fails to take such measures upon receipt of the copyright holder's notice of such infringement.

In order to further implement the Regulations on Computer Software Protection, promulgated by the State Council on December 20, 2001 and amended on January 8, 2011 and January 30, 2013, respectively, the National Copyright Administration issued the Measures for the Registration of Computer Software Copyright on February 20, 2002, which specify detailed procedures and requirements with respect to the registration of software copyrights.

***Trademark***

According to the Trademark Law of the People's Republic of China promulgated by the SCNPC on August 23, 1982, and amended on February 22, 1993, October 27, 2001, August 30, 2013 and April 23, 2019, respectively, the Trademark Office of the SAIC is responsible for the registration and administration of trademarks in China. The SAIC under the State Council has established a Trademark Review and Adjudication Board for resolving trademark disputes. Registered trademarks are valid for ten years from the date the registration is approved. A registrant may apply to renew a registration within twelve months before the expiration date of the registration. If the registrant fails to apply in a timely manner, a grace period of six additional months may be granted. If the registrant fails to apply before the grace period expires, the registered trademark shall be deregistered. Renewed registrations are valid for ten years. On April 29, 2014, the State Council issued the revised the Implementing Regulations of the Trademark Law of the People's Republic of China, which specified the requirements of applying for trademark registration and renewal.

***Patent***

According to the Patent Law of the People's Republic of China, or the Patent Law, promulgated by the SCNPC on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008, and October 17, 2020, respectively, and the Implementation Rules of the Patent Law of the People's Republic of China, or the Implementation Rules of the Patent Law, promulgated by the State Council on June 15, 2001 and revised on December 28, 2002 and January 9, 2010, the patent administrative department under the State Council is responsible for the administration of patent-related work nationwide. The patent administration departments of provincial or autonomous regions or municipal governments are responsible for administering patents within their respective administrative areas. The Patent Law and Implementation Rules of the Patent Law provide for three types of patents, namely "inventions," "utility models," and "designs." Invention patents are valid for twenty years, while utility model patents and design patents are valid for ten years, from the date of application. The Chinese patent system adopts a "first-come, first file" principle, which means that where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first. An invention or a utility model must possess novelty, inventiveness, and practical applicability to be patentable. Third Parties must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the unauthorized use constitutes an infringement on the patent rights.

***Domain Names***

On August 24, 2017, the MIIT promulgated the Administrative Measures for Internet Domain Names, or the Domain Name Measures, which became effective on November 1, 2017. On June 18, 2019, the Implementing Rules on Registration of National Top-level Domain Names was promulgated by the China Internet Network Information Center, or the CNNIC. According to which, the Domain Name Measures regulate the registration of domain names, such as China's national top-level domain name ".CN" and the MIIT is the main regulatory body responsible for the administration of PRC internet domain names.

**Regulations Relating to Offshore Special Purpose Companies Held by PRC Residents**

SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents on May 10, 2013, which became effective on May 13, 2013 and amended on October 10, 2018 and December 30, 2019 and which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

SAFE promulgated the Notice on Issues Relating to Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or the SAFE Circular 37, on July 4, 2014, that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name and term of operation), capital increase or capital reduction, transfers or exchanges of shares, or mergers or divisions. SAFE Circular 37 was issued to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investments via Overseas Special Purposes Vehicles.

SAFE further enacted the Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment on February 13, 2015, or the SAFE Circular 13, was amended on December 30, 2019 and which allows PRC residents or entities to register with qualified banks in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. However, remedial registration applications made by PRC residents that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from distributing profits to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary.

On January 26, 2017, SAFE issued the Notice on Improving the Check of Authenticity and Compliance to Further Promote Foreign Exchange Control, or the SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (ii) domestic entities shall hold income to account for previous years' losses before remitting the profits. Moreover, pursuant to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements and provide board resolutions, contracts, and other proof when completing the registration procedures in connection with an outbound investment.

**Regulations Relating to Taxation**

***Income Tax***

According to the Enterprise Income Tax Law of the People's Republic of China, or the EIT Law, which was promulgated on March 16, 2007, became effective as from January 1, 2008, and amended on February 24, 2017, and December 29, 2018 and amended on April 23, 2019, an enterprise established outside the PRC with de facto management bodies within the PRC is considered as a resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. The Implementing Rules of the Enterprise Income Law of the People's Republic of China, or the Implementing Rules of the EIT Law, defines a de facto management body as a managing body that in practice exercises "substantial and overall management and control over the production and operations, personnel, accounting, and properties" of the enterprise. Non-PRC resident enterprises without "de facto management bodies" located within China that has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment in the PRC pay an enterprise income tax in connection with their income originating from the PRC at the tax rate of 10%.

On February 3, 2015, the PRC State Administration of Taxation, or the SAT, issued the Announcement on Several Issues Concerning the Enterprise Income Tax on Indirect Transfer of Assets by Non-Resident Enterprises, or the SAT Circular 7. The SAT Circular 7 repeals certain provisions in the Notice of the State Administration of Taxation on Strengthening the Administration of Enterprise Income Tax on Income from Equity Transfer by Non-Resident Enterprises, or the SAT Circular 698, issued by SAT on December 10, 2009 and the Announcement on Several Issues Relating to the Administration of Income Tax on Non-resident Enterprises issued by SAT on March 28, 2011 and clarifies certain provisions in the SAT Circular 698. The SAT Circular 7 provides comprehensive guidelines relating to, and heightening the Chinese tax authorities' scrutiny on, indirect transfers by a non-resident enterprise of assets (including assets of organizations and premises in PRC, immovable property in the PRC, equity investments in PRC resident enterprises), or the PRC Taxable Assets. For instance, when a non-resident enterprise transfers equity interests in an overseas holding company that directly or indirectly holds certain PRC Taxable Assets and if the transfer is believed by the Chinese tax authorities to have no reasonable commercial purpose other than to evade enterprise income tax, the SAT Circular 7 allows the Chinese tax authorities to reclassify the indirect transfer of PRC Taxable Assets into a direct transfer and therefore impose a 10% rate of PRC enterprise income tax on the non-resident enterprise. The SAT Circular 7 lists several factors to be considered by tax authorities in determining if an indirect transfer has a reasonable commercial purpose. However, regardless of these factors, the overall arrangements in relation to an indirect transfer satisfying all the following criteria will be deemed to lack a reasonable commercial purpose: (i) 75% or more of the equity value of the intermediary enterprise being transferred is derived directly or indirectly from PRC Taxable Assets; (ii) at any time during the one year period before the indirect transfer, 90% or more of the asset value of the intermediary enterprise (excluding cash) is comprised directly or indirectly of investments in the PRC, or during the one year period before the indirect transfer, 90% or more of its income is derived directly or indirectly from the PRC; (iii) the functions performed and risks assumed by the intermediary enterprise and any of its subsidiaries and branches that directly or indirectly hold the PRC Taxable Assets are limited and are insufficient to prove their economic substance; and (iv) the foreign tax payable on the gain derived from the indirect transfer of the PRC Taxable Assets is lower than the potential PRC tax on the direct transfer of those assets. On the other hand, indirect transfers falling into the scope of the safe harbors under the SAT Circular 7 will not be subject to PRC tax under the SAT Circular 7. The safe harbors include qualified group restructurings, public market trades, and exemptions under tax treaties or arrangements.

On October 17, 2017, SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the SAT Circular 37, which took effect on December 1, 2017 and was amended on June 15, 2018. According to the SAT Circular 37, the balance after deducting the equity net value from the equity transfer income shall be the taxable income amount for equity transfer income. Equity transfer income shall mean the consideration collected by the equity transferor from the equity transfer, including various income in monetary form and non-monetary form. Equity net value shall mean the tax computation basis for obtaining the said equity. The tax computation basis for equity shall be: (i) the capital contribution costs actually paid by the equity transferor to a Chinese resident enterprise at the time of investment and equity participation, or (ii) the equity transfer costs actually paid at the time of acquisition of such equity to the original transferor of the said equity. Where there is reduction or appreciation of value during the equity holding period, and the gains or losses may be confirmed pursuant to the rules of the finance and tax authorities of the State Council, the equity net value shall be adjusted accordingly. When an enterprise computes equity transfer income, it shall not deduct the amount in the shareholders' retained earnings such as undistributed profits etc., of the investee enterprise, which may be distributed in accordance with the said equity. In the event of partial transfer of equity under multiple investments or acquisitions, the enterprise shall determine the costs corresponding to the transferred equity in accordance with the transfer ratio, out of all costs of the equity.

Under the SAT Circular 7 and the Law of the People's Republic of China on the Administration of Tax Collection promulgated by the SCNPC on September 4, 1992 and newly amended on April 24, 2015, in the case of an indirect transfer, entities or individuals obligated to pay the transfer price to the transferor shall act as withholding agents. In the event that they fail to make a withholding or withhold the full amount of tax payable, the transferor of equity shall declare and pay tax to the relevant tax authorities within seven days from the occurrence of tax payment obligation. The withholding agent does not make the withholding, and the transferor of the equity does not pay the tax payable amount. The tax authority may impose late payment interest on the transferor. In addition, the tax authority may also hold the withholding agents liable and impose a penalty of ranging from 50% to 300% of the unpaid tax on them. The penalty imposed on the withholding agents may be reduced or waived if the withholding agents have submitted the relevant materials in connection with the indirect transfer to the PRC tax authorities in accordance with the SAT Circular 7.

***Withholding Tax on Dividend Distribution***

The EIT Law prescribes a standard withholding tax rate of 20% on dividends and other China-sourced income of non-PRC resident enterprises which have no establishment or place of business in the PRC, or if established, the relevant dividends or other China-sourced income are in fact not associated with such establishment or place of business in the PRC. However, the Implementing Rules of the EIT Law which reduced the rate from 20% to 10%, became effective from January 1, 2008. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, for example, pursuant to the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income, or the Double Tax Avoidance Arrangement, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under the Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends that the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5% upon receiving approval from the tax authority in charge.

Based on the Notice on Relevant Issues Relating to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009 by the SAT, if the relevant PRC tax authorities determine, at their discretion, that a company benefits from such reduced income tax rate due to a structure or an arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment; and based on the Announcement of the State Administration of Taxation on Issues Concerning "Beneficial Owners" in Tax Treaties, which was promulgated on February 3, 2018 and came into effect on April 1, 2018. If the company's activities do not constitute substantive business activities, it will be analyzed according to the actual situation of the specific case, which may not be conducive to the determination of its "beneficiary owner" capacity, and thus may not enjoy the concessions under the Double Tax Avoidance Arrangement.

***Value-Added Tax***

Pursuant to the Interim Regulations on Value-Added Tax of the People's Republic of China, which was promulgated by the State Council on December 13, 1993, and amended on November 10, 2008, February 6, 2016, and November 19, 2017, and the Implementation Rules for the Interim Regulations on Value-Added Tax of the People's Republic of China, which the MOF promulgated on December 25, 1993, and amended on December 15, 2008, and October 28, 2011, entities or individuals engaging in the sale of goods, provision of processing services, repairs and replacement services or import of goods within the territory of the PRC shall pay value-added tax or the VAT. Unless provided otherwise, the rate of VAT is 17% on sales and 6% on the services. On April 4, 2018, MOF and SAT jointly promulgated the Circular of the Ministry of Finance and the State Administration of Taxation on Adjustment of Value-Added Tax Rates, or the Circular 32, according to which (i) for VAT taxable sales acts or import of goods originally subject to VAT rates of 17% and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively; (ii) for purchase of agricultural products originally subject to tax rate of 11%, such tax rate shall be adjusted to 10%; (iii) for purchase of agricultural products for the purpose of production and sales or consigned processing of goods subject to tax rate of 16%, such tax shall be calculated at the tax rate of 12%; (iv) for exported goods originally subject to tax rate of 17% and export tax refund rate of 17%, the export tax refund rate shall be adjusted to 16%; and (v) for exported goods and cross-border taxable acts originally subject to tax rate of 11% and export tax refund rate of 11%, the export tax refund rate shall be adjusted to 10%. Circular 32 became effective on May 1, 2018 and shall supersede existing provisions which are inconsistent with Circular 32.

Since January 1, 2012, the MOF and the SAT have implemented the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax, or the VAT Pilot Plan, which imposes VAT in lieu of business tax for certain "modern service industries" in certain regions and eventually expanded to nation-wide application in 2013. According to the Implementation Rules for the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax released by the MOF and the SAT on the VAT Pilot Program, the "modern service industries" include research, development and technology services, information technology services, cultural innovation services, logistics support, lease of corporeal properties, attestation and consulting services. The Notice on Comprehensively Promoting the Pilot Plan of the Conversion of Business Tax to Value-Added Tax, which was promulgated on March 23, 2016, became effective on May 1, 2016 and amended on July 11, 2017, sets out that VAT in lieu of business tax be collected in all regions and industries.

On March 20, 2019, MOF, SAT and GAC jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, which became effective on April 1, 2019 and provides that (i) with respect to VAT taxable sales acts or import of goods originally subject to VAT rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) with respect to purchase of agricultural products originally subject to tax rate of 10%, such tax rate shall be adjusted to 9%; (iii) with respect to purchase of agricultural products for the purpose of production or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the tax rate of 10%; (iv) with respect to export of goods and services originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) with respect to export of goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%.

**Regulations Relating to Overseas Listing and M&A Rules**

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Rules on the Merger and Acquisition of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and were amended on June 22, 2009. The M&A Rules, among other things, require offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. In September 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC. Our PRC legal counsel, Grandall Law Firm, has advised us based on their understanding of the current PRC laws, regulations and rules, the CSRC's approval may not be required for the listing and trading of our ordinary shares on the Nasdaq in the context of this offering.

However, our PRC legal counsel, Grandall Law Firm, has further advised us that there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering and its opinions summarized above are subject to any new laws, regulations and rules or detailed implementations and interpretations in any form relating to the M&A Rules, and our PRC legal counsel, Grandall Law Firm, cannot exclude the possibility that the CSRC or other relevant government authorities might, from time to time, further clarify or interpret the M&A Rules in writing or orally and require their approvals to be obtained for the offering. We cannot assure you that relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel, Grandall Law Firm, does. If it is determined that CSRC approval is required for this offering, we may face sanctions by the CSRC or other PRC regulatory agencies for failure to obtain or delay in obtaining CSRC approval for this offering. These sanctions may include fines and penalties on our operations in China, limitations on our operating privileges in China, delays in or restrictions on the repatriation of the proceeds from this offering into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A ordinary shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt this offering before the settlement and delivery of the Class A ordinary shares that we are offering. Consequently, if you engage in market trading or other activities in anticipation of and prior to the settlement and delivery of the Class A ordinary shares we are offering, you would be doing so at the risk that the settlement and delivery may not occur. In addition, if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for this offering, we may be unable to obtain a waiver of such approval requirements.

The M&A Rules and other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.

In addition, according to the Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011, and which became effective 30 days thereafter, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the MOFCOM on August 25, 2011, and which became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by the MOFCOM, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.

**MANAGEMENT**

**Executive Officers and Directors**

The following table provides information regarding our executive officers and directors:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position(s)** |
| Jianbiao Dai | 56 | Chief Executive Officer, Chairman of the Board and Director |
| Yuxing Chen | 42 | Chief Financial Officer |
| Lina Chen | 44 | Director |
| Xianghong Zhou (1)(2)(3)\* | 54 | Independent Director Nominee, Chair of Nominating Committee |
| Angel Colon (1)(2)(3)\* | 49 | Independent Director Nominee, Chair of Audit Committee |
| Xiao Fu (1)(2)(3)\* | 48 | Independent Director Nominee, Chair of Compensation Committee |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Member of the Audit Committee

&nbsp;&nbsp;&nbsp;&nbsp;(2) Member of the Compensation
 Committee

&nbsp;&nbsp;&nbsp;&nbsp;(3) Member of the Nominating
 Committee

\* The individual consents to be in such position and the appointment shall come into effect upon the effectiveness of the registration statement of which this prospectus forms a part.

**Jianbiao Dai*, Chief Executive Officer, Chairman of the Board and Director***

Dr. Jianbiao Dai has more than 15 years' experience in the education industry and more than 20 years' experience of management in the ICT industry. Dr. Jianbiao Dai has been the chief executive officer and chairman of the board of directors of NetClass since June 1, 2022. Dr. Jianbiao Dai has served as the chairman and chief executive officer of NetClass China since May 2015. He has been responsible for supervising business operation, preparing for OTC listing process in China and developing of smart education, IT solutions and courseware. Dr. Jianbiao Dai has been the Chairman of Shanghai IT Entrepreneur Association since 2014. He was elected the chairman of Shanghai Informatization Youth Talent Association from 2008 to 2012. Dr. Jianbiao Dai graduated from the Physics Department of Shanghai Jiaotong University in 1987 with a Bachelor of Science in Applied Physics, and he obtained a Doctor of Philosophy ("PhD") degree of Electronic Engineering and Applied Science from the University of New Orleans in 2000. Dr. Jianbiao Dai has served as an assistant professor and research scientist of the University of New Orleans from 2000 to 2001, during which he was responsible for of Electronic Engineering and Applied Science research and teaching.

**Yuxing Chen** ***, Chief Financial Officer***

Mr. Yuxing Chen has been the Chief Financial Officer of NetClass since June 1, 2022 and he has been responsible for financial reporting, internal control and budget planning. From August 2020 to March 2022, Mr. Yuxing Chen has served as the CFO of Shanghai TianKun e-Business Co., Ltd., during which he was responsible for financial reporting, internal control and budget planning. From April 2018 to August 2020, Mr. Yuxing Chen has served as the senior financial manager of Nantong Aisida Intelligent Technology Co., Ltd., during which he was responsible for annual reporting, financing management and internal control. From June 2012 to March 2018, Mr. Yuxing Chen has been worked as the financial manager of Shanghai Yunlu Catering Management Co., Ltd., during which he was responsible for internal control, managing public relations, advising marketing strategies. Mr. Yuxing Chen graduated from Shanghai University of Finance and Economics with a Bachelor's in Accounting in 2003 and a Master of Business Administration ("MBA") degree in 2012.

**Lina Chen, *Director***

Ms. Lina Chen has been a director and served as vice president of NetClass since June 1, 2022. From 2015 to 2020, Ms. Lina Chen has served as the vice president of NetClass China and became an executive officer of NetClass China in January 2021. She has been responsible for managing business operation, sales and marketing for smart education, IT solutions and courseware. Ms. Lina Chen served as the general manager of Shanghai Lvheng Material Utilization Co., Ltd. from June 2004 to December 2007, during which she was responsible for managing business operation and promoting reducing waste, reusing and recycling resources and products. And from October 2002 to June 2004, Ms. Lina Chen worked as the marketing manager of Shanghai Seiko Electronics Co., Ltd, during which she was responsible for building computer information, cybersecurity, all-access system Ms. Lina Chen is the member of China Vocational Education Association, and is the director of Shanghai Informatization Youth Talent Association. She obtained a three-year college degree in Sales and Marketing from Shenyang University in 2006 and a Bachelor's in Business Administration from PLA Nanjing Political College in 2012.

**Xianghong Zhou, *Independent Director Nominee and Chair of Nominating Committee***

Xianghong Zhou is our independent director nominee. Ms. Zhou is a professor at the School of Economics and Management of Shanghai Tongji University and she has been teaching and researching macro management and policy analysis since 2002. She is an expert in smart city construction and urban digital transformation planning. Her research work focuses on the application of new generation information technology in the field of urban public services and the innovation of management models. She is also a director of the Institute of Smart Cities and E-Governance of Tongji University and she is responsible for management and researches in smart city construction. She was funded by National Natural Science Foundation of China for the research on the reason of fund surplus of science fund project, United Nations Children's Fund and China International Poverty Alleviation Center for researches in rural environmental sanitation and children's healthy growth, Development Research Center of Shanghai Municipal Government and other research institutions for researches in smart city and e-governance. Ms. Zhou won the third-prize of the Shanghai Municipal Government Decision making Consulting Award for the researches in urban safety system.

Ms. Xianghong Zhou received her Ph.D degree of Sociology from Nanjing University in 2002. She was a visiting scholar experience at the University of Toronto in 2009.

**Angel Colon, *Independent Director Nominee and Chair of Audit Committee***

Angel Colon is our independent director nominee. Mr. Colon has over 15 years of expertise in negotiating and marketing of financial products, and risk management, of both fixed income and equity securities transactions with a highly diverse knowledge of financial, legal and operations management; public company management, accounting and SEC regulations. Mr. Colon has served as a board member and chair of the Audit Committee for Sentage Holdings Inc. (NASDAQ: SNTG), a publicly traded company since 2021. He has served as a managing member of NY Capital Management Group, LLC since January 2017; Turing Funds, LLC since July 2017; providing services to high net worth individuals, businesses and institutions to produce solutions that facilitate the advancement and management of capital along with the mitigation of risk to achieve dependable annual returns. Mr. Colon served as an hedge fund administrator at Vega Management Investments and from October 2018 to February 2020 and had responsibility of ensuring adherence to the investment policy, managing liquidity needs, reviewing NAV reporting and accounting audits; a financial advisor and a consultant of Andean Farm and Pharma Corp since December 2018 to January 2020 and had responsibility of research-backed support of strategies concerning the mitigation of risk and financial planning from inception to completion; as a board member of Bronson Resource Limited since December 2018 to January 2020 and had responsibility of advising the company on growth and capital decision making; a managing director of Cuttone & Co. from December 2016 to February 2018, and had responsibility of investment banking and expanding of new markets into Reg CF and Reg A+ raises; a managing director of Tribal Capital Markets, LLC from August 2016 to December 2016 and had responsibility of investment banking and expansion into regulation crowdfunding; a managing director of Bonwick Capital Partners, LLC from July 2015 to August 2016 and had responsibility of investment banking focused on debt financing of private, public, and municipal entities; a managing director at TriPoint Global Equities from December 2013 to July 2015 and had responsibility of creating a new platform, Banq, for IPO's via equity crowd funding; a corporate development officer at UBG Corp from 2006 to 2007 and had responsibility of new business development; and a principal at Andover Brokerage from 2001 to 2002 and had responsibility to interface with clearing firms and oversee 40 traders regarding risk and viability of investment decisions; an analyst for Wit Capital Corporation of New York from 1999 to 2000 and had responsibility of client relations, researching Digital IPO markets and ensuring the suitability of IPO's for client investment.

Mr. Colon received a Bachelor of Science in International Business; minor in Languages and Economics from St. John Fisher College in 1996. He currently holds FINRA Series 7, Series 63 and Series 65 and is a licensed broker with Entoro Securities, a FINRA Member Broker Dealer.

**Xiao Fu, *Independent Director Nominee and Chair of Compensation Committee***

 ****

Xiao Fu is our independent director nominee. Mr. Fu has more than 10 years of rich experience in equity investment and fund management. He has been the general manager of Shanghai Rizhen Private Equity Fund Management Co., Ltd since January 2012, he is responsible for the daily overall management of the company. From September 2002 to January 2012, Mr. Xiao Fu served as the director of industry consulting department in east China and director of industry consulting department in Shanghai of Kingdee software (China) Co., Ltd, a subsidiary of a publicly traded company, Kingdee International Software Group Co., Ltd (HKEX: 00268) and his responsibility is expansion and management of the consulting business in Shanghai and east China. Mr. Xiao Fu is the invited lecturer of the MBA Education Center of East China Normal University and invited lecturer of Shanghai University of Finance and Economics since 2015, and an entrepreneurial tutor of Shanghai University of Political Science and Law since 2016, a member of Chinese Association for Artificial Intelligence since 2019, and he is the council member of Shanghai IT Youth Talent Association since 2016.

Mr. Xiao Fu received a Bachelor Degree of Computer Application from the School of Computer Engineering and Science of Shanghai University in 1997, and received Master Degree of Computer Application from the School of Computer Engineering and Science of Shanghai University in 2000.

 ****

**Family Relationships**

None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.

**Involvement in Certain Legal Proceedings**

To the best of our knowledge, none of our directors or executive officers has, during the past 10 years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

**Board of Directors and Board Committees**

We expect our board of directors to consist of five directors, three of whom will be independent as such term is defined by the Nasdaq Capital Market. We have determined that Xianghong Zhou, Angel Colon and Xiao Fu satisfy the "independence" requirements under Nasdaq Rule 5605. We expect that all current directors will continue to serve after this offering.

The directors will be up for re-election at our annual general meeting of shareholders.

A director is not required to hold any shares in our company by way of qualification. A director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with our company is required to declare the nature of his interest at a meeting of our directors. A director may vote with respect to any contract, proposed contract or arrangement notwithstanding that he may be interested therein, and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of our directors at which any such contract or proposed contract or arrangement is considered. Our directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third party.

**Board Committees**

We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating committee, and adopted a charter for each of the three committees, effective upon the effectiveness of the registration statement of which this prospectus forms a part. Copies of our committee charters will be posted on our corporate investor relations website prior to our listing on the Nasdaq Capital Market.

Each committee's members and functions are described below.

**Audit Committee.** Our audit committee will consist of Xianghong Zhou, Angel Colon and Xiao Fu upon the effectiveness of their appointments. Angel Colon will be the chair of our audit committee. The audit committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee will be responsible for, among other things:

● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

● reviewing with the independent auditors any audit problems or difficulties and management's response;

● discussing the annual audited financial statements with management and the independent auditors;

● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

● reviewing and approving all proposed related party transactions;

● meeting separately and periodically with management and the independent auditors; and

● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

**Compensation Committee.** Our compensation committee will consist of Xianghong Zhou, Angel Colon and Jing Li upon the effectiveness of their appointments. Xiao Fu will be the chair of our compensation committee. The compensation committee will be responsible for, among other things:

● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers;

● reviewing and recommending to the shareholders for determination with respect to the compensation of our directors;

● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and

● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person's independence from management.

**Nominating Committee.** Our nominating committee will consist of Xianghong Zhou, Angel Colon and Xiao Fu upon the effectiveness of their appointments. Xianghong Zhou will be the chair of our nominating committee. The nominating committee will assist the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating committee will be responsible for, among other things:

● selecting and recommending to the board nominees for election by the shareholders or appointment by the board;

● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity;

● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and

● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.

**Duties of Directors**

Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights vested thereunder in the holders of the shares. In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. You may refer to "Description of Share Capital and Governing Documents — Differences in Corporate Law" on page 104 for additional information on our standard of corporate governance under Cayman Islands law.

**Terms of Directors and Officers**

Our directors may be appointed by a resolution of our board of directors, or by an ordinary resolution of our shareholders, and may be removed from office by an ordinary resolution of our shareholders. Each director is up for re-election at our annual general meeting of shareholders or until his earlier death, bankruptcy, insanity, resignation or removal. In addition, the office of a director shall be vacated if: (i) he gives notice in writing to our company that he resigns the office of director; (ii) he absents himself (without being represented by an alternate director appointed by him) from three consecutive meetings of the board of directors without special leave of absence from the directors, and they pass a resolution that he has by reason of such absence vacated office, (iii) he dies, becomes bankrupt or makes any arrangement or composition with his creditors generally, (iv) he is found to be or becomes of unsound mind, or (v) all the other directors (being not less than two in number) resolve that he should be removed as a director.

The directors may appoint officers as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the directors may think fit. Unless otherwise specified in the terms of his appointment an officer may be removed by the directors.

**Qualification**

There is currently no shareholding qualification for directors, although a minimum shareholding qualification for directors may be fixed by us in a general meeting.

**Code of Business Conduct and Ethics**

Our board of directors has adopted a code of business conduct and ethics applicable to all of our directors, officers, and employees. We will make our code of business conduct and ethics publicly available on our website prior to our listing on the Nasdaq Capital Market.

**Foreign Private Issuer Exemption**

We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:

● we are not required to provide as many Exchange Act reports, or as frequently, as a U.S. domestic public company;

● for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;

● we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

● we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;

● we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and

● we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any "short-swing" trading transaction.

We intend to comply with the Nasdaq corporate governance rules applicable to foreign private issuers, which permit us to follow certain corporate governance rules that conform to the Cayman Islands requirements in lieu of many of the Nasdaq corporate governance rules applicable to U.S. companies. As a result, our corporate governance practices may differ from those you might otherwise expect from a U.S. company listed on Nasdaq.

**EXECUTIVE COMPENSATION**

**Summary Compensation Table**

The following table sets forth certain information with respect to compensation for the years ended September 30, 2022 and 2021, earned by or paid to our chief executive officer and principal executive officer, our principal financial officer, and our other most highly compensated executive officers whose total compensation exceeded US$100,000 (the "named executive officers").

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name**<br> **and**<br> **Principal**<br> **Position** | **Year** | **Salary**<br> **(US$)** | **Bonus**<br> **(US$)** | **Stock**<br> **Awards**<br> **(US$)** | **Option**<br> **Awards**<br> **(US$)** | **Non-Equity**<br> **Incentive**<br> **Plan**<br> **Compensation** | **Deferred**<br> **Compensation**<br> **Earnings** | **Other** | **Total**<br> **(US$)** |
| Jianbiao Dai | 2022 | $19287 |  |  |  |  |  |  | $19287 |
| CEO | 2021 | $19160 |  |  |  |  |  |  | $19160 |
| Yuxing Chen | 2022 | $3052 |  |  |  |  |  |  | $3052 |
| CFO | 2021 | $- |  |  |  |  |  |  | $- |
| Lina Chen | 2022 | $36164 |  |  |  |  |  |  | $36164 |
| Director | 2021 | $30594 |  |  |  |  |  |  | $30594 |

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**Agreements with Named Executive Officers**

On June 1, 2022, the Company entered into an employment agreement with our Chief Executive Officer, Jianbiao Dai, for a term of 5 years from June 1, 2022 to May 31, 2027. Mr. Dai is entitled to an annual base salary of RMB96,000. The termination of this agreement is subject to PRC Labor Law and PRC Labor Contract Law. Mr. Dai agreed to keep confidential information during and after employment. He is obligated not to disclose confidential information without written consent of the Company.

On June 1, 2022, the Company entered into an employment agreement with our Chief Financial Officer, Mr. Yuxing Chen, for a term of one year, from June 2022 to May 31, 2023. Mr. Chen is entitled to an annual base salary of RMB60,000. The termination of both agreements is subject to PRC Labor Law and PRC Labor Contract Law. Mr. Chen agreed to keep confidential information during and after employment. He is obligated not to disclose confidential information without written consent of the Company.

On June 1, 2022, NetClassthe Company entered into an employment agreement with our director and vice president, Lina Chen, for a term of one year, from from June 2022 to May 31, 2023. Ms. Lina Chen is entitled to an annual base salary of RMB180,000. The termination of both agreements is subject to PRC Labor Law and PRC Labor Contract Law. Ms Lina agreed to keep confidential information during and after employment. He is obligated not to disclose confidential information without written consent of the Company.

**Compensation of Directors**

For the fiscal years ended September 30, 2022 and 2021, we did not compensate our directors for their services other than to reimburse them for out-of-pocket expenses incurred in connection with their attendance at meetings of the Board of Directors.

Upon effectiveness of the registration statement of which this prospectus forms a part, the appointment of the independent director nominees will become effective. We plan to pay each of Xianghong Zhou, Angel Colon and Xiao Fuan an annual compensation of $30,000, $45,000 and $30,000, respectively. We have entered into director offer letters with each of our independent director nominees in October and November 2022. We will also reimburse all directors for any out-of-pocket expenses incurred by them in connection with their services provided in such capacity.

**PRINCIPAL SHAREHOLDERS**

The following table is based on the assumption that our amended and restated memorandum and articles of association are effective and the recapitalization (as described in "Description of Share Capital") is completed, and it sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Class A ordinary share as of the date of this prospectus, and as adjusted to reflect the sale of the Class A ordinary share offered in this offering for

● each of our directors and executive officers who beneficially owns our Class A and/or Class B ordinary share; and

● each person known to us to own beneficially more than 5% of our Class A and/or Class B ordinary share.

Beneficial ownership includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A and Class B ordinary shares shown as beneficially owned by them. Percentage of beneficial ownership of each listed person prior to this offering is based on 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares issued and outstanding as of the date of this prospectus and (ii) Class A or Class B ordinary shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this prospectus. Percentage of beneficial ownership of each listed person after this offering includes (i) Class A ordinary share outstanding immediately after the completion of this offering and (ii) Class A or Class B ordinary shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this prospectus, but excludes any shares issuable upon the exercise of the over-allotment option.

As of the date of the prospectus, we have seven shareholders of record, who are not located in the United States.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Executive Officers and Directors** | **Amount of**<br> **Beneficial**<br> **Ownership**<br> **of Class A**<br> **Ordinary**<br> **Shares Pre-**<br> **Offering**<br> **<sup>(1)</sup>** | **Pre-**<br> **Offering**<br> **Percentage**<br> **Ownership**<br> **of Class A**<br> **Ordinary**<br> **Shares<sup>(2)</sup>** | **Post-**<br> **Offering**<br> **Percentage**<br> **Ownership**<br> **of Class A**<br> **Ordinary**<br> **Shares<sup>(2)</sup>** | **Amount of**<br> **Beneficial**<br> **Ownership**<br> **of Class B**<br> **Ordinary**<br> **Shares Pre-**<br> **and Post-**<br> **Offering** | **Pre-**<br> **Offering**<br> **And Post-**<br> **Offering**<br> **Percentage**<br> **Ownership**<br> **of Class B**<br> **Ordinary**<br> **Shares** | **Pre-Offering**<br> **Combined** <br> **Voting** <br> **Power of** <br> **Class A** <br> **and Class B**<br> **Ordinary**<br> **Shares<sup>(2)</sup>**  | **Post-**<br> **Offering**<br> **Combined**<br> **Voting**<br> **Power of**<br> **Class A and**<br> **Class B**<br> **Ordinary**<br> **Shares<sup>(2)</sup>** |
| **Directors and Named Executive Officers:** |  |  |  |  |  |  |  |
| Jianbiao Dai<sup>(3)</sup> | 5609500 | 43.15% | 33.49% | 2000000 | 100% | 82.81% | 76.17% |
| Yuxing Chen |  |  |  |  |  |  |  |
| Lina Chen |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Xianghong Zhou <sup>(5)</sup> |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Angel Colon <sup>(5)</sup> |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Xiao Fu <sup>(5)</sup> |  |  |  |  |  |  |  |
| *All executive officers and directors as a group (6 persons)* | 5609500 | 43.15% | 33.49% | 2000000 | 100% | 82.81% | 76.17% |
| **5% or Greater Stockholders** |  |  |  |  |  |  |  |
| Dragonsoft Holding Limited<sup>(3)</sup> | 5609500 | 43.15% | 33.49% | 2000000 | 100% | 82.81% | 76.17% |
| Lang Wide Investment INC<sup>(4)</sup> | 5185500 | 39.89% | 30.96% |  |  | 12.06% | 11.09% |

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(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the Class A ordinary shares and Class B ordinary shares. All shares represent only Class A ordinary Shares and Class B ordinary shares held by shareholders as no options are issued or outstanding.

---

| |
|:---|
| (2) Calculation based on 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares issued and outstanding as of the date of this prospectus. Each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of our company. Each Class B Ordinary Share shall entitle the holder thereof to fifteen (15) votes on all matters subject to vote at general meetings of our company. Assuming 3,750,000 Class A ordinary shares are issued in this offering, not including 562,500 Class A ordinary shares underlying the Underwriter's Over-Allotment Option and 187,500 Class A ordinary shares, assuming the over-allotment option is not exercised Class A ordinary shares underlying the Underwriter Warrants. |
| (3) Dragonsoft Holding Limited, a British Virgin Islands business company, holds 5,609,500 Class A ordinary shares and 2,000,000 Class B ordinary shares of the Company. Jianbiao Dai is the sole shareholder and sole director of Dragonsoft Holding Limited and is deemed the beneficial owner of the 5,609,500 Class A ordinary shares and 2,000,000 Class B ordinary shares held by Dragonsoft Holding Limited. |
| (4) Lang Wide Investment INC, a British Virgin Islands business company, holds 5,185,500 shares of Class A ordinary shares of the Company. Sze Kok is the sole shareholder and sole director of Lang Wide Investment INC and is deemed the beneficial owner of the 5,185,500 Class A ordinary shares held by Lang Wide Investment INC. |

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(5) The individual is a director nominee and consents to be a director upon the effectiveness of the registration statement of which this prospesctus forms a part.

**RELATED PARTY TRANSACTIONS**

In addition to the executive officer and director compensation arrangements discussed in "Executive Compensation," below we describe transactions since incorporation, to which we have been a participant, in which the amount involved in the transaction is material to our company and in which any of the following is a party: (a) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, our Company; (b) associates; (c) individuals owning, directly or indirectly, an interest in the voting power of our Company that gives them significant influence over our Company, and close members of any such individual's family; (d) key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling the activities of our Company, including directors and senior management of companies and close members of such individuals' families; and (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence.

*1)* *Nature of relationships with related parties*

---

| | |
|:---|:---|
| **Name of Related Party** | **Relationship to the Company** |
| Jianbiao Dai | Chief Executive Officer ("CEO"); Chairman of the Company |
| Shanghai Youfu Network Co., Ltd. | Shareholder of the Company |
| Shanghai Longruan Electronics Group Co., Ltd | Jianbiao Dai serves as legal representative and holds 80% of the shares; |
| Shanghai Yiyun Information Service Co., Ltd | Jianbiao Dai served as a supervisor and hold 60% of the shares |
| Shanghai Chuangbo Enterprise Development Co., Ltd | A director of the Company serving as a corporate supervisory role |
| Lina Chen | Director of the Company |

---

*2)* *Significant Related party transactions*

---

| | | |
|:---|:---|:---|
|  | **For the years ended**<br> **September 30,** | **For the years ended**<br> **September 30,** |
|  | **2022** | **2021** |
| **Sales to related party** |  |  |
| Shanghai Youfu Network Co., Ltd. | $- | $218035 |

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**Purchases from related parties**

---

| | | |
|:---|:---|:---|
|  | **For the years ended**<br> **September 30,** | **For the years ended**<br> **September 30,** |
|  | **2022** | **2021** |
| Shanghai Chuangbo Enterprise Development Co., Ltd. | $- | $22040 |
| Shanghai Youfu Network Co., Ltd. | 137645 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $137645 | $22040 |

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**Cash received from related parties**

---

| | | |
|:---|:---|:---|
|  | **For the years ended**<br> **September 30,** | **For the years ended**<br> **September 30,** |
|  | **2022** | **2021** |
| Shanghai Longruan Electronics Group Co., Ltd. | $- | $61480 |
| Shanghai Yiyun Information Service Co., Ltd. | - | 6148 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $- | $67628 |

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&nbsp;&nbsp;&nbsp;&nbsp;(3) Due to related parties

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,** | **As of<br> September 30,** |
|  | **2022** | **2021** |
| Due to related parties |  |  |
| &nbsp;&nbsp;&nbsp;Shanghai Chuangbo Enterprise Development Co., Ltd | $281 | $310 |
| &nbsp;&nbsp;&nbsp;Jianbiao Dai | 623 | 688 |
| &nbsp;&nbsp;&nbsp;Shanghai Youfu Network Co., Ltd | 112761 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $113665 | $998 |

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**DESCRIPTION OF SHARE CAPITAL**

A copy of our amended and restated memorandum and articles of association is filed as an exhibit to the registration statement of which this prospectus is a part (and which is referred to in this section as, respectively, the "memorandum" and the "articles").

We were incorporated as an exempted company with limited liability under the laws of the Cayman Islands on January 4, 2022. Our affairs are governed by our memorandum and articles of association, as amended and restated from time to time, the Cayman Islands Companies Act, and the common law of the Cayman Islands. A Cayman Islands exempted company:

● is a company that conducts its business mainly outside the Cayman Islands;

● is prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);

● does not have to hold an annual general meeting;

● does not have to make its register of members open to inspection by shareholders of that company;

● may obtain an undertaking against the imposition of any future taxation;

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and

● may register as a segregated portfolio company.

**Class A Ordinary Share and Class B Ordinary Share**

Our authorized share capital is US$50,000 divided into 200,000,000 shares comprising of (i) 190,000,000 Class A ordinary shares of par value US$0.00025 each and (ii) 10,000,000 Class B ordinary shares of par value US$0.00025 each. As of the date of this prospectus, 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares are issued and outstanding.

Each Class B Ordinary Share is convertible into one (1) Class A Ordinary Share at any time at the option of the holder thereof. The right to convert shall be exercisable by the holder of the Class B Ordinary Share delivering a written notice to the Company that such holder elects to convert a specified number of Class B Ordinary Shares into Class A Ordinary Shares. In no event shall Class A Ordinary Shares be convertible into Class B Ordinary Shares.

Any conversion of Class B Ordinary Shares into Class A Ordinary Shares pursuant to the articles shall be effected by redeeming the relevant Class B Ordinary Shares and in consideration therefor issuing fully-paid Class A Ordinary Shares in equal number. Such conversion shall become effective forthwith upon entries being made in the register of members of our company to record the conversion of the relevant Class B Ordinary Shares as Class A Ordinary Shares.

At the completion of this offering assuming no exercise of the underwriters' over-allotment option, there will be 16,750,000 Class A ordinary share and 2,000,000 Class B ordinary shares issued and outstanding. Shares sold in this offering will be delivered against payment from the underwriters upon the closing of the offering in New York, New York, on or about [·], 2023.

**Dividends**

Subject to the Cayman Islands Companies Act, our directors may declare and pay out of the funds of our company lawfully available for such purpose a distribution at a time and of an amount they think fit. Under the laws of the Cayman Islands, our company may pay a dividend out of either profit or share premium account; provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.

**Voting Rights**

Holders of Class A ordinary shares and Class B ordinary shares shall, at all times, vote together as one class on all matters submitted to a vote by the shareholders at any general meeting of the Company. Each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to the vote at general meetings of our company, and each Class B ordinary share shall entitle the holder thereof to fifteen (15) votes on all matters subject to the vote at general meetings of our company.

An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attached to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy (or, in the case of corporations, by their duly authorized representatives) at a general meeting, while a special resolution requires the affirmative vote of a majority of not less than two-thirds of the votes attached to the ordinary shares cast by those shareholders who are present in person or by proxy (or, in the case of corporations, by their duly authorized representatives) at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our company, as permitted by the Cayman Islands Companies Act and our amended and restated memorandum and articles of association. A special resolution will be required for important matters such as a change of name or making changes to our amended and restated memorandum and articles of association.

**Variation of Rights of Shares**

If, at any time our share capital is divided into different classes of shares, the rights attached to any class of (unless otherwise provided by the terms of issue of the shares of that class) may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of that class.

The rights conferred on the holders of the shares of any class shall, unless otherwise expressly provided by the terms of issue of the shares of that class, not be deemed to be varied by the creation or issue of further shares ranking pari passu there with.

**Alteration of Share Capital**

Subject to the Cayman Islands Companies Act, our shareholders may, by ordinary resolution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increase
 our share capital by such sum, to be divided into shares of such amount, and with the attached
 rights, privileges, priorities and restrictions as the resolution shall prescribe;

(b) consolidate and divide all or any of our share capital into shares of larger amount
 than our existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) sub-divide our shares or
 any of them into shares of an amount smaller than that fixed by the memorandum; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) cancel shares which, at
 the date of the passing of the resolution, have not been taken or agreed to be taken by any person.

Subject to the Cayman Islands Companies Act and the articles, our shareholders may, by special resolution, reduce its share capital and any capital redemption reserve in any manner.

**Calls on Shares and Forfeiture of Shares**

Subject to the terms of allotment, the directors may, from time to time, make calls on the shareholders in respect of some or all of any monies unpaid on their shares whether in respect of their par value or the premium payable on those shares and each shareholder shall (subject to receiving at least 14 days' notice specifying the time or times of payment), pay to us at the time or times so specified the amount called on his shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay calls in respect of the share. If a sum called in respect of a share is not paid before or on the day appointed for payment of that call, the shareholder from whom such amount is due shall pay interest upon the sum at such rate as the directors may determine from the day appointed for payment of the call to the time of the actual payment. The directors may, at their discretion, waive payment of any such interest in full or in part. The shares that have been called upon and remain unpaid are subject to forfeiture.

**Redemption, Repurchase and Surrender of Shares**

We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined, before the issue of such shares, by our directors. Our company may also repurchase any of our shares (including any redeemable shares) on such terms and in such manner as have been approved by our directors. Under the Cayman Islands Companies Act, the redemption or repurchase of any share may be paid out of our company's profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Cayman Islands Companies Act no such share may be redeemed or repurchased (i) unless it is fully paid up, (ii) if such redemption or repurchase would result in there being no shares outstanding, or (iii) if the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

**Transfer of Shares**

Subject to the restrictions set out below, any of our shareholders may transfer all or any of his or her ordinary share to another person by completing an instrument of transfer in writing in such forms as may be acceptable to the directors and shall be executed by or on behalf of the transferor and, if required by the directors, signed by the transferee.

The transferor shall be deemed to remain the holder of an ordinary share until the name of the transferee is entered into the register of members of our company.

The directors may, in their absolute discretion, refuse to consent to any transfer and decline to register the transfer without giving any reason. If our directors refuse to register a transfer, they are required, within two months after the date on which the transfer was lodged with us, to send to the transferee of such refusal.

**Inspection of Books and Records**

Holders of our ordinary share will have no general right under the Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records (other than copies of our memorandum and articles of association and register of mortgages and charges, and any special resolutions passed by our shareholders). Under Cayman Islands law, the names of our current directors can be obtained from a search conducted at the Registrar of Companies in the Cayman Islands. However, we intend to provide our shareholders with annual audited financial statements. See "Where You Can Find Additional Information."

**General Meetings of Shareholders**

As a Cayman Islands exempted company, we are not obligated by the Cayman Islands Companies Act to call shareholders' annual general meetings; accordingly, we may, but shall not be obliged to, in each year hold a general meeting as an annual general meeting. Any annual general meeting shall be held at such time and place as may be determined by our board of directors. All general meetings other than annual general meetings shall be called extraordinary general meetings.

The directors may convene a general meeting as they think fit. Upon the written request of shareholders entitled to exercise 10% or more of the voting rights in respect of the matter for which the meeting is requisitioned, any one or more of the directors shall forthwith proceed to convene a meeting of shareholders. In the event that the directors do not convene such meeting within 21 days of the written request to requisition a meeting being lodged, the requisitionists, or any of them together holding at least half of the voting rights of all of them, may convene the general meeting of shareholders in the same manner as nearly as possible as that in which a meeting of shareholders may be convened by a director. Where the requisitionists fail to convene the meeting of shareholders within three months of their right to convene the meeting arising, the right to convene the meeting of shareholders shall lapse.

No less than seven days' notice of a general meeting of shareholders shall be given to shareholders whose names on the date the notice is given appear as shareholders in the register of members of our company and are entitled to attend and vote at such meeting. Notice of every general meeting shall also be given to each of the directors.

Subject to the Cayman Islands Companies Act, a meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all the shares which that shareholder holds.

A quorum shall consist of the presence (whether in person or by proxy or, if a corporate or other non-natural person, by its duly authorized representative or proxy) of one or more shareholders holding shares that represent in aggregate not less than one-third of all votes attaching to all shares in issue and entitled to vote at such general meeting.

If, within two hours from the time appointed for the general meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved. In any other case it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as is determined by the directors, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the shareholders present shall be a quorum.

At any meeting of the shareholders the chairman is responsible for deciding in such manner as he considers appropriate whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any shareholder present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken at any meeting, the result shall be announced to the meeting and recorded in the minutes of the meeting. The minutes of the meeting shall be conclusive evidence of the fact that a resolution was carried or not without proof of the number or proportion of the votes recorded in favour of or against such resolution.

**Directors**

We may by ordinary resolution or by a resolution of the directors fix the maximum and minimum number of directors required to hold office at any time and vary such limits from time to time. Under the articles, we are required to have a minimum of one director.

A director may be appointed by ordinary resolution or by resolution of the directors. Any appointment may be to fill a vacancy or as an additional director.

The directors shall be entitled to such remuneration as the directors may determine.

The shareholding qualification for directors may be fixed by our shareholders in general meeting and unless and until so fixed no share qualification shall be required.

Each director holds office for the term, if any, fixed by the terms of his appointment or until his earlier death, bankruptcy, insanity, resignation or removal. If no term is fixed on the appointment of a director, the director serves indefinitely until his earlier death, bankruptcy, insanity, resignation or removal.

A director may be removed by an ordinary resolution.

Subject to the provisions of the articles, the office of a director shall be vacated if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) he gives notice in writing
 to the Company that he resigns the office of director;

(b) he absents himself (without
 being represented by an alternate director appointed by him) from three consecutive meetings
 of the board of directors without special leave of absence from the directors, and they pass a resolution that he has by reason of
 such absence vacated office;

(c) he dies, becomes bankrupt
 or makes any arrangement or composition with his creditors generally;

(d) he is found to be or becomes
 of unsound mind; or

(e) all the other directors
 (being not less than two in number) resolve that he should be removed as a director.

Each of the compensation committee and the nominating and corporate governance committee shall consist of at least three directors and the majority of the committee members shall be independent within the meaning of the Nasdaq corporate governance rules. The audit committee shall consist of at least three directors, all of whom shall be independent within the meaning of the Nasdaq corporate governance rules and will meet the criteria for independence set forth in Rule 10A-3 or Rule 10C-1 of the Exchange Act.

**Powers of Directors**

Subject to the provisions of the Cayman Islands Companies Act, our amended and restated memorandum and articles of association and any directions given by an ordinary resolution, our business and affairs shall be managed by, or under the direction or supervision of, the directors. The directors shall have all the powers necessary for managing, and for directing and supervising, the business and affairs of our company as are not by the Cayman Islands Companies Act, our amended and restated memorandum and articles of association or the terms of any special resolution required to be exercised by the shareholders. No alteration of the memorandum or the articles or any direction given by an ordinary resolution or a special resolution shall invalidate any prior act of the directors that was valid at the time undertaken. A duly convened meeting of directors at which a quorum is present may exercise all powers exercisable by the directors.

The directors may exercise all the powers of our company to incur indebtedness, liabilities or obligations and to issue debentures, debenture stock, mortgages, bonds and other such securities and to secure indebtedness, liabilities or obligations whether of our company or of any third party.

Each director shall exercise his powers for a proper purpose. Each director, in exercising his powers or performing his duties, shall act honestly and in good faith in what the director believes to be the best interests of us.

**Capitalization** 

The directors may capitalize any sum standing to the credit of any of our reserve accounts (including share premium account and capital redemption reserve) or to the credit of profit and loss account or otherwise available for distribution and appropriate such sum to shareholders in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and apply such sum on their behalf in paying up in full unissued shares for issue, allotment and distribution credited as fully paid-up to and amongst them in the proportions aforesaid. In such event the directors may make such provisions as they think fit in the case of shares becoming distributable in fractions.

**Liquidation** 

If we shall be wound up, and the assets available for distribution amongst the shareholders shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the par value of the shares held by them. If in a winding up the assets available for distribution amongst the shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the shareholders in proportion to the par value of the shares held by them at the commencement of the winding up subject to a deduction from those shares in respect of which there are monies due, of all monies payable to us for unpaid calls or otherwise.

**Register of Members**

Under the Cayman Islands Companies Act, we must keep a register of members and there should be entered therein:

● the names and addresses of the members, a statement of the shares held by each member, and such statement shall confirm (i) the amount paid or agreed to be considered as paid, on the shares of each shareholder, (ii) the number and category of shares held by each member, and (iii) whether each relevant category of shares held by a member carries voting rights under rights under the articles of association of the company, and if so, whether such voting rights are conditional;

● the date on which the name of any person was entered on the register as a member; and

● the date on which any person ceased to be a member.

Under the Cayman Islands Companies Act, the register of members of our company is prima facie evidence of the matters set out therein (that is, the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of members is deemed as a matter of the Cayman Islands Companies Act to have legal title to the shares as set against its name in the register of members. Upon the completion of this offering, the register of members will be immediately updated to record and give effect to the issuance of shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name. However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.

**Differences in Corporate Law**

The Cayman Islands Companies Act is derived, to a large extent, from the older Companies Acts of England and Wales but does not follow recent English statutory enactments, and accordingly there are significant differences between the Cayman Islands Companies Act and the current Companies Act of England and Wales. In addition, the Cayman Islands Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Cayman Islands Companies Act applicable to us and the comparable laws applicable to companies incorporated in the State of Delaware in the United States and their shareholders.

*Mergers and Similar Arrangements*

The Cayman Islands Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (b) a "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company's articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

A merger between a Cayman Islands parent company and its Cayman Islands subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman Islands subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose, a company is a "parent" of a subsidiary if it holds issued shares that together represent at least 90% of the votes at a general meeting of the subsidiary.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Except in certain limited circumstances, a shareholder of a Cayman Islands constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation; provided that the dissenting shareholder complies strictly with the procedures set out in the Cayman Islands Companies Act. The exercise of such dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, except for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

Separate from the statutory provisions relating to mergers and consolidations, the Cayman Islands Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (i) 75 per cent in value of the members or class of members or (ii) a majority in number representing 75 per cent in value of the creditors or class of creditors, in each case, depending on the circumstances, as are present at a meeting convened for such purpose and thereafter sanctioned by the courts. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the statutory provisions
 as to the required majority vote have been met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the shareholders have been
 fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to
 promote interests adverse to those of the class;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the arrangement is such
 that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the arrangement is not
 one that would more properly be sanctioned under some other provision of the Cayman Islands Companies Act.

The Cayman Islands Companies Act also contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of dissentient minority shareholders upon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares affected within four months the offeror may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer that has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted in accordance with the foregoing statutory procedures, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

*Shareholders' Suits*

In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company and as a general rule, a derivative action may not be brought by a minority shareholder. However, based on English law authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands courts can be expected to follow and apply the common law principles (namely the rule in *Foss v. Harbottle* and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company to challenge actions where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a company acts or proposes
 to act illegally or ultra vires ;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the act complained of,
 although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained ;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) those who control the company
 are perpetrating a "fraud on the minority ."

*Indemnification of Directors and Executive Officers and Limitation of Liability*

Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provide that every director, alternate director or officer shall be indemnified out of our assets against any liability incurred by him as a result of any act or failure to act in carrying out his functions other than such liability (if any) that he may incur by his own actual fraud or wilful default. No such director, alternate director or officer shall be liable to us for any loss or damage in carrying out his functions unless that liability arises through the actual fraud or wilful default of such director or officer. Expenses, including legal fees, incurred by a director, alternate director or officer, or former director, alternate director or officer in defending any legal, administrative or investigative proceedings may be paid by us in advance of the final disposition of such proceedings upon receipt of an undertaking by such party to repay the amount if it shall ultimately be determined that such director, alternate director or officer is not entitled to be indemnified by us and upon such terms and conditions, if any, as we deem appropriate.

This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and executive officers that will provide such persons with additional indemnification beyond that provided in our amended and restated memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

*Anti-Takeover Provisions in Our Amended and Restated Memorandum and Articles of Association*

Some provisions of our amended and restated memorandum and articles of association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue shares at such times and on such terms and conditions as the board of directors may decide without any further vote or action by our shareholders.

Under the Cayman Islands Companies Act, our directors may only exercise the rights and powers granted to them under our amended and restated memorandum and articles of association for what they believe in good faith to be in the best interests of our company and for a proper purpose.

*Directors' Fiduciary Duties*

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company—a duty to act in good faith in the best interests of the company, a duty not to make a personal profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved toward an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

*Shareholder Proposals*

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but in keeping with common law, Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

The Cayman Islands Companies Act provides shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our amended and restated memorandum and articles of association provide that, upon the written request of shareholders entitled to exercise 10% or more of the voting rights in respect of the matter for which the meeting is requisitioned, any one or more of the directors shall forthwith proceed to convene a meeting of shareholders. If the directors do not proceed to convene a meeting of shareholders within 21 days of the written request to requisition a meeting being lodged the requisitionists, or any of them together holding at least half of the voting rights of all of them, may convene the meeting of shareholders in the same manner as nearly as possible as that in which a meeting of shareholders may be convened by a director. As a Cayman Islands exempted company, we are not obligated by law to call shareholders' annual general meetings.

*Cumulative Voting*

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands, but our amended and restated memorandum and articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

*Removal of Directors*

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our amended and restated memorandum and articles of association (which include the removal of a director by ordinary resolution), the office of a director shall be vacated if (a) he gives notice in writing to us that he resigns the office of director, (b) he absents himself (without being represented by an alternate director appointed by him) from three consecutive meetings of the board of directors without special leave of absence from the directors, and they pass a resolution that he has by reason of such absence vacated office, (c) he dies, becomes bankrupt or makes any arrangement or composition with his creditors generally, (d) he is found to be or becomes of unsound mind, or (e) all the other directors (being not less than two in number) resolve that he should be removed as a director.

*Transactions with Interested Shareholders*

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation or bylaws that its shareholders approve, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting stock or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation's outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction, resulting in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

There is no comparable statute under Cayman Islands law. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, the directors of our company are required to comply with fiduciary duties which they owe to our company under Cayman Islands laws, including the duty to ensure that, in their opinion, any such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.

*Dissolution; Winding Up*

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors.

Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

*Variation of Rights of Shares*

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our amended and restated memorandum and articles of association, if our share capital is divided into more than one class of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of that class.

*Amendment of Governing Documents*

Under the Delaware General Corporation Law, a corporation's certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved by a majority of the outstanding shares entitled to vote. The bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote. If so provided in the certificate of incorporation, they may also be amended by the board of directors. Under the Cayman Islands Companies Act and our amended and restated memorandum and articles of association, our memorandum and articles of association may only be amended by a special resolution of our shareholders.

*Anti-money Laundering—Cayman Islands*

In order to comply with legislation and regulations aimed at the prevention of money laundering and counter terrorist financing, we may be required to adopt and maintain anti-money laundering and counter terrorist financing policies and procedures, and may require subscribers to provide evidence to satisfactorily identify and verify their identity and source of funds. Such customer due diligence can be simplified or enhanced depending on the risk rating given to the subscriber. Where permitted, and subject to certain conditions, we may also delegate the maintenance of our anti-money laundering and counter terrorist financing policies and procedures (including the acquisition of due diligence information) to a suitable third persons based in Cayman Islands approved equivalent jurisdictions. A list of these equivalent jurisdictions, as updated from time to time, can be accessed here: <u>https://www.cima.ky/list-of-equivalent-jurisdictions</u>.

We reserve the right to request such information as is necessary to identify and verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber in producing any information and/or documentation required for identification or verification purposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account from which they were originally debited.

We also reserve the right to refuse to make any redemption payment to a shareholder if our directors or officers suspect or are advised that the payment of redemption proceeds to such shareholder might result in a breach of applicable anti-money laundering, counter terrorist financing or other applicable laws, regulations or guidance by any person in any equivalent jurisdiction, or if such refusal is considered necessary or appropriate to ensure our compliance with any such laws or regulations in any applicable jurisdiction.

If any person resident in the Cayman Islands knows or suspects or has reason for knowing or suspecting that another person is engaged in criminal conduct, money laundering or proliferation financing or is involved with terrorism or terrorist property and the information for that knowledge or suspicion came to their attention in the course of their business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) a nominated officer (appointed in accordance with the Proceeds of Crime Act (2020 Revision) of the Cayman Islands) or the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (2020 Revision), if the disclosure relates to criminal conduct or money laundering or (ii) to a police constable or a nominated officer (pursuant to the Terrorism Act (2018 Revision) of the Cayman Islands) or the Financial Reporting Authority, pursuant to the Terrorism Act (2018 Revision), if the disclosure relates to involvement with terrorism or terrorist financing and terrorist property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.

**Listing**

We have applied to list our Class A ordinary shares on Nasdaq under the symbol "NTCL". At this time, Nasdaq Capital Market has not yet approved our application to list our Class A ordinary shares. The closing of this offering is conditioned upon Nasdaq Capital Market's final approval of our listing application, and there is no guarantee or assurance that our Class A ordinary shares will be approved for listing on Nasdaq Capital Market. We will not consummate and close this offering without a listing approval letter from Nasdaq Capital Market. Our receipt of a listing approval letter is not the same as an actual listing on the Nasdaq Capital Market. The listing approval letter will serve only to confirm that, if we sell a number of Class A ordinary shares in this offering sufficient to satisfy applicable listing criteria, our Class A ordinary shares will in fact be listed.

If the application is approved, trading of our Class A ordinary shares on the Nasdaq Capital Market will begin within five days following the closing of this offering. If our Class A ordinary shares are listed on the Nasdaq Capital Market, we will be subject to continued listing requirements and corporate governance standards. We expect these new rules and regulations to significantly increase our legal, accounting and financial compliance costs.

**Transfer Agent and Registrar**

The transfer agent and registrar for the Class A ordinary shares is VStock Transfer, LLC.

**SHARES ELIGIBLE FOR FUTURE SALE**

Before this offering, there has not been a public market for our Class A and Class B ordinary shares, and while we have applied to list our Class A ordinary shares on Nasdaq, we cannot assure you that a significant public market for the Class A ordinary shares will develop or be sustained after this offering. Future sales of substantial amounts of our Class A ordinary shares in the public markets after this offering, or the perception that such sales may occur, could adversely affect market prices prevailing from time to time. As described below, only a limited number of our Class A ordinary shares currently outstanding will be available for sale immediately after this offering due to contractual and legal restrictions on resale. Nevertheless, after these restrictions lapse, future sales of substantial amounts of our Class A ordinary shares, including Class A ordinary shares issued upon exercise of outstanding options, in the public market in the United States, or the possibility of such sales, could negatively affect the market price in the United States of our Class A ordinary shares and our ability to raise equity capital in the future.

We will have 16,750,000 Class A ordinary shares and 2,000,000 Class B ordinary shares outstanding upon closing the offering, assuming no exercise of the underwriters' over-allotment option. Of that amount, 3,750,000 Class A ordinary shares will be publicly held by investors participating in this offering, and 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares will be held by our existing shareholders, some of whom may be our "affiliates" as that term is defined in Rule 144 under the Securities Act. As defined in Rule 144, an "affiliate" of an issuer is a person who directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with the issuer.

All of the Class A ordinary shares sold in the offering will be freely transferable by persons other than our "affiliates" in the United States without restriction or further registration under the Securities Act. Class A ordinary shares purchased by one of our "affiliates" may not be resold, except pursuant to an effective registration statement or an exemption from registration, including an exemption under Rule 144 under the Securities Act described below.

The Class A and Class B ordinary shares held by existing shareholders are, and any Class A ordinary shares issuable upon exercise of options outstanding following the completion of this offering will be, "restricted securities," as that term is defined in Rule 144 under the Securities Act. These restricted securities may be sold in the United States only if they are registered or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act. These rules are described below.

**Lock-Up Agreements**

We have agreed not to, for a period of six (6) months from the effective date of the registration statement of which this prospectus is a part, offer, issue, sell, contract to sell, encumber, grant any option for the sale of, or otherwise dispose of, except in this offering, any of our Class A ordinary shares or securities that are substantially similar to our Class A ordinary shares, including any options or warrants to purchase our Class A ordinary shares, or any securities that are convertible into or exchangeable for, or that represent the right to receive, our Class A ordinary shares or any such substantially similar securities (other than pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date such lock-up agreement was executed), without the prior written consent of the Representative.

Furthermore, each of our directors, officers and holders of 5% or more of Class A ordinary shares on a fully diluted basis immediately prior to the consummation of this offering has also entered into a similar lock-up agreement for a period of six (6) from the date of this prospectus, subject to certain exceptions below, with respect to our Class A ordinary shares and securities that are substantially similar to our Class A ordinary shares. These shareholders may transfer their lock-up Class A ordinary shares without the prior written consent of the Representative in connection with (a) transactions relating to their lock-up Class A ordinary shares acquired in open market transactions after the completion of the Initial Public Offering; (b) transfers of their lock-up Class A ordinary shares as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of these shareholders and/or one or more family members (for purposes of this lock-up agreement, "family member" means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of their lock-up Class A ordinary shares to a charity or educational institution or other not-for-profit organization; (d) if these shareholders, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of their lock-up Class A ordinary shares to any such corporation, partnership, limited liability company or other business entity, or any shareholder, partner or member of, or owner of similar equity interests in, the same, as the case may be; (e) a sale or surrender to the Company of any options or shares of the Company underlying options in order to pay the exercise price or taxes associated with the exercise of options or (f) transfers or distributions pursuant to any bona fide third-party tender offer, merger, acquisition, consolidation or other similar transaction made to all holders of the Company's shares involving a change of control of the Company, provided that in the event that such tender offer, merger, acquisition, consolidation or other such transaction is not completed, the lock-up Class A ordinary shares held by these shareholders shall remain subject to the provisions of this lock-up agreement; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of the lock-up agreements and (iii) no filing under Section 16(a) of the U.S. Securities Exchange Act of 1934, as amended shall be required or shall be voluntarily made.

See "Underwriting – Lock-Up Agreements" for more information.

**Rule 144**

All of our Class A and Class B ordinary shares outstanding prior to this offering are "restricted securities" as that term is defined in Rule 144 under the Securities Act and may be sold publicly in the United States only if they are subject to an effective registration statement under the Securities Act or pursuant to an exemption from the registration requirement such as those provided by Rule 144 and Rule 701 promulgated under the Securities Act.

In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person who is not deemed to have been our affiliate at any time during the three months preceding a sale and who has beneficially owned restricted securities within the meaning of Rule 144 for more than six months would be entitled to sell an unlimited number of those shares, subject only to the availability of current public information about us. A non-affiliate who has beneficially owned restricted securities for at least one year from the later of the date these shares were acquired from us or from our affiliate would be entitled to freely sell those shares.

A person who is deemed to be an affiliate of ours and who has beneficially owned "restricted securities" for at least six months would be entitled to sell, within any three-month period, a number of shares that is not more than the greater of:

● 1% of the number of Class A and Class B ordinary shares then outstanding, in the form of Class A ordinary shares or otherwise, which will equal approximately shares immediately after this offering; or

● the average weekly trading volume of the Class A ordinary shares on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

**Rule 701**

In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases our Class A ordinary shares from us in connection with a compensatory stock or option plan or other written agreement relating to compensation is eligible to resell such Class A ordinary shares 90 days after we became a reporting company under the Exchange Act in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144.

**Regulation S**

Regulation S provides generally that sales made in offshore transactions are not subject to the registration or prospectus-delivery requirements of the Securities Act.

**TAXATION**

**<u>People's Republic of China Enterprise Taxation</u>**

Unless otherwise noted in the following discussion, this section is the opinion of Grandall Law Firm, our PRC counsel, insofar as it relates to legal conclusions with respect to matters of People's Republic of China Enterprise Taxation below.

The following brief description of Chinese enterprise laws is designed to highlight the enterprise-level taxation on our earnings, which will affect the number of dividends, if any, we are ultimately able to pay to our shareholders. See "Dividend Policy."

We are an exempted holding company incorporated in Cayman Islands with limited liability and we gain income by way of dividends paid to us from our PRC subsidiaries. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor's jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.

Under the EIT Law, an enterprise established outside of China with a "de facto management body" within China is considered a "resident enterprise," which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define "de facto management body" as a managing body that actually, comprehensively manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition currently available is set forth in SAT Notice 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although NetClass does not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of SAT Notice 82, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in SAT Notice 82 to evaluate the tax residence status of NetClass and its subsidiaries organized outside the PRC.

According to SAT Notice 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a "de facto management body" in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders' meetings of the enterprise are located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.

Accordingly, we believe that NetClass and its offshore subsidiaries should not be treated as a "resident enterprise" for PRC tax purposes if the criteria for "de facto management body" as set forth in SAT Notice 82 were deemed applicable to us as of the date of this prospectus. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body" as applicable to our offshore entities, we will continue to monitor and update our tax status.

The Implementation rules of the EIT Law provide that, (i) if the enterprise that distributes dividends is domiciled in the PRC or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or gains are treated as China-sourced income. It is not clear how "domicile" may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for PRC tax purposes, any dividends we pay to our overseas shareholders which are non-resident enterprises as well as gains realized by such shareholders from the transfer of our shares may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%. Therefore, we believe that it is possible but highly unlikely that the income received by our overseas shareholders will be regarded as China-sourced income.

See "*Risk Factors – Risks Related to Doing Business in China – If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders*" of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders on page 27.

Our company pays an EIT rate of 25% for WFOE and its subsidiaries. The EIT is calculated based on the entity's global income as determined under PRC tax laws and accounting standards. If the PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our Class A ordinary shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Company is treated as a PRC resident enterprise. There is no guidance from the PRC government to indicate whether or not any tax treaties between the PRC and other countries would apply in circumstances where a non-PRC company was deemed to be a PRC tax resident, and thus there is no basis for expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.

**<u>Hong Kong Taxation</u>**

Entities incorporated in Hong Kong are subject to profits tax in Hong Kong at the rate of 16.5% for the years ended September 30, 2022 and 2021.

**<u>Cayman Islands Taxation</u>**

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our Class A ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Class A ordinary shares, as the case may be, nor will gains derived from the disposal of our Class A ordinary shares be subject to Cayman Islands income or corporation tax.

The Cayman Islands enacted the International Tax Co-operation (Economic Substance) Act (2021 Revision) together with the Guidance Notes published by the Cayman Islands Tax Information Authority from time to time. The Company is required to comply with the economic substance requirements from January 4, 2022 and make an annual report in the Cayman Islands as to whether or not it is carrying on any relevant activities and if it is, it must satisfy an economic substance test.

**<u>United States Federal Income</u>**

**WE URGE POTENTIAL PURCHASERS OF OUR CLASS A ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR CLASS A ORDINARY SHARES.**

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

● banks;

● financial institutions;

● insurance companies;

● regulated investment companies;

● advertising investment trusts;

● broker-dealers;

● persons that elect to mark their securities to market;

● U.S. expatriates or former long-term residents of the U.S.;

● governments or agencies or instrumentalities thereof;

● tax-exempt entities;

● persons liable for alternative minimum tax;

● persons holding our Class A ordinary shares as part of a straddle, hedging, conversion or integrated transaction;

● persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our ordinary share);

● persons who acquired our Class A ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation;

● persons holding our Class A ordinary shares through partnerships or other pass-through entities;

● beneficiaries of a Trust holding our Class A ordinary shares; or

● persons holding our Class A ordinary shares through a Trust.

The discussion set forth below is addressed only to U.S. Holders that purchase Class A ordinary shares in this offering. Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Class A ordinary shares.

***Material Tax Consequences Applicable to U.S. Holders of Our Class A Ordinary Shares***

The following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Class A ordinary shares. It is directed to U.S. Holders (as defined below) of our Class A ordinary shares and is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This description does not deal with all possible tax consequences relating to ownership and disposition of our Class A ordinary shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Class A ordinary shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect as of the date of this prospectus and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this prospectus, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

The brief description below of the U.S. federal income tax consequences to "U.S. Holders" will apply to you if you are a beneficial owner of Class A ordinary shares and you are, for U.S. federal income tax purposes,

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

● an estate whose income is subject to U.S. federal income taxation regardless of its source; or

● a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

**Taxation of Dividends and Other Distributions on Our** Class A **Ordinary Shares**

Subject to the passive foreign investment company (PFIC) rules (defined below) discussed below, the gross amount of distributions made by us to you with respect to the Class A ordinary shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of actual or constructive receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from U.S. corporations.

With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Class A ordinary shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and the Cayman Islands, clause (1) above can be satisfied only if the Class A ordinary shares are readily tradable on an established securities market in the United States. Under U.S. Internal Revenue Service authority, Class A ordinary shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently include the Nasdaq. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Class A ordinary shares, including the effects of any change in law after the date of this prospectus.

Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class A ordinary shares will constitute "passive category income" but could, in the case of certain U.S. Holders, constitute "general category income."

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A ordinary shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that all distributions will be treated as a dividend even if a particular distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

***Taxation of Dispositions of Class A Ordinary Shares***

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a Class A ordinary share equal to the difference between the amount realized (in U.S. dollars) for the Class A ordinary shares and your tax basis (in U.S. dollars) in the Class A ordinary shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Class A ordinary shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.

***Passive Foreign Investment Company ("PFIC")***

A non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:

● at least 75% of its gross income for such taxable year is passive income; or

● at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the "asset test").

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in this offering will generally be considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value of our Class A ordinary shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets (including the cash raised in this offering) on any particular quarterly testing date for purposes of the asset test.

Based on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. However, we must make a separate determination each year as to whether we are a PFIC, and there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year. Depending on the amount of cash we raise in this offering, together with any other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax year. In addition, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Class A ordinary shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Class A ordinary shares and the amount of cash we raise in this offering.

Accordingly, fluctuations in the market price of the Class A ordinary shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend the cash we raise in this offering. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price of our Class A ordinary shares from time to time and the amount of cash we raise in this offering) that may not be within our control. If we are a PFIC for any year during which you hold Class A ordinary shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Class A ordinary shares. However, if we cease to be a PFIC and you did not previously make a timely "mark-to-market" election as described below, you may avoid some of the adverse effects of the PFIC regime by making a "purging election" (as described below) with respect to your Class A ordinary shares.

If we are a PFIC for your taxable year(s) during which you hold Class A ordinary shares, you will be subject to special tax rules with respect to any "excess distribution" that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Class A ordinary shares, unless you make a "mark-to-market" election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Class A ordinary shares will be treated as an excess distribution. Under these special tax rules:

● the excess distribution or gain will be allocated ratably over your holding period for the Class A ordinary shares (in the case of Class A ordinary shares obtained through the exercise of warrants, the holding period will include the holding period of the underlying warrants);

● the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income earned in the current taxable year; and

● the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate on ordinary income in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or "excess distribution" cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A ordinary shares cannot be treated as capital, even if you hold the Class A ordinary shares as capital assets.

A U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the US Internal Revenue Code for such stock (but not our warrants) to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed to hold) Class A ordinary shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Class A ordinary shares as of the close of such taxable year over your adjusted basis in such Class A ordinary shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Class A Class A ordinary shares over their fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market gains on the Class A ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Class A ordinary shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A ordinary shares. Your basis in the Class A ordinary shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under "— Taxation of Dividends and Other Distributions on Our Class A Ordinary Shares" generally would not apply.

The mark-to-market election is available only for "marketable stock," which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq. If the Class A ordinary shares are regularly traded on the Nasdaq and if you are a holder of Class A ordinary shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock (but not warrants) in a PFIC may make a "qualified electing fund" election under Section 1295(b) of the US Internal Revenue Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder's pro rata share of the corporation's earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. Therefore, prospective investors should assume that a qualified electing fund election will not be available. If you hold Class A ordinary shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding such Class A ordinary shares, including regarding distributions received on the Class A ordinary shares and any gain realized on the disposition of the Class A ordinary shares. The failure to file IRS Form 8621 could result in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax.

If you do not make a timely "mark-to-market" election (as described above), and if we were a PFIC at any time during the period you hold our Class A ordinary shares, then such Class A ordinary shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a "purging election" for the year we cease to be a PFIC (no such election is available to warrants). A "purging election" creates a deemed sale of such Class A ordinary shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Class A ordinary shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Class A ordinary shares for tax purposes. U.S. shareholders may make a purging election and make a simultaneous qualified electing fund (QEF) election if the foreign corporation remains a PFIC at the time of the purging election.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A ordinary shares and the elections discussed above.

***Information Reporting and Backup Withholding***

Dividend payments with respect to our Class A ordinary shares and proceeds from the sale, exchange or redemption of our Class A ordinary shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.

Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Class A ordinary shares, subject to certain exceptions (including an exception for Class A ordinary shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Class A ordinary shares.

**ENFORCEABILITY OF CIVIL LIABILITIES**

We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands to take advantage certain benefits associated with being a Cayman Islands exempted company, such as:

● political and economic stability;

● an effective judicial system;

● tax neutrality;

● the absence of exchange control or currency restrictions; and

● the availability of professional and support services.

However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include but are not limited to:

● the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection to investors; and

● Cayman Islands companies may not have standing to sue before the federal courts of the United States.

Our constitutional documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.

Substantially all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against them or against us, judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

We have appointed Cogency Global Inc. as our agent upon whom process may be served in any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any State of the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

Grandall Law Firm, our counsel as to Chinese law, has advised us that the recognition and enforcement of foreign judgments are provided for under the Chinese Civil Procedure Law. Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of the Chinese Civil Procedure Law based either on treaties between China and the country where the judgment is made or in reciprocity between jurisdictions. China does not have any treaties or other agreements with the Cayman Islands or the United States that provide for the reciprocal recognition and enforcement of foreign judgments. As a result, it is uncertain whether a Chinese court would enforce a judgment rendered by a court in either of these two jurisdictions.

According to the Civil Procedure Law of the People's Republic of China (amended in 2017), if a legally effective judgment or ruling made by a foreign court requires recognition and enforcement by a people's court of the People's Republic of China, the party concerned may directly apply to an intermediate people's court with jurisdiction over for recognition and enforcement, or the foreign court may request recognition and enforcement by a people's court in accordance with the provisions of an international treaty concluded or acceded to by the country and the People's Republic of China, or in accordance with the principle of reciprocity.

In the event that the people's court is of the opinion that the legally effective judgment or ruling made by the foreign court applying for or requesting recognition and enforcement does not violate the basic principles of the laws of the People's Republic of China or the sovereignty, security and public interests of the country after the people's court reviews the legally effective judgment or ruling made by the foreign court applying for or requesting recognition and enforcement in accordance with the international treaties concluded or acceded to by the People's Republic of China or in accordance with the principle of reciprocity, the people's court shall issue ruling that recognizes its validity and, if enforcement is necessary, issues an enforcement order, which shall be implemented in accordance with the relevant laws. Those judgments or rulings that violate the basic principles of the laws of the People's Republic of China or the sovereignty, security and public interests of the country will not be recognized and implemented.

If an award made by a foreign arbitration institution requires recognition and enforcement by the people's court of the People's Republic of China, the party concerned shall directly apply to the intermediate people's court in the place where the person subjected to enforcement has his domicile or where his property is located. The people's court shall handle the matter in accordance with international treaties concluded or acceded to by the People's Republic of China or in accordance with the principle of reciprocity.

PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedure Law based either on treaties between China and the country where the judgment is made or on reciprocity between different jurisdictions, and PRC courts will not recognize or enforce these foreign judgments if PRC courts believe the foreign judgments violate the basic principles of PRC laws or national sovereignty, security or public interest after review.

Harney Westwood & Riegels, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States.

Harney Westwood & Riegels has informed us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final and conclusive, (iv) is not in respect of taxes, a fine or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, there is uncertainty with regard to Cayman Islands law on whether judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State will be determined by the courts of the Cayman Islands. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against a Cayman Islands company, such as our company. Because such a determination in relation to judgments obtained from U.S. courts under civil liability provisions of U.S. securities laws has not yet been made by a court of the Cayman Islands, it is uncertain whether such judgments would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

**UNDERWRITING**

In connection with this offering, will enter into an underwriting agreement (the "Underwriting Agreement") with Revere Securities LLC, as representative (the "Representative") of several underwriters, in this offering. The Representative may retain other brokers or dealers to act as a sub-agents or selected dealers on their behalf in connection with this offering. Under the terms and subject to the conditions contained in the underwriting agreement, we have agreed to issue and sell to the Underwriters the number of Class A ordinary shares as indicated below at the offering price less the underwriting discounts set forth on the cover page of this prospectus.

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| | |
|:---|:---|
| **Name of Underwriter** | **Number of<br> Class A**<br> **Ordinary<br> Shares** |
| Revere Securities LLC |  |
| Total | 3750000 |

---

The Representative committed to purchase all the Class A ordinary shares offered by this prospectus if they purchase any Class A ordinary shares. The Underwriters are not obligated to purchase the Class A ordinary shares covered by the Underwriters' over-allotment option to purchase Class A ordinary shares as described below. The Underwriters are offering the Class A ordinary shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, and other conditions contained in the Underwriting Agreement, such as the receipt by the Underwriters of officer's certificates and legal opinions. The Underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Certain of the underwriters are expected to make offers and sales both inside and outside the U.S. through their respective selling agents. Any offers or sales in the U.S. will be conducted by broker-dealers registered with the SEC.

**Over-Allotment Option**

Pursuant to the Underwriting Agreement, we have agreed to grant to the Representative an option to purchase from us up to an additional 562,500 Class A ordinary shares, representing 15% of the Class A ordinary shares sold in the offering, solely to cover over-allotments, if any, at the initial public offering price less the underwriting discounts. The Representative may exercise this option any time during the 45-day period after the closing date of the offering, but only to cover over-allotments, if any. To the extent the Representative exercise the option, the Representative will become obligated, subject to certain conditions, to purchase the shares for which they exercise the option.

**Fees, Commissions and Expense Reimbursement**

We will pay the Representative a fee/commission equivalent to seven percent (7.5%) of the gross proceeds of this offering. The Representative propose initially to offer the Class A ordinary shares to the public at the offering price set forth on the cover page of this prospectus and to dealers at those prices less the aforesaid fee ("underwriting discount") set forth on the cover page of this prospectus. If all of the Class A ordinary shares offered by us are not sold at the offering price, the Underwriters may change the offering price and other selling terms by means of a supplement to this prospectus.

The following table shows the underwriting fees/commission payable to the Representative, assuming an initial public offering price of $4.5 per share (which is the midpoint of the estimated range of the initial public offering price shown on the cover page of this prospectus):

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| | | | |
|:---|:---|:---|:---|
|  | **Per**<br> **Ordinary**<br> **Share** | **Total**<br> **Without**<br> **Over-Allotment**<br> **Option** | **Total**<br> **With Full**<br> **Over-Allotment**<br> **Option**  |
| Public offering price | $4.50 | $16875000 | $19406250 |
| Underwriting fees and commissions (7.5%)<sup>(1)</sup> | $0.34 | $1265625 | $1455469 |
| Proceeds, before expenses, to us | $4.16 | $15609375 | $17950781 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The fees do not include
 the Representative Warrants or expense reimbursement as described below.

We have agreed to pay expenses relating to the offering, including: a) the costs of preparing, printing and filing the Registration Statement with the SEC, amendments and supplements thereto, and post effective amendments, as well as the filing with FINRA, and payment of all necessary fees in connection therewith and the printing of a sufficient quantity of preliminary and final prospectuses as the Representative may reasonably request; (b) the costs of preparing, printing and delivering exhibits thereto, in such quantities as the Representative may reasonably request; (c) all fees, expenses and disbursements relating to the registration, qualification or exemption of securities offered under the securities laws of foreign jurisdictions designated by the Representative; (d) the fees of counsel(s) and accountants for the Company, including fees associated with any blue sky filings where applicable; (e) fees associated with the Company's transfer agent; (f) fees, if necessary, associated with translation services; (g) expenses related to road shows and (h) the costs of any pre-approved due diligence meetings. Promptly upon consummation of this offering or the earlier termination or expiration of the Engagement Letter between the Company and the Representative dated as of March 5, 2023 ("Engagement Letrer")in accordance with its terms, the Representative will return to the Company the balance of any remaining portion of the advance to the extent such monies were not used for reasonable and documented out-of-pocket expenses incurred. We are required to supply the Representative and its counsel, at our cost, with a reasonable number of bound volumes of the offering materials within a reasonable time after the closing of this offering as well as commemorative tombstones.

We also agreed to pay to the Representative non-accountable expenses equal to 1% of the gross proceeds raised in the offering. We have also agreed to reimburse the Representative for certain accountable expenses not to exceed the total amount of $250,000, including the Representative's legal fees, background check expenses, and all other expenses related to the offering. We paid an expense deposit of $120,000 to the Representative, upon the execution of the letter of intent between us and the Representative and shall pay the remaining of $130,000 to the RepresentativeAny expense deposits will be returned to us to the extent the Representative's out-of-pocket accountable expenses are not actually incurred in accordance with FINRA Rule 5110(g)(4)(A), regardless of whether the offering is terminated.

We estimate that the total expenses payable by us in connection with the offering, other than the underwriting fees and commissions and accountable and non-accountable expenses, will be approximately $1,334,331.

In addition, we agreed, during the engagement period of the Representative or until the consummation of this offering, whichever is earlier, not to negotiate with any other broker-dealer relating to a possible private and/or public offering of the securities without the written consent of the Representative, provided that the Representative is reasonably proceeding in good faith with preparation for this offering. Until the Underwriting Agreement is signed, we or the Representative may at any time terminate its further participation in this offering for any reason whatsoever, and we agree to reimburse the Representative for its actual reasonable accountable out-of-pocket expenses, up to a maximum of $250,000, incurred prior to the termination, less any advance and amounts previously paid to the Representative in reimbursement for such expenses; provided, however, that such fees shall be subject to FINRA Rule 5110(g)(4)(A) and shall not apply if and to the extent the Representative has advised us of the Representative's inability or unwillingness to proceed with this offering.

**Escrow Account**

The Company shall establish and maintain an SEC compliant offering deposit or escrow account with the financial institution as designated by the parties of the Engagement Letter, and the Company shall deposit into the designated account an amount of two hundred thousand dollars ($200,000) (the "Escrow Amount") in order to provide source of funding for certain indemnification obligations of the Company to the Representative and other indemnified persons. The Escrow Amount shall be held at the designated account for twelve (12) months after the closing of this offering, during which period the Company may use the Escrow Amount for low risk investment (e.g. bonds, mutual funds, money market funds, etc.) at its discretion, provided that the Company has notified the Representative in writing in advance.

**The Representative's Warrants**

We have agreed to issue to the Representative and to register herein warrants to purchase up to 187,500 Class A ordinary shares, assuming the over-allotment option is not exercised and up to 215,625 Class A ordinary shares, assuming the over-allotment option is exercised Class A ordinary shares (equal to five percent (5%) of the Class A ordinary shares sold in this offering) and to also register herein such underlying Class A ordinary shares. The Representative Warrants may be exercised after the date of issuance and from time to time, in whole or in part, provided that the shares issuable upon exercise of such warrants may not be sold during the period beginning on the commandment of the offering and ending from 180 days after the commencement of sale of the offering. The Representative Warrants will expire five (5) years from the commencement of sales of the offering. The Representative Warrants are exercisable at a per share price of 120% of the offering price of the Class A ordinary shares offered hereby and may be exercised on a cashless basis. The Representative Warrants shall not be callable or cancellable.

The Representative Warrants may be exercised at any time after the date of issuance but may not be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the commencement of sales of the offering (in accordance with FINRA Rule 5110), except that they may be assigned, in whole or in part, to any successor, officer, manager, member, or partner of the Representative, and to members of the syndicate or selling group and their respective officers, managers, members or partners. The Representative Warrants may be exercised as to all or a lesser number of shares, may be exercised on a cashless exercise and contain provisions for immediate "piggyback" registration rights at our expense for a period of five years from the date of commencement of sales of the offering in compliance with FINRA Rule 5110(g)(8)(D). We have registered the Class A ordinary shares underlying the Representative Warrants in this offering. The Representative's Warrants also provide for one demand registration of the sale of the underlying shares of common stock at the Company's expense and an additional demand registration right at the warrant holder's expense, provided such demand registration rights will not be greater than five years from the date of the commencement of sales of this offering in compliance with FINRA Rule 5110(g)(8)(C). The exercise price and number of Class A ordinary shares issuable upon exercise of the Representative Warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary cash dividend, or our recapitalization, reorganization, merger, or consolidation.

The foregoing does not purport to be a complete statement of the terms and conditions of the Underwriting Agreement. A form of the Underwriting Agreement is included as an exhibit to the registration statement of which this prospectus forms a part.

**Indemnification**

We have agreed to indemnify the Underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, arising from breaches of representations and warranties contained in the underwriting agreement, or to contribute to payments that the Underwriters may be required to make in respect of those liabilities.

**Lock-Up Agreements**

We have agreed not to, for a period of six (6) months from the effective date of the registration statement of which this prospectus is a part, offer, issue, sell, contract to sell, encumber, grant any option for the sale of, or otherwise dispose of, except in this offering, any of our Class A ordinary shares or securities that are substantially similar to our Class A ordinary shares, including any options or warrants to purchase our Class A ordinary shares, or any securities that are convertible into or exchangeable for, or that represent the right to receive, our Class A ordinary shares or any such substantially similar securities (other than pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date such lock-up agreement was executed), without the prior written consent of the Representative.

Furthermore, each of our directors, officers and holders of 5% or more of Class A ordinary shares on a fully diluted basis immediately prior to the consummation of this offering has also entered into a similar lock-up agreement for a period of six (6) months from the date of this prospectus, subject to certain exceptions below, with respect to our Class A ordinary shares and securities that are substantially similar to our Class A ordinary shares. These shareholders may transfer their lock-up Class A ordinary shares without the prior written consent of the Representative in connection with (a) transactions relating to their lock-up Class A ordinary shares acquired in open market transactions after the completion of the Initial Public Offering; (b) transfers of their lock-up Class A ordinary shares as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of these shareholders and/or one or more family members (for purposes of this lock-up agreement, "family member" means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of their lock-up Class A ordinary shares to a charity or educational institution or other not-for-profit organization; (d) if these shareholders, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of their lock-up Class A ordinary shares to any such corporation, partnership, limited liability company or other business entity, or any shareholder, partner or member of, or owner of similar equity interests in, the same, as the case may be; (e) a sale or surrender to the Company of any options or shares of the Company underlying options in order to pay the exercise price or taxes associated with the exercise of options or (f) transfers or distributions pursuant to any bona fide third-party tender offer, merger, acquisition, consolidation or other similar transaction made to all holders of the Company's shares involving a change of control of the Company, provided that in the event that such tender offer, merger, acquisition, consolidation or other such transaction is not completed, the lock-up Class A ordinary shares held by these shareholders shall remain subject to the provisions of this lock-up agreement; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of the lock-up agreements and (iii) no filing under Section 16(a) of the U.S. Securities Exchange Act of 1934, as amended shall be required or shall be voluntarily made.

The Representative has no present intention to waive or shorten the lock-up period; however, the terms of the lock-up agreements may be waived at its discretion. In determining whether to waive the terms of the lock-up agreements, the Representative may base its decision on its assessment of the relative strengths of the securities markets and companies similar to ours in general, and the trading pattern of, and demand for, our securities in general.

**Stabilization, Short Positions and Penalty Bids**

In connection with the offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions, penalty bids and passive market making in accordance with Regulation M under the Exchange Act.

● Stabilizing transactions permit the underwriters to make bids or purchases for the purpose of pegging, fixing or maintaining the price of the Class A ordinary shares, so long as stabilizing bids do not exceed a specified maximum.

● Over-allotment involves sales by the underwriters of the Class A ordinary shares in excess of the number of Class A ordinary shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of Class A ordinary shares over-allotted by the underwriters is not greater than the number of Class A ordinary shares that they may purchase in the over-allotment option. In a naked short position, the number of Class A ordinary shares involved is greater than the number of Class A ordinary shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing Class A ordinary shares in the open market.

● Syndicate covering transactions involve purchases of Class A ordinary shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of Class A ordinary shares to close out the short position, the underwriters will consider, among other things, the price of our Class A ordinary shares available for purchase in the open market as compared to the price at which they may purchase Class A ordinary shares through the over-allotment option. If the underwriters sell more Class A ordinary shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying Class A ordinary shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the Class A ordinary shares in the open market after pricing that could adversely affect investors who purchase in the offering.

● Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the Class A ordinary shares originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

● In passive market making, market makers in the Class A ordinary shares who are the underwriters or prospective underwriter may, subject to limitations, make bids for or purchases of our Class A ordinary shares until the time, if any, at which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of the Class A ordinary shares or preventing or retarding a decline in the market price of Class A ordinary shares. As a result, the price of Class A ordinary shares may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the Nasdaq Stock Market or otherwise, and, if commenced, may be discontinued at any time.

**Determination of Offering Price**

We determined the public offering price of the Class A ordinary shares we are offering in consultation with the Underwriter based on discussions with potential investors in light of the history and prospects of our Company, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, the public stock price for similar companies, general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.

**Listing**

We have applied to list our Ordinary Shares on the Nasdaq Capital Market under the symbol "NTCL."

**Electronic Offer, Sale and Distribution of Securities**

A prospectus in electronic format may be delivered to potential investors by the Underwriter. The prospectus in electronic format will be identical to the paper version of such prospectus. Other than the prospectus in electronic format, the information on the Underwriter' website and any information contained in any other website maintained by the Underwriter is not part of the prospectus or the registration statement of which this Prospectus forms a part.

**Relationships**

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include the sales and trading of securities, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, financing, brokerage and other financial and non-financial activities and services. The underwriters and their respective affiliates may have, from time to time, performed, and may in the future perform, a variety of such activities and services for us and for persons or entities with relationships with us for which they received or will receive customary fees, commissions and expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates, directors, officers and employees may at any time purchase, sell or hold a broad array of investments, and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own accounts and for the accounts of their customers. Such investment and trading activities may involve or relate to our assets, securities and/or instruments (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with us. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments. In addition, the underwriters and their respective affiliates may at any time hold, or recommend to clients that they should acquire, long and short positions in such assets, securities and instruments.

**Selling Restrictions**

No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of the Class A ordinary shares, or the possession, circulation or distribution of this prospectus or any other material relating to us or the Class A ordinary shares, where action for that purpose is required. Accordingly, the Class A ordinary shares may not be offered or sold, directly or indirectly, and neither this prospectus nor any other offering material or advertisements in connection with the Class A ordinary shares may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction.

***Notice*** ***to Prospective Investors in Australia***

This prospectus:

● does not constitute a product disclosure document or a prospectus under Chapter 6D.2 of the Corporations Act 2001 (Cth), or the Corporations Act;

● has not been, and will not be, lodged with the Australian Securities and Investments Commission, or the ASIC, as a disclosure document for the purposes of the Corporations Act and does not purport to include the information required of a disclosure document under Chapter 6D.2 of the Corporations Act;

● does not constitute or involve a recommendation to acquire, an offer or invitation for issue or sale, an offer or invitation to arrange the issue or sale, or an issue or sale, of interests to a "retail client" (as defined in section 761G of the Corporations Act and applicable regulations) in Australia; and

● may only be provided in Australia to select investors who are able to demonstrate that they fall within one or more of the categories of investors, or Exempt Investors, available under section 708 of the Corporations Act.

The Class A ordinary shares may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for or buy the Class A ordinary shares may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any Class A ordinary shares may be distributed in Australia, except where disclosure to investors is not required under Chapter 6D of the Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the Class A ordinary shares, you represent and warrant to us that you are an Exempt Investor.

As any offer of Class A ordinary shares under this prospectus will be made without disclosure in Australia under Chapter 6D.2 of the Corporations Act, the offer of those securities for resale in Australia within 12 months may, under section 707 of the Corporations Act, require disclosure to investors under Chapter 6D.2 if none of the exemptions in section 708 applies to that resale. By applying for the Class A ordinary shares you undertake to us that you will not, for a period of 12 months from the date of issue of the Class A ordinary shares, offer, transfer, assign or otherwise alienate those securities to investors in Australia except in circumstances where disclosure to investors is not required under Chapter 6D.2 of the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.

***Notice to Prospective Investors in Canada***

**Resale restrictions**. The distribution of the Class A ordinary shares in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of the Class A ordinary shares are made. Any resale of the Class A ordinary shares in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.

**Representations of Canadian purchasers.** By purchasing Class A ordinary shares in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:

● the purchaser is entitled under applicable provincial securities laws to purchase the Class A ordinary shares without the benefit of a prospectus qualified under those securities laws as it is an "accredited investor" as defined under National Instrument 45-106—Prospectus Exemptions;

● the purchaser is a "permitted client" as defined in National Instrument 31-103—Registration Requirements, Exemptions and Ongoing Registrant Obligations;

● where required by law, the purchaser is purchasing as principal and not as agent; and

● the purchaser has reviewed the text above under Resale Restrictions.

**Conflicts of Interest***.* Canadian purchasers are hereby notified that the underwriters are relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105—Underwriting Conflicts from having to provide certain conflict of interest disclosure in this prospectus.

**Statutory rights of action**. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the offering memorandum (including any amendment thereto) such as this prospectus contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.

**Enforcement of legal rights.** All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

**Taxation and eligibility for investment**. Canadian purchasers of Class A ordinary shares should consult their own legal and tax advisors with respect to the tax consequences of an investment in the Class A ordinary shares in their particular circumstances and about the eligibility of the Class A ordinary shares for investment by the purchaser under relevant Canadian legislation.

***Notice to Prospective Investors in Cayman Islands***

This prospectus does not constitute a public offer of the Class A ordinary shares, whether by way of sale or subscription, in the Cayman Islands. The Class A ordinary shares have not been offered or sold, and will not be offered or sold, directly or indirectly, in the Cayman Islands.

***Notice to Prospective Investors in Dubai International Financial Centre, or the DIFC***

This prospectus relates to an Exempt Offer of the Dubai Financial Services Authority, or the DFSA, in accordance with the Markets Rules 2012 of the DFSA. This prospectus is intended for distribution only to persons of a type specified in the Markets Rules 2012 of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus supplement nor taken steps to verify the information set forth herein and has no responsibility for this prospectus. The securities to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

In relation to its use in the DIFC, this prospectus is strictly private and confidential and is being distributed to a limited number of investors and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. The interests in the securities may not be offered or sold directly or indirectly to the public in the DIFC.

***Notice to Prospective Investors in European Economic Area***

In relation to each Member State of the European Economic Area (each, a Relevant State), no Class A ordinary shares have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus in relation to the Class A ordinary shares which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that offers of Class A ordinary shares may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:

● to any legal entity which is a qualified investor as defined under the Prospectus Regulation;

● to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or

● in any other circumstances falling within Article 1(4) of the Prospectus Regulation.

For the purposes of this provision, the expression an "offer to the public" in relation to any Class A ordinary shares in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any Class A ordinary shares to be offered so as to enable an investor to decide to purchase or subscribe for any Class A ordinary shares, and the expression "Prospectus Regulation" means Regulation (EU) 2017/1129.

***Notice to Prospective Investors in France***

Neither this prospectus nor any other offering material relating to the Class A ordinary shares described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The Class A ordinary shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the Class A ordinary shares has been or will be:

● released, issued, distributed or caused to be released, issued or distributed to the public in France; or

● used in connection with any offer for subscription or sale of the Class A ordinary shares to the public in France.

Such offers, sales and distributions will be made in France only:

● to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d'investisseurs), in each case investing for their own account, all as defined in, and in accordance with articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the FrenchCode monétaire et financier;

● to investment services providers authorized to engage in portfolio management on behalf of third parties; or

● in a transaction that, in accordance with article L.411-2-II-1° -or-2° -or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l'épargne).

The Class A ordinary shares may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.

***Notice to Prospective Investors in Hong Kong***

The Class A ordinary shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong), (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules promulgated thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the Class A ordinary shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Class A ordinary shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules promulgated thereunder.

***Notice to Prospective Investors in Japan***

The Class A ordinary shares will not be offered or sold directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws, rules and regulations of Japan. For purposes of this paragraph, "Japanese person" means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

***Notice to Prospective Investors in Kuwait***

Unless all necessary approvals from the Kuwait Ministry of Commerce and Industry required by Law No. 31/1990 "Regulating the Negotiation of Securities and Establishment of Investment Funds," its Executive Regulations and the various Ministerial Orders issued pursuant thereto or in connection therewith, have been given in relation to the marketing and sale of the Class A ordinary shares, these may not be marketed, offered for sale, nor sold in the State of Kuwait. Neither this prospectus (including any related document), nor any of the information contained therein is intended to lead to the conclusion of any contract of whatsoever nature within Kuwait.

Investors in Kuwait who approach us or any of the underwriters to obtain copies of this prospectus are required by us and the underwriters to keep such prospectus confidential and not to make copies thereof nor distribute the same to any other person in Kuwait and are also required to observe the restrictions provided for in all jurisdictions with respect to offering, marketing and the sale of the Class A ordinary shares.

***Notice to Prospective Investors in People's Republic of China***

This prospectus may not be circulated or distributed in the People's Republic of China, or the PRC, and the Class A ordinary shares may not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident of the PRC except pursuant to applicable laws, rules and regulations of the PRC. For the purpose of this paragraph only, the PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

***Notice to Prospective Investors in Qatar***

In the State of Qatar, the offer contained herein is made on an exclusive basis to the specifically intended recipient thereof, upon that person's request and initiative, for personal use only and shall in no way be construed as a general offer for the sale of securities to the public or an attempt to do business as a bank, an investment company or otherwise in the State of Qatar. This prospectus and the underlying securities have not been approved or licensed by the Qatar Central Bank or the Qatar Financial Centre Regulatory Authority or any other regulator in the State of Qatar. The information contained in this prospectus shall only be shared with any third parties in Qatar on a need to know basis for the purpose of evaluating the contained offer. Any distribution of this prospectus by the recipient to third parties in Qatar beyond the terms hereof is not permitted and shall be at the liability of such recipient.

***Notice to Prospective Investors in Saudi Arabia***

This prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Offers of Securities Regulations issued by the Capital Market Authority. The Capital Market Authority does not make any representation as to the accuracy or completeness of this prospectus, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this prospectus. Prospective purchasers of the securities offered hereby should conduct their own due diligence on the accuracy of the information relating to the securities. If you do not understand the contents of this prospectus you should consult an authorized financial adviser.

***Notice to Prospective Investors in Singapore***

This prospectus has not been registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this prospectus and any other documents or material in connection with the offer or sale, or invitation for subscription or purchase, of the Class A ordinary shares may not be circulated or distributed, nor may the Class A ordinary shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, or (ii) to a relevant person pursuant to Section 275(1), or to any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where our Class A ordinary shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor as defined in Section 4A of the SFA) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor; securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest in that trust shall not be transferred within six months after that corporation or that trust has acquired the Class A ordinary shares under Section 275 of the SFA, except: (1) to an institutional investor (for corporations under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is or will be given for the transfer; or (3) where the transfer is by operation of law.

***Notice to Prospective Investors in Switzerland***

The Class A ordinary shares will not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or regulated trading facility in Switzerland. This prospectus has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing material relating to our company or the Class A ordinary shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filed with, and the offer of the Class A ordinary shares will not be supervised by, the Swiss Financial Market Supervisory Authority, and the offer of the Class A ordinary shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or the CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of the Class A ordinary shares.

***Notice to Prospective Investors in Taiwan***

The Class A ordinary shares have not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the Class A ordinary shares in Taiwan.

***Notice to Prospective Investors in United Arab Emirates***

The Class A ordinary shares have not been offered or sold, and will not be offered or sold, directly or indirectly, in the United Arab Emirates, except: (i) in compliance with all applicable laws and regulations of the United Arab Emirates; and (ii) through persons or corporate entities authorized and licensed to provide investment advice and/or engage in brokerage activity and/or trade in respect of foreign securities in the United Arab Emirates. The information contained in this prospectus does not constitute a public offer of securities in the United Arab Emirates in accordance with the Commercial Companies Law (Federal Law No. 8 of 1984 (as amended)) or otherwise and is not intended to be a public offer and is addressed only to persons who are sophisticated investors.

***Notice to Prospective Investors in United Kingdom***

This prospectus is only being distributed to and is only directed at: (i) persons who are outside the United Kingdom; (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or the Order; or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons falling within (i)-(iii) together being referred to as "relevant persons"). The Class A ordinary shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire the Class A ordinary shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents.

***Notice to Prospective Investors in Israel***.

This prospectus does not constitute a prospectus under the Israeli Securities Law, 5728-1968, and has not been filed with or approved by the Israel Securities Authority. In Israel, this prospectus may be distributed only to, and is directed only at, investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in trust funds; provident funds; insurance companies; banks; portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange Ltd., underwriters, each purchasing for their own account; venture capital funds; entities with equity in excess of NIS 50 million and "qualified individuals," each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors. Qualified investors shall be required to submit written confirmation that they fall within the scope of the Addendum.

**Indemnification**

We have agreed to indemnify the Underwriters against liabilities relating to the offering arising under the Securities Act and the Exchange Act and to contribute to payments that the Underwriters may be required to make for these liabilities. In the opinion of the Securities and Exchange Commission, we have been advised that indemnification of liabilities under the Securities Act is against public policy as expressed in the Securities Act, and is therefore unenforceable.

**Application for Nasdaq Listing**

We have applied to Class A list our Class A ordinary shares on the Nasdaq Capital Market under the symbol "NTCL." At this time, Nasdaq Capital Market has not yet approved our application to list our Class A ordinary shares. The closing of this offering is conditioned upon Nasdaq Capital Market's final approval of our listing application, and there is no guarantee or assurance that our Class A ordinary shares will be approved for listing on Nasdaq Capital Market. We will not consummate and close this offering without a listing approval letter from Nasdaq Capital Market. Our receipt of a listing approval letter is not the same as an actual listing on the Nasdaq Capital Market. The listing approval letter will serve only to confirm that, if we sell a number of Class A ordinary shares in this offering sufficient to satisfy applicable listing criteria, our Class A ordinary shares will in fact be listed.

If the application is approved, trading of our Class A ordinary shares on the Nasdaq Capital Market will begin within five days following the closing of this offering. If our Class A ordinary shares are listed on the Nasdaq Capital Market, we will be subject to continued listing requirements and corporate governance standards. We expect these new rules and regulations to significantly increase our legal, accounting and financial compliance costs.

**<u>EXPENSES RELATING TO THIS OFFERING</u>**

Set forth below is an itemization of the total expenses, excluding underwriting discounts and advisory fees, that we expect to incur in connection with this offering. With the exception of the SEC registration fee, the FINRA filing fee, and the Nasdaq listing fee, all amounts are estimates.

---

| | |
|:---|:---|
| Securities and Exchange Commission Registration Fee | $2518 |
| Nasdaq Listing Fee | 75000 |
| FINRA | 4813 |
| Legal Fees and Expenses | 765000 |
| Accounting Fees and Expenses | 398000 |
| Printing and Engraving Expenses | 39000 |
| Miscellaneous Expenses | 50000 |
| **Total Expenses** | $**1334331** |

---

Under the Underwriting Agreement, we will pay our underwriters a fee and commission equal to 7.5% of the public offering price multiplied by the shares sold in the offering. In addition to the cash commission, we will also pay to the Representative non-accountable expenses equal to 1% of the gross proceeds raised in this offering, and reimburse the Representative for its accountable expenses not to exceed the total amount of $250,000, including legal expenses, background check expenses, the cost of preparing a reasonable number of bound volumes of the public offering materials as well as commemorative tombstones after the closing up to an amount of $2,500, and other offering expenses. Any expense deposits will be returned to us to the extent the Representative's out-of-pocket accountable expenses are not actually incurred in accordance with FINRA Rule 5110(g)(4)(A), regardless of whether the offering is terminated.

**<u>LEGAL MATTERS</u>**

Ortoli Rosenstadt LLP is acting as counsel to our company regarding U.S. securities law matters. The validity of the Class A ordinary shares offered hereby will be opined upon for us by Harney Westwood & Riegels, our Cayman Islands counsel. The Representative is being represented by Sichenzia Ross Ference LLP with respect to certain legal matters as to United States federal securities laws. Certain legal matters as to PRC law will be passed upon for us by Grandall Law Firm. Ortoli Rosenstadt LLP may rely upon Harney Westwood & Riegels with respect to matters governed by the laws of the Cayman Islands and Grandall Law Firm with respect to matters governed by PRC law.

**<u>EXPERTS</u>**

The consolidated financial statements for the years ended September 30, 2022 and 2021, as set forth in this prospectus and elsewhere in the registration statement have been so included in reliance on the report of Marcum Asia CPAs LLP, an independent registered public accounting firm, given on their authority as experts in accounting and auditing. The office of Marcum Asia CPAs LLP is located at Seven Penn Plaza, Suite 830, New York, NY10001.

**<u>WHERE YOU CAN FIND ADDITIONAL INFORMATION</u>**

We have filed with the SEC a registration statement on Form F-1 under the Securities Act with respect to the Class A ordinary shares offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits filed therewith. For further information about us and the Class A ordinary shares offered hereby, reference is made to the registration statement and the exhibits filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete. In each instance, we refer you to the copy of such contract or other document filed an exhibit to the registration statement. However, statements in the prospectus contain the material provisions of such contracts, agreements and other documents. We currently do not file periodic reports with the SEC. Upon closing of our public offering, we will be required to file periodic reports and other information with the SEC pursuant to the Exchange Act. A copy of the registration statement and the exhibits filed therewith may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street, NE, Washington, DC 20549, and copies of all or any part of the registration statement may be obtained from that office. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, information statements and other information regarding registrants that file electronically with the SEC. The address of the website is *www.sec.gov.*

**NETCLASS TECHNOLOGY INC**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Consolidated Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID: 5395)](#Kalai_017) | [F-2](#Kalai_017) |
| [Consolidated Balance Sheets as of September 30, 2022 and 2021](#Kalai_002) | [F-3](#Kalai_002) |
| [Consolidated Statements of Income and Comprehensive Income (Loss) for the Years Ended September 30, 2022 and 2021](#Kalai_003) | [F-4](#Kalai_003) |
| [Consolidated Statements of Changes in Equity for the Years Ended September 30, 2022 and 2021](#Kalai_004) | [F-5](#Kalai_004) |
| [Consolidated Statements of Cash Flows for the Years Ended September 30, 2022 and 2021](#Kalai_005) | [F-6](#Kalai_005) |
| [Notes to Consolidated Financial Statements](#Kalai_006) | [F-7- F-27](#Kalai_006) |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and Board of Directors of NetClass Technology Inc

**Opinion on the Financial Statements** 

We have audited the accompanying consolidated balance sheets of NetClass Technology Inc (the "Company") as of September 30, 2022 and 2021, the related consolidated statements of income and comprehensive income (loss), changes in equity and cash flows for each of the two years in the period ended September 30, 2022, 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 as of September 30, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

**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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

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 audit**s** 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.

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

We have served as the Company's auditor since 2021.

**Beijing, China**<br> March 28, 2023

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **September 30,** |
|  | **2022** | **2021** |
| **ASSETS** |  |  |
| **CURRENT ASSETS:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash | $208206 | $1041937 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 93499 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 3366941 | 2511620 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories |  | 162177 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance to vendors | 94573 | 86974 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayments and other current assets | 37936 | 34034 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred issuance costs | 222361 | - |
| &nbsp;&nbsp;&nbsp;**TOTAL CURRENT ASSETS** | 4023516 | 3836742 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 145470 | 281161 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets, net | 184785 | 100103 |
| &nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $**4353771** | $**4218006** |
| **LIABILITIES AND EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;**CURRENT LIABILITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank loans | $130938 | $98552 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 1010191 | 1005926 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance from customers | 302433 | 413012 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 292794 | 102686 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 113665 | 998 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes payable | 92721 | 70389 |
| &nbsp;&nbsp;&nbsp;**TOTAL CURRENT LIABILITIES** | 1942742 | 1691563 |
| &nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES** | 1942742 | 1691563 |
| &nbsp;&nbsp;&nbsp;**COMMITMENTS AND CONTINGENCIES** |  |  |
| &nbsp;&nbsp;&nbsp;**EQUITY:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary shares, 200,000,000 shares authorized, consisting of 190,000,000 Class A ordinary shares of $0.00025 par value per share and 10,000,000 Class B ordinary shares of $0.00025 par value per share, 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares issued and outstanding at September 30, 2022 and 2021, respectively\* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A Ordinary shares | 3250 | 3250 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class B Ordinary shares | 500 | 500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid in capital | 2922182 | 2922182 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statutory reserves | 35448 | 20747 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (327038) | (445024) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive (loss) income | (223313) | 24788 |
| &nbsp;&nbsp;&nbsp;**TOTAL SHAREHOLDERS' EQUITY** | **2411029** | **2526443** |
| &nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES AND EQUITY** | $**4353771** | $**4218006** |

---

\*Share and per share data are presented on a retroactive basis to reflect the reorganization and the stock split as disclosed in footnote #10.

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

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME (LOSS)**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** <br> **September 30,** | **For the Years Ended** <br> **September 30,** |
|  | **2022** | **2021** |
| **Revenues** | $9257607 | $11557513 |
| **Cost of revenues** | (6216774) | (7580167) |
| **Gross profit** | **3040833** | **3977346** |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing expenses | (1298462) | (1776667) |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | (865690) | (586314) |
| &nbsp;&nbsp;&nbsp;Research and development expenses | (828311) | (406754) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | (2992463) | (2769735) |
| **Income from operations** | **48370** | **1207611** |
| **Other income (expense):** |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (8572) | (11911) |
| &nbsp;&nbsp;&nbsp;Other income, net | 24353 | 34286 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income, net | 15781 | 22375 |
| **Income before income taxes** | **64151** | **1229986** |
| Income tax benefit (provision) | 68536 | (163481) |
| **Net income** | **132687** | **1066505** |
| Less: Loss attributable to non-controlling interests | - | (41) |
| **Net income attributable to NETCLASS TECHNOLOGY INC's shareholders** | **132687** | **1066546** |
| **Other comprehensive income (loss)** |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | (248101) | 84190 |
| **Comprehensive (loss) income** | **(115414)** | **1150695** |
| Less: comprehensive loss attributable to non-controlling interests | - | (41) |
| **Comprehensive (loss) income attributable to NETCLASS TECHNOLOGY INC's shareholders** | $(115414) | $1150826 |
| **Earnings per share\*** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $0.01 | $0.07 |
| **Weighted average number of shares outstanding\*** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 15000000 | 15000000 |

---

\*Share and per share data are presented on a retroactive basis to reflect the reorganization and the stock split as disclosed in footnote #10.

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

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Attributable to NETCLASS TECHNOLOGY INC shareholders** | **Attributable to NETCLASS TECHNOLOGY INC shareholders** | **Attributable to NETCLASS TECHNOLOGY INC shareholders** | **Attributable to NETCLASS TECHNOLOGY INC shareholders** | **Attributable to NETCLASS TECHNOLOGY INC shareholders** | **Attributable to NETCLASS TECHNOLOGY INC shareholders** | **Attributable to NETCLASS TECHNOLOGY INC shareholders** | | | |
|  | **Ordinary shares** | **Ordinary shares** | **Ordinary shares** | **Ordinary shares** | | | | | | |
|  | **Class A** | **Class A** | **Class B** | **Class B** | | | | | | |
|  | <br>**Shares\***  | **Amount** | **Shares\*** | **Amount** |<br>**Additional**<br> **Paid-in Capital** |<br>**Statutory Reserve** |<br>**(Accumulated**<br> **Deficit)** |<br>**Accumulated**<br> **Other Comprehensive Income (Loss)** |<br>**Non-controlling**<br> **interest** |<br>**Total**<br> **equity** |
| **Balance at September 30, 2020** | **13000000** | $**3250** | **2000000** | $**500** | $**2967494** | $**-** | $**((1490823)** | $**(59492)** | $**(45181)** | $**1375748** |
| Net income (loss) |  |  |  |  |  |  | 1066546 |  | (41) | 1066505 |
| Statutory reserve |  |  |  |  |  | 20747 | (20747) |  |  |  |
| Acquisition of noncontrolling interest |  |  |  |  | (45312) |  |  |  | 45312 |  |
| Foreign currency translation adjustments | - | - | - | - | - | - | - | 84280 | (90) | 84190 |
| **Balance at September 30, 2021** | **13000000** | $**3250** | **2000000** | $**500** | $**2922182** | $**20747** | $**(445024)** | $**24788** | $**-** | $**2526443** |
| Net income |  |  |  |  |  |  | 132687 |  |  | 132687 |
| Statutory reserve |  |  |  |  |  | 14701 | (14701) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign <br> currency <br> translation <br> adjustment | - | - | - | - | - | - | - | (248101) | - | (248101) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Balance at**<br> **September 30,**<br> **2022** | **13000000** | $**3250** | **2000000** | $**500** | $**2922182** | $**35448** | $**(327038)** | $**(223313)** | $**-** | $**2411029** |

---

\*Share and per share data are presented on a retroactive basis to reflect the reorganization and the stock split as disclosed in footnote #10.

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

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** <br> **September 30,** | **For the Years Ended** <br> **September 30,** |
|  | **2022** | **2021** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $132687 | $1066505 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 118564 | 130831 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for doubtful accounts | 29128 | 40088 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory markdown |  | 58760 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax (benefits) expenses | (102129) | 99758 |
| &nbsp;&nbsp;&nbsp;*Changes in operating assets and liabilities:* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1213888) | (714033) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 159460 | 466160 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance to vendors | (17128) | 361686 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayments and other current assets | (7709) | 104946 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 107335 | (528422) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to a related party | 122385 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance from customers | (77848) | (459420) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 146269 | 55221 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes payable | 31425 | 63723 |
| &nbsp;&nbsp;&nbsp;**Net cash (used in) provided by operating activities** | **(571449)** | **745803** |
| &nbsp;&nbsp;&nbsp;**Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property, and equipment |  | (3482) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposition of intangible assets | - | 23055 |
| &nbsp;&nbsp;&nbsp;**Net cash provided by investing activities** | **-** | **19573** |
| &nbsp;&nbsp;&nbsp;**Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Deferred issuance costs | (170791) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from related parties |  | 69934 |
| &nbsp;&nbsp;&nbsp;Repayment to related parties |  | (2562) |
| &nbsp;&nbsp;&nbsp;Proceeds from bank loan | 177642 |  |
| &nbsp;&nbsp;&nbsp;Repayment of bank loans | (132429) | (97600) |
| &nbsp;&nbsp;&nbsp;**Net cash used in financing activities** | **(125578)** | **(30228)** |
| &nbsp;&nbsp;&nbsp;**Effect of exchange rates changes on cash** | **(43205)** | **329** |
| &nbsp;&nbsp;&nbsp;**Net (decrease) increase in cash and restricted cash** | **(740232)** | **735477** |
| &nbsp;&nbsp;&nbsp;**Cash and restricted cash, beginning of the year** | **1041937** | **306460** |
| &nbsp;&nbsp;&nbsp;**Cash and restricted cash, end of the year** | $**301705** | $**1041937** |

---

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **September 30,** |
| **Reconciliation of cash and restricted cash, end of year** | **2022** | **2021** |
| Cash | $208206 | $1041937 |
| Restricted cash | 93499 | - |
| Cash and restricted cash, at the end of year | $301705 | $1041937 |
| **Supplemental cash flow disclosures:** |  |  |
| Cash paid for income tax | $1621 | $- |
| Cash paid for interest | $9683 | $13993 |
| **Non-Cash Investing Activities** |  |  |
| Acquisition of noncontrolling interest | $- | $45312 |

---

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

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION**

NETCLASS TECHNOLOGY INC ("NetClass" or "the Company") is a holding company that was incorporated under the laws of Cayman Islands on January 4, 2022. NetClass, through its wholly-owned subsidiaries (collectively, "the Group") is engaged in offering online professional education platform and related courseware, providing smart education IT solutions service in the People's Republic of China ("China" or "PRC"). The Group has no substantive operations other than holding 100% ownership interest of DragonSoft Group (China) Limited ("NetClass HK") established under the laws of Hong Kong on December 12, 2006.

As of September 30, 2022, the Company's subsidiaries and consolidated affiliated entities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Subsidiaries** | **Date of <br> Incorporation** | **Jurisdiction of <br> Formation** | **Percentage of <br> direct/indirect <br> Economic<br> Ownership** | **Principal <br> Activities** |
| DragonSoft Group (China) Limited ("NetClass HK") | December 12, 2006 | Hong Kong, PRC | 100% | Investment Holding |
| Shanghai Zhima Information Technology Co., Ltd. ("WFOE") | April 30, 2019 | PRC | 100% | Investment Holding |
| Shanghai Netwide Enterprise Management Co., Ltd. ("Shanghai Netwide") | April 27, 2022 | PRC | 100% | Subscription and Application development service |
| Shanghai NetClass Information Technology Co., Ltd. ("NetClass China") | May 13, 2003 | PRC | 100% | Subscription and Application development service |
| Shanghai NetClass Enterprise Management Co., Ltd ("NetClass Management") | August 29, 2016 | PRC | 100% | Subscription and Application development service |
| Shanghai NetClass Human Resources Co., Ltd ("NetClass HR") | November 09, 2016 | PRC | 100% | Subscription and Application development service |
| Shanghai Chuangyuan Education Technology Co., Ltd ("NetClass Education") | April 14, 2004 | PRC | 100% | Subscription and Application development service |
| NetClass Training (Shanghai) Co., Ltd. ("NetClass Training") | August 19, 2016 | PRC | 100% | Subscription and Application development service |

---

As described below, the Company, through a series of transactions which is accounted for as a reorganization of entities under common control (the "Reorganization"), became the ultimate parent of its subsidiaries. Mr. Jianbiao Dai, the CEO and the Chairman of the Board of Directors of the Company, is the ultimate controlling shareholder of the Company.

***Reorganization***

A reorganization of the legal structure was completed on June 10, 2022. The reorganization involved:

(i) the formation of the Company's wholly owned subsidiary NetClass HK; the formation of WFOE fully controlled by Mr. Jianbiao Dai;

(ii) The transfer of all the shareholder equity interest in WOFE to NetClass HK on May 05, 2022;

(iii) The transfer of all the shareholders' equity interest in NetClass China to WOFE on June 10, 2022.

Before and after the Reorganization, the Company, together with its subsidiaries, is effectively controlled by the same shareholders, and therefore the reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification ("ASC") 805-50-25. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements in accordance with ASC 805-50-45-5.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of consolidation***

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") pursuant to the rules and regulations of the Securities Exchange Commission ("SEC").

***Principles of consolidation***

The consolidated financial statements include the financial statements of the Company and its subsidiaries.

All intercompany transactions and balances between the Company and subsidiaries have been eliminated upon consolidation.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.

***Uses of estimates***

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes 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 reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements and are adjusted to reflect actual experience when necessary. Significant estimates required to be made by management include, but are not limited to allowance for doubtful accounts, allowance for inventory obsolescence and realization of deferred tax assets. Actual results could differ from those estimates. The Company evaluates its estimates and assumptions on an ongoing basis and its estimates on historical experience, current and expected future conditions and various other assumptions that management believes are reasonable under the circumstances based on the information available to management at the time these estimates and assumptions are made. Actual results and outcomes may differ significantly from these estimates and assumptions.

***Cash***

Cash comprise cash at banks and on hand, which includes deposits with original maturities of three months or less with commercial banks in PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.

***Restricted cash***

Cash that is restricted as to withdrawal is reported separately on the face of the Consolidated Balance Sheets and is included in the total cash in the Consolidated Statements of Cash Flows. Restricted cash mainly represents required cash deposits reserved for commercial litigation.

***Accounts Receivable, net***

Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management's best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Allowance for doubtful accounts amounted to $694,257 and $736,725 as of September 30, 2022 and 2021, repectively.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Inventories***

Inventories, mainly computers, are stated at the lower of cost or net realizable value. Costs include purchase price and related shipping costs. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products.

***Advances to Vendors***

Advance to vendors consists of balances paid to suppliers for services and materials that have not been provided or received. Advance to vendors are short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the relative services or inventory will not be provided or received laterIn addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful advances to vendors by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. As of September 30, 2022 and 2021, no such allowance was recognized.

***Prepayment and other assets***

Prepayment and other assets primarily consist of prepaid rents, loans to third-parties, security deposits made to customers and advances to employees, which are presented net of allowance for doubtful accounts. Prepayment and other assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. The allowance is also based on management's best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management's estimate of credit worthiness and the economic environment. Other receivables are written off against the allowances only after exhaustive collection efforts.

 ****

***Deferred issuance costs***

Deferred issuance costs represent costs associated with the Company's current offering, which will be netted against the proceeds from the Company's current offering.

***Property and equipment, net***

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided in the amounts sufficient to depreciate the cost of the related assets over their useful lives using the straight-line method, as follows:

---

| | | |
|:---|:---|:---|
|  | **Useful life** | **Useful life** |
| Office furniture |  | 5 years |
| Electronic equipment |  | 3-5 years |
| Transportation equipment |  | 5 years |

---

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income in other income or expenses.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Impairment of long-lived assets***

Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment charge was recognized for the years ended September 30, 2022 and 2021, respectively.

***Fair Value of Financial Instruments***

ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard, ASC Topic 820, Fair Value Measurements ("ASC Topic 820") establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measurements.A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

• Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

• Level 3 — inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the fair value of the Company's financial instruments, including cash, accounts receivable, prepayments and other current assets, accounts payable, accrued expenses and other liabilities and bank loans, approximates their recorded values due to their short-term maturities. The Company determined that the carrying value of the long term bank loans approximated their fair value by comparing the stated loan interest rate to the rate charged by similar financial institutions.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Revenue recognition***

The Company adopted ASC Topic 606 Revenue from Contracts with Customers ("ASC 606") on October 1, 2019 using the modified retrospective approach. Revenues were presented under ASC 606 and all subsequent ASUs that modified ASC 606 for the years ended September 30, 2022 and 2021. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps:

Step 1: Identify the contract (s) with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

The Company derives its revenues from two sources: (1) revenue from application development services, and (2) revenue from subscription services. All of the Company's contracts with customer do not contain cancelable and refund-type provisions.

&nbsp;&nbsp;&nbsp;&nbsp;(1) Revenue from application development service

The Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers' specific needs. These services also require significant production and customization. Upon delivery of the services, customer acceptance is generally required.

In some arrangements, the Company's ongoing customers purchased general purposed IT equipment from the Company and the Company sells and delivers IT equipment such as servers and computer terminals prior to the delivery of the services (or without any related application development service arrangement after the IT equipment purchase). Since the delivered item has value to the customer on a standalone basis and there is no general right of return for the equipment, the equipment is considered a distinct performance obligation. The IT equipment sale and application development services are not interrelated.

For application development service contracts determined to have multiple performance obligations, the total transaction price is allocated to each performance obligation based on its relative standalone selling price using a market or expected cost plus margin approach. The contract consideration is allocated to the equipment (if applicable) and the application development services based on their relative standalone selling prices. The consideration allocated to the delivered equipment is not contingent on the delivery of the services or meeting other specified performance conditions. That is, payment on the equipment is due upon the delivery of the equipment and is not contingent upon the delivery of the undelivered services.

For the application development service contract, the Company believes the application development performance obligation is satisfied upon customer acceptance.

The sale of IT equipment is recognized when delivery has occurred and the customer accepts the equipment and the Company has no performance obligation after the acceptance. For the years ended September 30, 2022 and 2021, IT equipment sales amounted to $852,379 and $1,258,785, respectively.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Revenue recognition (continued)***

(2) Revenue from subscription services

Revenue from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications for a subscribed period. The Company's billing to customer is on the basis of number of users or the actual usage by the customers. The subscription arrangements are considered service contracts because customers do not have the right to take possession of the software and can only benefit from the software when provided the right to access the software. Accordingly, the subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.

Revenue includes reimbursements of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company reports revenues net of value added tax ("VAT"). The Company's subsidiaries in PRC are subject to a 6% to 13% value added tax ("VAT").

*Practical Expedient and Exemptions*

The Company does not disclose the value of unsatisfied performance obligations within one year by applying the right to invoice practical expedient provided by ASC 606-10-55-18.

***Contract balances***

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing when the Company has satisfied the Company's performance obligation and has the unconditional rights to payment. The balances of accounts receivable including related party balances, net of allowance for doubtful accounts were $3,366,941 and $2,511,620 as of September 30, 2022 and 2021, respectively. Unearned revenues consist of payments received or awards to customers related to unsatisfied performance obligation at the end of the period, included in advance from customers in the Company's consolidated balance sheets with the balance of $302,433 and $413,012 as of September 30, 2022 and 2021, respectively. All unsatisfied performance obligation will be performed within the next twelve months and no significant financing component is involved.

*Disaggregation of revenue*

For the years ended September 30, 2022 and 2021, the disaggregation of revenue by major revenue stream is as follows:

---

| | | |
|:---|:---|:---|
|  | **For** **the years ended** <br> **September 30,** | **For** **the years ended** <br> **September 30,** |
|  | **2022** | **2021** |
| Application development services | $3380284 | $3977071 |
| Subscription service | 5877323 | 7580442 |
| Total | $9257607 | $11557513 |

---

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Advertising expenditures***

Advertising expenditures are expensed as incurred for the periods presented. Advertising expenditures have been included as part of selling expenses. For the years ended September 30, 2022 and 2021, advertising expenses amounted to $1,202,430 and $1,570,875 respectively.

***Operating leases***

A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases.

***Value added tax ("VAT")***

Revenue represents the invoiced value of goods and services, net of VAT. The VAT is based on gross sales price and VAT rates range from 6% to 13%, depending on the type of products sold or service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company's subsidiaries in PRC remain subject to examination by the tax authorities for five years from the date of filing.

***Government grant***

Government grants are recognized as income in other income, net or as a reduction of specific costs and expenses for which the grants are intended to compensate. Such amounts are recognized in the Consolidated Statements of Income and Comprehensive Income (Loss) upon receipt and all conditions attached to the grants are fulfilled. For the years ended September 30, 2022 and 2021, the Company received $10,884 and $nil government subsidy for various research programs, included in other income, net.

***Income taxes***

The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. 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 including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred for the years ended September 30, 2022 and 2021. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($14,060). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. All of the tax returns of the Company's subsidiaries in the PRC remain subject to examination by the tax authorities for five years from the date of filing.

***Earnings per Share***

The Company computes earnings per share ("EPS") in accordance with ASC 260, "Earnings per Share". ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Foreign currency translation***

The functional currencies of the Company are the local currency of the county in which the subsidiaries operate. The Company's consolidated financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect on that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component in accumulated other comprehensive income included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of income and comprehensive income.

Since the Company operates primarily in the PRC, the Company's functional currency is the Chinese Yuan ("RMB"). The Company's consolidated financial statements have been translated into the reporting currency of U.S. Dollars ("US$"). The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in the translation.

The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2022** | **September 30,**<br> **2021** |
| Balance sheet items, except for equity accounts | US$1=RMB 7.1135 | US$1=RMB 6.4434 |
| Items in the statements of income and cash flows | US$1=RMB 6.5532 | US$1=RMB 6.5072 |

---

***Comprehensive income (loss)***

Comprehensive income consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders' equity but are excluded from net income. Other comprehensive income (loss) consists of foreign currency translation adjustment resulting from the Company not using US$ as its functional currency.

***Risks and uncertainties***

Beginning in late 2019, an outbreak of a novel strain of coronavirus (COVID-19) first emerged in China and has spread globally. In March 2020, the World Health Organization ("WHO") declared the COVID-19 as a pandemic. Governments in affected countries are imposing travel bans, quarantines and other emergency public health measures, which have caused material disruption to businesses globally resulting in an economic slowdown. In March 2022, a new COVID-19 subvariant (Omicron) outbreak hit China, and spread faster and more easily than previous viruses. As a result, a new round of lockdown, quarantines or travel restrictions has been imposed to date upon different provinces or cities in China by the relevant local government authorities. We temporarily closed our Shanghai office and suspended our offline marketing activities since April 1, 2022 as required by the local authorities in Shanghai, and had our employees located in Shanghai work remotely. All marketing activities in Shanghai were accordingly changed to online meetings. Starting from June 1, 2022, we reopened our Shanghai office and resumed our offline marketing activities. On December 7, 2022, China announced 10 new rules that constitute a relaxation of almost all of its stringent COVID-19 pandemic control measures. Shortly after their announcement, additional mobility restrictions issued by local governments were also scrapped. While such measures effectively reopened business within China, COVID-19's continued existence may have significant and still not well-understood impacts on our industry. The full extent to which the COVID-19 outbreak in China impacts our future financial condition and results of operations is uncertain and will depend on future developments that currently cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 outbreak and the actions necessary to contain the COVID-19 outbreak or treat its impact, the disruption to the general business activities of China and the impact on the economic growth and business of our production facility and distributors for the foreseeable future, among others.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements. The specific impact on the Company's financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Segment reporting***

In accordance with ASC Topic 280, Segment Reporting, the Company's chief operating decision maker ("CODM") has been identified as the Chief Executive Officer. The Company's CODM reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment. The Company operates and manages its business in PRC China as a single segment. As the Company's long-lived assets are substantially all located in the PRC and substantially all the Company's revenues are derived from within the PRC, no geographical segments are presented.

***Concentrations of risks***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Concentration of credit risk

Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, accounts receivable and other current assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of September 30, 2022 and 2021, the aggregate amount of cash of $301,067 and $1,041,841 respectively, was held at major financial institutions in PRC, where there RMB 500,000 deposit insurance limit for a legal entity's aggregated balance at each bank. To limit the exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the PRC. The Company conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company establishes an accounting policy to provide for allowance for doubtful accounts based on the individual customer's and supplier's financial condition, credit history, and the current economic conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Significant customers

For the year ended September 30, 2022, three customers accounted for approximately 14.1%, 11.7% and 11.3% of total revenues, respectively. For the year ended September 30, 2021, two customers accounted for approximately 28.5% and 12.3% of total revenues, respectively. As of September 30, 2022, four customers accounted for approximately 17.0%, 14.7%, 12.9% and 12.3% of total accounts receivable, respectively. As of September 30, 2021, four customers accounted for approximately 31.6%, 20.0%, 12.6% and 11.1% of total accounts receivable, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Significant suppliers

For the year ended September 30, 2022, four suppliers accounted for approximately 39.8%, 14.5%, 11.6% and 10.8% of total purchases, respectively. For the year ended September 30, 2021, four suppliers accounted for approximately 30.5%, 13.4%, 11.2%and 10.1% of total purchases, respectively. As of September 30, 2022, three suppliers accounted for approximately 55.9%, 23.1% and 10.7% of total accounts payable, respectively. As of September 30, 2021, three suppliers accounted for approximately 33.4%, 31.6% and 18.5% of total accounts payable, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Foreign currency risk

A majority of the Company's expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

The Company's functional currency is the RMB, and the Company's financial statements are presented in U.S. dollars. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect the Company's financial results reported in the U.S. dollar terms without giving effect to any underlying changes in the Company's business or results of operations. Currently, the Company's assets, liabilities, revenues and costs are denominated in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

***Recent accounting pronouncements***

The Company is an "emerging growth company" ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. As a result, the Company's operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The update provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the company's financial statements. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 "Target Improvement" and ASU 2018-20 "Narrow-scope Improvements for Lessors." In June 2020, the FASB issued ASU No. 2020-05, "Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities" ("ASU 2020-05") in response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides a limited deferral of the effective dates for implementing previously issued ASU 842 to give some relief to businesses and the difficulties they are facing during the pandemic. ASU 2020-05 affects entities in the "all other" category and public Not-For-Profit entities that have not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the "all other" category may defer to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As an emerging growth company, the Company will adopt this guidance effective October 1, 2022. The Company is evaluating the impact on its consolidated financial statements.

The Company estimates that approximately $0.15 million and $0.14 million would be recognized as total right-of-use assets and total lease liabilities on the consolidated balance sheet as of October 1, 2022. The Company does not expect the new standard to have a material impact on its results of operations or cash flows.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses", which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Subsequently, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard. For the Company as a EGC, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASUs is on a modified retrospective basis. The Company is in the process of evaluating the effect of the adoption of this ASU.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 3 – ACCOUNTS RECEIVABLE, NET**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **September 30, 2021** |
| Accounts receivable | $4061198 | $3248345 |
| Less: allowance for doubtful accounts | (694257) | (736725) |
| Account receivable, net | $3366941 | $2511620 |

---

Allowance for doubtful accounts movement is as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **September 30, 2021** |
| Beginning balance | $736725 | $660805 |
| Additions | 29128 | 40088 |
| Foreign currency translation adjustments | (71596) | 35832 |
| Ending balance | $694257 | $736725 |

---

**NOTE 4 —** **INVENTORIES**

Inventories consist of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **September 30, 2021** |
| Finished goods | $- | $162177 |

---

**NOTE 5 —** **ADVANCE TO VENDORS**

Advance to vendors consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **September 30, 2021** |
| Prepayments for technical service | $94573 | $86974 |

---

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 6 — PROPERTY AND EQUIPMENT, NET**

Property and equipment, net, consist of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **September 30,**<br> **2021** |
| Electronic equipment | $590759 | $652104 |
| Office furniture | 4358 | 4811 |
| Transportation equipment | 37281 | 41152 |
| Subtotal | 632398 | 698067 |
| Less: accumulated depreciation | (486928) | (416906) |
| Property and equipment, net | $145470 | $281161 |

---

Depreciation expense for the years ended September 30, 2022 and 2021 amounted to $118,564 and $130,831, respectively.

**NOTE 7 — BANK LOANS**

Bank loans consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2022** | **September 30,**<br> **2021** |
| **Xiamen International Bank Co., Ltd.** |  |  |
| Interest rate of 8.8% per annum, from May 24, 2022 to May 20, 2023 | $130938 | $- |
| **Shenzhen Qianhai We Bank Co., Ltd** |  |  |
| Interest rate of 9.18% per annum, from September 11, 2020 to September 10, 2022 | - | 98552 |
| &nbsp;&nbsp;&nbsp;**Total** | $130938 | $98552 |

---

On September 11, 2020, the Company entered into a loan agreement with Shenzhen Qianhai We Bank to obtain a loan of $187,071 (RMB 1,270,000) for two years with a maturity date on September 10, 2022 at a fixed annual. interest rate of 9.18%. After the repayment of $88,519 during fiscal year 2021, the loan balance was $98,552 as of September 30, 2021. There is no guarantee or collateral for the loan. The loan was fully repaid upon maturity.

On June 21, 2022, the Company entered into a loan agreement with Xiamen International Bank to obtain a loan of $177,642 (RMB 1,164,103) with a maturity date on May 20, 2023 at a fixed annual interest rate of 8.8%. After the repayment of $35,528 during fiscal year 2022, the loan balance was $130,938 as of September 30, 2022. The Company further repaid $53,292 during the five months ended March 31, 2023. Mr. Jianbiao Dai, the shareholder of the Company, personally guaranteed the repayment of the loan.

Interest expense for the above-mentioned loans amounted to $9,683 and $13,197 for the years ended September 30, 2022 and 2021, respectively.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 8 — RELATED PARTIES BALANCES AND TRANSACTIONS**

The Company records transactions with various related parties. These related party balances as of September 30, 2022 and 2021 and transactions for the years ended September 30, 2022 and 2021 are identified as follows:

&nbsp;&nbsp;&nbsp;&nbsp;**(1)** **Related parties with transactions and related party relationships** 

---

| | |
|:---|:---|
| **Name of Related Party** | **Relationship to the Company** |
| Jianbiao Dai | Chief Executive Officer ("CEO"); Chairman of the Company |
| Shanghai Youfu Network Co., Ltd. | Shareholder of the Company |
| Shanghai Yiyun Information Service Co., Ltd | Jianbiao Dai served as a supervisor and hold 60% of the shares |
| Shanghai Chuangbo Enterprise Development Co., Ltd | A director of the Company serving as a corporate supervisory role |
| Shanghai Longruan Electronics Group Co., Ltd | Jianbiao Dai serves as legal representative and holds 80% of the shares |
| Lina Chen | Director of the Company |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(2)** **Significant Related Party Transactions** 

---

| | | |
|:---|:---|:---|
|  | **For the years ended**<br> **September 30,** | **For the years ended**<br> **September 30,** |
|  | **2022** | **2021** |
| **Sales to related party** |  |  |
| &nbsp;&nbsp;&nbsp;Shanghai Youfu Network Co., Ltd. | $- | $218035 |

---

**Purchases from related parties**

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> September 30,** | **For the years ended<br> September 30,** |
|  | **2022** | **2021** |
| Shanghai Youfu Network Co., Ltd | $137645 | $- |
| Shanghai Chuangbo Enterprise Development Co., Ltd | - | 22040 |
| &nbsp;&nbsp;&nbsp;Total | $137645 | $22040 |

---

**Cash received from related parties**

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> September 30,** | **For the years ended<br> September 30,** |
|  | **2022** | **2021** |
| Shanghai Longruan Electronics Group Co., Ltd. | $- | $61480 |
| Shanghai Yiyun Information Service Co., Ltd. | - | 6148 |
| &nbsp;&nbsp;&nbsp;Total | $- | $67628 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(3)** **Due to related parties** 

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,** | **As of<br> September 30,** |
|  | **2022** | **2021** |
| Due to related parties |  |  |
| &nbsp;&nbsp;&nbsp;Shanghai Chuangbo Enterprise Development Co., Ltd | $281 | $310 |
| &nbsp;&nbsp;&nbsp;Jianbiao Dai | 623 | 688 |
| &nbsp;&nbsp;&nbsp;Shanghai Youfu Network Co., Ltd | 112761 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $113665 | $998 |

---

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 9 — TAXES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Corporate Income Taxes ("CIT")** 

<u>Cayman Islands</u>

The Company is incorporated in the Cayman Islands and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.

<u>Hong Kong</u>

Under Hong Kong tax laws, with effect from April 1, 2018, a two-tiered profits tax rate regime applies. The profits tax rate for the first HKD 2 million of corporate profits is 8.25%, while the standard profits tax rate of 16.5% remains for profits exceeding HKD 2 million. If no election has been made, the whole of the taxpaying entity's assessable profits will be chargeable to standard profits tax rate. NetClass HK is subject to a statutory income tax rate at 16.5% because the preferential tax treatment is not elected by the Company as there were no actual operating income or expenses. For the years ended September 30, 2022 and 2021, the Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong for any of the periods presented.

<u>PRC</u>

Under the Enterprise Income Tax ("EIT") Law of PRC, domestic enterprises and Foreign Investment Enterprises (the "FIE") are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis. EIT grants preferential tax treatment to High and New Technology Enterprises ("HNTEs"). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Education Technology was approved as a HNTE and is entitled to a reduced income tax rate of 15% beginning December 2019. The certificate is valid for three years.

The impact of the tax holidays noted above decreased foreign taxes by $nil and $124,952 for the years ended September 30, 2022 and 2021, respectively. The benefit of the tax holidays on net income per share (basic and diluted) $0.001 and $0.008 for the years ended September 30, 2022 and 2021, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***i)***  ***The components of the income tax provision are as follows:*** 

---

| | | |
|:---|:---|:---|
|  | **For the <br> year ended<br> September 30,**<br>**2022** | **For the <br> year ended<br> September 30,**<br> **2021** |
| Current income tax | $33593 | $63723 |
| Deferred income tax | (102129) | 99758 |
| Total provision (benefit) for income taxes | $(68536) | $163481 |

---

***ii)*** ***The following table reconciles PRC statutory rates to the Company's effective tax expense (benefit):***

---

| | | |
|:---|:---|:---|
|  | **For the<br> year ended<br> September 30,**<br>**2022** | **For the<br> year ended<br> September 30,**<br>**2021** |
| PRC statutory tax expense | $16038 | $307497 |
| Effect of PRC preferential tax rate | 3499 | (124952) |
| Effect of Research & Development ("R&D") credits \* | (93185) | (45760) |
| Effect of change in valuation allowance | 5653 | 10739 |
| Non-deductible items and others \*\* | (541) | 15957 |
| Income tax expense (benefit) | $(68536) | $163481 |

---

\*According to PRC tax regulations, 175% of current year R&D expense approved by the local tax authority may be deducted from tax income for the fiscal years 2022 and 2021.

\*\* Non-deductible items and others represent excess expenses and losses not deductible for PRC tax purpose.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 9 — TAXES (continued)**

***iii)*** ***The following table summarizes deferred tax assets and liabilities resulting from differences between financial accounting basis and tax basis of assets and liabilities:***

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2022** | **September 30,**<br> **2021** |
| Deferred tax assets: |  |  |
| Allowance for doubtful accounts | $121045 | $135852 |
| Net operating losses | 197073 | 142510 |
| Valuation allowance | (133333) | (178259) |
| Total deferred tax assets, net | $184785 | $100103 |

---

Valuation allowance movement is as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2022** | **September 30,**<br> **2021** |
| Beginning balance | $178259 | $158893 |
| Additions | 37 | 23896 |
| Releases | (30597) | (13157) |
| Foreign currency translation adjustments | (14366) | 8627 |
| Ending balance | $133333 | $178259 |

---

According to PRC tax regulations, the PRC net operating loss can generally carry forward for no longer than five years starting from the year subsequent to the year in which the loss was incurred. Carryback of losses is not permitted. As of September 30, 2022 and 2021, the Company had net operating losses of $1,045,181 and $570,041, respectively, which will be available to offset future taxable income. If not used, these carryforwards will expire from 2023 through 2027.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Recovery of substantially all of the Company's deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. The valuation allowance is considered on an individual entity basis. As of September 30, 2022 and 2021, valuation allowances on deferred tax assets are provided because the Company believes that it is more-likely-than-not that certain of the subsidiaries in the PRC will not be able to generate sufficient taxable income in the near future, to realize the deferred tax assets carried-forwards. For the remaining entities, based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as of September 30, 2022 and 2021. For the years ended September 30, 2022 and 2021, the change in valuation allowance amounted to $(44,926) and $19,366, respectively.

**(b)** **Taxes payable** 

Taxes payable consist of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2022** | **September 30,<br> 2021** |
| Income tax payable | $92721 | $70389 |
| Total taxes payable | $92721 | $70389 |

---

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not accrue any liability, interest or penalties relating to uncertain tax positions in its provision for income taxes line of its consolidated statements of income for the years ended September 30, 2022 and 2021.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 10 — SHAREHOLDERS' EQUITY**

**Ordinary shares**

The Company was established by founding shareholders under the laws of the Cayman Islands on with ordinary shares authorized 50,000, $1.0 par value, 10,000 ordinary shares issued and outstanding.

On July 26, 2022, the board of directors and shareholders of the Company unanimously approved the amended and restated memorandum of association, after which, the Company's authorized share capital is $50,000 divided into 200,000,000 shares comprising of (i) 190,000,000 Class A ordinary shares of par value $0.00025 each and (ii) 10,000,000 Class B ordinary shares of par value $0.00025 each. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of our company and each Class B ordinary share shall entitle the holder thereof to fifteen (15) votes on all matters subject to vote at general meetings of our company. Also, each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof but Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Save and except for voting rights and conversion rights, the Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions. As of the date of this prospectus, 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares are issued and outstanding. Before and after the share capital change, there was no change of percentage ownership of all shareholders of the Company.

**Statutory reserve and restricted net assets**

As stipulated by relevant PRC laws and regulations, the Company's subsidiaries and affiliated entities in the PRC must take appropriations from tax profit to non-distributive funds. These reserves include general reserve and the development reserve.

The statutory reserve requires annual appropriation 10% of after-tax profits at each year-end until the balance reaches 50% of a PRC company's registered capital. Other reserve is set aside at the Company's discretion. These reserves can only be used for general enterprise expansion and are not distributable as cash dividends. The general reserve amounted to $35,448 and $20,747 as of September 30, 2022 and 2021, respectively.

Because the Company's operating subsidiaries in the PRC can only be paid out of distributable profits reported in accordance with PRC accounting standards, the Company's operating subsidiaries in the PRC are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital and statutory reserves of the Company's entities in the PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Company's operating subsidiaries in the PRC not available for distribution, was $2,957,630 and $2,942,929 as of September 30, 2022 and 2021, respectively.

**NOTE 11 — COMMITMENTS AND CONTINGENCIES**

**<u>Contingencies</u>**

From time to time, the Company is subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of September 30, 2022, the Company has no significant outstanding litigation.

**<u>Operating lease commitments</u>**

As of September 30, 2022, the Company was obligated under operating leases for minimum rentals as follows:

---

| | |
|:---|:---|
| **Twelve months ending September 30,** | **Minimum**<br> **lease**<br> **payment** |
| 2023 | $44665 |
| 2024 | 11166 |
| Total | $55831 |

---

Rent expenses for the years ended September 30, 2022 and 2021 were $42,538 and $84,103, respectively.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 12 — SUBSEQUENT EVENTS**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. Based on the review, the Company did not identify any material subsequent event that is required disclosure in the consolidated financial statements..

**NOTE 13 — UNAUDITED CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY**

The Company's PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in the PRC is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in the PRC. The Company's subsidiaries are also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its statutory reserves account until the accumulative amount of such reserves reaches 50% of its respective registered capital. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

In addition, the Company's operations and revenues are conducted and generated in the PRC, all of the Company's revenues being earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulation in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Company's ability to convert RMB into USD.

Regulation S-X requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company's PRC subsidiary exceed 25% of the consolidated net assets of the Company.

Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted. The Company's investment in subsidiary is stated at cost plus equity in undistributed earnings of subsidiaries.

The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. For the parent company, the Group records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheets as "Investments in subsidiaries" and the subsidiaries' gain as "Equity in gain of subsidiaries" on the Condensed Statements of Comprehensive Income.

For the years ended September 30, 2022 and 2021, there were no material contingencies, significant provisions of long-term obligations, guarantees of the Group.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 13 — UNAUDITED CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (continued)**

**UNAUDITED PARENT COMPANY CONDENSED BALANCE SHEETS**

**(Expressed in U.S. dollar, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2022** | **September 30,**<br>**2021** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Investments in subsidiaries | $2411029 | $2526443 |
| **TOTAL ASSETS** | $2411029 | $2526443 |
| **SHAREHOLDERS' EQUITY:** |  |  |
| &nbsp;&nbsp;&nbsp;Ordinary shares, 200,000,000 shares authorized, consisting of 190,000,000 Class A ordinary shares of $0.00025 par value per share and 10,000,000 Class B ordinary shares of $0.00025 par value per share, 13,000,000 Class A ordinary shares and 2,000,000 Class B ordinary shares issued and outstanding at September 30, 2022 and 2021, respectively\* |  |  |
| &nbsp;&nbsp;&nbsp;Class A Ordinary shares | $3250 | $3250 |
| &nbsp;&nbsp;&nbsp;Class B Ordinary shares | 500 | 500 |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 2922182 | 2922182 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (291590) | (424277) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (223313) | 24788 |
| &nbsp;&nbsp;&nbsp;**TOTAL SHAREHOLDERS' EQUITY** | 2411029 | 2526443 |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $**2411029** | $**2526443** |

---

\* Shares and per share data are presented on a retroactive basis to reflect the reorganization and the stock split as disclosed in footnote #10.

**NETCLASS TECHNOLOGY INC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 13 — UNAUDITED CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (continued)**

**UNAUDITED PARENT COMPANY CONDENSED**

**STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)**

---

| | | |
|:---|:---|:---|
|  | **For the years Ended**<br> **September 30,** | **For the years Ended**<br> **September 30,** |
|  | **2022** | **2021** |
| Equity in gain of subsidiaries | $132687 | $1066546 |
| **NET INCOME** | **132687** | **1066546** |
| **OTHER COMPREHENSIVE INCOME (LOSS)** |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | (248101) | 84280 |
| **COMPREHENSIVE INCOME (LOSS)** | $**(115414)** | $**1150826** |

---

**UNAUDITED PARENT COMPANY CONDENSED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the years Ended**<br> **September 30,** | **For the years Ended**<br> **September 30,** |
|  | **2022** | **2021** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net income | $132687 | $1066546 |
| Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Equity in earnings of subsidiaries | (132687) | (1066546) |
| **NET CASH USED IN OPERATING ACTIVITIES** | **-** | **-** |
| **CHANGES IN CASH** | **-** | **-** |
| **CASH, BEGINNING OF YEAR** | **-** | **-** |
| **CASH, END OF YEAR** | $**-** | $**-** |

---

***3,750,000 Class A Ordinary Shares***

![](tm2224158d3_f1img10.jpg)

**NETCLASS TECHNOLOGY INC**

![](image_002.jpg)

March 27 , 2023

**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.**

Cayman Islands law does not limit the extent to which a company's articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provide that every director, alternate director or officer shall be indemnified out of our assets against any liability incurred by him as a result of any act or failure to act in carrying out his functions other than such liability (if any) that he may incur by his own actual fraud or wilful default. No such director, alternate director or officer shall be liable to us for any loss or damage in carrying out his functions unless that liability arises through the actual fraud or wilful default of such director or officer. Expenses, including legal fees, incurred by a director, alternate director or officer, or former director, alternate director or officer in defending any legal, administrative or investigative proceedings may be paid by us in advance of the final disposition of such proceedings upon receipt of an undertaking by such party to repay the amount if it shall ultimately be determined that such director, alternate director or officer is not entitled to be indemnified by us and upon such terms and conditions, if any, as we deem appropriate.

To the extent permitted by law, we may make a payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing or former secretary or any of our officers in respect of any matter identified in above on condition that the secretary or officer must repay the amount paid by us to the extent that it is ultimately found not liable to indemnify the secretary or that officer for those legal costs.

The Underwriting Agreement, the form of which has been filed as Exhibit 1.1 to this Registration Statement, will also provide for indemnification of us and our officers and directors.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

**ITEM 7. RECENT SALES OF UNREGISTERED SECURITIES.**

Upon incorporation of the Company on January 4, 2022, the Company has an authorized share capital of $50,000 divided into 50,000 ordinary shares with par value of US$1.00 per share and issued an aggregate of 10,000 ordinary shares of par value of US$1.00 per share in the Company including 7,092 ordinary shares to Dragonsoft Holding Limited, 1,531 ordinary shares to NTC Capital Company Limited, 512 ordinary shares to New Version Capital Inc, 453 ordinary shares to GGA Technology Inc, 312 ordinary shares to Golden Ocean LY Investment Limited and 100 ordinary shares to ASD Capital Inc at par value. On May 30, 2022, Dragonsoft Holding Limited transferred 899 ordinary shares to Lang Wide Investment INC and 120 ordinary shares to Yovole Data Group (HONG KONG) LIMITED. On May 30, 2022, NTC Capital Company Limited, New Version Capital Inc, GGA Technology Inc, Golden Ocean LY Investment Limited and ASD Capital Inc also transferred 1,531 ordinary shares, 512 ordinary shares, 453 ordinary shares, 312 ordinary shares and 100 ordinary shares, respectively to Lang Wide Investment INC. *These shares were issued in reliance on the exemption under Section 4(a)(2) and/or Regulation S of the Securities Act. No underwriters were involved in these issuances of ordinary shares.*

On July 26, 2022, the Company adopted its amended and restated memorandum and articles of association. The Company's authorized share capital was changed into US$50,000 divided into 200,000,000 shares comprising of (a) 190,000,000 Class A ordinary shares of par value of US$0.00025 per share and (b) 10,000,000 Class B ordinary shares of par value of US$0.00025 per share. Concurrently, Dragonsoft Holding Limited, Lang Wide Investment INC and Yovole Data Group (HONG KONG) LIMITED surrendered 17,182,500, 9,517,500 and 300,000 ordinary shares to the Company; the Company issued an aggregate of 2,000,000 Class B ordinary shares of par value of US$0.00025 each in the Company to Dragonsoft Holding Limited. *These shares were issued in reliance on the exemption under Section 4(a)(2) and/or Regulation S of the Securities Act. No underwriters were involved in these issuances of the Class A or Class B ordinary shares.*

**ITEM 8. *EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Exhibits** 

See Exhibit Index beginning on page II-5 of this registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Financial Statement Schedules** 

Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the Consolidated Financial Statements or the Notes thereto.

**ITEM 9. UNDERTAKINGS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The undersigned Registrant hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers or sales are being made,
 a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. To include any prospectus required by section 10(a)(3) of the Securities
 Act of 1933;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. To reflect in the prospectus any facts or events arising after the
 effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the
 aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing,
 any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which
 was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of
 prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more
 than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the
 effective registration statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. To include any material information with respect to the plan of distribution
 not previously disclosed in the registration statement or any material change to such information in the registration statement;
 provided, however, that paragraphs (a)(1)(i), (ii), and (iii) of this section do not apply if the information required to be included
 in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant
 pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that are incorporated by
 reference in the registration statement, or, as to a registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the Securities
 Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered
 therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective amendment
 any of the securities being registered which remain unsold at the termination of the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) To file a post-effective amendment to the registration statement to
 include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous
 offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided
 that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to
 this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current
 as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a
 post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act
 or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished
 to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
 by reference in the Form F-3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If the registrant is relying on Rule 430B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant
 to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B
 or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement
 as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus
 that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
 statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior
 to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the
 registration statement or made in any such document immediately prior to such date of first use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) That, for the purpose of determining liability of the registrant under
 the Securities Act of 1933 to any purchaser in the initial distribution of the securities the undersigned registrant undertakes that
 in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting
 method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the
 following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
 securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any preliminary prospectus or prospectus of the undersigned registrant
 relating to the offering required to be filed pursuant to Rule 424;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any free writing prospectus relating to the offering prepared by or
 on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The portion of any other free writing prospectus relating to the offering
 containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other communication that is an offer in the offering made by the
 undersigned registrant to the purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6 hereof, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The undersigned registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Shanghai, China, on March 28, 2023.

---

| | |
|:---|:---|
| **NETCLASS TECHNOLOGY INC** | **NETCLASS TECHNOLOGY INC** |
| By: | /s/ *Jianbiao Dai* |
|  | Jianbiao Dai |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Jianbiao Dai | Chief Executive Officer and Chairman of the Board of Director | March 28, 2023 |
| Name: Jianbiao Dai | (Principal Executive Officer) |  |
| /s/ Yuxing Chen | Chief Financial Officer | March 28, 2023 |
| Name: Yuxing Chen | (Principal Accounting and Financial Officer) |  |
| /s/ Lina Chen | Director | March 28, 2023 |
| Name: Lina Chen |  |  |

---

**SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES**

Pursuant to the Securities Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America, has signed this registration statement thereto in New York, NY on March 28, 2023.

---

| | |
|:---|:---|
| By: | /s/ *Colleen A. De Vries* |
|  | Name: Colleen A. De Vries |
|  | Title: Senior Vice-President on behalf of Cogency Global Inc. |

---

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| [1.1\*](tm2224158d7_ex1-1.htm) | [Form of Underwriting Agreement](tm2224158d7_ex1-1.htm) |
| [3.1\*](tm2224158d7_ex3-1.htm) | [Amended and Restated Memorandum and Articles of Association](tm2224158d7_ex3-1.htm) |
| [4.1\*](tm2224158d7_ex4-1.htm) | [Specimen Certificate for Class A ordinary share](tm2224158d7_ex4-1.htm) |
| [4.2\*](tm2224158d7_ex4-2.htm) | [Form of Representative's Warrant Agreement](tm2224158d7_ex4-2.htm) |
| [5.1\*](tm2224158d7_ex5-1.htm) | [Opinion of Harney Westwood & Riegels regarding the validity of the Class A ordinary share being registered](tm2224158d7_ex5-1.htm) |
| [5.2\*](tm2224158d7_ex5-2.htm) | [Opinion of Ortoli Rosenstadt LLP, U.S. counsel to NETCLASS TECHNOLOGY INC, as to the enforceability of the Underwriters Warrants](tm2224158d7_ex5-2.htm) |
| [8.1\*](tm2224158d7_ex99-1.htm) | [Opinion of Grandall Law Firm regarding certain PRC tax matters (included in Exhibit 99.1)](tm2224158d7_ex99-1.htm) |
| [10.1\*](tm2224158d7_ex10-1.htm) | [Employment Agreement between NETCLASS TECHNOLOGY INC and Jianbiao Dai](tm2224158d7_ex10-1.htm) |
| [10.2\*](tm2224158d7_ex10-2.htm) | [Employment Agreement between NETCLASS TECHNOLOGY INC and Lina Chen](tm2224158d7_ex10-2.htm) |
| [10.3\*](tm2224158d7_ex10-3.htm) | [Employment Agreement between NETCLASS TECHNOLOGY INC and Yuxing Chen](tm2224158d7_ex10-3.htm) |
| [10.4\*](tm2224158d7_ex10-4.htm) | [Director Offer Letter between NETCLASS TECHNOLOGY INC and Xianghong Zhou](tm2224158d7_ex10-4.htm) |
| [10.5\*](tm2224158d7_ex10-5.htm) | [Director Offer Letter between NETCLASS TECHNOLOGY INC and Angel Colon](tm2224158d7_ex10-5.htm) |
| [10.6\*](tm2224158d7_ex10-6.htm) | [Director Offer Letter between NETCLASS TECHNOLOGY INC and Xiao Fu](tm2224158d7_ex10-6.htm) |
| [10.7\*](tm2224158d7_ex10-7.htm) | [Standarized Application Development Service Contracts](tm2224158d7_ex10-7.htm) |
| [14.1\*](tm2224158d7_ex14-1.htm) | [Code of Business Conduct and Ethics of the Registrant](tm2224158d7_ex14-1.htm) |
| [21.1\*](tm2224158d7_ex21-1.htm) | [List of Subsidiaries](tm2224158d7_ex21-1.htm) |
| [23.1\*](tm2224158d7_ex23-1.htm) | [Consent of Marcum Asia CPAs LLP](tm2224158d7_ex23-1.htm) |
| [23.2\*](tm2224158d7_ex23-2.htm) | [Consent of Xianghong Zhou](tm2224158d7_ex23-2.htm) |
| [23.3\*](tm2224158d7_ex23-3.htm) | [Consent of Angel Colon](tm2224158d7_ex23-3.htm) |
| [23.4\*](tm2224158d7_ex23-4.htm) | [Consent of Xiao Fu](tm2224158d7_ex23-4.htm) |
| [23.5\*](tm2224158d7_ex23-5.htm) | [Consent of Shanghai Association for Informatization Development Research](tm2224158d7_ex23-5.htm) |
| [99.1\*](tm2224158d7_ex99-1.htm) | [Opinion of Grandall Law Firm. PRC counsel to the Registrant, regarding certain PRC law matters](tm2224158d7_ex99-1.htm) |
| [99.2\*](tm2224158d7_ex99-2.htm) | [Audit Committee Charter](tm2224158d7_ex99-2.htm) |
| [99.3\*](tm2224158d7_ex99-3.htm) | [Compensation Committee Charter](tm2224158d7_ex99-3.htm) |
| [99.4\*](tm2224158d7_ex99-4.htm) | [Nomination Committee Charter](tm2224158d7_ex99-4.htm) |
| [107\*](tm2224158d7_ex-filingfees.htm) | [Filing Fee table](tm2224158d7_ex-filingfees.htm) |

---

**\*** Filed herewith

\*\* To be filed by amendment

## Exhibit 1.1

**Exhibit 1.1**

**NETCLASS TECHNOLOGY INC**

**UNDERWRITING AGREEMENT**

[ ], 2023

Revere Securities LLC

650 Fifth Avenue, 35<sup>th</sup> Floor

Ladies and Gentlemen:

The undersigned, NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company (the "**Company**"), hereby confirms its agreement (this "**Agreement**") with Revere Securities LLC (the "**Underwriter**") to issue and sell to the Underwriter Class A Ordinary Shares, par value $0.00025, of the Company ("**Shares**"). The offering and sale of securities contemplated by this Agreement is referred to herein as the "**Offering**."

**1.** <u>Firm Shares; Additional Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase of Firm Shares</u>. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Underwriter an aggregate of [●] Class A Ordinary Shares (the "**Firm Shares**") at a purchase price (net of underwriting discounts) of $[●] per Share. The Underwriter agrees to purchase from the Company the Firm Shares set forth opposite its name on <u>Schedule A</u> attached hereto and made a part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Delivery of and Payment for Firm Shares</u>. Delivery of and payment for the Firm Shares shall be made at 10:00 A.M., Eastern time, on the second (2<sup>nd</sup>) Business Day following the effective date of the Registration Statement ("**Effective Date**"), or at such time as shall be agreed upon by the Underwriter and the Company, at the offices of Sichenzia Ross Ference LLP (the "**Underwriter's Counsel**") or at such other place as shall be agreed upon by the Underwriter and the Company. The hour and date of delivery of and payment for the Firm Shares is called the "**Closing Date**." The closing of the payment of the purchase price for, and delivery of certificates representing, the Firm Shares, is referred to herein as the "**Closing**." Payment for the Firm Shares shall be made on the Closing Date by wire transfer in federal (same day) funds upon delivery to the Underwriter of the Firm Shares through the full fast transfer facilities of the Depository Trust Company (the "**DTC**") for the account of the Underwriter. The Firm Shares shall be registered in such names and in such denominations as the Underwriter may request in writing at least two (2) Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Underwriter for all the Firm Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Additional Shares</u>. The Company hereby grants to the Underwriter an option (the "**Over-allotment Option**") to purchase up to an additional [●] Shares (the "**Additional Shares**"), representing fifteen percent (15%) of the Firm Shares sold in the offering, in each case only for the purpose of covering over-allotments of such securities, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Exercise of Over-allotment Option</u>. The Over-allotment Option granted pursuant to <u>Section 1(c)</u> hereof may be exercised in whole or in part at any time within 45 days after the Effective Date. The purchase price to be paid per Additional Share shall be equal to the price per Firm Share in <u>Section 1(a)</u>. The Underwriter shall not be under any obligation to purchase any Additional Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised upon written notice given at least two full business days prior to the exercise to the Company from the Underwriter setting forth the aggregate number of Additional Shares to be purchased by the Underwriter and the date and time for delivery of and payment for the Additional Shares (the "**Option Closing Date**"), which Closing Date shall not be later than five (5) full Business Days after the date of such written notice to purchase Additional Shares is given or such other time as shall be agreed upon by the Company and the Underwriter, at the offices of Underwriter's Counsel or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Underwriter. If such delivery and payment for the Additional Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the written notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Additional Shares, subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriter the number of Additional Shares specified in such notice and (ii) the Underwriter shall purchase from the Company that portion of the total number of Additional Shares then being purchased with the number of Firm Shares set forth in <u>Schedule A</u> opposite the name of such Underwriter bears to the total number of Firm Shares, subject, in each case, to such adjustment as the Underwriter, in its sole discretion, shall determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Delivery and Payment of Additional Shares</u>. Payment for the Additional Shares shall be made on the Option Closing Date by wire transfer in federal (same day) funds, upon delivery to the Underwriter of the Additional Shares through the facilities of DTC for the account of the Underwriter. The Additional Shares shall be registered in such name or names and in such authorized denominations as the Underwriter may request in writing at least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Additional Shares except upon tender of payment by the Underwriter for applicable Additional Shares. The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date; and in the event that such time and date are simultaneous with the Closing Date, the term "Closing Date" shall refer to the time and date of delivery of the Firm Shares and Additional Shares.

The Firm Shares and the Additional Shares are hereinafter referred to collectively as the "**Securities**."

**2.** <u>Representations and Warranties of the Company</u>. The Company represents and warrants to the Underwriter as of the Applicable Time (as defined below) and as of the Closing Date, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Filing of Registration Statement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Pursuant to the Act</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company has filed with the Securities and Exchange Commission (the "**Commission**") a registration statement and an amendment or amendments thereto, on Form F-1 (File No. 333-[●]), including any related prospectus or prospectuses, for the registration of the Securities under the Securities Act of 1933, as amended (the "**Act**"), which registration statement and amendment or amendments have been prepared by the Company and conform, in all material respects, with the requirements of the Act and the rules and regulations of the Commission under the Act (the "**Regulations**"). Except as the context may otherwise require, such registration statement on file with the Commission at the time the registration statement becomes effective (including the prospectus, financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Regulations), is referred to herein as the "**Registration Statement**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The final prospectus in the form first furnished to the Underwriter for use in the Offering, is hereinafter called the "**Prospectus**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Registration Statement has been declared effective by the Commission on or prior to the date hereof. "**Applicable Time**" means 9:00 a.m. EDT, on [date] or such other time as agreed to by the Company and the Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Registration under the Exchange Act</u>. The Securities are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the "**Exchange Act**"), and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Securities under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration except as described in the Registration Statement and Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Listing on Nasdaq</u>. The Shares will be approved for listing on the Nasdaq Capital Market ("**Nasdaq**") by the Closing Date, subject to official notice of issuance, and the Company has taken no action designed to, or likely to have the effect of, terminating the listing of the Securities on Nasdaq, nor has the Company received any notification that Nasdaq is contemplating revoking or withdrawing approval for listing of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>No Stop Orders, etc</u>. Neither the Commission nor, to the Company's knowledge, any state regulatory authority has issued any order preventing or suspending the use of any preliminary prospectus ("**Preliminary Prospectus**"), the Prospectus or the Registration Statement or has instituted or, to the Company's knowledge, threatened to institute any proceedings with respect to such an order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Disclosures in Registration Statement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>10b-5 Representation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Act and the Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Registration Statement, when it became effective, and any amendment or supplement thereto, did not contain and, at the Closing Date, will not contain, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Prospectus when filed with the Commission does not contain and, at the Closing Date, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The representation and warranty made in this <u>Section 2(c)(i)(2)</u> does not apply to statements made or statements omitted in reliance upon and in conformity with written information with respect to the Underwriter furnished to the Company by the Underwriter expressly for use in the Registration Statement or Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of the Underwriter consists solely of the disclosure contained in the "Underwriting" section of the Prospectus (collectively, the "**Underwriter's Information**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The General Disclosure Package (as defined below), when taken together as a whole with the Prospectus (collectively, the "**Disclosure Materials**"), does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Materials based upon and in conformity with the Underwriter's Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Prior Securities Transactions</u>. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by, or under common control with the Company, except as disclosed in the Registration Statement and the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Changes After Dates in Registration Statement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>No Material Adverse Change</u>. Since the end of the period covered by the latest audited financial statements included in the Registration Statement and the Prospectus, and except as otherwise specifically stated therein: (i) to the knowledge of the Company, there have been no events that have occurred that would have a Material Adverse Effect (as defined below); and (ii) there have been no material transactions entered into by the Company not in the ordinary course of business, other than as contemplated pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Recent Securities Transactions, etc</u>. Since the end of the period covered by the latest audited financial statements included in the Registration Statement and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement and the Prospectus, the Company has not, other than with respect to options to purchase Class A Ordinary Shares at an exercise price equal to the then fair market price of the Class A Ordinary Shares, as determined by the Company's board of directors, from time to time, granted to employees, consultants or service providers: (i) issued any securities or incurred any material liability or obligation, direct or contingent, for borrowed money other than in the ordinary course of business; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Independent Accountants</u>. To the best of the Company's knowledge, Marcum Asia CPAs LLP ("**Marcum**"), whose report is filed with the Commission as part of the Registration Statement, are independent registered public accountants as required by the Act and the Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Financial Statements, etc</u>. The financial statements, including the notes thereto and supporting schedules included in the Registration Statement and Prospectus, fairly present the financial position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with United States generally accepted accounting principles ("**GAAP**"), consistently applied throughout the periods involved, except as disclosed therein; and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. The Registration Statement discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company's financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement and the Prospectus, (a) neither the Company nor any of its operating subsidiaries (each, a "**Subsidiary**", and together, the "**Subsidiaries**"), has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the capital stock of the Company or any of its Subsidiaries or any grants under any stock compensation plan and, (d) there has not been any material adverse change in the Company's long-term or short-term debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Authorized Capital; Options, etc</u>. The Company has the duly authorized, issued and outstanding capitalization as set forth in the Registration Statement and the Prospectus. Based on the assumptions stated in the Registration Statement and the Prospectus, the Company will have on the Closing Date the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, this Agreement, the Registration Statement and the Prospectus, on the Effective Date and on the Closing Date, there will be no options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued capital stock of the Company or any security convertible into capital stock of the Company, or any contracts or commitments to issue or sell capital stock or any such options, warrants, rights or convertible securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Valid Issuance of Securities, etc.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Outstanding Securities</u>. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Securities Sold Pursuant to this Agreement</u>. The Securities have been duly authorized for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the foregoing Securities has been duly and validly taken. The Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Issuance of Securities</u>. Upon issuance of Securities, and subject to full payment thereof by the Underwriter in accordance with the terms hereof, such Securities will be duly and validly issued, and the persons in whose names the Securities are registered will be entitled to the rights specified in the Securities, and upon the sale and delivery of these Securities, and payment therefor, pursuant to this Agreement, the purchasers will acquire good, marketable and valid title to such Securities, free and clear of all pledges, liens, security interests, charges, claims or encumbrances of any kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Registration Rights of Third Parties</u>. Except as set forth in the Registration Statement and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Act or to include any such securities in a registration statement to be filed by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Validity and Binding Effect of This Agreement</u>. This Agreement has been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>No Conflicts</u>. The execution, delivery, and performance by the Company of this Agreement, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms hereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company is a party; (ii) result in any violation of the provisions of the Company's amended and restated memorandum and articles of association (as the same may be amended from time to time, the "**Charter**"); or (iii) violate any existing applicable law, rule, regulation, to its best knowledge, violate any judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its properties or business as constituted as of the date hereof, except such violation or breach that would not reasonably be expected to have a material adverse effect on the assets, business, conditions, financial position or results of operations of the Company (a "**Material Adverse Effect**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>No Defaults; Violations</u>. No default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other material agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the properties or assets of the Company is subject, except for such defaults that would not, singly or in the aggregate, result in a Material Adverse Effect to the Company and its Subsidiaries, taken as a whole, and that are not otherwise disclosed in the Registration Statement, the Prospectus or the Disclosure Materials. The Company is not in violation of any term or provision of its Charter, or in violation in any respect of any franchise, license, permit, applicable law, rule, regulation, to its best knowledge, violate any judgment or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its properties or businesses, except for such defaults that would not, singly or in the aggregate, result in a Material Adverse Effect to the Company and its Subsidiaries, taken as a whole, and that are not otherwise disclosed in the Registration Statement, the Prospectus or the Disclosure Materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Corporate Power; Licenses; Consents</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Conduct of Business</u>. Except as described in the Registration Statement and the Prospectus, the Company has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described in the Prospectus, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Transactions Contemplated Herein</u>. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof and thereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery of the Securities and the consummation by the Company of the transactions and agreements contemplated by this Agreement and as contemplated by the Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. ("**FINRA**") and the Nasdaq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>D&O Questionnaires</u>. To the Company's knowledge, all information contained in the questionnaires (the "**Questionnaires**") completed by each of the Company's directors and officers named in the section "Management" in the Prospectus immediately prior to the Offering (the "**Insiders**") and provided to the Underwriter is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed in the questionnaires completed by each Insider to become inaccurate and incorrect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Litigation; Governmental Proceedings</u>. Except as disclosed in the Registration Statement and the Prospectus, there is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the Company's knowledge, threatened against, or involving the Company or, to the Company's knowledge, any executive officer or director that is required to be disclosed but has not been disclosed in the Registration Statement and the Prospectus or in connection with the Company's listing application for the listing of the Securities on Nasdaq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Good Standing</u>. The Company has been duly organized, is validly existing and is in good standing under the laws of the Cayman Islands as of the date hereof, and is duly qualified to do business and is in good standing in each jurisdiction in which the conduct of business requires such qualification, except where the failure to qualify would not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Transactions Affecting Disclosure to FINRA</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Finder's Fees</u>. Except as described in the Registration Statement and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder's, consulting or origination fee by the Company or any Insider with respect to the sale of the Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the best of the Company's knowledge, any of its shareholders that may affect the Underwriter's compensation, as determined by FINRA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Payments Within Twelve (12) Months</u>. Except as described in the Registration Statement and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder's fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to any FINRA member; or (iii) to any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve months prior to the Effective Date, other than the prior payment of US$120,000 to the Underwriter, as provided hereunder in connection with the Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>FINRA Affiliation</u>. To the Company's knowledge, and except as may have been previously disclosed in writing to the Underwriter, no Insider or any beneficial owner of 10% or more of the Company's outstanding Class A Ordinary Shares has any direct or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Use of Proceeds</u>. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates inclusive of any FINRA member or its affiliates in any country or jurisdiction outside of the United States, except as specifically authorized herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Information.</u> All information provided by the Company in its FINRA Questionnaire to Underwriter Counsel specifically for use by Underwriter Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Foreign Corrupt Practices Act</u>. Neither the Company nor, to the Company's knowledge, any of the Insiders or employees of the Company or any other person authorized to act on behalf of the Company has, directly or indirectly, knowingly given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) that might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Officers' Certificate</u>. Any certificate signed by any duly authorized executive officer of the Company and delivered to you or to the Underwriter's Counsel shall be deemed a representation and warranty by the Company to the Underwriter as to the matters covered thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Lock-Up Period.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each Insider and, in addition, each beneficial owner of the Company holding at least five percent of the outstanding Class A Ordinary Shares (or securities convertible into Class A Ordinary Shares) (together with the Insiders, the "**Lock-Up Parties**"), have agreed, pursuant to executed Lock-Up Agreements in the form attached hereto as <u>Annex II,</u> that for a period ending 180 days after the Effective Date (the "**Lock-Up Period**"), such persons and their affiliated parties shall not offer, pledge, sell, contract to sell, grant, lend or otherwise transfer or dispose of, directly or indirectly, any Securities or capital stock of the Company, including Class A Ordinary Shares, or any securities convertible into or exercisable or exchangeable for such Securities or capital stock, without the consent of the Underwriter, with certain exceptions. The Underwriter may consent to an early release from the applicable Lock-Up period if, in its opinion, the market for the Securities would not be adversely impacted by sales and in cases of financial emergency of a Lock-up Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company, on behalf of itself and any successor entity, has agreed that, without the prior written consent of the Underwriter, it will not, for a period ending 90 days after the Effective Date, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise. The restrictions contained in this <u>Section 2(t)(ii)</u> shall not apply to (i) the Securities to be sold hereunder, (ii) the issuance by the Company of Securities upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof of, provided that the Underwriter has been advised in writing of such issuance prior to the date hereof, (iii) the issuance by the Company of option to purchase or shares of Securities, capital stock or restricted stock of the Company under any stock compensation plan of the Company outstanding on the date hereof, (iv) any registration statement on Form S-8, or (v) the issuance of securities in connection with mergers, acquisitions, joint ventures, licensing arrangements or any other similar non-capital raising transactions provided such shares are not registered pursuant to a registrations statement For purposes of subclause (ii) in this paragraph, the Underwriter acknowledges that disclosure in the Registration Statement filed prior to the date hereof of any outstanding option or warrant shall be deemed to constitute prior written notice to the Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Subsidiaries</u>. Exhibit 21.1 of the Registration Statement lists each Subsidiary and consolidated entity of the Company and sets forth the ownership of all of the Subsidiaries. The Subsidiaries are duly organized and in good standing under the laws of the place of organization or incorporation, and each such Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not reasonably be expected to have a Material Adverse Effect. The Company's ownership and control of each Subsidiary and each Subsidiary's ownership and control of other Subsidiaries, is as described in the Registration Statement, the Disclosure Materials and the Prospectus. The Company does not own or control, directly or indirectly, any corporation, association or entity, except as disclosed in the Registration Statement and the Prospectus. Each of the Company and its Subsidiaries has full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Materials and the Prospectus, and is duly qualified to do business under the laws of each jurisdiction which requires such qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Related Party Transactions</u>. Except as disclosed in the Registration Statement and the Prospectus, there are no business relationships or related party transactions involving the Company or any other person required to be described in the Prospectus that have not been described as required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Board of Directors</u>. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Prospectus captioned "Board of Directors and Board Committees." The qualifications of the persons serving as board members and the overall composition of the board comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of Nasdaq. At least one member of the Board of Directors of the Company qualifies as an "audit committee financial expert", as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and the rules of Nasdaq. In addition, at least a majority of the persons serving on the Board of Directors qualify as "independent" as defined under the rules of Nasdaq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Sarbanes-Oxley Compliance</u>. Except as described in the Registration Statement, the Disclosure Materials, and the Prospectus, the Company will be, on the Effective Date, in material compliance with the provisions of the Sarbanes-Oxley Act of 2002 applicable to it and has implemented or will implement such programs and taken reasonable steps to ensure the Company's future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all the material provisions of the Sarbanes-Oxley Act of 2002.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>No Investment Company Status</u>. The Company is not and, after giving effect to the Offering and sale of the Securities and the application of the net proceeds thereof as described in the Registration Statement and the Prospectus, will not be, an "investment company" as defined in the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>No Material Labor Disputes</u>. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the best of the Company's knowledge, is imminent, which would result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Intellectual Property</u>. Except as described in the Registration Statement and the Prospectus, the Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights ("**Intellectual Property**") necessary for the conduct of the business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement and the Prospectus, except for such Intellectual Property, the failure of which to own or possess, as the case may be, would not reasonably be expected to result in a Material Adverse Effect. To the Company's knowledge, no action or use by the Company or any of its Subsidiaries will involve or give rise to any infringement of, or material license or similar fees for, any Intellectual Property of others, that would reasonably be expected to have a Material Adverse Effect on the Company and the Subsidiaries, taken as a whole, except as disclosed in the Registration Statement or the Prospectus. Neither the Company nor any of its Subsidiaries has received any notice alleging any such infringement or fee, except such infringement or fee that would not reasonably be expected to have a Material Adverse Effect on the Company or the Subsidiaries, taken as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Taxes</u>. Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all material taxes imposed on or assessed against the Company or such subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriter and to the knowledge of the Company, (i) no material issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term "**taxes**" mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term "**returns**" means all returns, declarations, reports, statements, and other documents required to be filed with relevant taxing authorities in respect to taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Data</u>. The statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived. The Company has obtained the written consent to the use of such data from such sources to the extent necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) The Company's Board of Directors has validly appointed an audit committee whose composition satisfies the requirements of the rules and regulations of Nasdaq and the Board of Directors and/or audit committee has adopted a charter that satisfies the requirements of the rules and regulations of Nasdaq. Except as disclosed in the Registration Statement and the Prospectus, neither the Board of Directors nor the audit committee has been informed, nor is any director of the Company aware, of any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) Neither the Company nor the Subsidiaries has, prior to the date hereof, made any offer or sale of any securities which are required to be "integrated" pursuant to the Act or the Regulations with the offer and sale of the Underwriter pursuant to the Registration Statement. Except as disclosed in the Registration Statement, neither the Company nor the Subsidiaries has sold or issued any Class A Ordinary Shares or any securities convertible into, exercisable or exchangeable for Class A Ordinary Shares, or other equity securities, or any rights to acquire any Class A Ordinary Shares or other equity securities of the Company, during the six-month period preceding the date of the Prospectus, including but not limited to any sales pursuant to Rule 144A or Regulation D or S under the Act, other than Class A Ordinary Shares issued pursuant to employee benefit plans, qualified stock option plans or the employee compensation plans or pursuant to outstanding options, rights or warrants as described in the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>PRC Representation and Warranties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Organization</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Shanghai Zhima Information Technology Co., Ltd. ("WFOE") has been duly organized and is validly existing as a company under the laws of the PRC, and its business license is in full force and effect; WFOE has been duly qualified as a foreign invested enterprise with the following approvals and certificates: (A) Certificate of Filing and (B) Business License. 100% of the equity interests of WFOE are owned, through DragonSoft Group (China) Limited ("NetClass HK"), by the Company as described in the Prospectus, and such equity interests are free and clear of all liens, encumbrances, equities or claims; the bylaws, the business license and other constituent documents of WFOE comply in all material respects with the requirements of applicable laws of the PRC and are in full force and effect; WFOE has full power and authority (corporate and other) and all consents, approvals, authorizations, permits, licenses, orders, registrations, clearances and qualifications of or with any governmental agency having jurisdiction over WFOE or any of its properties required for the ownership or lease of property by it and the conduct of its business in accordance with its registered business scope, except for such that would not reasonably be expected to have a Material Adverse Effect and has the legal right and authority to own, use, lease and operate its assets and to conduct its business in the manner presently conducted and as described in the Prospectus; and the registered capital of WFOE has not been paid, which does not violate the articles of association and applicable PRC Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Reserved

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Each of WFOE and its subsidiaries has legal and valid title to all of its properties and assets, free and clear of all liens, charges, encumbrances, equities, claims, options and restrictions; each lease agreement to which it is a party is duly executed and legally binding; its leasehold interests are set forth in and governed by the terms of any lease agreements, and, to the best of the Company's knowledge, such agreements are valid, binding and enforceable in accordance with their respective terms under PRC law, except where the invalidity of such lease agreements would not reasonably be expected to have a Material Adverse Effect on the Company or the Subsidiaries, taken as a whole; and, neither of WFOE nor its subsidiary owns, operates, manages or has any other right or interest in any other material real property of any kind, which would reasonably result in a Material Adverse Effect to the Company and the Subsidiaries, taken as a whole, except as described in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>PRC Taxes</u>. Except as disclosed in the Registration Statement, the Disclosure Materials and Prospectus, including the risk factor set forth in "*Risk Factors—Risks Relating to Doing Business in the PRC—Risks Related to Doing Business in China – If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders."*, no transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding taxes or duties are payable in China, Hong Kong or the Cayman Islands to any Chinese, Hong Kong or Cayman Islands taxing authority in connection with (A) the issuance, sale and delivery of the Securities to or for the account of the purchasers, and (B) the purchase from the Company and the sale and delivery of the Securities to purchasers thereof, save that Cayman Islands stamp duty will be payable on any document that is executed in, brought into or produced before a court of the Cayman Islands.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Dividends and Distributions</u>. Except as disclosed in the Disclosure Materials, Registration Statement and the Prospectus, no Subsidiary of the Company is currently prohibited or restricted, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiary's capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary's property or assets to the Company or any other Subsidiary of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Money Laundering</u>. The operations of the Company, its Subsidiaries are and have been conducted at all times in all material respects in compliance with applicable financial recordkeeping and reporting requirements of money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "**Money Laundering Laws**") and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company, any of its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Office of Foreign Assets Control</u>. None of the Company, any of its Subsidiaries, or, to the Company's knowledge, any director, officer, or employee of the Company, any of its Subsidiaries has conducted or entered into a contract to conduct any transaction with the governments or any subdivision thereof, residents of, or any entity based or resident in the countries that are currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("**OFAC**"); none of the Company, any of its Subsidiaries is currently subject to any U.S. sanctions administered by OFAC (including but not limited to the designation as a "specially designated national or blocked person" thereunder), the United Nations Security Council, or the European Union, or is located, organized or resident in a country or territory that is the subject of OFAC-administered sanctions, including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria; and the Company will not knowingly directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>No Immunity</u>. None of the Company, its Subsidiaries, or any of its or their properties or assets has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the laws of the Cayman Islands, Hong Kong, the PRC, New York or United States federal law; and, to the extent that the Company, its Subsidiaries, or any of their respective properties, assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced, each of the Company and its Subsidiaries waives or will waive such right to the extent permitted by law and has consented to such relief and enforcement under New York law as provided under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <u>Free Transferability of Dividends or Distributions</u>. Except as disclosed in the Disclosure Materials, Registration Statement and Prospectus all dividends and other distributions declared and payable on the Class A Ordinary Shares may under current Cayman Islands, Hong Kong and PRC law and regulations be paid to the holders of Securities in United States dollars and may be converted into foreign currency that may be transferred out of the Cayman Islands, Hong Kong and the PRC in accordance with, and all such payments made to holders thereof or therein who are non-residents of the Cayman Islands, Hong Kong or the PRC, will not be subject to income, withholding or other taxes under, the laws and regulations of the Cayman Islands, Hong Kong and the PRC, or any political subdivision or taxing authority thereof or therein and will otherwise be free and clear of any other tax, duty, withholding or deduction in the Cayman Islands, Hong Kong and the PRC or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining any governmental authorization in the Cayman Islands, Hong Kong and the PRC or any political subdivision or taxing authority thereof or therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>Not a PFIC</u>. Except as disclosed in the Disclosure Materials, Registration Statement and Prospectus, the Company does not expect that it will be treated as a Passive Foreign Investment Company ("**PFIC**") within the meaning of Section 1297 of the United States Internal Revenue Code of 1986, as amended, for its current taxable year. The Company has no plan or intention to operate in such a manner that would reasonably be expected to result in the Company becoming a PFIC in future taxable years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <u>Compliance with SAFE Regulations</u>. The Company has taken all reasonable steps to cause all of the Company's shareholders and option holders who are residents or citizens of the PRC, to comply with any applicable rules and regulations of the State Administration of Foreign Exchange (**SAFE**) relating to such shareholders' and option holders' shareholding with the Company (the "**SAFE Rules and Regulations**"), including, without limitation, taking reasonable steps to require each shareholder or option holder that is, or is directly or indirectly owned or controlled by, a resident or citizen of the PRC to complete any registration and other procedures required under applicable SAFE Rules and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) <u>M&A and CSRC Rules</u>. The Company is aware of and has been advised as to the content of the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly promulgated by the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Tax Administration, the State Administration of Industry and Commerce, the China Securities Regulatory Commission (**CSRC**) and SAFE on August 8, 2006 and amended on June 22, 2009 (the "**M&A Rules**"), in particular the relevant provisions thereof that purport to require offshore special purpose vehicles formed for the purpose of obtaining a stock exchange listing outside of the PRC and controlled directly or indirectly by companies or natural persons of the PRC, to obtain the approval of the CSRC prior to the listing and trading of their securities on a stock exchange located outside of the PRC; the Company has received legal advice specifically with respect to the M&A Rules from its PRC counsel and based on such legal advice, the Company confirms with the Underwriter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except as disclosed in the Disclosure Materials, Registration Statement and the Prospectus, the issuance and sale of the Securities, the listing and trading of the Securities on Nasdaq and the consummation of the transactions contemplated by this Agreement are not and will not be, as of the date hereof or on the Closing Date, affected by the M&A Rules or any official clarifications, guidance, interpretations or implementation rules in connection with or related to the M&A Rules, including the guidance and notices issued by the CSRC on September 8, 2006 and September 21, 2006, as amended (collectively, the "**M&A Rules and Related Clarifications**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Except as disclosed in the Disclosure Materials, Registration Statement and the Prospectus, as of the date hereof, the M&A Rules and Related Classifications did not and do not require the Company to obtain the approval of the CSRC prior to the issuance and sale of the Securities, the listing and trading of the Securities on Nasdaq, or the consummation of the transactions contemplated by this Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) <u>Foreign Private Issuer Status</u>. The Company is a "foreign private issuer" within the meaning of Rule 405 under the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) <u>Choice of Law</u>. Except as disclosed in the Disclosure Materials, Registration Statement and the Prospectus, the choice of law provision set forth in this Agreement constitutes a legal and valid choice of law under the laws of the Cayman Islands, Hong Kong and the PRC and will be honored by courts in the Cayman Islands, Hong Kong and the PRC, subject to compliance with relevant civil procedural requirements (that do not involve a re-examination of the merits of the claim) in the Cayman Islands, Hong Kong and the PRC. The Company has the power to submit, and pursuant <u>to Section 14</u> of this Agreement, has legally, validly, effectively and submitted, to the personal jurisdiction of each of the New York Courts, and the Company has the power to designate, appoint and authorize, and pursuant to <u>Section 14</u> of this Agreement, has legally, validly, effectively and irrevocably designated, appointed an authorized agent for service of process in any action arising out of or relating to this Agreement or the Securities in any New York Court, and service of process effected on such authorized agent will be effective to confer valid personal jurisdiction over the Company as provided in <u>Section 14</u> of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) <u>Recognition of Judgments</u>. Any final judgment for a fixed sum of money rendered by a New York Court having jurisdiction under New York law in respect of any suit, action or proceeding against the Company based upon this Agreement would be recognized and enforced against the Company by Cayman Islands courts without re-examining the merits of the case under the common law doctrine of obligation; provided that such judgment is (A) given by a foreign court of competent jurisdiction; (B) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given; (C) is final; (D) is not in respect of taxes, a fine or a penalty; and (E) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>MD&A</u>. The section entitled "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" in the Preliminary Prospectus included in the Disclosure Materials and the Prospectus accurately and fully describes in all material respects (A) accounting policies that the Company believes are the most important in the portrayal of the Company's financial condition and results of operations and that require management's most difficult, subjective or complex judgments ("**Critical Accounting Policies**"); (B) judgments and uncertainties affecting the application of the Critical Accounting Policies; and (C) the likelihood that materially different amounts would be reported under different conditions or using different assumptions and an explanation thereof; and the Company's management have reviewed and agreed with the selection, application and disclosure of the Critical Accounting Policies as described in the Disclosure Materials and the Prospectus and have consulted with its independent accountants with regard to such disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(hh) Escrow Agreement</u>. Concurrently with the execution and delivery of this Agreement, the Company, the Underwriter and [●], as escrow agent (the "**Escrow Agent**"), shall enter into an escrow agreement (the "**Escrow Agreement**"), pursuant to which $200,000 from gross proceeds from the Offering shall be deposited by the Company at Closing in an escrow account (the "**Escrow Account**") for a period of 12 months after the Closing of the initial public offering for purposes of covering potential legal action. During the period of 12 months, the Company may use the Escrow Amount for low risk investment (e.g. bonds, mutual funds, money market funds, etc.) at its discretion, provided that the Company has notified the Representative in writing in advance. All remaining funds in the Escrow Account that are not subject to an indemnification claim as of the 12 months period after the Closing Date will be returned to the Company in accordance with the terms of the Escrow Agreement. The Company shall pay the reasonable fees and expenses of the Escrow Agent.

**3.** <u>Offering</u>. Upon authorization of the release of the Securities by the Underwriter, the Underwriter intends to offer the Securities for sale to the public upon the terms and conditions set forth in the Prospectus.

**4.** <u>Covenants of the Company</u>. The Company acknowledges, covenants and agrees with the Underwriter that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Registration Statement and any amendments thereto have been declared effective, and if Rule 430A is used or the filing of the Prospectus is otherwise required under Rule 424(b), the Company will file the Prospectus (properly completed if Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time period and will provide evidence satisfactory to the Underwriter of such timely filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the period beginning on the date hereof and ending on the later of the Closing Date or such date as, in the reasonable opinion of Underwriter's Counsel, the Prospectus is no longer required by law to be delivered (or in lieu thereof the notice referred to in Rule 173(a) under the Act is no longer required to be provided) in connection with sales by an underwriter or dealer (the "**Prospectus Delivery Period**"), prior to amending or supplementing the Registration Statement, the General Disclosure Package or the Prospectus, the Company shall furnish to the Underwriter and Underwriter's Counsel for review a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Underwriter reasonably objects within 36 hours of delivery thereof to Underwriter's Counsel. The term "General Disclosure Package" means, collectively, the Issuer Free Writing Prospectus(es) (as defined below) issued at or prior to the date hereof, the most recent preliminary prospectus related to this offering, and the information included on Schedule A hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) After the date of this Agreement, the Company shall promptly advise the Underwriter in writing of: (i) the receipt of any comments of, or requests for additional or supplemental information from, the Commission; (ii) the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any prospectus, the General Disclosure Package or the Prospectus; (iii) the time and date that any post-effective amendment to the Registration Statement becomes effective; and (iv) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending its use or the use of any prospectus, the General Disclosure Package, the Prospectus or any issuer free writing prospectus as defined in Rule 433 of the Regulations (the "**Issuer Free Writing Prospectus**"), or the initiation of any proceedings to remove, suspend or terminate from listing the Shares from any securities exchange upon which the Shares are listed for trading, or of the threatening of initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its reasonable efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B, as applicable, under the Act and will use its reasonable efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or Rule 164(b)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) (i) During the Prospectus Delivery Period, the Company will comply in all material respects with all requirements imposed upon it by the Act as now in effect and as may be hereafter amended, and by the Regulations, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Securities as contemplated by the provisions hereof, the General Disclosure Package, the Registration Statement and the Prospectus. If during such period any event or development occurs as a result of which the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the General Disclosure Package) would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances then existing, not misleading, or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Underwriter or Underwriter's Counsel to amend the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the General Disclosure Package) to comply with the Act, the Company will promptly notify the Underwriter and will promptly amend the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the General Disclosure Package) or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information contained in the Registration Statement or the Prospectus or would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances there existing, not misleading, the Company will promptly notify the Underwriter and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Company will deliver to the Underwriter and Underwriter's Counsel a copy of the Registration Statement, as initially filed, and all amendments thereto, including all consents and exhibits filed therewith, and will maintain in the Company's files manually signed copies of such documents for at least five (5) years after the date of filing thereof. The Company will promptly deliver to the Underwriter such number of copies of any Preliminary Prospectus, the Prospectus, the Registration Statement, and all amendments of and supplements to such documents, if any, and all documents which are exhibits to the Registration Statement and any Preliminary Prospectus or Prospectus or any amendment thereof or supplement thereto, as the Underwriter may reasonably request. On the Business Day next succeeding the date of this Agreement, and from time to time thereafter, the Company will furnish to the Underwriter copies of the Prospectus in such quantities as the Underwriter may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company consents to the use and delivery of the Preliminary Prospectus by the Underwriter in accordance with Rule 430 and Section 5(b) of the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) If the Company elects to rely on Rule 462(b) under the Act, the Company shall both file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by the earlier of: (i) 10:00 P.M., Eastern time, on the date of this Agreement, and (ii) the time that confirmations are given or sent, as specified by Rule 462(b)(2), and pay the applicable fees in accordance with Rule 111 of the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Company will use its reasonable best efforts, in cooperation with the Underwriter, at or prior to the time of effectiveness of the Registration Statement, to qualify the Securities for offering and sale under the securities laws relating to the offering or sale of the Securities of such jurisdictions as the Underwriter may reasonably designate and to maintain such qualifications in effect for so long as required for the distribution thereof; except that in no event shall the Company be obligated in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process or to subject itself to taxation if it is otherwise not so subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company will make generally available (which includes filings pursuant to the Exchange Act made publicly through the Electronic Data Gathering, Analysis and Retrieval ("**EDGAR**") system) to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company's current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period that shall satisfy the provisions of Section 11(a) of the Act and Rule 158 of the Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Except with respect to (i) securities of the Company which may be issued in connection with an acquisition of another entity (or the assets thereof), (ii) the issuance of securities of the Company intended to provide the Company with proceeds to acquire another entity (or the assets thereof), or (iii) the issuance of securities under the Company's stock option plans with exercise or conversion prices at fair market value (as defined in such plans) in effect from time to time, during the six (6) months following the Closing Date, the Company or any successor to the Company shall not undertake any public or private offerings of any equity securities of the Company (including equity-linked securities) without the prior written consent of the Underwriter, which shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Following the Closing Date, any of the entities and individuals listed on <u>Schedule B</u> hereto (the "**Lock-Up Parties**"), without the prior written consent of the Underwriter, shall not sell or otherwise dispose of any securities of the Company, whether publicly or in a private placement, during the period that their respective lock-up agreements are in effect. The Company will deliver to the Underwriter the agreements of the Lock-Up Parties to the foregoing effect prior to the Closing Date, which agreements shall be substantially in the form attached hereto as <u>Annex II</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Company will not issue press releases or engage in any other publicity without the Underwriter's prior written consent, for a period ending at 5:00 P.M., Eastern time, on the first Business Day following the forty-fifth (45th) day following the Closing Date, other than normal and customary releases issued in the ordinary course of the Company's business, or as required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Company will apply the net proceeds from the sale of the Securities as set forth under the caption "Use of Proceeds" in the Prospectus. Without the prior written consent of the Underwriter, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, no proceeds of the Offering will be used to pay outstanding loans from officers, directors or shareholders or to pay any accrued salaries or bonuses to any employees or former employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The Company will use its reasonable best efforts to effect and maintain the listing of the Shares on the NASDAQ Capital Market or other Trading Market for at least two (2) years after the Effective Date, unless such listing is terminated as a result of a transaction approved by the holders of a majority of the voting securities of the Company. If the Company fails to maintain such listing of its Shares on the NASDAQ Capital Market or other Trading Market, for a period of two (2) years from the Effective Date, the Company, at its expense, shall obtain and keep current a listing of such securities in the Standard & Poor's Corporation Records Services or Mergent's Industrial Manual; provided that Mergent's OTC Industrial Manual is not sufficient for these purposes. "Trading Market" means any of the following markets or exchanges on which the Class A Ordinary Shares is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Stock Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The Company will use its reasonable best efforts to do and perform all things required to be done or performed under this Agreement by the Company prior to the Closing Date, and to satisfy all conditions precedent to the delivery of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Company will not take, and will cause its Affiliates not to take, directly or indirectly, any action which constitutes or is designed to cause or result in, or which could reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any security to facilitate the sale or resale of any of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) The Company shall cause to be prepared and delivered to the Underwriter, at its expense, within two (2) Business Days from the date of this Agreement, an Electronic Prospectus to be used by the Underwriter in connection with the Offering. As used herein, the term "Electronic Prospectus" means a form of prospectus, and any amendment or supplement thereto, that meets each of the following conditions: (i) it shall be encoded in an electronic format, satisfactory to the Underwriter, that may be transmitted electronically by the Underwriter to offerees and purchasers of the Securities for at least the period during which a Prospectus relating to the Securities is required to be delivered under the Act or the Exchange Act; (ii) it shall disclose the same information as the paper prospectus and prospectus filed pursuant to EDGAR, except to the extent that graphic and image material cannot be disseminated electronically, in which case such graphic and image material shall be replaced in the electronic prospectus with a fair and accurate narrative description or tabular representation of such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic format, satisfactory to the Underwriter, that will allow recipients thereof to store and have continuously ready access to the prospectus at any future time, without charge to such recipients (other than any fee charged for subscription to the Internet as a whole and for online time).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) In the event that at any time prior to the first anniversary of the final Closing Date the Company, or any of its affiliates or Subsidiaries, shall enter into any transaction (including, without limitation, any merger, consolidation, acquisition, financing, joint venture or other arrangement) with any party (i) introduced directly to the Company by the Underwriter, during such period, or (ii) who participated in the Offering, the Underwriter will be paid a transaction fee, payable at the closing thereof, equal to 1% of the consideration or value received by the Company and/or its shareholders.

**5.** <u>Representations and Warranties of the Underwriter</u>.

The Underwriter represents and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute a "free writing prospectus," as defined in Rule 405 under the Act, required to be filed with the Commission; *provided* that the prior written consent of the parties hereto shall be deemed to have been given in respect of the free writing prospectuses included in <u>Schedule C</u>. Any such free writing prospectus consented to by the Underwriter is herein referred to as a "Permitted Free Writing Prospectus." The Underwriter represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an "issuer free writing prospectus," as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping.

**6.** <u>Consideration; Payment of Expenses</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In consideration of the services to be provided for hereunder, the Company shall pay to the Underwriter or its designee(s) the following compensation (or pro rata portion thereof, if applicable) with respect to the Securities purchased from the Company in this Offering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) an underwriting discount equal to seven and one half percent (7.5%) of the aggregate gross proceeds raised in the Offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a non-accountable expense allowance of one percent (1%) of the gross proceeds of the Offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) an accountable expense allowance of up to $250,000, of which [$120,000] has already been paid to the Underwriter as an advance against accountable expenses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Company shall grant to the Underwriter or its designated affiliates share purchase warrants (the "**Underwriter's Warrants**") covering a number of shares equal to five percent (5%) of the total number of Firm Shares and Option Shares sold in this offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In compliance with FINRA Rule 5110(e)(1), the Underwriter's Warrants and the underlying securities will be locked up for 180 days beginning on the date of commencement of sales of the Offering and will expire five (5) years after the Effective Date. The Underwriter's Warrants will be exercisable at a price equal to one hundred twenty percent (120%) of the public offering price of the underlying Class A Ordinary Shares in connection with the Offering. The Underwriter's Warrants shall not be redeemable. The Company will register the Class A Ordinary Shares underlying the Underwriter's Warrants under the Act and will file all necessary undertakings in connection therewith. The Underwriter's Warrants and the underlying securities shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days beginning on the date of commencement of sales of the Offering, except that they, or any portion thereof, may be transferred or assigned to any successor to the Underwriter, any officer, manager, member or partner of the Underwriter, as well as to any member participating in the Offering and the officers, or partners, managers or members thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Underwriter may exercise the Underwriter's Warrants at any time after issuance thereof, as to all or a lesser number of the underlying Class A Ordinary Shares, provided that such Class A Ordinary Shares underlying such Underwriter Warrants will remain subject to the 180-day lock-up period. The Underwriter's Warrants will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Class A Ordinary Share at the Company's expense, an additional demand registration at the Underwriter's Warrants holder's expense, and unlimited "piggyback" registration rights for a period of five (5) years after the Effective Date at the Company's expense and provided that the demand registration rights will not be for more than five years from the Effective Date. The Underwriter's Warrants shall further provide for adjustment in the number and price of such warrants (and the Class A Ordinary Share underlying such Warrants) in the event of recapitalization, merger or other structural transaction to prevent dilution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Underwriter reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriter' aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement is terminated, the Company hereby agrees to pay all costs and expenses incident to the Offering, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 costs of preparing, printing and filing the Registration Statement with the SEC, amendments
 and supplements thereto, and post effective amendments, as well as the filing with FINRA,
 and payment of all necessary fees in connection therewith and the printing of a sufficient
 quantity of preliminary and final prospectuses as the Representative may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 costs of preparing, printing and delivering exhibits thereto, in such quantities as the Representative
 may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all
 fees, expenses and disbursements relating to the registration, qualification or exemption
 of securities offered under the securities laws of foreign jurisdictions designated by the
 Representative;

(iv) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the
 fees of counsel;

(vi) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) and
 accountants for the Company, including fees associated with any blue sky filings where applicable;

(viii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) fees
 associated with the Company's transfer agent;

(x) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) fees,
 if necessary, associated with translation services;

(xii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) expenses
 related to road shows;

(xiv) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) the
 costs of any pre-approved due diligence meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) It is understood, however, that except as provided in this <u>Section 6</u>, and <u>Sections 8</u>, <u>9</u> and <u>11(d)</u> hereof, the Underwriter will pay all of their own costs and expenses. Notwithstanding anything to the contrary in this <u>Section 6</u>, in the event that this Agreement is terminated pursuant to <u>Section 11(b)</u> hereof, or subsequent to a Material Adverse Change, the Company will pay $250,000, less any advances previously paid which as of the date hereof is $120,000, as an advance to be applied towards the accountable expenses allowance (the "**Advance**"). On the Closing Date, the Company shall pay the Underwriter $130,000, such that as of the Closing Date the Company shall have paid the Underwriter a total of no more than $250,000 in respect of such accountable expenses pursuant to this Section 6(e). All documented out-of-pocket expenses of the Underwriter (including but not limited to tombstone, fees and disbursements of Underwriter's Counsel, and reasonable and accountable travel) incurred in connection herewith which shall be limited to expenses which are actually incurred as allowed under FINRA Rule 5110(g)(4)(A) and in any event, the aggregate amount of such expenses to be reimbursed by the Company shall not exceed $250,000, including the Advances. To the extent that the Underwriter' out-of-pocket expenses are less than the Advance, the Underwriter will return to the Company that portion of the Advances not offset by actual expenses, regardless of whether the offering is terminated.

**7.** <u>Conditions of Underwriter' Obligations</u>. The obligations of the Underwriter to purchase and pay for the Firm Shares as provided herein shall be subject to: (i) the accuracy of the representations and warranties of the Company herein contained, as of the date hereof and as of the Closing Date, (ii) the absence from any certificates, opinions, written statements or letters furnished to the Underwriter or to Underwriter's Counsel pursuant to this <u>Section 7</u> of any misstatement or omission, (iii) the performance by the Company of its obligations hereunder, and (iv) each of the following additional conditions. For purposes of this <u>Section 7</u>, the terms "Closing Date" and "Closing" shall refer to the Closing Date for the Firm Shares and each of the foregoing and following conditions must be satisfied as of each Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Registration Statement shall have become effective and all necessary regulatory and listing approvals shall have been received not later than 5:30 P.M., Eastern time, on the date of this Agreement, or at such later time and date as shall have been consented to in writing by the Underwriter. If the Company shall have elected to rely upon Rule 430A under the Act, the Prospectus shall have been filed with the Commission in a timely fashion in accordance with the terms thereof and a form of the Prospectus containing information relating to the description of the Securities and the method of distribution and similar matters shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period; and, at or prior to the Closing Date and the actual time of the Closing, no stop order suspending the effectiveness of the Registration Statement or any part thereof, or any amendment thereof, nor suspending or preventing the use of the General Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall have been initiated or threatened; all requests of the Commission for additional information (to be included in the Registration Statement, the General Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or otherwise) shall have been complied with to the Underwriter's satisfaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Underwriter shall not have reasonably determined, and advised the Company, that the Registration Statement, the General Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue statement of fact which, in the Underwriter's reasonable opinion, is material, or omits to state a fact which, in the Underwriter's reasonable opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Underwriter shall have received legal opinions, in form and substance reasonably satisfactory to the Underwriter and Underwriter's Counsel of (i) Harney Westwood & Riegels, Cayman Islands counsel to the Company dated as of the Closing Date and addressed to the Underwriter, (ii) Ortoli Rosenstadt LLP, U.S. legal counsel for the Company, dated as of the Closing Date and addressed to the Underwriter; and (iii) Grandall Law Firm, PRC legal counsel to the Company, dated as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Underwriter shall have received a certificate from the Chief Executive Officer and Chief Financial Officer of the Company, dated as of the Closing Date, to the effect that: (i) the conditions set forth in subsection (a) of this <u>Section 7</u> have been satisfied, (ii) as of the date hereof and as of the Closing Date, the representations and warranties of the Company set forth in <u>Section 2</u> hereof are accurate, (iii) as of the Closing Date, all agreements, conditions and obligations of the Company to be performed or complied with hereunder on or prior thereto have been duly performed or complied with, (iv) except as disclosed in the Registration Statement the General Disclosure Package or the Prospectus, the Company has not sustained any material loss or interference with its businesses, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding, (v) no stop order suspending the effectiveness of the Registration Statement or any amendment thereof has been issued and no proceedings therefor have been initiated or threatened by the Commission, (vi) there are no pro forma or as adjusted financial statements that are required to be included in the Registration Statement and the Prospectus pursuant to the Regulations which are not so included, and (vii) subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any Material Adverse Change or any development involving a prospective Material Adverse Change, whether or not arising from transactions in the ordinary course of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) At each of the Closing Date and any Option Closing Date, the Underwriter shall have received a certificate of the Company signed by a duly authorized executive officer of the Company, dated the Closing Date and Option Closing Date (if such date is other than the Closing Date), certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company's Board of Directors relating to the Offering are in full force and effect and have not been modified; (iii) the good standing of the Company; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) On the date of this Agreement and on the Closing Date, the Underwriter shall have received a "comfort" letter from Marcum as of each such date, addressed to the Underwriter and in form and substance satisfactory to the Underwriter and Underwriter's Counsel, confirming that they are independent certified public accountants with respect to the Company within the meaning of the Act and all applicable Regulations, and stating, as of such date (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five (5) days prior to such date), the conclusions and findings of such firm with respect to the financial information and other matters relating to the Registration Statement covered by such letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date or the Option Closing Date or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto), there shall not have been any change in the capital stock or long-term debt of the Company or any change or development involving a change, whether or not arising from transactions in the ordinary course of business, in the business, condition (financial or otherwise), results of operations, shareholders' equity, or properties of the Company, taken as a whole, including but not limited to the occurrence of any fire, flood, storm, explosion, accident, act of war or terrorism or other calamity, the effect of which, in any such case described above, is, in the reasonable judgment of the Underwriter, so material and adverse as to make it impracticable or inadvisable to proceed with the sale of Securities or Offering as contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Underwriter shall have received a lock-up agreement from each Lock-Up Party, duly executed by the applicable Lock-Up Party, in each case substantially in the form attached as <u>Annex II</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Shares are registered under the Exchange Act and, as of the Closing Date, the Shares shall be listed and admitted and authorized for trading on the NASDAQ Capital Market and satisfactory evidence of such action shall have been provided to the Underwriter. The Company shall have taken no action designed to terminate, or likely to have the effect of terminating, the registration of the Shares under the Exchange Act or delisting or suspending the Shares from trading on the NASDAQ Capital Market, nor will the Company have received any information suggesting that the Commission or the NASDAQ Capital Market is contemplating terminating such registration or listing. The Firm Shares and the Additional Shares shall be DTC eligible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) FINRA shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Securities; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Company shall have furnished the Underwriter and Underwriter' Counsel with such other certificates, opinions or documents as they may have reasonably requested.

**8.** <u>Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company agrees to indemnify and hold harmless the Underwriter and each Person, if any, who controls the Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever, as incurred (including but not limited to reasonable attorneys' fees and any and all reasonable expenses whatsoever, incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon: (i) an untrue statement or alleged untrue statement of a material fact contained in (A) the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Regulations, any Preliminary Prospectus, the General Disclosure Package, the Prospectus, or any amendment or supplement to any of them or (B) any Issuer Free Writing Prospectus or any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities ("**Marketing Materials**"), including any road show or investor presentations made to investors by the Company (whether in person or electronically), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and will reimburse such indemnified party for any legal or other expenses reasonably incurred by it in connection with investigations or defending against such losses, liabilities, claims, damages or expenses (or actions in respect thereof); or (ii) in whole or in part upon any inaccuracy in the representations and warranties of the Company contained herein; or (iii) in whole or in part upon any failure of the Company to perform its obligations hereunder; *provided, however*, that the Company shall not be liable in any such case to the extent that any such loss, liability, claim, damage or expense (or action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the General Disclosure Package, the Prospectus, or any such amendment or supplement to any of them, or any Issuer Free Writing Prospectus or any Marketing Materials in reliance upon and in conformity with the Underwriter's Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Underwriter agrees to indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company who shall have signed the Registration Statement, and each other Person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever, as incurred (including but not limited to reasonable attorneys' fees and any and all reasonable expenses whatsoever, incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Underwriter), insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Regulations, any Preliminary Prospectus, the General Disclosure Package, the Prospectus, any amendment or supplement to any of them or any Marketing Materials, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such indemnified party for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such losses, liabilities, claims, damages or expenses (or actions in respect thereof), in each case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense (or action in respect thereof) arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in the Underwriter's Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of any claim or the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing thereof (but the failure so to notify an indemnifying party shall not relieve the indemnifying party from any liability which it may have under this <u>Section 8</u> to the extent that it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability that such indemnifying party may have otherwise than on account of the indemnity agreement hereunder). In case any such claim or action is brought against any indemnified party, and it so notifies an indemnifying party thereof, the indemnifying party will be entitled to participate at its own expense in the defense of such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel satisfactory to such indemnified party; *provided however,* that counsel to the indemnifying party shall not (except with the written consent of the indemnified party) also be counsel to the indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless: (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action; (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of the claim or the commencement of the action; (iii) the indemnifying party does not diligently defend the action after assumption of the defense; or (iv) such indemnified party or parties shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party, or any of them, in conducting the defense of any such action or there may be legal defenses available to it or them which are different from or additional to those available to any of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties and shall be paid as incurred. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) of the indemnified party or parties unless such separate representations are required under applicable ethics rules that govern the representations of the indemnified party or parties by such legal counsel. In the case of any separate firm for the Underwriter and such control persons and affiliates of any Underwriter, such firm shall be designated in writing by the Underwriter. In the case of more than one separate firm (in addition to any local counsel) for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. No indemnifying party shall, without the prior written consent of the indemnified parties, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened claim, investigation, action or proceeding in respect of which indemnity or contribution may be or could have been sought by an indemnified party under this <u>Section 8</u> or <u>Section 9</u> hereof (whether or not the indemnified party is an actual or potential party thereto), unless (x) such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such claim, investigation, action or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or any failure to act, by or on behalf of the indemnified party, and (y) the indemnifying party confirms in writing its indemnification obligations hereunder with respect to such settlement, compromise or judgment.

**9.** <u>Contribution</u>. In order to provide for contribution in circumstances in which the indemnification provided for in <u>Section 8</u> is for any reason held to be unavailable from any indemnifying party or is insufficient to hold harmless a party indemnified thereunder, the Company and the Underwriter shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company, any contribution received by the Company from Persons, other than the Underwriter, who may also be liable for contribution, including Persons who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, officers of the Company who signed the Registration Statement and directors of the Company), as incurred, to which the Company and one or more of the Underwriter may be subject, in such proportions as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the Offering and sale of the Securities or, if such allocation is not permitted by applicable law, in such proportions as are appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Company and the Underwriter in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Underwriter shall be deemed to be in the same proportion as (x) the total proceeds from the Offering (net of underwriting discount and commission but before deducting expenses) received by the Company bears to (y) the underwriting discount and commissions received by the Underwriter, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company and the Underwriter shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriter and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriter agree that it would not be just and equitable if contribution pursuant to this <u>Section 9</u> were determined by *pro rata* allocation (even if the Underwriter were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this <u>Section 9</u>. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this <u>Section 9</u> shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any judicial, regulatory or other legal or governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this <u>Section 9</u>: (i) no Underwriter shall be required to contribute any amount in excess of the underwriting discounts applicable to the Securities underwritten by it and distributed to the public and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of Section 12(f) of the Act) shall be entitled to contribution from any Person who was not guilty of fraudulent misrepresentation (within the meaning of Section 12(f) of the Act). For purposes of this <u>Section 9</u>, each Person, if any, who controls an Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Underwriter, and each Person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to clauses (i) and (ii) of the immediately preceding sentence. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this <u>Section 9</u> or otherwise. As used herein, a "Person" refers to an individual or entity.

**10.** <u>Survival of Representations and Agreements</u>. All representations, warranties, covenants and agreements of the Company and the Underwriter contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, including, without limitation, the agreements contained in <u>Sections 6</u>, <u>14</u> and <u>15</u>, the indemnity agreements contained in <u>Section 8</u> and the contribution agreements contained in <u>Section 9</u>, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter or any controlling Person thereof or by or on behalf of the Company, any of its officers or directors or any controlling Person thereof, and shall survive delivery of and payment for the Securities to and by the Underwriter. The representations and warranties contained in <u>Section 2</u> and <u>Section 5</u> and the covenants and agreements contained in <u>Sections 4</u>, <u>6, 8</u>, <u>9</u>, <u>14</u> and <u>15</u> shall survive any termination of this Agreement, including termination pursuant to <u>Sections 11</u>. For the avoidance of doubt, in the event of termination the Underwriter will receive only out-of-pocket accountable expenses actually incurred subject to the limit in <u>Section 11(d)</u> below, in compliance with FINRA Rules 5110.

**11.** <u>Effective Date of Agreement; Termination</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall become effective upon the later of: (i) receipt by the Underwriter and the Company of notification of the effectiveness of the Registration Statement or (ii) the execution of this Agreement. Notwithstanding any termination of this Agreement, the provisions of this <u>Section 12</u> and of <u>Sections 1</u>, <u>4</u>, <u>6</u>, <u>8</u>, <u>9</u>, <u>14</u> and <u>15</u> shall remain in full force and effect at all times after the execution hereof to the extent they are in compliance with FINRA Rule 5110.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Underwriter shall have the right to terminate this Agreement at any time prior to the consummation of the Closing if: (i) any domestic or international event or act or occurrence has materially disrupted, or in the reasonable opinion of the Underwriter will in the immediate future materially disrupt, the market for the Company's securities or securities in general; or (ii) trading on the New York Stock Exchange or the NASDAQ Stock Market has been suspended or made subject to material limitations or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, on the NYSE Euronext or the NASDAQ Stock Market or by order of the Commission, FINRA or any other governmental authority having jurisdiction; or (iii) a banking moratorium has been declared by any state or federal authority or any material disruption in commercial banking or securities settlement or clearance services has occurred; or (iv) (A) there has occurred any outbreak or escalation of hostilities or acts of terrorism involving the United States or there is a declaration of a national emergency or war by the United States or (B) there has been any other calamity or crisis or any change in political, financial or economic conditions, if the effect of any such event in (A) or (B), in the reasonable judgment of the Underwriter, is so material and adverse that such event makes it impracticable or inadvisable to proceed with the offering, sale and delivery of the Firm Shares on the terms and in the manner contemplated by the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise stated in this section, the Agreement may not be terminated by the Company shall have the right to terminate this Agreement at any time prior to the consummation of the Closing prior to the completion of the Engagement Period, other than for "Cause." "Cause," for the purpose of this Agreement, shall mean, as determined by a court of competent jurisdiction, willful misconduct, gross negligence or a material breach of the Agreement by the Underwriter. In the event that the Company believes that the Underwriter has engaged conduct constituting Cause, it must first notify the Underwriter in writing of the facts and circumstances supporting such an assertion(s) and allow the Underwriter twenty five (25) days to cure such alleged conduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any notice of termination pursuant to this <u>Section 11</u> shall be in writing and delivered in accordance with <u>Section 12</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If this Agreement shall be terminated pursuant to any of the provisions hereof (other than pursuant to <u>Section 11(b)</u> hereof), or if the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriter set forth herein is not satisfied or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof, the Company will, subject to demand by the Underwriter, reimburse the Underwriter for only those documented out-of-pocket expenses (including the reasonable fees and expenses of their counsel), actually incurred by the Underwriter in connection herewith as allowed under FINRA Rule 5110(g)(4)(A) less any amounts previously paid by the Company); *provided, however,* that all such expenses, including the costs and expenses set forth in <u>Section 6(d)</u> which were actually paid, shall not exceed $250,000 in the aggregate, including any advances.

**12.** <u>Notices</u>. All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing, and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if sent to the Underwriter, shall be mailed, delivered, or emailed, to:

Revere Securities LLC

650 Fifth Avenue, 35<sup>th</sup> Floor

New York, New York

Attention: Dajiang Guo, Senior Managing Director

Email: dguo@reveresecurities.com

with a copy to Underwriter's Counsel at:

Sichenzia Ross Ference LLP

1185 Avenue of the Americas, 31st Floor

New York, New York 10036

Attention: David B. Manno, Esq.

Email: <u>dmanno@srf.com and</u>

Huan Lou, Esq.

Email: hlou@srf.law

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if sent to the Company, shall be mailed, delivered, or emailed, to the Company with a copy to its counsel, at the addresses set forth in the Registration Statement.

**13** <u>Parties; Limitation of Relationship</u>. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Underwriter, the Company and the controlling Persons, directors, officers, employees and agents referred to in <u>Sections 8</u> and <u>9</u> hereof, and their respective successors and assigns, and no other Person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and such Persons and their respective successors and assigns, and not for the benefit of any other Person. The term "successors and assigns" shall not include a purchaser, in its capacity as such, of Securities from the Underwriter.

**14.** <u>Governing Law</u>. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the conflict of laws principles thereof. Each of the parties hereto hereby submits to the exclusive jurisdiction of the federal and state courts in the Borough of Manhattan in The City of New York (each, a "New York Court") in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto irrevocably waives any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in the New York Courts, and irrevocably waives and agrees not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum. The Company irrevocably appoints Cogency Global Inc. , as its authorized agent (the "Authorized Agent") in the Borough of Manhattan in The City of New York, upon which process may be served in any such suit or proceeding, and agrees that service of process in any manner permitted by applicable law upon such agent shall be deemed in every respect effective service of process in any manner permitted by applicable law upon the Company in any such suit or proceeding. The Company further agrees to take any and all actions as may be necessary to maintain such designation and appointment of such agent in full force and effect for a period of three years from the date of this Agreement.

**15.** <u>Entire Agreement</u>. This Agreement, together with the schedules and annexes attached hereto and as the same may be amended from time to time in accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no other or further agreements outstanding not specifically mentioned herein. This Agreement supersedes any prior agreements or understandings among or between the parties hereto, including the engagement entered into between the parties on March 5, 2023.

**16.** <u>Severability</u>. If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforceable to the fullest extent permitted by law.

**17.** <u>Amendment</u>. This Agreement may only be amended by a written instrument executed by each of the parties hereto.

**18.** <u>Waiver, etc.</u> The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver may be sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

**19.** <u>No Fiduciary Relationship</u>. The Company hereby acknowledges that the Underwriter is acting solely as Underwriter in connection with the offering of the Company's Securities. The Company further acknowledges that the Underwriter is acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm's-length basis and in no event do the parties intend that the Underwriter act or be responsible as a fiduciary to the Company, its management, shareholders, creditors or any other person in connection with any activity that the Underwriter may undertake or have undertaken in furtherance of the offering of the Company's Securities, either before or after the date hereof. The Underwriter hereby expressly disclaims any fiduciary or similar obligations to the Company, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby confirms its understanding and agreement to that effect. The Company hereby further confirms its understanding that the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Company with respect to the Offering contemplated hereby or the process leading thereto, including, without limitation, any negotiation related to the pricing of the Securities; and the Company has consulted its own legal and financial advisors to the extent it has deemed appropriate in connection with this Agreement and the Offering. The Company and the Underwriter agree that they are each responsible for making their own independent judgments with respect to any such transactions, and that any opinions or views expressed by the Underwriter to the Company regarding such transactions, including but not limited to any opinions or views with respect to the price or market for the Company's securities, do not constitute advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriter with respect to any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.

**20.** <u>Counterparts</u>. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or other electronic transmission shall constitute valid and sufficient delivery thereof.

**21.** <u>Headings</u>. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

**22.** <u>Time is of the Essence</u>. Time shall be of the essence of this Agreement. As used herein, the term "Business Day" shall mean any day other than a Saturday, Sunday or any day on which any of the major U.S. stock exchanges are not open for business.

*[Signature Page Follows]*

If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

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| | | |
|:---|:---|:---|
| Very truly yours, | Very truly yours, | Very truly yours, |
| **NETCLASS TECHNOLOGY INC** | **NETCLASS TECHNOLOGY INC** | **NETCLASS TECHNOLOGY INC** |
| By: |  |  |
|  | Name: | Jianbiao Dai |
|  | Title: | Chief Executive Officer |

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Accepted by the Underwriter,

as of the date first written above:

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| | |
|:---|:---|
| **Revere Securities LLC**  | **Revere Securities LLC**  |
| By: |  |
|  | Name: |
|  | Title: |

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[Signature Page to Underwriting Agreement]

**SCHEDULE A**

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| | | |
|:---|:---|:---|
| Underwriters | Closing Securities | Closing Purchase Price |
| Revere Securities LLC |  |  |
| Total |  |  |

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**SCHEDULE B**

Lock-Up Parties

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| |
|:---|
| Jainbiao Dai |
| Yuxing Chen |
| Lina Chen |
| Dragonsoft Holding Limited |
| Lang Wide Investment Inc. |

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**SCHEDULE C**

Free Writing Prospectuses

<u>Annex II</u>

**Lock-Up Agreement**

[●]

Revere Securities LLC .

650 Fifth Avenue, 35<sup>th</sup> Floor

New York, New York 1022

Ladies and Gentlemen:

The undersigned understands that Revere Securities LLC (the "**Underwriter**") proposes to enter into an Underwriting Agreement (the "**Underwriting Agreement**") with NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company (the "**Company**"), providing for the initial public offering in the United States (the "**Initial Public Offering**") of a certain number of the Company's Class A Ordinary Shares, par value $0.00025 per share (the "**Securities**"). For purposes of this letter agreement, "Shares" shall mean shares of the Company's Class A Ordinary Shares.

To induce the Underwriter to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Underwriter, the undersigned will not, during the period commencing on the date hereof and ending one hundred and eighty (180) days after the date of the final prospectus (the "**Prospectus**") relating to the Initial Public Offering (the "**Lock-Up Period**"), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for or represent the right to receive Shares, whether now owned or hereafter acquired by the undersigned (collectively, the "**Lock-Up Securities**"); (2) enter into any swap or other agreement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) above or this clause (2) is to be settled by delivery of Shares or such other securities, in cash or otherwise; (3) make any written demand for or exercise any right with respect to the registration of any Shares or any security convertible into or exercisable or exchangeable for Shares; or (4) publicly disclose the intention to do any of the foregoing.

Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Underwriter in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of the Initial Public Offering; (b) transfers of Lock-Up Securities as a *bona fide* gift, by will or intestacy or to a family member or trust for the benefit of the undersigned and/or one or more family members (for purposes of this lock-up agreement, "family member" means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution or other not-for-profit organization; (d) if the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any such corporation, partnership, limited liability company or other business entity, or any shareholder, partner or member of, or owner of similar equity interests in, the same, as the case may be; (e) a sale or surrender to the Company of any options or Shares of the Company underlying options in order to pay the exercise price or taxes associated with the exercise of options or (f) transfers or distributions pursuant to any *bona fide* third-party tender offer, merger, acquisition, consolidation or other similar transaction made to all holders of the Company's Shares involving a Change of Control of the Company, provided that in the event that such tender offer, merger, acquisition, consolidation or other such transaction is not completed, the Lock-Up Securities held by the undersigned shall remain subject to the provisions of this lock-up agreement; <u>provided</u> that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Underwriter a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 16(a) of the U.S. Securities Exchange Act of 1934, as amended shall be required or shall be voluntarily made (collectively, "**Permitted Transfers**"). For purposes of this paragraph, the term "Change of Control" shall mean any transaction or series of related transactions pursuant to which any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Shares of the Company on a fully diluted basis. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the undersigned's Lock-Up Securities except in compliance with this lock-up agreement.

The undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement (for the avoidance of doubt, excluding any transaction or other action in connection with a Permitted Transfer) during the period from the date hereof to and including the [●] day following the expiration of the initial Lock-Up Period, the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period has expired.

The undersigned agrees that (i) the foregoing restrictions shall be equally applicable to any issuer-directed or "friends and family" Shares that the undersigned may purchase in the Initial Public Offering, (ii) at least three (3) business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Lock-Up Securities, the Underwriter will notify the Company of the impending release or waiver. Any release or waiver granted by the Underwriter hereunder to any such officer or director shall only be effective two (2) business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration or in connection with any other Permitted Transfer and (b) the transferee has agreed in writing to be bound by a lock-up agreement substantially in the form of this lock-up agreement.

No provision in this agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities exercisable or exchangeable for or convertible into Shares, as applicable; <u>provided</u> that the undersigned does not transfer the Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless in connection with a Permitted Transfer or in a transfer otherwise permitted pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or modification of a so-called "10b5-1" plan at any time (other than the entry into or modification of such a plan in such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period).

The undersigned understands that the Company and the Underwriter are relying upon this lock-up agreement in proceeding toward consummation of the Initial Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned's heirs, legal Underwriters, successors and assigns.

The undersigned understands that, (1) if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder; (2) either the Underwriter, on the one hand, or the Company, on the other hand, advising the other in writing, they have determined not to proceed with the Initial Public Offering (as defined in the Underwriting Agreement); (3) the withdrawal of the Registration Statement (as defined in the Underwriting Agreement), or (4) the Initial Public Offering has not closed by the termination date of the Initial Public Offering or such other date as may be agreed as the final date of the Initial Public Offering if the Company and the Underwriter extend the Initial Public Offering, then this lock-up agreement shall be void and of no further force or effect.

Whether or not the Initial Public Offering actually occurs depends on a number of factors, including market conditions. The Initial Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriter.

This lock-up agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to the conflict of laws principles thereof. Delivery of a signed copy of this lock-up agreement by facsimile or e-mail/.pdf transmission shall be effective as the delivery of the original hereof.

[**SIGNATURE PAGE TO FOLLOW**]

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| |
|:---|
| Very truly yours, |
| (Signature) |
| Address: |

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## Exhibit 3.1

**Exhibit 3.1**

**THE COMPANIES ACT (AS REVISED) OF THE CAYMAN ISLANDS**

**NETCLASS TECHNOLOGY INC**

Exempted Company Limited By Shares

**AMENDED AND RESTATED<br> MEMORANDUM OF ASSOCIATION**

(Adopted by a Special Resolution passed on 26 July 2022 and effective on 26 July 2022)

![](tm2224158d7_ex3-1img01.jpg)

**THE COMPANIES ACT (AS REVISED) <br> OF THE CAYMAN ISLANDS <br> AMENDED AND RESTATED**

**MEMORANDUM OF ASSOCIATION OF**

**NETCLASS TECHNOLOGY INC**

Exempted Company Limited By Shares

(Adopted by a Special Resolution passed on 26 July 2022 and effective on 26 July 2022)

---

| | |
|:---|:---|
| 1 | NAME |

---

The name of the Company is NETCLASS TECHNOLOGY INC.

---

| | |
|:---|:---|
| 2 | STATUS |

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The Company is an exempted company limited by shares.

3 REGISTERED OFFICE

The registered office of the Company is at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands or at such other place as the Directors may from time to time decide.

4 OBJECTS AND CAPACITY

Subject to paragraph 9 of this Memorandum, the objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act or any other law of the Cayman Islands. The Company is a body corporate capable of exercising all the functions of a natural person of full capacity, irrespective of any question of corporate benefit.

5 SHARE CAPITAL

The authorized share capital of the Company is USD50,000 divided into 200,000,000 shares comprising of (i) 190,000,000 Class A Ordinary Shares of par value USD0.00025 each and (ii) 10,000,000 Class B Ordinary Shares of par value USD0.00025 each, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorized share capital and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided.

![](tm2224158d7_ex3-1img01.jpg)

6 LIABILITY OF MEMBERS

The liability of each Member is limited to the amount from time to time unpaid on such Member's Shares.

7 CONTINUATION

The Company may exercise the powers contained in the Companies Act to transfer and be registered by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be de-registered in the Cayman Islands.

8 DEFINITIONS

Capitalised terms used and not defined in this Memorandum of Association shall bear the same meaning as those given in the Articles of Association of the Company.

9 EXEMPTED COMPANY

The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands.

10 FINANCIAL YEAR

The financial year end of the Company is 30 September or such other date as the Directors may from time to time decide and annex to this Memorandum.

![](tm2224158d7_ex3-1img01.jpg)

**THE COMPANIES ACT (AS REVISED) <br> OF THE CAYMAN ISLANDS**

**NETCLASS TECHNOLOGY INC**

Exempted Company Limited By Shares

**AMENDED AND RESTATED ARTICLES OF ASSOCIATION** 

(Adopted by a Special Resolution passed on 26 July 2022 and effective on 26 July 2022)

![](tm2224158d7_ex3-1img01.jpg)

**THE COMPANIES ACT (AS REVISED) <br> OF THE CAYMAN ISLANDS**

**AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF<br> NETCLASS TECHNOLOGY INC**

Exempted Company Limited By Shares

(Adopted by a Special Resolution passed on 26 July 2022 and effective on 26 July 2022)

1 DEFINITIONS AND INTERPRETATION

1.1 The
 Regulations contained in Table A in the First Schedule to the Companies Act do not apply
 to the Company. In these Articles of Association, if not inconsistent with the context, the
 following words and expressions shall have the following meanings:

***Articles*** means these articles of association of the Company, as amended or substituted from time to time;

***Companies Act*** means the Companies Act (As Revised) of the Cayman Islands, as amended or re- enacted from time to time;

Company means NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company;

***Class or Classes*** means any class or classes of Shares as may from time to time be issued by the Company;

***Class A Ordinary Share*** means a class A ordinary share of a par value of US$0.00025 in the share capital of the Company having the rights provided for in these Articles;

***Class B Ordinary Share*** means a class B ordinary share of a par value of US$0.00025 in the share capital of the Company having the rights provided for in these Articles;

***Designated Stock Exchanges*** means NASDAQ Capital Markets in the United States of America for so long as the Company's Shares are there listed and any other stock exchange on which the Company's Shares are listed for trading;

***Director*** means a director of the Company appointed in accordance with these Articles;

***Distribution*** means a distribution, dividend (including an interim dividend) or other payment or transfer of property of the Company on or in respect of a Share (save in respect of its redemption or repurchase);

***Electronic Transactions Act*** means the Electronic Transactions Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof;

***Member*** has the same meaning as in the Companies Act;

***Memorandum*** means the memorandum of association of the Company of the Company, as amended or substituted from time to time;

***Officer*** means any person appointed by the Directors to hold an office in the Company;

![](tm2224158d7_ex3-1img01.jpg)

***Ordinary Resolution*** means a resolution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) passed
 by a simple majority of the votes cast by such Members as, being entitled to do so, vote
 in person or, where proxies are allowed, by proxy or, in the case of corporations, by their
 duly authorized representatives, at a general meeting of the Company held in accordance with
 these Articles; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) approved
 in writing by all of the Members entitled to vote at a general meeting of the Company in
 one or more instruments each signed by one or more of the Members and the effective date
 of the resolution so adopted shall be the date on which the instrument, or the last of such
 instruments, if more than one, is executed.

***Ordinary Share*** means a Class A Ordinary Share or a Class B Ordinary Share;

***Register of Directors and Officers*** means the register of Directors and Officers maintained by the Company in accordance with these Articles;

***Register of Members*** means the register of Members maintained in accordance with the Companies Act;

***Registrar*** means the Registrar of Companies and includes the Deputy Registrar of Companies;

***Registered Office*** means the registered office for the time being of the Company;

***Seal*** means any seal which has been duly adopted as the common seal of the Company and includes every duplicate seal;

***Secretary*** means the person appointed to perform any or all of the duties of secretary of the Company, including any assistant secretary;

***Share*** means a share in the capital of the Company, including a fraction of a share issued or authorised to be issued by the Company;

***Special Resolution*** means a special resolution passed in accordance with Section 60 of the Companies Act, being a resolution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) passed
 by a majority of not less than two-thirds of the votes cast by such Members as, being entitled
 to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations,
 by their duly authorized representatives, at a general meeting of the Company of which notice
 specifying the intention to propose the resolution as a Special Resolution has been duly
 given; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) approved
 in writing by all of the Members entitled to vote at a general meeting of the Company in
 one or more instruments each signed by one or more of the Members and the effective date
 of the special resolution so adopted shall be the date on which the instrument or the last
 of such instruments, if more than one, is executed;

***Treasury Share*** means a Share that has been repurchased, redeemed, surrendered to or otherwise acquired by the Company and not cancelled; and

***Written*** includes information generated, sent, received or stored by electronic, electrical, digital, magnetic, optical, electromagnetic, biometric or photonic means, including electronic data interchange and electronic mail in accordance with the Electronic Transactions Act and in writing shall be construed accordingly.

1.2 In the Memorandum
 and these Articles, unless the context otherwise requires a reference to:

![](tm2224158d7_ex3-1img01.jpg)

(a) words importing
 the masculine gender include the feminine gender;

(b) any
 Cayman Islands law or regulation, is a reference to such law or regulation as amended or
 re-enacted from time to time;

(c) the singular
 includes the plural and vice versa;

(d) a person
 includes all legal persons and natural persons;

(e) legal
 persons include all forms of corporate entity and any other person having capacity to act

(f) any
 requirements as to execution or signature under the Articles, including the execution of
 the Articles themselves, can be satisfied in the form of an electronic signature as defined
 in the Electronic Transactions Act; and

(g) Sections
 8 and 19(3) of the Electronic Transactions Act shall not apply.

1.3 Headings
 are for ease of reference only and shall be disregarded in interpreting the Memorandum and
 the Articles.

---

| | |
|:---|:---|
| **2** | **COMMENCEMENT OF BUSINESS** |

---

2.1 **Commencement**.
 The business of the Company may be commenced at such time as determined by the Directors.

2.2 **Commencement Costs and Expenses**. The Directors may pay, out of capital or other money of the Company,
 all costs and expenses incurred in the establishment and registration of the Company.

---

| | |
|:---|:---|
| **3** | **REGISTERED SHARES** |

---

3.1 **Registered Shares**. The Company shall issue registered Shares only.

3.2 **No Bearer Shares**. The Company is not authorised to issue bearer Shares, convert registered
 Shares to bearer Shares or exchange registered Shares for bearer Shares.

---

| | |
|:---|:---|
| **4** | **SHARE CERTIFICATES** |

---

4.1 **Share Certificates**. Unless and until the Directors resolve to issue share certificates, no
 share certificate shall be issued, and the records of the shareholdings of each Member shall
 be in uncertified book entry form. If the Directors do resolve to issue share certificates
 in respect of any one or more classes of Shares, then every Member holding such Shares shall
 be entitled, upon written request only, to a certificate signed by a Director or Secretary,
 or any other person authorised by a resolution of the Directors, or under the Seal specifying
 the number of Shares held by him and the signature of the Director, Secretary or authorised
 person and the Seal may be facsimiles or affixed by electronic means pursuant to the Electronic
 Transactions Act.

4.2 **Indemnity and Replacement**. Any Member receiving a certificate shall indemnify and hold the Company
 and its Directors and Officers harmless from any loss or liability which it or they may incur
by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof. If a certificate
for Shares is worn out or lost it may be renewed or, in connection with any proposed share transfer, a new certificate may be issued,
on production of the worn out certificate or on satisfactory proof of its loss together with such indemnity as may be required by the
Directors.

![](tm2224158d7_ex3-1img01.jpg)

4.3 **Joint Holders**. If several Members are registered
 as joint holders of any Shares, any one of such Members may give an effectual receipt for any share certificate.

5 ISSUE OF SHARES

5.1 **Issue**.
 Subject to the provisions, if any, of the Memorandum and directions given by any Ordinary
 Resolution and the rights attaching to any class of existing Shares, the Directors may issue,
 allot, grant options over or otherwise dispose of Shares (including any fractions of Shares)
 and other securities of the Company at such times, to such persons, for such consideration
 and on such terms as the Directors may determine.

5.2 The
 Directors may authorize the division of Shares into any number of Classes and the different
 Classes shall be authorized, established and designated (or re-designated as the case may
 be) and the variations in the relative rights (including, without limitation, voting, dividend
 and redemption rights), restrictions, preferences, privileges and payment obligations as
 between the different Classes (if any) may be fixed and determined by the Directors or by
 an Ordinary Resolution. The Directors may issue Shares with such preferred or other rights,
 all or any of which may be greater than the rights of Ordinary Shares, at such time and on
 such terms as they may think appropriate. Notwithstanding Article 6.1, the Directors may
 issue from time to time, out of the authorised share capital of the Company (other than the
 authorised but unissued Ordinary Shares), series of preferred shares in their absolute discretion
 and without approval of the Members; provided, however, before any preferred shares of any
 such series are issued, the Directors shall by resolution of Directors determine, with respect
 to any series of preferred shares, the terms and rights of that series, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the
 designation of such series, the number of preferred shares to constitute such series and
 the subscription price thereof if different from the par value thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) whether
 the preferred shares of such series shall have voting rights, in addition to any voting rights
 provided by law, and, if so, the terms of such voting rights, which may be general or limited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 dividends, if any, payable on such series, whether any such dividends shall be cumulative,
 and, if so, from what dates, the conditions and dates upon which such dividends shall be
 payable, and the preference or relation which such dividends shall bear to the dividends
 payable on any shares of any other class or any other series of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) whether
 the preferred shares of such series shall be subject to redemption by the Company, and, if
 so, the times, prices and other conditions of such redemption;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) whether
 the preferred shares of such series shall have any rights to receive any part of the assets
 available for distribution amongst the Members upon the liquidation of the Company, and,
 if so, the terms of such liquidation preference, and the relation which such liquidation
 preference shall bear to the entitlements of the holders of shares of any other class or
 any other series of shares;

![](tm2224158d7_ex3-1img01.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) whether
 the preferred shares of such series shall be subject to the operation of a retirement or
 sinking fund and, if so, the extent to and manner in which any such retirement or sinking
 fund shall be applied to the purchase or redemption of the preferred shares of such series
 for retirement or other corporate purposes and the terms and provisions relative to the operation
 thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) whether
 the preferred shares of such series shall be convertible into, or exchangeable for, shares
 of any other class or any other series of preferred shares or any other securities and, if
 so, the price or prices or the rate or rates of conversion or exchange and the method, if
 any, of adjusting the same, and any other terms and conditions of conversion or exchange;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the
 limitations and restrictions, if any, to be effective while any preferred shares of such
 series are outstanding upon the payment of dividends or the making of other distributions
 on, and upon the purchase, redemption or other acquisition by the Company of, the existing
 shares or shares of any other class of shares or any other series of preferred shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon
 the issue of any additional shares, including additional shares of such series or of any
 other class of shares or any other series of preferred shares; and

---

| | |
|:---|:---|
| (j) | any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof; |
|  | and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued. The Company shall not issue Shares to bearer. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 Class
 A Ordinary Shares and Class B Ordinary Shares

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Holders
 of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as
 one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share
 shall entitle the holder thereof to one (1) vote on all matters subject to vote at general
 meetings of the Company, and each Class B ordinary share shall entitle the holder thereof
 to fifteen (15) votes on all matters subject to vote at general meetings of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each
 Class B Ordinary Share is convertible into one (1) Class A Ordinary Share at any time at
 the option of the holder thereof. The right to convert shall be exercisable by the holder
 of the Class B Ordinary Share delivering a written notice to the Company that such holder
 elects to convert a specified number of Class B Ordinary Shares into Class A Ordinary Shares.
 In no event shall Class A Ordinary Shares be convertible into Class B Ordinary Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any
 conversion of Class B Ordinary Shares into Class A Ordinary Shares pursuant to these Articles
 shall be effected by redeeming the relevant Class B Ordinary Shares and in consideration
 therefor issuing fully-paid Class A Ordinary Shares in equal number. Such conversion shall
 become effective forthwith upon entries being made in the Register of Members to record the
 conversion of the relevant Class B Ordinary Shares as Class A Ordinary Shares. The Directors
 shall at all times reserve and keep available out of the Company's authorised but unissued
 Class A Ordinary Shares, solely for the purpose of effecting the conversion of the Class
 B Ordinary Shares, such number of its Class A Ordinary Shares as shall from time to time
 be sufficient to effect the conversion of all outstanding Class B Ordinary Shares; and if
 at any time the number of authorised but unissued Class A Ordinary Shares shall not be sufficient
 to effect the conversion of all then outstanding Class B Ordinary Shares, in addition to
 such other remedies as shall be available to the holders of such Class B Ordinary Shares,
 the Directors will take such action as may be necessary to increase its authorised but
unissued Class A Ordinary Shares to such number of Shares as shall be sufficient for such purposes.

![](tm2224158d7_ex3-1img01.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each
 Class B Ordinary Share shall only be issued to Qualified Holders. Upon termination of being
 a Qualified Holder or upon any sale, transfer, assignment or disposition of any Class B Ordinary
 Share by a Qualified Holder to any person who is not a Qualified Holder or Qualified Holder
 Affiliate, such Class B Ordinary Share shall be automatically and immediately converted into
 one Class A Ordinary Share. For the avoidance of doubt, (i) a sale, transfer, assignment
 or disposition shall be effective upon the Company's registration of such sale, transfer,
 assignment or disposition in its Register of Members; and (ii) the creation of any pledge,
 charge, encumbrance or other third party right of whatever description on any Class B Ordinary
 Shares to secure a holder's contractual or legal obligations shall not be deemed as
 a sale, transfer, assignment or disposition unless and until any such pledge, charge, encumbrance
 or other third party right is enforced and results in the third party holding legal title
 to the relevant Class B Ordinary Shares, in which case all the related Class B Ordinary Shares
 shall be automatically converted into the same number of Class A Ordinary Shares. For purpose
 of this Article 5.4, beneficial ownership shall have the meaning set forth in Rule 13d-3
 under the United States Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Save
 and except for voting rights and conversion rights as set out in Articles 5.3 (a) to (d)
 (inclusive), the Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari
 passu with one another and shall have the same rights, preferences, privileges and restrictions.

5.4 **Consideration for Share Issue**. A Share may be issued for consideration in any form, including money,
 a promissory note or other written obligation to contribute money or property, real property,
 personal property (including goodwill and know-how), services rendered or a contract for
 future services.

5.5 **Register of Members**. The Register of Members kept by the Company shall contain:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the names
 and addresses of each Member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a statement
 of the Shares held by each Member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the distinguishing
 numbers of the Shares of each Member (if any);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the amount
 paid, or agreed to be considered as paid, on the Shares of each Member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the
 date on which the name of each person was entered on the register as a Member; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the date
 on which any person ceased to be a Member.

5.6 **Commission**.
 The Company is authorised to pay a commission to any person in consideration of his subscribing
 or agreeing to subscribe (whether absolutely or conditionally) for any Shares or procuring
 or agreeing to procure subscriptions (whether absolute or conditional) for any Shares.

---

| | |
|:---|:---|
| **6** | **VARIATION OF RIGHTS** |

---

6.1 **Class Variation.** If, at any time, the share capital of the Company is divided into different
 classes of Shares, the rights attached to any class (unless otherwise provided by the terms
 of issue of the Shares of that class) may be varied with the consent in writing of the holders
 of two-thirds of
the issued Shares of that class or with the sanction of a Special Resolution passed at a separate general meeting of the holders of the
Shares of the class. To every such separate general meeting the provisions of these Articles relating to general meetings shall, mutatis
mutandis, apply, but so that the necessary quorum shall be one or more persons holding or representing by proxy one-third of the issued
Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll.

![](tm2224158d7_ex3-1img01.jpg)

6.2 **No Variation on Further Issue.** The rights conferred upon the holders of the Shares of any
 class shall not, unless otherwise expressly provided by the terms of issue of the Shares
 of that class, be deemed to be varied by the creation or issue of further Shares ranking
 pari passu therewith.

---

| | |
|:---|:---|
| **7** | **REDEMPTION, PURCHASE AND SURRENDER OF SHARES AND TREASURY SHARES** |

---

7.1 **Redemption, Purchase and Surrender.** Subject to the provisions of the Companies Act and to the rights
 attaching to any class of Share, the Company may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) issue
 Shares on terms that they are to be redeemed or are liable to be redeemed at the option of
 the Company or the Member on such terms and in such manner as the Directors may, before the
 issue of such Shares, determine;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) purchase
 its own Shares (including any redeemable Shares) on such terms and in such manner as the
 Directors determine;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) make
 a payment in respect of the redemption or purchase of its own Shares in any manner permitted
 by the Companies Act including out of capital; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) permit the
 surrender of fully paid Shares for no consideration.

7.2 **Effect of Redemption, Purchase and Surrender.** Shares that the Company redeems, purchases, accepts
 by way of surrender or otherwise acquires pursuant to Article 7.1 may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) be cancelled;
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) be
 held as Treasury Shares on such terms and in such manner as the Directors determine prior
 to such acquisition.

7.3 **Treasury Shares.** All rights and obligations attaching to a Treasury Share are suspended and shall
 not be exercised by the Company while it holds the Share as a Treasury Share, other than
 as set out in this Article. The Company may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cancel
 the Treasury Shares on such terms and in such a manner as the Directors may determine; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) transfer
 the Treasury Shares in accordance with Article 12.

7.4 **No Participation.** Any Share in respect of which notice of redemption has been given shall
 not be entitled to participate in the profits of the Company in respect of the period after
 the date specified as the date of redemption in the notice of redemption.

7.5 **No other Redemption.** The redemption, purchase or surrender of any Share shall not be deemed
 to give rise to the redemption, purchase or surrender of any other Share.

7.6 **Redemption in Kind.** The Directors may, when making payments in respect of redemption or purchase
 of Shares, if authorised by the terms of issue of the Shares being redeemed or purchased or with the
agreement of the holder of such Shares, make such payments either in cash or in kind.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **8** | **LIEN** |

---

8.1 **All Monies Payable.** The Company shall have a first and paramount lien on every Share, whether
 or not it is a fully paid Share, for all moneys, whether presently payable or not, called
 or payable at a fixed time in respect of that Share and for all debts, liabilities or other
 obligations owed, whether presently or not, by the Member or by one or more joint Members
 or by any of their estates to the Company (together, the Lien Amounts) but the Directors
 may, at any time, declare any Share to be wholly or in part exempt from this Article. The
 Company's lien, if any, on a Share shall extend to all Distributions payable thereon.
 Any registration of the transfer of a Share shall operate to extinguish the Company's
 lien on that Share.

8.2 **Sale.** The Company may sell, in such manner as the Directors think fit, any Shares in which
 the Company has a lien, but no sale shall be made unless some amount in respect of which
 the lien exists is presently payable and the period of fourteen days has elapsed after the
 Company has given a notice in writing, stating and demanding payment of such part of the
 presently payable amount, to the relevant Member.

8.3 **Registration of Purchase.** The Directors may authorise any person to transfer the Shares sold in accordance
 with this Article to the purchaser of such Shares. The purchaser shall be registered as the
 holder of the Shares so transferred and he shall not be bound to see to the application of
 the purchase money, nor shall his title to the Shares be affected by any irregularity or
 invalidity in the sale of the Shares in accordance with this Article.

8.4 **Application of Proceeds.** The proceeds of the sale, net of any costs incurred by the Company in relation
 to the sale, shall be applied by the Company in payment of such part of the amount in respect
 of which the lien exists as is presently payable. The Company shall retain and have a lien
 over such part of the remainder of the proceeds as is equal to the Lien Amounts which exist
 but are not presently payable by the Member and may apply such proceeds against the Lien
 Amounts as and when they become payable and the residue shall be paid to the person entitled
 to the Shares at the date of the sale.

---

| | |
|:---|:---|
| **9** | **CALLS ON SHARES** |

---

9.1 **Calls.** The Directors may, from time to time, make calls upon the Members in respect of some
 or all of any moneys unpaid on their Shares, whether in respect of their par value or the
 premium payable on those Shares; each Member shall (subject to receiving at least 14 days'
 notice specifying the time or times of payment) pay to the Company at the time or times so
 specified the amount called on his Shares. A call may be required to be paid in instalments.
 The Directors may revoke or postpone a call at any time.

9.2 **Joint Holders.** The joint holders of a Share shall be jointly and severally liable to pay calls
 in respect thereof and the holder or joint holders of a Share at the time of a call shall
 remain liable to pay the call on that Share, notwithstanding any subsequent transfer of the
 Share being registered by the Company.

9.3 **Interest on Calls.** If a
 sum called in respect of a Share is not paid before or on the day appointed for payment of that call, the Member from whom such
 amount is due shall pay interest upon the sum at such rate as the Directors may determine from the day appointed for payment of the
 call to the time of the actual payment. The Directors shall have the discretion to waive payment of any such interest in full or in
 part.

![](tm2224158d7_ex3-1img01.jpg)

9.4 **Fixed Payment Dates.** The provisions contained in these Articles in respect of calls shall apply
 to payments, whether on account of the amount of the Share, or by way of premium, to be made
 on the allotment of a Share or any date fixed on the issue of the Share as if the same had
 become payable by virtue of a call duly made and notified.

---

| | |
|:---|:---|
| **10** | **FORFEITURE** |

---

10.1 **Failure to pay Call.** If a Member fails to pay any call or instalment of a call in respect of
 Shares on the day appointed for payment, the Directors may serve a notice on such Member
 naming a further date not earlier than the expiration of 14 days from the date of service
 on or before which the payment required by the notice is to be made and containing a statement
 that in the event of non-payment the Shares, or any of them, will be liable to be forfeited.

10.2 **Forfeiture.** If the requirements of the notice referenced in this Article are not complied with the
 Company may forfeit the Shares together with any Distributions declared payable in respect
 of the forfeited Shares and not paid at any time before tender of payment.

10.3 **No Refund.** The Company is under no obligation to refund any moneys to the Member whose Shares
 have been forfeited.

10.4 **Sale of Forfeited Share.** A forfeited Share may be sold or otherwise disposed of on such terms
 and in such manner as the Directors think fit, and at any time before a sale or disposition
 the forfeiture may be cancelled on such terms as the Directors think fit. The proceeds of
 any sale or disposition of the forfeited Share may be received and used by the Company as
 the Directors determine.

10.5 **Outstanding Liability.** A person whose Shares have been forfeited shall cease to be a Member in respect
 of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company
 all moneys which at the date of forfeiture were payable by him to the Company in respect
 of the Shares together with interest.

10.6 **Certificate of Forfeiture.** A certificate in writing under the hand of a Director or Officer stating
 that a Share has been duly forfeited on the date stated in the certificate shall be conclusive
 evidence of the facts stated in the certificate as against all persons claiming to be entitled
 to the Share. The Directors may authorize any person to transfer the Shares sold in accordance
 with this Article to the purchaser of such Shares. The purchaser shall be registered as the
 holder of the Shares so transferred and he shall not be bound to see to the application of
 the purchase money, nor shall his title to the Shares be affected by any irregularity or
 invalidity in the sale of the Shares in accordance with this Article.

10.7 **Fixed Payment Dates.** The provisions of this Article applying to forfeiture for failure to pay
 any call or instalment of a call shall apply to the failure to make payments, whether on
 account of the amount of the Share, or by way of premium, to be made on the allotment of
 a Share or any date fixed on the issue of the Share as if the same had become payable by
 virtue of a call duly made and notified.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **11** | **TRANSMISSION OF SHARES** |

---

11.1 **Legal Personal Representative.** The legal personal representative of a deceased sole holder
 of a Share shall be the only person recognised by the Company as having any title to the
 Share. In the case of a Share registered in the names of two or more holders, the survivors,
 survivor or the legal personal representatives of the deceased survivor, shall be the only
 person(s) recognised by the Company as having any title to the Share.

11.2 **Transmission.** Any person becoming entitled to a Share in consequence of the death or bankruptcy of
 or any analogous event affecting a Member (each such event a Transmission Event and each
 such person a Representative) shall, upon such evidence being produced as may from time to
 time be required by the Directors, have the right either to be registered as a Member in
 respect of the Share or, instead of being registered himself, to make such transfer of the
 Share as the Member could have made; but the Directors shall, in either case, have the same
 right to decline or suspend registration as they would have had in the case of a transfer
 of the Share by such Member before the occurrence of a Transmission Event.

11.3 **Pre-Registration Status.** Representatives shall be entitled to the same notices, dividends and other advantages
 to which he would be entitled if he were the registered holder of the Share, except that
 he shall not, before being registered as a Member in respect of the Share, be entitled in
 respect of it to exercise any right conferred by membership in relation to meetings of the
 Company.

11.4 **Requirement for Registration.** The Directors may at any time give notice requiring a Representative
 to elect either to be registered himself or to have some person nominated by him become the
 holder of the Share (but the Directors shall, in either case, have the same right to decline
 or suspend registration as they would have had in the case of a transfer of the Share by
 the relevant Member before the Transmission Event). If the notice is not complied with within
 ninety days the Directors may thereafter withhold payment of all Dividends, bonuses or other
 monies payable in respect of the Share until the requirements of the notice have been complied
 with.

---

| | |
|:---|:---|
| **12** | **TRANSFER OF SHARES** |

---

12.1 **Directors' Consent.** Shares and Treasury Shares are transferable, subject to the consent of the Directors
 who may, in their absolute discretion, refuse to consent to any transfer and decline to register
 the transfer without giving any reason.

12.2 **Instrument of Transfer.** The instrument of transfer shall be in writing in such form as may be acceptable
 to the Directors and shall be executed by or on behalf of the transferor and, if required
 by the Directors, signed by the transferee.

12.3 **Certificates.** Subject to Article 4.2, where the Company has issued a certificate in respect of a Share
 proposed to be transferred, the transferor shall lodge, with the instrument of transfer,
 the original certificate relating to the Share being transferred.

12.4 **Effective Date**. The transfer of a Share is effective when the name of the transferee is entered
 on the Register of Members. Until such time, the transferor shall be deemed to remain a Member.

12.5 **Lost Certificate**. If the Directors are satisfied that an instrument of transfer relating to
 Shares has been signed but that the instrument has been lost or destroyed, they may, on receipt
 of such indemnities as they may require:

![](tm2224158d7_ex3-1img01.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) accept such
 evidence of the transfer of Shares as they consider appropriate; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) proceed to
 register the transferee's name in the Register of Members.

12.6 **Notification of Refusal.** Where the Directors refuse to register a transfer of a Share, they shall,
 within two months after the date on which the transfer was lodged with the Company, notify
 the transferee of the refusal.

12.7 **Transfer of Treasury Shares.** The transfer of Treasury Shares may be for valuable consideration
 or otherwise, and at a discount to the par value of the Shares.

---

| | |
|:---|:---|
| **13** | **REGISTERED HOLDER DEEMED ABSOLUTE OWNER** |

---

13.1 The
 registered holder of a Share shall be treated as the absolute owner of such Share. No person
 shall be recognised by the Company as holding any Share upon trust and the Company shall
 not register nor be bound by or required to recognise any equitable or other interest of
 whatever nature in a Share other than an absolute right to the Share, irrespective of whether
 the Company has notice of such interest.

---

| | |
|:---|:---|
| **14** | **ALTERATION OF SHARE CAPITAL** |

---

14.1 Increase
 or Amendment. The Company may by Ordinary Resolution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increase
 the share capital by such sum, to be divided into Shares of such amount, and with such rights,
 privileges, priorities and restrictions attached to them as the resolution shall prescribe;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) consolidate
 and divide all or any of its share capital into Shares of larger amount than its existing
 Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) subject
 to section 13 of the Companies Act, sub-divide its existing Shares, or any of them, into
 Shares of smaller amounts than is fixed by the Memorandum; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) cancel
 any Shares which, at the date of the passing of the resolution, have not been taken or agreed
 to be taken by any person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 Reduction.
 Subject to the provisions of the Companies Act and these Articles, the Company may, by Special
 Resolution, reduce its share capital and any capital redemption reserve in any manner.

---

| | |
|:---|:---|
| **15** | **MEETINGS AND CONSENTS OF MEMBERS** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1 **Meetings**.
 All meetings of Members shall be referred to as extraordinary general meetings unless the
 general meeting is an annual general meeting. The Company may but shall not be obliged to
 hold an annual general meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2 **Directors Convene and Cancel.** The Directors may convene a general meeting at such time and in such
 manner and place within or outside the Cayman Islands as the Directors consider necessary
 or desirable and the Directors may cancel a general meeting with such notice, in such manner
 and for such reason as the Directors consider necessary.

![](tm2224158d7_ex3-1img01.jpg)

15.3 **Members Convene.** Upon the written request of Members entitled to exercise 10% or more of the
 voting rights in respect of the matter for which the meeting is requisitioned, any one or
 more of the Directors shall forthwith proceed to convene a meeting of Members. The written
 request of Members to requisition a meeting must state the objects of the meeting and must
 be signed by the Members requisitioning the meeting. The written request must be lodged at
 the Registered Office and may be delivered in counterpart.

15.4 **Failure to Convene.** If the Directors do not proceed to convene a meeting of Members within 21
 days of the written request to requisition a meeting being lodged the requisitionists, or
 any of them together holding at least half of the voting rights of all of them, may convene
 the meeting of Members in the same manner as nearly as possible as that in which a meeting
 of Members may be convened by a Director. Where the requisitionists fail to convene the meeting
 of Members within three months of their right to convene the meeting arising, the right to
 convene the meeting of Members shall lapse.

15.5 **Notice of Meeting.** The Director convening a meeting shall give not less than seven days'
 notice of a meeting of Members to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) those
 Members whose names on the date the notice is given appear as Members in the Register of
 Members and are entitled to vote at the meeting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) each of the
 Directors.

15.6 **Failure to Give General Notice.** A meeting of Members held in contravention of the requirement
 to give notice is valid if Members holding at least 90% of the total voting rights on all
 the matters to be considered at the meeting have waived notice of the meeting and, for this
 purpose, the presence of a Member at the meeting shall constitute waiver in relation to all
 the Shares which that Member holds.

15.7 **Failure to give Individual Notice.** The inadvertent failure of a Director who convenes a meeting
 to give notice of a meeting to a Member or another Director, or the fact that a Member or
 another Director has not received notice, does not invalidate the meeting.

15.8 **Voting.** No person shall be entitled to vote at any meeting of Members unless he is registered
 as a Member on the record date for such meeting and all calls or other moneys payable by
 him in respect of Shares have been paid at or before the record date. Subject to any rights
 and restrictions for the time being attached to any Shares and the provisions of this Article,
 each Member who is present in person or by proxy (or, if a corporation or other non-natural
 person, by its duly authorized representative or proxy), shall, at a general meeting of the
 Company, have one (1) vote and on a poll each Member shall have one vote for every Class
 A Ordinary Share and fifteen (15) votes for each Class B Ordinary Share of which he is the
 holder

---

| | |
|:---|:---|
| **16** | **PROXIES** |

---

16.1 **Proxies.** A Member may be represented at a meeting of Members by a proxy who may speak and vote
 on behalf of the Member.

16.2 **Production of Proxies.** The instrument appointing a proxy shall be produced at the place designated
 for the meeting before the time for holding the meeting at which the person named in such
 instrument proposes to vote. The notice of the meeting may specify an alternative or additional
 place or time at which the proxy shall be presented.

![](tm2224158d7_ex3-1img01.jpg)

16.3 **Form of Proxy.** An instrument appointing a proxy may be in any usual or common form (or such
 other form as the Directors may approve) and may be expressed to be for a particular meeting
 or any adjournment thereof or may appoint a standing proxy until notice of revocation is
 received at the Registered Office or at such place or places as the Directors may otherwise
 specify for the purpose.

16.4 **Joint Ownership and Proxies.** Where Shares are jointly owned:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if
 two or more persons hold Shares jointly, each of them may be present in person or by proxy
 at a meeting of Members and may speak as a Member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if
 only one of the joint owners is present in person or by proxy he may vote on behalf of all
 joint owners; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if two or
 more of the joint owners are present in person or by proxy they must vote as one.

---

| | |
|:---|:---|
| **17** | **PROCEEDINGS OF SHAREHOLDER MEETINGS** |

---

17.1 **Chairman of Member Meeting.** At every meeting of Members, the chairman of the board of Directors
 shall preside as chairman of the meeting. If there is no chairman of the board of Directors
 or if he is not present at the meeting within fifteen minutes of the time appointed after
 the meeting or if he is unwilling to act the Directors present shall elect the chairman of
 the meeting.

17.2 **Adjournment.** The chairman may, with the consent of the meeting, adjourn any meeting from time to time,
 and from place to place, but no business shall be transacted at any adjourned meeting other
 than the business left unfinished at the meeting from which the adjournment took place.

17.3 **Conference Call.** A Member, or his duly authorised representative or proxy, shall be deemed to be
 present at a meeting of Members if he participates by telephone or other electronic means
 by means of which all the persons participating in the meeting are able to hear each other.

17.4 **Objections.** No objection shall be raised to the qualification of any voter except at the meeting
 of members or adjourned meeting of Members at which the vote objected to is given or tendered
 and every vote not disallowed at the meeting shall be valid. Any objection made in due time
 shall be referred to the chairman whose decision shall be final and binding on all parties.

17.5 **Casting of Votes.** A Member holding more than one Share need not cast the votes in respect of
 the Shares held by him in the same way on any resolution for which a poll is taken. A person
 appointed as the authorised representative or proxy of a Member may cast the votes in respect
 of the Shares for which he is appointed in a like manner.

17.6 **Quorum.** Save as provided in the following Article, no business shall be transacted at any general
 meeting unless a quorum is present at the time when the meeting proceeds to business and
 unless such business has been specified in the notice of the general meeting in accordance
 with these Articles. Save as otherwise provided by these Articles, one or more holder(s)
 of Shares which carry in aggregate not less than one-third of all votes attaching to all
 Shares in issue and entitled to vote at such general meeting, present in person or by proxy
 or, if a corporate or other non-natural person, by its duly authorized representative, shall
 constitute a quorum; unless the Company has only one Member entitled to vote at such general
 meeting in which case the quorum
shall be that one Member present in person or by proxy or (in the case of a corporation or other non-natural person) by a duly authorized
representative or proxy.

![](tm2224158d7_ex3-1img01.jpg)

17.7 **No Quorum.** If within two hours from the time appointed for the meeting a quorum is not present,
 the meeting, if convened upon the requisition of Members, shall be dissolved; in any other
 case it shall stand adjourned to the next business day in the jurisdiction in which the meeting
 was to have been held at the same time and place or to such other time and place as the Directors
 may determine, and if at the adjourned meeting a quorum is not present within half an hour
 from the time appointed for the meeting the Members present shall be a quorum.

17.8 **Polls.** At any meeting of the Members the chairman is responsible for deciding in such manner
 as he considers appropriate whether any resolution proposed has been carried or not and the
 result of his decision shall be announced to the meeting and recorded in the minutes of the
 meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution,
 he shall cause a poll to be taken of all votes cast upon such resolution. If the chairman
 fails to take a poll then any Member present in person or by proxy who disputes the announcement
 by the chairman of the result of any vote may immediately following such announcement demand
 that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken
 at any meeting, the result shall be announced to the meeting and recorded in the minutes
 of the meeting. The minutes of the meeting shall be conclusive evidence of the fact that
 a resolution was carried or not without proof of the number or proportion of the votes recorded
 in favour of or against such resolution.

17.9 **Director Participation.** Directors may attend and speak at any meeting of Members and at any separate
 meeting of the holders of any class or series of Shares.

17.10 **Unanimous Written Resolutions.** Any Ordinary or Special Resolution of Members and any other action
 that may be taken by the Members at a meeting may also be taken by a resolution consented
 to in writing, without the need for any notice, by all Members who would have been entitled
 to attend and vote at a meeting called for the purpose of passing such a resolution or taking
 any other action. The consent may be in the form of counterparts, each counterpart being
 signed by one or more Members. If the consent is in one or more counterparts, and the counterparts
 bear different dates, then the resolution shall take effect on the latest date borne by the
 counterparts.

---

| | |
|:---|:---|
| **18** | **APPOINTMENT AND REMOVAL OF DIRECTORS** |

---

18.1 **Number of Directors.** The Company shall have a board of Directors consisting of not less than
 one Director. The Company may by Ordinary Resolution or by a resolution of the Directors
 impose a maximum or minimum number of Directors required to hold office at any time and vary
 such limits from time to time.

18.2 **Appointment of Directors**. Subject to the limits set out in the preceding Article, Directors shall
 be appointed by Ordinary Resolution or by a resolution of the Directors and may be removed
 by Ordinary Resolution.

18.3 **Term**.
 Each Director holds office for the term, if any, fixed by the terms of his appointment or
 until his earlier death, bankruptcy, insanity, resignation or removal. If no term is fixed
 on the appointment of a Director, the Director serves indefinitely until his earlier death,
 bankruptcy, insanity, resignation or removal.

18.4 **Vacation**.
 The office of a Director shall be vacated if:

![](tm2224158d7_ex3-1img01.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) he gives
 notice in writing to the Company that he resigns the office of Director; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) he
 absents himself (without being represented by an alternate Director appointed by him) from
 three consecutive meetings of the board of Directors without special leave of absence from
 the Directors, and they pass a resolution that he has by reason of such absence vacated office;
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) he
 dies, becomes bankrupt or makes any arrangement or composition with his creditors generally;
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) he is found
 to be or becomes of unsound mind; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) all
 the other Directors (being not less than two in number) resolve that he should be removed
 as a Director.

---

| | |
|:---|:---|
| **19** | **REGISTER OF DIRECTORS AND OFFICERS** |

---

19.1 **Details.** The Register of Directors and Officers shall contain:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the names
 and addresses of the persons who are Directors and Officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 date on which each person whose name is entered in the register was appointed as a Director
 or Officer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the
 date on which each person named as a Director or Officer ceased to be a Director or Officer.

---

| | |
|:---|:---|
| **20** | **POWERS OF DIRECTORS** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1 **Management by Directors.** Subject to the provisions of the Companies Act, the Memorandum, these Articles
 and any directions given by Ordinary Resolution, the business and affairs of the Company
 shall be managed by, or under the direction or supervision of, the Directors. The Directors
 shall have all the powers necessary for managing, and for directing and supervising, the
 business and affairs of the Company as are not by the Companies Act, the Memorandum, these
 Articles or the terms of any Special Resolution required to be exercised by the Members.
 No alteration of the Memorandum or these Articles or any direction given by Ordinary or Special
 Resolution shall invalidate any prior act of the Directors that was valid at the time undertaken.
 A duly convened meeting of Directors at which a quorum is present may exercise all powers
 exercisable by the Directors.

20.2 **Good Faith**. Each Director shall exercise his powers for a proper purpose. Each Director, in
 exercising his powers or performing his duties, shall act honestly and in good faith in what
 the Director believes to be the best interests of the Company.

20.3 **Acting in Vacancy.** The continuing Directors may act notwithstanding any vacancy in their body,
 but if and for so long as their number is below any minimum number of Directors fixed by
 or pursuant to these Articles, the continuing Directors may act for the purpose of passing
 a resolution to appoint further Directors to the board of Directors and of convening a meeting
 of Members to appoint further Directors but for no other purpose.

20.4 **Indebtedness and Security.** The Directors may exercise all the powers of the Company to incur indebtedness,
 liabilities or obligations and to issue debentures, debenture stock, mortgages, bonds and
 other such securities and to secure indebtedness, liabilities or obligations whether of the
 Company or of any third party.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **21** | **PROCEEDINGS OF DIRECTORS** |

---

21.1 **Quorum.** The quorum for the transaction of the business of the Directors may be fixed by the Directors,
 and unless so fixed shall be two if there are two or more Directors, and shall be one if
 there is only one Director. A person who holds office as an alternate Director shall be counted
 in the quorum. A Director who also acts as an alternate Director shall count twice towards
 the quorum.

21.2 **Voting**.
 Subject to the provisions of these Articles, the Directors may regulate their proceedings
 as they think fit. Questions arising at any meeting shall be decided by a majority of votes.
 In the case of an equality of votes, the chairman shall not have a second or casting vote.
 A Director who is also an alternate Director shall be entitled to a separate vote on behalf
 of his appointor in addition to his own vote.

21.3 **Conference Call.** A person may participate and vote in a meeting of the Directors or committee of
 Directors by telephone or other electronic means by means of which all the persons participating
 in the meeting are able to hear each other. Unless otherwise determined by the Directors
 the meeting shall be deemed to be held at the place where the chairman is at the start of
 the meeting.

21.4 **Unanimous Written Resolution.** A resolution in writing (in one or more counterparts) signed by all
 the Directors or all the members of a committee of Directors (an alternate Director being
 entitled to sign any such resolution on behalf of his appointor) shall be as valid and effectual
 as if it had been passed at a meeting of the Directors, or committee of Directors as the
 case may be, duly convened and held.

21.5 **Notice of Meetings.** A Director may, or other Officer on the requisition of a Director shall,
 call a meeting of the Directors by at least two days' notice in writing to every Director
 which notice shall set forth the general nature of the business to be considered unless notice
 is waived by all the Directors either at, before or after the meeting is held.

21.6 **Chairman of the Board.** The Directors may elect a chairman of their board and determine the period
 for which he is to hold office; but if no such chairman is elected, or if at any meeting
 the chairman is not present within five minutes after the time appointed for holding the
 same, the Directors present may choose one of their number to be chairman of the meeting.

21.7 **Defects.** Absent fraud, all acts done by any meeting of the Directors or a committee of Directors
 shall, notwithstanding that it be afterwards discovered that there was some defect in the
 appointment of any Director or alternate Director, or that they or any of them were disqualified,
 be as valid as if every such person had been duly appointed and qualified to be a Director
 or alternate Director as the case may be.

---

| | |
|:---|:---|
| **22** | **PRESUMPTION OF ASSENT** |

---

22.1 A
 Director who is present at a meeting of the board of Directors at which action on any Company
 matter is taken shall be presumed to have assented to the action taken unless his dissent
 shall be entered in the minutes of the meeting or unless he shall file his written dissent
 from such action with the person acting as the chairman or secretary of the meeting before
 the adjournment thereof. Such
right to dissent shall not apply to a Director who voted in favour of such action.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **23** | **DIRECTORS' INTERESTS** |

---

23.1 **Other Office.** A Director may hold any other office or place of profit under the Company (other
 than the office of auditor) in conjunction with his office of Director for such period and
 on such terms as to remuneration and otherwise as the Directors may determine. A Director
 may act by himself or his firm in a professional capacity for the Company and he or his firm
 shall be entitled to remuneration for professional services as if he were not a Director
 or alternate Director.

23.2 **No Exclusivity**. A Director or alternate Director may be or become a director or other officer
 of or otherwise interested in any company promoted by the Company or in which the Company
 may be interested as shareholder or otherwise, and no such Director or alternate Director
 shall be accountable to the Company for any remuneration or other benefits received by him
 as a director or officer of, or from his interest in, such other company.

23.3 **Disclosure of Interests.** No person shall be disqualified from the office of Director or alternate
 Director or prevented by such office from contracting with the Company, either as vendor,
 purchaser or otherwise, nor shall any such contract or any other contract or transaction
 entered into by or on behalf of the Company in which any Director or alternate Director shall
 be in any way interested be or be liable to be avoided, nor shall any Director or alternate
 Director so contracting or being so interested be liable to account to the Company for any
 profit realised by any such contract or transaction by reason of such Director holding office
 or of the fiduciary relation thereby established. A Director (or his alternate Director in
 his absence) shall be at liberty to vote in respect of any contract or transaction in which
 he is interested provided that the nature of the interest of any Director or alternate Director
 in any such contract or transaction shall be disclosed by him at or prior to its consideration
 and any vote thereon.

23.4 **General Notice of Interests.** A general notice that a Director or alternate Director is a shareholder,
 director, officer or employee of any specified firm or company and is to be regarded as interested
 in any transaction with such firm or company shall be sufficient disclosure for the purposes
 of voting on a resolution in respect of a contract or transaction in which he has an interest,
 and after such general notice it shall not be necessary to give special notice relating to
 any particular transaction.

---

| | |
|:---|:---|
| **24** | **MINUTES** |

---

24.1 The
 Directors shall cause minutes to be made in books kept for the purpose of all appointments
 of officers made by the Directors, all proceedings at meetings of the Company or the holders
 of any class of Shares and of the Directors, and of committees of Directors including the
 names of the Directors or alternate Directors present at each meeting.

---

| | |
|:---|:---|
| **25** | **DELEGATION OF DIRECTORS' POWERS** |

---

25.1 **Delegation.** The Directors may delegate any of their powers to any committee consisting of one or
 more Directors. They may also delegate to any managing director or any Director holding any
 other executive office such of their powers as they consider desirable to be exercised by
 him provided that an alternate Director may not act as managing director and the appointment
 of a managing
director shall automatically terminate if he ceases to be a Director. Any such delegation may be made subject to any conditions the Directors
may impose and may be revoked or altered. Subject to any such conditions, the proceedings of a committee of Directors shall be governed
by the Articles regulating the proceedings of Directors, so far as they are capable of applying.

![](tm2224158d7_ex3-1img01.jpg)

25.2 **Committees.** The Directors may establish any committees, local boards or agencies or appoint any person
 to be a manager or agent for managing the affairs of the Company and may appoint any person
 to be a member of such committees or local boards. Any such appointment may be made subject
 to any conditions the Directors may impose, and may be revoked or altered. Subject to any
 such conditions, the proceedings of any such committee, local board or agency shall be governed
 by the Articles regulating the proceedings of Directors, so far as they are capable of applying.

25.3 **Third Party Delegation.** The Directors may by power of attorney or otherwise appoint any company,
 firm, person or body of persons, whether nominated directly or indirectly by the Directors,
 to be the attorney or authorised signatory of the Company for such purpose and with such
 powers, authorities and discretions (not exceeding those vested in or exercisable by the
 Directors under these Articles) and for such period and subject to such conditions as they
 may think fit, and any such powers of attorney or other appointment may contain such provisions
 for the protection and convenience of persons dealing with any such attorneys or authorised
 signatories as the Directors may think fit and may also authorise any such attorney or authorised
 signatory to delegate all or any of the powers, authorities and discretions vested in him.

25.4 **Officers.** The Directors may appoint such Officers as they consider necessary on such terms, at
 such remuneration and to perform such duties, and subject to such provisions as to disqualification
 and removal as the Directors may think fit. Unless otherwise specified in the terms of his
 appointment an officer may be removed by the Directors.

---

| | |
|:---|:---|
| **26** | **ALTERNATE DIRECTORS** |

---

26.1 **Alternate Appointment.** Any Director (other than an alternate Director) may by writing in notice
 to the Company appoint any other Director, or any other person willing to act, to be an alternate
 Director.

26.2 **Conduct of Alternates.** An alternate Director shall be entitled to receive notice of all meetings
 of Directors and of all meetings of committees of Directors of which his appointor is a member,
 to attend and vote at every such meeting at which the Director appointing him is not personally
 present, and, save as expressly provided herein, to perform all the functions and exercise
 all of the powers of his appointor as a Director in his absence.

26.3 **Automatic termination.** An alternate Director shall cease to be an alternate Director if his appointor
 ceases to be a Director.

26.4 **No Agency.** An alternate Director shall be deemed for all purposes to be a Director and shall
 alone be responsible for his own acts and defaults and shall not be deemed to be the agent
 of the Director appointing him.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **27** | **NO MINIMUM SHAREHOLDING** |

---

27.1 The
 Company in general meeting may fix a minimum shareholding required to be held by a Director,
 but unless and until such a shareholding qualification is fixed a Director is not required
 to hold Shares.

---

| | |
|:---|:---|
| **28** | **REMUNERATION OF DIRECTORS** |

---

28.1 **Office Remuneration.** The remuneration to be paid to the Directors, if any, shall be such remuneration
 as the Directors shall determine. The Directors shall also be entitled to be paid all travelling,
 hotel and other expenses properly incurred by them in connection with their attendance at
 meetings of Directors or committees of Directors, or general meetings of the Company, or
 separate meetings of the holders of any class of Shares or debentures of the Company, or
 otherwise in connection with the business of the Company, or to receive a fixed allowance
 in respect thereof as may be determined by the Directors, or a combination of such methods.

28.2 **Additional Remuneration.** The Directors may by resolution approve additional remuneration to any
 Director for any services other than his ordinary routine work as a Director. Any fees paid
 to a Director who is also counsel or solicitor to the Company, or otherwise serves it in
 a professional capacity shall be in addition to his remuneration as a Director.

28.3 **Pensions.** The Directors, on behalf of the Company, may pay a gratuity or pension or allowance on
 retirement to any Director who has held any other salaried office or place of profit with
 the Company or to his widow or dependants and may make contributions to any fund and pay
 premiums for the purchase or provision of any such gratuity, pension or allowance.

---

| | |
|:---|:---|
| **29** | **INDEMNIFICATION** |

---

29.1 **Indemnity and Exclusion of Liability.** Every Director, alternate Director or Officer shall be indemnified
 out of the assets of the Company against any liability incurred by him as a result of any
 act or failure to act in carrying out his functions other than such liability (if any) that
 he may incur by his own actual fraud or wilful default. No such Director, alternate Director
 or Officer shall be liable to the Company for any loss or damage in carrying out his functions
 unless that liability arises through the actual fraud or wilful default of such Director
 or officer. References in this Article to actual fraud or wilful default mean a finding to
 such effect by a competent court in relation to the conduct of the relevant party.

29.2 **Advancement of Expenses**. Expenses, including legal fees, incurred by a Director, alternate Director
 or Officer, or former Director, alternate Director or Officer in defending any legal, administrative
 or investigative proceedings may be paid by the Company in advance of the final disposition
 of such proceedings upon receipt of an undertaking by such party to repay the amount if it
 shall ultimately be determined that such Director, alternate Director or Officer is not entitled
 to be indemnified by the Company and upon such terms and conditions, if any, as the Company
 deems appropriate.

29.3 **Insurance.** The Company may purchase and maintain insurance in relation to any person who is or was
 a Director, alternate Director, Officer or liquidator of the Company, or who at the request
 of the Company is or was serving as a Director, alternate director, Officer or liquidator
 of, or in any other capacity is or was acting for, another body corporate or a partnership,
 joint venture, trust or other enterprise, against any liability asserted against the person
 and incurred by the person in that capacity.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **30** | **RECORDS** |

---

30.1 **Registered Office Records.** The Company shall keep the following documents at the Registered Office:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Certificate
 of Incorporation and any Certificate on Change of Name;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a copy of
 the Memorandum and Articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Register
 of Directors and Officers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to
 the extent the Company has created a security interest over any of its assets the Register
 of Mortgages and Charges required to be maintained by the Company under Section 54 of the
 Companies Act.

30.2 **Other Corporate Records.** The Company shall keep the following records at the Registered Office
 or at such other place or places, within or outside the Cayman Islands, as the Directors
 may determine:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) minutes
 of meetings, Ordinary Resolutions and Special Resolutions of Members and classes of Members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Register
 of Members; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) minutes of
 meetings and Resolutions of Directors and committees of Directors.

30.3 **Electronic Form.** All of the registers and records kept by the Company under these Articles shall
 be in written form or either wholly or partly as electronic records complying with the requirements
 of the Electronic Transactions Act.

---

| | |
|:---|:---|
| **31** | **SEAL** |

---

31.1 **Use of Seal.** The Company may, if the Directors so determine, have a Seal. The Seal shall
 only be used by the authority of the Directors or of a committee of the Directors authorised
 by the Directors. Every instrument to which the Seal has been affixed shall be signed by
 at least one person who shall be either a Director or an Officer or other person appointed
 by the Directors for the purpose.

31.2 **Duplicate Seal.** The Company may have for use in any place or places outside the Cayman Islands
 a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company
 and, if the Directors so determine, with the addition on its face of the name of every place
 where it is to be used.

31.3 **Authentication and Filing.** A Director or Officer, representative or attorney of the Company may without
 further authority of the Directors affix the Seal over his signature alone to any document
 required to be authenticated by him under seal or to be filed with the Registrar of Companies
 in the Cayman Islands or elsewhere wheresoever.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **32** | **DISTRIBUTIONS** |

---

32.1 **Payment of Distributions.** Subject to the Companies Act and this Article, the Directors may declare
 and pay out of the funds of the Company lawfully available for such purpose a Distribution
 at a time and of an amount they think fit. No Distribution shall be paid except out of the
 realised and unrealised profits of the Company, and/or out of the share premium account and/
 or as otherwise permitted by the Companies Act.

32.2 **Ranking.** Except as otherwise provided by the rights attached to Shares, all Distributions shall
 be declared and paid according to the par value of the Shares that a Member holds. The Company
 may pay Distributions in proportion to the amount paid upon each Share where a larger amount
 is paid up on some Shares than on others. If any Share is issued on terms providing that
 it shall rank for Distributions as from a particular date, that Share shall rank for Distributions
 accordingly.

32.3 **Deductions.** The Directors may deduct from any Distribution payable to any Member all sums of money,
 if any, then payable by him to the Company on account of calls or otherwise.

32.4 **Distribution in Kind.** The Directors may declare that any Distribution be paid wholly or partly by
 the distribution of specific assets and in particular of shares, debentures, or securities
 of any other company or in any one or more of such ways and the Directors may settle the
 same as they think expedient and in particular may issue fractional Shares and fix the value
 for distribution of such specific assets or any part thereof and may determine that cash
 payments shall be made to any Members upon the basis of the value so fixed in order to adjust
 the rights of all Members and may vest any such specific assets in trustees as may seem expedient
 to the Directors.

32.5 **Payment.** Any Distribution payable in cash in respect of Shares may be paid by electronic funds
 transfer to the holder or by cheque or warrant sent through the post directed to the registered
 address of the holder or, in the case of joint holders, to the registered address of the
 holder who is first named on the Register of Members or to such person and to such address
 as such holder or joint holders may in writing direct. Every such cheque or warrant shall
 be made payable to the order of the person to whom it is sent. Any one of two or more joint
 holders may give effectual receipts for any Distributions payable in respect of the Shares
 held by them as joint holders.

32.6 **No Interest**. No Distribution shall bear interest as against the Company and no distribution
 shall be paid on Treasury Shares.

32.7 **Unclaimed Payments.** Any Distribution which cannot be paid to a Member and/or which remains unclaimed
 after six months from the date of declaration of such Distribution may, in the discretion
 of the Directors, be paid into a separate account in the Company's name, provided that the
 Company shall not be constituted as a trustee in respect of that account and the Distribution
 shall remain as a debt due to the Member. Any Distribution which remains unclaimed after
 a period of six years from the date of declaration of such Distribution shall be forfeited
 and shall revert to the Company.

---

| | |
|:---|:---|
| **33** | **CAPITALISATIONS** |

---

33.1 **Capitalisations.** The Directors may capitalise any sum standing to the credit of any of the Company's reserve
 accounts (including share premium account and capital redemption reserve) or to the credit
 of profit and loss account or otherwise available for distribution and appropriate such sum
 to Members in the proportions in which such sum would have been divisible amongst them had
 the same been a Distribution of profits by way of dividend and apply such sum on their behalf
 in paying up in full unissued Shares for issue, allotment and distribution credited as fully
 paid-up to and amongst them in the proportions aforesaid. In such event the Directors may
 make such provisions as they think fit in the case of Shares becoming distributable in fractions.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **34** | **RECORD DATE** |

---

34.1 **Record Date Determination.** For the purpose of determining Members entitled to attend meetings,
 receive payment of any Distribution or capitalisation or for any other purpose, the Directors
 may provide that the Register of Members shall be closed for transfers for a stated period
 which shall not in any case exceed forty days. In lieu of, or apart from, closing the Register
 of Members, the Directors may fix in advance or arrears a date as the record date for any
 such determination of Members provided that the record date for a meeting may not be earlier
 than the date of notice of such meeting.

34.2 **No Record Date Chosen.** If the Register of Members is not so closed and no record date is
 fixed for the determination of Members entitled to attend meetings, receive payment of a
 Distribution or capitalisation, the date on which the notice of the meeting is given or resolution
 of the Directors declaring such Distribution or capitalisation is adopted, as the case may
 be, shall be the record date for such determination of Members.

---

| | |
|:---|:---|
| **35** | **REPRESENTATION** |

---

35.1 **Representation of Legal Persons.** The right of any individual to speak for or represent a Member or a
 Director being a legal person shall be determined by the law of the jurisdiction where, and
 by the documents by which, such legal person is constituted or derives its existence but
 save where an objection has been raised by a Member or a Director, the Directors shall not
 be obliged to verify the rights of individuals purporting to speak for or represent legal
 persons. In case of doubt, the Directors may in good faith seek legal advice from any qualified
 person and unless and until a court of competent jurisdiction shall otherwise rule, the Directors
 may rely and act upon such advice without incurring any liability to any Member or the Company.

---

| | |
|:---|:---|
| **36** | **ACCOUNTS** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36.1 **Accounts.** The Company shall keep proper books of account with respect to (a) all sums of money
 received and expended by the Company and the matters in respect of which the receipt and
 expenditure takes place; (b) all sales and purchases of goods by the Company; and (c) the
 assets and liabilities of the Company, that in each case, are sufficient to give a true and
 fair view of the Company's affairs and to explain its transactions.

36.2 **Inspection.** The Directors shall from time to time determine whether and to what extent and at what
 times and places and under what conditions or regulations the accounts and books of the Company
 or any of them shall be open to the inspection of Members not being Directors and no Member
 (not being a Director) shall have any right of inspecting any account or book or document
 of the Company except as conferred by the Companies Act or authorised by the Directors or
 by the Company in general meeting.

36.3 **Financial Information.** The Directors may from time to time cause to be prepared and to be laid
 before the Company in general meeting profit and loss accounts, balance sheets, group accounts
 (if any) and such other reports and accounts as may be required by law.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **37** | **AUDIT** |

---

37.1 **Auditor**.
 The Directors may appoint an auditor of the Company who shall hold office until removed from
 office by resolution of the Directors, and may fix his or their remuneration.

37.2 **Access Right.** Every auditor of the Company shall have a right of access at all times to the
 books and accounts and vouchers of the Company and shall be entitled to require from the
 Directors and Officers such information and explanation as may be necessary for any audit.

37.3 **Auditor Reports.** Auditors shall, if so required by the Directors, make a report on the accounts
 of the Company during their tenure of office at such times as shall be required by the Directors
 or any meeting of the Members.

---

| | |
|:---|:---|
| **38** | **NOTICES** |

---

38.1 **Calculation of Elapsed Time.** Subject to the laws of the Cayman Islands, where any period of time
 is expressed as required for the giving of any notice or in any other case where some other
 action is required to be undertaken within or omitted from being taken during a specified
 period of time, the calculation of the requisite period of time will not include the day
 on which the notice is given (or deemed to be given) or the day on which the event giving
 rise to the need to take or omit action occurred, but shall include the day on which the
 period of time expires.

38.2 **Delivery of Notices.** Notices shall be in writing and may be given by the Company to any Member
 either personally or by sending it by courier, post, fax or e-mail to him or to his address
 as shown in the Register of Members (or where the notice is given by e-mail by sending it
 to the e-mail address provided by such Member). Any notice, if posted from one country to
 another, is to be sent airmail. E-mail notices may be sent by e-mail text and/or by way of
 a document attached to an email in portable document format (PDF) or in Microsoft Word format
 and/or by any other method separately agreed between the Company and its Members.

38.3 **Deemed Receipt.** Where a notice is sent by courier, service of the notice shall be deemed to
 be effected by delivery of the notice to a courier company, and shall be deemed to have been
 received on the third day (not including Saturdays or Sundays or public holidays) following
 the day on which the notice was delivered to the courier. Where a notice is sent by post,
 service of the notice shall be deemed to be effected by properly addressing, pre-paying and
 posting a letter containing a notice, and shall be deemed to have been received on the fifth
 day (not including Saturdays or Sundays or public holidays) following the day on which the
 notice was posted. Where a notice is sent by fax, service of the notice shall be deemed to
 have been received on the same day that it was transmitted. Where a notice is given by e-mail
 service it shall be deemed to be effected by transmitting the e-mail to the e-mail address
 provided by the intended recipient and shall be deemed to have been received on the same
 day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged
 by the recipient.

38.4 **Notices of General Meeting.** Notice of every general meeting shall be given in any manner hereinbefore
 authorized to every person shown as a Member in the Register of Members on the record date
 for such meeting except that in the case of joint holders the notice shall be sufficient
 if given to the joint holder first named in the Register of Members.

![](tm2224158d7_ex3-1img01.jpg)

---

| | |
|:---|:---|
| **39** | **VOLUNTARY LIQUIDATION** |

---

39.1 Subject
 to the Companies Act, the Company may by Special Resolution be wound up voluntarily.

---

| | |
|:---|:---|
| **40** | **WINDING UP** |

---

40.1 Distribution
 of Assets. If the Company shall be wound up, and the assets available for distribution amongst
 the Members shall be insufficient to repay the whole of the share capital, such assets shall
 be distributed so that, as nearly as may be, the losses shall be borne by the Members in
 proportion to the par value of the Shares held by them. If in a winding up the assets available
 for distribution amongst the Members shall be more than sufficient to repay the whole of
 the share capital at the commencement of the winding up, the surplus shall be distributed
 amongst the Members in proportion to the par value of the Shares held by them at the commencement
 of the winding up subject to a deduction from those Shares in respect of which there are
 monies due, of all monies payable to the Company for unpaid calls or otherwise. This Article
 is without prejudice to the rights of the holders of Shares issued upon special terms and
 conditions.

40.2 Valuation
 of Assets. If the Company shall be wound up the liquidator may, with the sanction of a Special
 Resolution and any other sanction required by the Companies Act, divide amongst the Members
 in kind the whole or any part of the assets of the Company (whether they shall consist of
 property of the same kind or not) and may for that purpose value any assets and determine
 how the division shall be carried out as between the Members or different classes of Members.
 The liquidator may, with the like sanction, vest the whole or any part of such assets in
 trustees upon such trusts for the benefit of the Members as the liquidator, with the like
 sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon
 which there is a liability.

---

| | |
|:---|:---|
| **41** | **CONTINUATION** |

---

41.1 The
 Company may, subject to the provisions of the Companies Act and with the approval of a Special
 Resolution, transfer and be registered by way of continuation as a body corporate limited
 by shares under the laws of any jurisdiction outside the Cayman Islands and be de- registered
 in the Cayman Islands.

---

| | |
|:---|:---|
| **42** | **AMENDMENT OF THE MEMORANDUM AND ARTICLES** |

---

42.1 Subject
 to the Companies Act and the rights attaching to any class or series of Shares, the Company
 may by Special Resolution change its name or alter or amend these Articles and/ or the Memorandum
 in whole or in part.

![](tm2224158d7_ex3-1img01.jpg)

## Exhibit 4.1

**Exhibit 4.1**

---

| | |
|:---|:---|
| &nbsp;&nbsp;![GRAPHIC](tm2224158d7_ex4-1img01.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NUMBER Netclass Technology Inc. SHARES CERT.9999 \*\*\*\*\*\*\*9,000,000,000\*\*\*\*\*\*\* INCORPORATED UNDER THE LAWS OF THE CAYMAN ISLANDS CUSIP 999999ZZ9 $0.00025 PAR VALUE CLASS A ORDINARY SHARES CLASS A ORDINARY SHARES THIS CERTIFIES THAT \* SPECIMEN \* Is The Owner of \* NINE BILLION AND 00/100 \* FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A ORDINARY SHARES OF Netclass Technology Inc. Transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. Dated: JANUARY 01, 2009 COUNTERSIGNED AND REGISTERED: VSTOCK TRANSFER, LLC Transfer Agent and Registrar Chief Executive Officer By:____________________________ AUTHORIZED SIGNATURE |

---

## Exhibit 4.2

**Exhibit 4.2**

**Form of Representative's Warrant**

THE REGISTERED HOLDER OF THIS REPRESENTATIVE WARRANT AGREES BY HIS, HER OR ITS ACCEPTANCE HEREOF, THAT SUCH HOLDER WILL NOT FOR A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS BEGINNING ON THE date of the commencemEnt of sales of the offering pursuant the registration statement No: 333-[●] AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION: (A) SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS REPRESENTATIVE WARRANT TO ANYONE OTHER THAN OFFICERS OR PARTNERS OF revere, EACH OF WHOM SHALL HAVE AGREED TO THE RESTRICTIONS CONTAINED HEREIN, IN ACCORDANCE WITH FINRA CONDUCT RULE 5110(E)(1), OR (B) CAUSE THIS REPRESENTATIVE WARRANT OR THE SECURITIES ISSUABLE HEREUNDER TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THIS REPRESENTATIVE WARRANT OR THE SECURITIES HEREUNDER, EXCEPT AS PROVIDED FOR IN FINRA RULE 5110(e)(2).

CLASS A ORDINARY SHARES REPRESENTATIVE WARRANT

For the Purchase of [●] Class A Ordinary Shares

of

NETCLASS TECHNOLOGY INC

1. <u>Representative Warrant</u>. THIS CLASS A ORDINARY SHARES REPRESENTATIVE WARRANT (this "**Representative Warrant**") certifies that, pursuant to that certain Underwriting Agreement by and between NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company (the "**Company**") and Revere Securities LLC ("**Revere**"), dated [●], 2023 (the "**Underwriting Agreement**"), Revere (in such capacity with its permitted successors or assigns, the "**Holder**"), as registered owner of this Representative Warrant, is entitled, at any time or from time to time from [●], 2023 (the "**Exercise Date**") [THE DATE THAT IS THE OFFERING CLOSING DATE ], and at or before 5:00 p.m., Eastern time, [●], 2028 [DATE THAT IS FIVE YEARS FROM THE COMMENCEMENT OF SALES OF THE OFFERING] (the "**Expiration Date**"), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to [●] Class A Ordinary Shares of the Company, par value $0.00025 per share (the "**Shares**")<sup>1</sup>, subject to adjustment as provided in <u>Section 5</u> hereof. If the Expiration Date is a day on which banking institutions are authorized by law or executive order to close, then this Representative Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period commencing on the date hereof and ending on the Expiration Date, the Company agrees not to take any action that would terminate this Representative Warrant. This Representative Warrant is initially exercisable at $[●] per Share (120% of the price of the Shares sold in the Offering); provided, however, that upon the occurrence of any of the events specified in <u>Section 5</u> hereof, the rights granted by this Representative Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term "**Exercise Price**" shall mean the initial exercise price or the adjusted exercise price, depending on the context. Any term not defined herein shall have the meaning ascribed thereto in the Underwriting Agreement. The Representative Warrant is redeemable.

<sup>1</sup> 5% of the number of Class A Ordinary Shares sold in the Offering.

2. <u>Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Exercise Form</u>. In order to exercise this Representative Warrant, the exercise form attached hereto as <u>Exhibit</u> A (the "**Exercise Form**") must be duly executed and completed and delivered to the Company, together with this Representative Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern Time, on the Expiration Date, this Representative Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Cashless Exercise</u>. In lieu of exercising this Representative Warrant by payment of cash pursuant to <u>Section 2.1</u> above, Holder may, at any time, elect to receive the number of Shares equal to the value of this Representative Warrant (or the portion thereof being exercised), by surrender of this Representative Warrant to the Company, together with the Exercise Form, in which event the Company shall issue to Holder, Shares in accordance with the following formula:

X = <u>Y(A – B)</u> <br> A

Where, X = The number of Shares to be issued to Holder;

Y = The number of Shares that would be issuable upon exercise of this Representative Warrant in accordance with the terms of this Representative Warrant if such exercise were by means of a cash exercise rather than a cashless exercise;

A = The fair market value of one Share; and

B = The Exercise Price of this Representative Warrant, as adjusted hereunder.

For purposes of this <u>Section 2.2</u>, the fair market value of a Share is defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the Company's Class A Ordinary Shares are traded on a securities exchange, the value shall be deemed to be the closing price on such exchange on the trading day immediately prior to the Exercise Form being submitted in connection with the exercise of this Representative Warrant; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the Company's Class A Ordinary Shares are traded over-the-counter, the value shall be deemed to be the closing bid price on the trading day immediately prior to the Exercise Form being submitted in connection with the exercise of the Representative Warrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company's Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Legend</u>. Each certificate for the securities purchased under this Representative Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the "**Act**"):

"(i) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE COMMENCEMENT OF SALES OF THE OFFERING PURSUANT TO THE REGISTRATION STATEMENT OF THE COMPANY'S SECURITIES (FILE NO. 333-[●])) AND MAY NOT BE (A) SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED TO ANYONE OTHER THAN REVERE SECURITIES LLC OR BONA FIDE OFFICERS OR PARTNERS OF REVERE SECURITIES LLC, OR (B) CAUSED TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THIS SECURITIES HEREUNDER, EXCEPT AS PROVIDED FOR IN FINRA RULE 5110(E)(2).""

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Mechanics of Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i. Delivery of the Shares Upon Exercise. The Company shall cause the Shares purchased hereunder to be issued by the Company to the Holder by crediting the account of the Holder's or its designee's balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system ("<u>DWAC</u>") if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Shares to or resale of the Shares by the Holder or (B) the Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Representative Warrant), and otherwise by physical delivery of a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Exercise Form by the date that is the earliest of (i) two (2) trading days after the delivery to the Company of the Form of Exercise, (ii) one (1) trading day after delivery of the aggregate Exercise Price to the Company and (iii) the number of trading days comprising the Standard Settlement Period after the delivery to the Company of the Form of Exercise (such date, the "<u>Share Delivery Date</u>"). Upon delivery of the Form of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Shares with respect to which this Representative Warrant has been exercised, irrespective of the date of delivery of the Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Share Delivery Date. If the Company fails for any reason to deliver to the Holder the Shares subject to a Form of Exercise by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Shares subject to such exercise (based on the volume-weighted average price of the Class A Ordinary Shares of the Company on the date of the applicable Form of Exercise), $10 per trading day (increasing to $20 per trading day on the fifth trading day after such liquidated damages begin to accrue) for each trading day after such Share Delivery Date until such Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a Company that is a participant in the FAST program so long as this Representative Warrant remains outstanding and exercisable. As used herein, "<u>Standard Settlement Period</u>" means the standard settlement period, expressed in a number of Business Days, on the Company's primary trading market with respect to the Shares as in effect on the date of delivery of the Form of Exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Compensation for Buy-In on Failure to Timely Deliver Shares Upon Exercise.</u> In addition to any other rights available to the Holder, if the Company fails to cause the transfer agent to transmit to the Holder the Shares in accordance with the provisions of Section 2(4)(i) above pursuant to an exercise on or before the Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, Class A Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Shares which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the Class A Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of the Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Representative Warrant and equivalent number of the Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Class A Ordinary Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Class A Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Class A Ordinary Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver Class A Ordinary Shares upon exercise of the Representative Warrant as required pursuant to the terms hereof.

3. <u>Transfer</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>General Restrictions</u>. The registered Holder of this Representative Warrant agrees by his, her or its acceptance hereof, that such Holder will not for a period of one hundred eighty (180) days following the date of commencement of sales of the offering: (a) sell, transfer, assign, pledge or hypothecate this Representative Warrant (or any portion thereof) or any of the Shares issuable hereunder to anyone other than: (i) Revere , or a selected dealer (including any officer, manger, member, partner of such selected dealer) participating in the Offering contemplated by the Underwriting Agreement, or (ii) officers, managers, members or partners of Revere, each of whom shall have agreed to the restrictions contained herein, in accordance with FINRA Rule 5110(e)(1), or (b) cause this Representative Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of this Representative Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(e)(2). The registered Holder of this Representative Warrant will have the option to exercise their warrants after issuance hereof, for all or a lesser number of the underlying Shares, at any time, provided that such underlying Shares will remain subject to the 180-day lock-up period. On and after that date that is one hundred eighty (180) days after the commencement of sales of the offering, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto as <u>Exhibit</u> B duly executed and completed, together with this Representative Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Representative Warrant on the books of the Company and shall execute and deliver a new Representative Warrant or Representative Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Restrictions Imposed by the Act</u>. The securities evidenced by this Representative Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company, (ii) a Registration Statement relating to the offer and sale of such securities that includes a current prospectus has been filed and declared effective by the Securities and Exchange Commission (the "**Commission**") and compliance with applicable state securities law has been established.

4. <u>New Representative Warrants to be Issued</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Partial Exercise or Transfer</u>. Subject to the restrictions in <u>Section 3</u> hereof, this Representative Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Representative Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to <u>Section 2.1</u> hereof, the Company shall cause to be delivered to the Holder, without charge, a new Representative Warrant of like tenor to this Representative Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Representative Warrant has not been exercised or assigned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Lost Certificate</u>. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Representative Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Representative Warrant of like tenor and date. Any such new Representative Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

5. <u>Adjustments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Adjustments to Exercise Price and Number of Shares</u>. The Exercise Price and the number of Shares underlying this Representative Warrant shall be subject to adjustment from time to time as hereinafter set forth:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1 <u>Share Dividends; Split Ups</u>. If, after the date hereof, and subject to the provisions of <u>Section 5.3</u> below, the number of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding shares, and the Exercise Price shall be proportionately decreased.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2 <u>Aggregation of Shares</u>. If, after the date hereof, and subject to the provisions of <u>Section 5.3</u> below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares, and the Exercise Price shall be proportionately increased.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.3 <u>Replacement of Shares upon Reorganization, etc</u>. In case of any reclassification or reorganization of the outstanding Shares other than a change covered by <u>Section 5.1.1</u> or <u>Section 5.1.2</u> hereof or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Representative Warrant shall have the right thereafter (until the expiration of the right of exercise of this Representative Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Representative Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by <u>Section 5.1.1</u> or <u>Section 5.1.2</u>, then such adjustment shall be made pursuant to <u>Section 5.1.1</u>, <u>Section 5.1.2</u> and this <u>Section 5.1.3</u>. The provisions of this <u>Section 5.1.3</u> shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.4 <u>Changes in Form of Representative Warrant</u>. This form of Representative Warrant need not be changed because of any change pursuant to this <u>Section 5.1</u>, and Representative Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Representative Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Representative Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the date hereof or the computation thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Substitute Representative Warrant</u>. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Representative Warrant providing that the holder of each Representative Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Representative Warrant) to receive, upon exercise of such Representative Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Representative Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Representative Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this <u>Section 5</u>. The above provision of this <u>Section 5</u> shall similarly apply to successive consolidations or share reconstructions or amalgamations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Elimination of Fractional Interests</u>. The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Representative Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.

6. <u>Registration Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Demand Registration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.1 <u>Grant of Right</u>. Unless all of the Registrable Securities (defined as below) are included in an effective registration statement with a current prospectus, the Company, upon written demand ("**Demand Notice**") of the Holder(s) of at least 51% of the Representative Warrants and/or the underlying securities ("**Majority Holder(s)**"), agrees to register, on two occasions, all or any portion of the remaining Class A Ordinary Shares (collectively, the "**Registrable Securities**") as requested by the Majority Holder(s) in the Demand Notice, provided that no such registration will be required unless the Holders request registration of an aggregate of at least 51% of the outstanding Registrable Securities. On such occasion, the Company will file a new registration statement or a post-effective amendment to the Registration Statement covering the Registrable Securities within sixty (60) days after receipt of the Demand Notice and use its commercially reasonable efforts to have such registration statement or post-effective amendment declared effective as soon as possible thereafter. The demand for registration may be made at any time after one (1) year from the date of effectiveness of the Registration Statement, but no later than five (5) years from the effective date of the Registration Statement. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Representative Warrants and/or the Registrable Securities within ten (10) days from the date of the receipt of any such Demand Notice, who shall have five days from the receipt of such Notice in which to notify the Company of their desire to have their Registrable Securities included in the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.2 <u>Terms</u>. The Company shall bear all fees and expenses attendant to registering the Registrable Securities upon the first Demand Notice, including the reasonable expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities, but the Holders shall pay any and all underwriting commissions, if any. The Holders shall bear all fees and expenses attendant to registering the Registrable Securities upon the second Demand Notice. The Company agrees to use its commercially reasonable efforts to qualify or register the Registrable Securities in such States as are reasonably requested by the Majority Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause (i) the Company to be obligated to qualify to do business in such State or execute a general consent to service of process, or would subject the Company to taxation as a foreign corporation doing business in such jurisdiction or (ii) the principal shareholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration statement or post-effective amendment filed pursuant to the demand rights granted under <u>Section 6.1.1</u> to remain effective for a period of twelve (12) consecutive months from the effective date of such registration statement or post-effective amendment or until the Holders have completed the distribution of the Registrable Securities included in the Registration Statement, whichever occurs first.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.3. <u>Deferred Filing</u>. If (i) in the good faith judgment of the Board, filing a registration statement pursuant to <u>Section 6.1</u> would be seriously detrimental to the Company and the Board concludes, as a result, that it is essential to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by a duly authorized officer of the Company stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, essential to defer the filing of such registration statement, then the Company shall have the right to defer such filing on two occasions for an aggregate of not more than one hundred and twenty (120) days in any twelve-month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.4. <u>No Cash Settlement Option</u>. The Company is only required to use its commercially reasonable efforts to cause a registration statement covering issuance of the Registrable Securities underlying the Representative Warrant to be declared effective, and once effective, only to use its commercially reasonable efforts to maintain the effectiveness of the registration statement. The Company will not be obligated to deliver securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective at the time of exercise. Additionally, in no event is the Company obligated to settle any Representative Warrant, in whole or in part, for cash in the event it is unable to register the Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 "<u>Piggy-Back" Registration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1 <u>Grant of Right</u>. Unless all of the Registrable Securities are included in an effective registration statement with a current prospectus, the Holders of the Representative Warrants shall have the right for a period of not more than five (5) years from the date of effectiveness of the Registration Statement, to include the remaining Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Act or pursuant to Form S-8 or any successor or equivalent form); provided, however, that if, in the written opinion of the Company's managing underwriter or underwriters, if any, for such offering, the inclusion of the Registrable Securities, when added to the securities being registered by the Company or the selling shareholder(s), will exceed the maximum amount of the Company's securities which can be marketed (i) at a price reasonably related to their then current market value, and (ii) without materially and adversely affecting the entire offering, then the Company will still be required to include the Registrable Securities, but may require the Holders to agree, in writing, to delay the sale of all or any portion of the Registrable Securities for a period of ninety (90) days from the effective date of the offering, provided, further, that if the sale of any Registrable Securities is so delayed, then the number of securities to be sold by all shareholders in such public offering shall be apportioned pro rata among all such selling shareholders, including all holders of the Registrable Securities, according to the total amount of securities of the Company owned by said selling shareholders, including all holders of the Registrable Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2 <u>Terms</u>. The Company shall bear all fees and expenses attendant to registering the Registrable Securities, including the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities, but the Holders shall pay any and all underwriting commissions. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than ten (10) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each applicable registration statement filed (during the period in which the Representative Warrant is exercisable) by the Company until such time as all of the Registrable Securities have been registered and sold. The holders of the Registrable Securities shall exercise the "piggy back" rights provided for herein by giving written notice, within ten (10) days of the receipt of the Company's notice of its intention to file a registration statement. The Company shall use its commercially reasonable efforts to cause any registration statement filed pursuant to the above "piggyback" rights that does not relate to a firm commitment underwritten offering to remain effective for at least nine (9) consecutive months from the effective date of such registration statement or until the Holders have completed the distribution of the Registrable Securities in the registration statement, whichever occurs first.

7. <u>Reservation and Listing</u>. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of this Representative Warrant, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of this Representative Warrant and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees that upon exercise of this Representative Warrant and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as this Representative Warrant shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of this Representative Warrant to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.

8. <u>Certain Notice Requirements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Holder's Right to Receive Notice</u>. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Representative Warrants and their exercise, any of the events described in <u>Section 8.2</u> shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books (the "**Notice Date**") for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <u>Events Requiring Notice</u>. The Company shall be required to give the notice described in this <u>Section 8</u> upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <u>Notice of Change in Exercise Price</u>. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to <u>Section 5</u> hereof, send notice to the Holders of such event and change ("**Price Notice**"). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company's Chief Financial Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <u>Transmittal of Notices</u>. All notices, requests, consents and other communications under this Representative Warrant shall be in writing and shall be deemed to have been duly made (1) when hand delivered, (2) when mailed by express mail or private courier service, (3) if sent by electronic mail, on the day the notice was sent if during regular business hours and, if sent outside of regular business hours, on the following business day, or (4) when the event requiring notice is disclosed in all material respects and filed in a Current Report on Form 6-K prior to the Notice Date: (i) if to the registered Holder of the Representative Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders:

If to the Holder:

Revere Securities LLC

650 Fifth Avenue, 35<sup>th</sup> Floor

New York, New York

Attention: Dajiang Guo, Senior Managing Director

Email: dguo@reveresecurities.com 

*with a copy (which shall not constitute notice) to:*

Sichenzia Ross Ference LLP

1185 Avenue of the Americas, 31<sup>st</sup> Floor

New York, New York 10036

Attention: David B. Mano, Esq.

Email: dmanno@srf.law

If to the Company:

NETCLASS TECHNOLOGY INC

6F, Building A, 1188 Wan Rong Road

Shanghai, People's Republic of China 200436

Attention: Jianbiao Dai, CEO

Email: jdai@netclass.cn

 

*with a copy (which shall not constitute notice) to:*

Ortoli Rosenstadt LLP

366 Madison Avenue, 3rd Floor

New York, NY 10005

Attn: Mengyi "Jason" Ye, Esq.

Email: jye@orllp.legal

9. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Amendments</u>. The Company and Revere may from time to time supplement or amend this Representative Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and Revere may deem necessary or desirable and that the Company and Revere deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 <u>Headings</u>. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Representative Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 <u>Entire Agreement</u>. This Representative Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Representative Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 <u>Binding Effect</u>. This Representative Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees and respective successors and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Representative Warrant or any provisions herein contained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 <u>Governing Law; Submission to Jurisdiction</u>. This Representative Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Representative Warrant shall be brought and enforced in the Borough of Manhattan in The City of New York (each, a "**New York Court**"), and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in <u>Section 8.4</u> hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys' fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 <u>Waiver, etc</u>. The failure of the Company or the Holder to at any time enforce any of the provisions of this Representative Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Representative Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Representative Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Representative Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 <u>Exchange Agreement</u>. As a condition of the Holder's receipt and acceptance of this Representative Warrant, Holder agrees that, at any time prior to the complete exercise of this Representative Warrant by Holder, if the Company and Revere enter into an agreement ("**Exchange Agreement**") pursuant to which they agree that all outstanding Representative Warrants will be exchanged for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 <u>Execution in Counterparts</u>. This Representative Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9 <u>Holder Not Deemed a Shareholder</u>. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Representative Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Representative Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Representative Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of share, reclassification of share, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the exercise of this Representative Warrant by the Holder with respect to the Shares which it is then entitled to receive upon the due exercise of this Representative Warrant. In addition, nothing contained in this Representative Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Representative Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10 <u>Restrictions</u>. The Holder acknowledges that the Shares acquired upon the exercise of this Representative Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.11 <u>Severability</u>. Wherever possible, each provision of this Representative Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Representative Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Representative Warrant.

**[Remainder of page intentionally left blank]**

**IN WITNESS WHEREOF**, the Company has caused this Representative Warrant to be signed by its duly authorized officer as of the ____ day of _______, 2023.

---

| | | |
|:---|:---|:---|
| NETCLASS TECHNOLOGY INC | NETCLASS TECHNOLOGY INC | NETCLASS TECHNOLOGY INC |
| By: |  |  |
|  | Name: | Jianbiao Dai |
|  | Title: | Chief Executive Officer |

---

**EXHIBIT A**

**EXERCISE FORM**

Form to be used to exercise Representative Warrant:

Date: __________, 20___

The undersigned hereby elects irrevocably to exercise the Representative Warrant for ______ Shares of NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company (the "**Company**") and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Representative Warrant is exercised in accordance with the instructions given below and, if applicable, a new Representative Warrant representing the number of Shares for which this Representative Warrant has not been exercised.

or

The undersigned hereby elects irrevocably to convert its right to purchase ___ Shares under the Representative Warrant for ______ Shares, as determined in accordance with the following formula:

---

| | | |
|:---|:---|:---|
| X | = | Y(A-B) |
|  |  | A |

---

Where,

X = The number of Shares to be issued to Holder;

Y = The number of Shares that would be issuable upon exercise of this Representative Warrant in accordance with the terms of this Representative Warrant if such exercise were by means of a cash exercise rather than a cashless exercise;

A = The fair market value of one Share; and

B = The Exercise Price of this Representative Warrant, as adjusted hereunder

The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.

Please issue the Shares as to which this Representative Warrant is exercised in accordance with the instructions given below and, if applicable, a new Representative Warrant representing the number of Shares for which this Representative Warrant has not been exercised.

Signature

Signature Guaranteed

**INSTRUCTIONS FOR REGISTRATION OF SECURITIES**

Name:

(Print in Block Letters)

Address:

NOTICE: The signature to this form must correspond with the name as written upon the face of the Representative Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

**EXHIBIT B**

**ASSIGNMENT FORM**

Form to be used to assign Representative Warrant:

(To be executed by the registered Holder to effect a transfer of the within Representative Warrant):

FOR VALUE RECEIVED, does hereby sell, assign and transfer unto the right to purchase shares of NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company (the "**Company**"), evidenced by the Representative Warrant and does hereby authorize the Company to transfer such right on the books of the Company to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated: ____________, 20__

Holder's Signature: _____________________________

Holder's Address: _____________________________

_____________________________

Signature Guaranteed: ___________________________________________

NOTICE: The signature to this form must correspond with the name as written upon the face of the within Representative Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Representative Warrant.

## Exhibit 5.1

**Exhibit 5.1**

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| | |
|:---|:---|
| ![](tm2224158d5_ex5-1img01.jpg) | Harney Westwood & Riegels<br> 3501 The Center<br> 99 Queen's Road Central<br> Hong Kong<br> Tel: +852 5806 7800<br> Fax: +852 5806 7810 |

---

24 November 2022

058345.0001 **NETCLASS TECHNOLOGY INC**

6F, Building A

1188 Wan Rong Road Shanghai

People's Republic of China

200436

Dear Sir or Madam

**NETCLASS TECHNOLOGY INC (the *Company*)**

We are lawyers qualified to practise in the Cayman Islands and have acted as Cayman Islands legal advisers to the Company in connection with the Company's registration statement on Form F-1, including all amendments or supplements thereto, and accompanying prospectus filed with the Securities and Exchange Commission (the ***Commission***) under the United States Securities Act of 1933, as amended (the ***Securities Act***) (the ***Registration Statement***), relating to the offering by the Company of certain of its Class A ordinary shares of par value USD0.00025 per share (the ***IPO Shares***), the warrants to be issued to the underwriters (the ***Underwriter's Warrants***), and the Class A ordinary shares underlying the Underwriter's Warrants (the ***Underlying Shares***, together with the IPO Shares and the Underwriter's Warrants, the ***Shares***).

We are furnishing this opinion as Exhibit 5.1 to the Registration Statement.

For the purposes of giving this opinion, we have examined the Documents (as defined in Schedule 1) which we regard as necessary in order to issue this opinion. We have not examined any other documents, official or corporate records or external or internal registers and have not undertaken or been instructed to undertake any further enquiry or due diligence in relation to the transaction which is the subject of this opinion.

In giving this opinion we have relied upon the assumptions set out in Schedule 2 which we have not independently verified.

---

| | |
|:---|:---|
| The British Virgin Islands is Harneys Hong Kong office's main jurisdiction of practice. Jersey legal services are provided through a referral arrangement with Harneys (Jersey) which is an independently owned and controlled Jersey law firm.<br> Resident Partners: M Chu \| I Clark \| JP Engwirda \| P Kay \| MW Kwok IN Mann \| R Ng \| ATC Ridgers \| PJ Sephton | Anguilla \| Bermuda \| British Virgin Islands \| Cayman Islands<br> Cyprus \| Hong Kong \| Jersey \| London \| Luxembourg <br> Montevideo \| São Paulo \| Shanghai \| Singapore <br> harneys.com |

---

Based solely upon the foregoing examinations and assumptions and upon such searches as we have conducted and having regard to legal considerations which we deem relevant, and subject to the qualifications set out in Schedule 3, we are of the opinion that under the laws of the Cayman Islands:

---

| | |
|:---|:---|
| 1 | **Existence and Good Standing.** The Company is an exempted company duly incorporated with limited liability, and is validly existing and in good standing under the laws of the Cayman Islands. The Company is a separate legal entity and is subject to suit in its own name. |
| 2 | **Authorised Share Capital.** Based on our review of the Memorandum and Articles (as defined in Schedule 1), the share capital of the Company is USD50,000 divided into 200,000,000 shares comprising of (i) 190,000,000 Class A ordinary shares of par value USD0.00025 each and (ii) 10,000,000 Class B ordinary shares of par value USD0.00025 each. |
| 3 | **Valid Issuance of Shares.** The allotment and issue of the Shares as contemplated by the Registration Statement have been duly authorised and, when allotted, issued and fully paid for in accordance with the Registration Statement, and when the names of the shareholders are entered in the register of members of the Company, the Shares will be validly issued, allotted, fully paid and non-assessable, and there will be no further obligation of the holders of any of the Shares to make any further payment to the Company in respect of such Shares. |
| 4 | **Cayman Islands Law.** The statements under the caption "Taxation" in the prospectus forming part of the Registration Statement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material respects as at the date of this opinion and such statements constitute our opinion. |

---

This opinion is confined to the matters expressly opined on herein and given on the basis of the laws of the Cayman Islands as they are in force and applied by the Cayman Islands courts at the date of this opinion. We have made no investigation of, and express no opinion on, the laws of any other jurisdiction. Except as specifically stated herein, we express no opinion as to matters of fact.

In connection with the above opinion, we hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference made to this firm in the Registration Statement under the headings "Enforceability of Civil Liabilities", "Taxation" and "Legal Matters" and elsewhere in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.

This opinion is limited to the matters referred to herein and shall not be construed as extending to any other matter or document not referred to herein.

This opinion shall be construed in accordance with the laws of the Cayman Islands.

Yours faithfully

*/s/ Harney Westwood & Riegels*

**Harney Westwood & Riegels**

**SCHEDULE 1**

List of Documents and Records Examined

---

| | |
|:---|:---|
| 1 | The certificate of incorporation of the Company dated 4 January 2022; |
| 2 | The amended and restated memorandum and articles of association of the Company adopted by a special resolution passed on 26 July 2022 (the ***Memorandum and Articles***); |
| 3 | The register of directors of the Company provided to us on 6 June 2022 and register of members of the Company provided to us on 20 September 2022; |

---

Copies of 1-3 above have been provided to us by the Company (the ***Corporate Documents***, and together with 4-7 below, the ***Documents***).

---

| | |
|:---|:---|
| 4.0 | A copy of executed written resolutions of the sole director of the Company dated 22 November 2022 and a copy of executed written resolutions of the shareholders of the Company dated 22 November 2022 (the ***Resolutions***); |
| 5.0 | A certificate of good standing dated 18 November 2022 in respect of the Company, issued by the Registrar of Companies in the Cayman Islands (the ***Certificate of Good Standing***); |
| 6.0 | A certificate from a director of the Company dated 22 November 2022, a copy of which is attached hereto (the ***Director's Certificate***); and |
| 7.0 | The Registration Statement. |

---

**SCHEDULE 2**

Assumptions

---

| | |
|:---|:---|
| 1 | **Authenticity of Documents.** Copy documents or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals. All original Documents are authentic, all signatures, initials and seals are genuine. |
| 2 | **Corporate Documents.** All matters required by law to be recorded in the Corporate Documents are so recorded, and all corporate minutes, resolutions, certificates, documents and records which we have reviewed are accurate and complete, and all facts expressed in or implied thereby are accurate and complete as at the date of the passing of the Resolutions. |
| 3 | **Director's Certificate**. The contents of the Director's Certificate are true and accurate as at the date of this opinion and there is no information not contained in the Director's Certificate that will in any way affect this opinion. |
| 4 | **No Steps to Wind-up**. The directors and shareholders of the Company have not taken any steps to appoint a liquidator of the Company and no receiver has been appointed over any of the Company's property or assets. |
| 5 | **Resolutions.** The Resolutions remain in full force and effect. |
| 6 | **Unseen Documents.** Save for the Corporate Documents provided to us there are no resolutions, agreements, documents or arrangements which materially affect, amend or vary the transactions envisaged in the Registration Statement. |

---

**SCHEDULE 3**

Qualifications

---

| | |
|:---|:---|
| 1 | We express no opinion in relation to provisions making reference to foreign statutes in the Registration Statement. |
| 2 | Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions the subject of this opinion. |
| 3 | In this opinion the phrase ***non-assessable*** means, with respect to the issuance of shares, that a shareholder shall not, in respect of the relevant shares, have any obligation to make further contributions to the Company's assets (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). |
| 4 | **Good Standing.** The Company shall be deemed to be in good standing at any time if all fees (including annual filing fees) and penalties under the Law have been paid and the Registrar of Companies has no knowledge that the Company is in default under the Law. |

---

## Exhibit 5.2

**Exhibit 5.2**

---

| | |
|:---|:---|
| ![](tm2224258d7_ex5-2img001.jpg) | 366 Madison Avenue |
| ![](tm2224258d7_ex5-2img001.jpg) | 3rd Floor |
| ![](tm2224258d7_ex5-2img001.jpg) | New York, NY 10017 |
| ![](tm2224258d7_ex5-2img001.jpg) | tel: (212) 588-0022 |
| ![](tm2224258d7_ex5-2img001.jpg) | fax: (212) 826-9307 |

---

March 28, 2023

**NETCLASS TECHNOLOGY INC** 

6F, Building A

1188 Wan Rong Road

Shanghai, People's Republic of China 200436

Re: <u>Form F-1 Registration Statement</u> 

Ladies and Gentlemen:

We are acting as special counsel for NETCLASS TECHNOLOGY INC, a Cayman Islands corporation (the "Company"), in connection with the registration statement on Form F-1 (the "Registration Statement"), as initially filed with the Company with the U.S. Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), on March 28, 2023, as amended from time to time, for the proposed sale (the "Offering") of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) up to $3,750,000 of shares (the "Initial Shares") of the Company's Class A ordinary shares, par value $0.00025 per share (the "Class A ordinary shares"),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) additional shares of Class A ordinary shares in an amount of up to 15% of the Initial Shares sold (together with the Initial Shares, the "Offered Shares"),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) warrants to purchase shares of Class A ordinary shares in an amount equal to 5% of the Offered Shares to be issued to Revere Securities LLC (the " Representative") , the representative of the underwriters, in connection with the Offering (the "Representative's Warrants"), and

(iv) the Company's Class A ordinary shares issuable upon exercise of the Representative's Warrants. .

This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus, other than as expressly stated herein with respect to the issuance of the Representative's Warrants.

In connection with this opinion, we have examined and relied upon the originals or copies certified or otherwise identified to our satisfaction of (i) the Registration Statement and the prospectus which forms a part of a Registration Statement, including all exhibits filed therewith, (ii) the form of the Underwriting Agreement to be executed in connection with the Offering by and between the Company and the Representative (the "Underwriting Agreement"), (iii) the form of Representative's Warrants, and (iv) a copy of the executed written resolution of the directors of the Company dated November 22, 2022 and (v) such other documents as we have deemed necessary for purposes of rendering the opinion hereinafter set forth.

In addition to the foregoing, we have relied as to matters of fact upon the representations made by the Company and its representatives. In our examination of the foregoing documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, the authenticity of the originals of such latter documents, the legal competence of all signatories to such documents, that each signatory to such document has or will have sufficient legal capacity to execute such document and that the issuance of the Representative's Warrants has been duly authorized by the Company. Other than our examination of the documents indicated above, we have made no other examination in connection with this opinion.

We are members of the Bar of the State of New York. We do not hold ourselves out as being conversant with, or expressing any opinion with respect to, the laws of any jurisdiction other than the laws of the State of New York. Accordingly, the opinions expressed herein are expressly limited to the laws of the State of New York. Our opinion is based on these laws as in effect on the date hereof. We express no opinion as to whether the laws of any other jurisdiction are applicable to the subject matter hereof. We are not rendering any opinion as to compliance with any federal or state law, rule or regulation relating to securities, or to the sale or issuance thereof.

![](tm2224258d7_ex5-2img001.jpg)

March 28, 2023

On the basis of the foregoing and in reliance thereon, and subject to the qualifications herein stated, we are of the opinion that the Representative's Warrants, when issued and paid for in accordance with the terms of the Registration Statement and the Underwriting Agreement, will constitute valid and binding obligations of the Company in accordance with their terms under the laws of the State of New York.

This opinion letter speaks only as of the date hereof, and we assume no obligation to update or supplement this opinion letter if any applicable laws change after the date of this opinion letter or if we become aware after the date of this opinion letter of any facts, whether existing before or arising after the date hereof, that might change the opinions expressed above.

This opinion is furnished in connection with the filing of the Registration Statement and the prospectus and may not be relied upon for any other purpose without our prior written consent in each instance. Further, no portion of this opinion may be quoted, circulated or referred to in any other document for any other purpose without our prior written consent.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the prospectus. In giving such consent, we do not admit that we are we are an "expert" within the meaning of the Securities Act or in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.

---

| |
|:---|
| Very truly yours, |
| */s/ Ortoli Rosenstadt LLP* |
| Ortoli Rosenstadt LLP |

---

## Exhibit 10.1

**Exhibit 10.1**

**EMPLOYMENT AGREEMENT**

This EMPLOYMENT AGREEMENT (the "<u>Agreement"</u>), is entered into as of June 1, 2022, by and between NETCLASS TECHNOLOGY INC, a Cayman Islands corporation (the "<u>Company</u>"), and Jianbiao Dai, an individual (the "<u>Executive</u>"). Except with respect to the direct employment of the Executive by the Company, the term "Company" as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its subsidiaries and affiliated entities (collectively, the "<u>Group</u>").

**RECITALS**

A. The Company desires to employ the Executive as its Chief Executive Officer and Director to assure itself of the services of the Executive during the term of Employment (as defined below).

B. The Executive desires to be employed by the Company as its Chief Executive Officer and Director during the term of Employment and upon the terms and conditions of this Agreement.

**AGREEMENT**

The parties hereto agree as follows:

**1.** **POSITION** 

The Executive hereby accepts a position of Chief Executive Officer and Director (the "<u>Employment</u>") of the Company.

**2.** **TERM** 

Subject to the terms and conditions of this Agreement, the term of the Employment is from June 1, 2022 to May 31, 2027.

**3.** **DUTIES AND RESPONSIBILITIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Executive's duties at the Company will include all jobs assigned by the Company's Board of the Directors (the " <u>Board</u> ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Executive shall devote all of his working time, attention and skills to the performance of his duties at the Company and shall
faithfully and diligently serve the Company in accordance with this Agreement, the Certificate of Incorporation and Bylaws of the Company,
as amended and restated from time to time (the "Charter Documents"), and the guidelines, policies and procedures of the Company
approved from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Executive shall use his best efforts to perform his duties hereunder. The Executive shall not, without the prior written consent
of the Board, become an employee of any entity other than the Company and any subsidiary or affiliate of the Company, and shall not be
concerned or interested in any business or entity that engages in the same business in which the Company engages (any such business or
entity, a " <u>Competitor</u> "), provided that nothing in this clause shall preclude the Executive from holding any shares
or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere if such shares
or securities represent less than 5% of the competitors outstanding shares and securities. The Executive shall notify the Company in writing
of his interest in such shares or securities in a timely manner and with such details and particulars as the Company may reasonably require.

**4.** **NO BREACH OF CONTRACT** 

The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements entered into by and between the Executive and any member of the Group pursuant to applicable law, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his duties hereunder; (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.

**5.** **COMPENSATION AND BENEFITS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Base Salary.</u> The Executive's base salary shall be RMB 96,000 annually, paid by the Group in accordance with the Company's
regular payroll practices, and such compensation is subject to annual review and adjustment by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Bonus</u>. The Executive shall be eligible for Bonuses determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Equity Incentives</u>. To the extent the Company adopts and maintains a share incentive plan, the Executive will be eligible to
participate in such plan pursuant to the terms thereof as determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Benefits</u>. The Executive is eligible for participation in any standard employee benefit plan of the Company that currently exists
or may be adopted by the Company in the future, including, but not limited to, any retirement plan, life insurance plan, health insurance
plan and travel/holiday plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Expenses</u>. The Executive shall be entitled to reimbursement by the Company for all reasonable ordinary and necessary travel
and other expenses incurred by the Executive in the performance of his duties under this Agreement; provided that he properly accounts
for such expenses in accordance with the Company's policies and procedures.

**6.** **TERMINATION OF THE AGREEMENT** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>By the Company.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>For Cause</u>. The Company may terminate the Employment for cause, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Executive has been grossly negligent or acted dishonestly to the detriment of the Company,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Executive has engaged in actions amounting to willful misconduct or failed to perform his duties hereunder and such failure continues after the Executive is afforded a reasonable opportunity to cure such failure; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4) the Executive violates Section 7 of this Agreement.

Upon termination for cause, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive's right to all other benefits will terminate, except as required by any applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>For death and disability</u>. The Company may also terminate the Employment, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1) the Executive has died, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his employment with the Company, with or without reasonable accommodation, for more than 120 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply.

Upon termination for death or disability, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive's right to all other benefits will terminate, except as required by any applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Without Cause</u>. The Company may terminate the Employment without cause, at any time, upon a prior written notice. Upon termination without cause, the Company shall provide the following severance payments and benefits to the Executive: (1) a lump sum cash payment equal to 12 months of the Executive's base salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of his target annual bonus for the year immediately preceding the termination, if any; (3) payment of premiums for continued health benefits under the Company's health plans for 12 months following the termination, if any; and (4) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.

Upon termination without, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Change of Control Transaction</u>. If the Company or its successor terminates the Employment upon a merger, consolidation, or transfer or sale of all or substantially all of the assets of the Company with or to any other individual(s) or entity (the "<u>Change of Control Transaction</u>"), the Executive shall be entitled to the following severance payments and benefits upon such termination: (1) a lump sum cash payment equal to 12 months of the Executive's base salary at a rate equal to the greater of his/her annual salary in effect immediately prior to the termination, or his/her then current annua1 salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of his/her target annual bonus for the year immediately preceding the termination; and (3) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>By the Executive</u>. The Executive may terminate the Employment at any time with a prior written notice to the Company, if (1) there
is a material reduction in the Executive's authority, duties and responsibilities, or (2) there is a material reduction in
the Executive's annual salary. Upon the Executive's termination of the Employment due to either of the above reasons, the
Company shall provide compensation to the Executive equivalent to 12 months of the Executive's base salary that he is entitled to
immediately prior to such termination. In addition, the Executive may resign prior to the expiration of the Agreement if such resignation
is approved by the Board or an alternative arrangement with respect to the Employment is agreed to by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Notice of Termination.</u> Any termination of the Executive's employment under this Agreement shall be communicated by written
notice of termination from the terminating party to the other party.

**7.** **CONFIDENTIALITY AND NON-DISCLOSURE** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Confidentiality and Non-disclosure</u>. The Executive hereby agrees at all times during the term of the Employment and after his termination,
to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, corporation
or other entity without prior written consent of the Company, any Confidential Information. The Executive understands that " <u>Confidential Information</u> " means any proprietary or confidential information of the Company, its affiliates, or their respective clients,
customers or partners, including, without limitation, technical data, trade secrets, research and development information, product plans,
services, customer lists and customers, supplier lists and suppliers, software developments, inventions, processes, formulas, technology,
designs, hardware configuration information, personnel information, marketing, finances, information about the suppliers, joint ventures,
franchisees, distributors and other persons with whom the Company does business, information regarding the skills and compensation of
other employees of the Company or other business information disclosed to the Executive by or obtained by the Executive from the Company,
its affiliates, or their respective clients, customers or partners, either directly or indirectly, in writing, orally or otherwise, if
specifically indicated to be confidential or reasonably expected to be confidential. Notwithstanding the foregoing, Confidential Information
shall not include information that is generally available and known to the public through no fault of the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Company Property</u>. The Executive understands that all documents (including computer records, facsimile and e-mail) and materials
created, received or transmitted in connection with his work or using the facilities of the Company are property of the Company and subject
to inspection by the Company at any time. Upon termination of the Executive's employment with the Company (or at any other time
when requested by the Company), the Executive will promptly deliver to the Company all documents and materials of any nature pertaining
to his work with the Company and will provide written certification of his compliance with this Agreement. Under no circumstances will
the Executive have, following his termination, in his possession any property of the Company, or any documents or materials or copies
thereof containing any Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Former Employer Information</u>. The Executive agrees that he has not and will not, during the term of his employment, (i) improperly
use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive
has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of the
Company any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to
in writing by such former employer, person or entity. The Executive will indemnify the Company and hold it harmless from and against all
claims, liabilities, damages and expenses, including reasonable attorneys' fees and costs of suit, arising out of or in connection
with any violation of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Third Party Information</u>. The Executive recognizes that the Company may have received, and in the future may receive, from third
parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third
parties, during the Executive's employment by the Company and thereafter, a duty to hold all such confidential or proprietary information
in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited
purposes permitted by, the Company's agreement with such third party.

This Section 7 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 7, the Company shall have right to seek remedies permissible under applicable law.

**8.** **CONFLICTING EMPLOYMENT.** 

The Executive hereby agrees that, during the term of his employment with the Company, he or she will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the term of the Executive's employment, nor will the Executive engage in any other activities that conflict with his obligations to the Company without the prior written consent of the Company.

**9.** **WITHHOLDING TAXES** 

Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such national, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

**10.** **ASSIGNMENT** 

This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a Change of Control Transaction, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

**11.** **SEVERABILITY** 

If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

**12.** **ENTIRE AGREEMENT** 

This Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including any prior agreements between the Executive and a member of the Group. The Executive acknowledges that he or she has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement. Any amendment to this Agreement must be in writing and signed by the Executive and the Company.

**13.** **GOVERNING LAW; JURISDICTION** 

This Agreement shall be governed by and construed in accordance with the laws of the Cayman Islands.

**14.** **AMENDMENT** 

This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

**15.** **WAIVER** 

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

**16.** **NOTICES** 

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.

**17.** **COUNTERPARTS** 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

**18.** **NO INTERPRETATION AGAINST DRAFTER** 

Each party recognizes that this Agreement is a legally binding contract and acknowledges that it, he or she has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.

*[remainder of this page left intentionally blank]*

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

---

| | |
|:---|:---|
| **NETCLASS TECHNOLOGY INC** | **NETCLASS TECHNOLOGY INC** |
| By: | /s/ *Jianbiao Dai* |
| Name: | Jianbiao Dai |
| Title: | CEO |
| **Executive** | **Executive** |
| By: | /s/ *Jianbiao Dai* |
| Name: | Jianbiao Dai |

---

## Exhibit 10.2

**Exhibit 10.2**

**EMPLOYMENT AGREEMENT**

This EMPLOYMENT AGREEMENT (the "<u>Agreement"</u>), is entered into as of June 1, 2022, by and between NETCLASS TECHNOLOGY INC, a Cayman Islands corporation (the "<u>Company</u>"), and Lina Chen, an individual (the "<u>Executive</u>"). Except with respect to the direct employment of the Executive by the Company, the term "Company" as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its subsidiaries and affiliated entities (collectively, the "Group").

**RECITALS**

A. The Company desires to employ the Executive as its Vice President and Director to assure itself of the services of the Executive during the term of Employment (as defined below).

B. The Executive desires to be employed by the Company as its Chief Operation Officer and Director during the term of Employment and upon the terms and conditions of this Agreement.

**AGREEMENT**

The parties hereto agree as follows:

**1.** **POSITION** 

The Executive hereby accepts a position of Vice President and Director (the "Employment") of the Company.

**2.** **TERM** 

Subject to the terms and conditions of this Agreement, the term of the Employment is from June 1, 2022 to May 31, 2027.

**3.** **DUTIES AND RESPONSIBILITIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Executive's duties at the Company will include all jobs assigned by the Company's Board of the Directors (the " <u>Board</u> ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Executive shall devote all of his working time, attention and skills to the performance of his duties at the Company and shall
faithfully and diligently serve the Company in accordance with this Agreement, the Certificate of Incorporation and Bylaws of the Company,
as amended and restated from time to time (the "Charter Documents"), and the guidelines, policies and procedures of the Company
approved from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Executive shall use his best efforts to perform his duties hereunder. The Executive shall not, without the prior written consent
of the Board, become an employee of any entity other than the Company and any subsidiary or affiliate of the Company, and shall not be
concerned or interested in any business or entity that engages in the same business in which the Company engages (any such business or
entity, a " <u>Competitor</u> "), provided that nothing in this clause shall preclude the Executive from holding any shares
or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere if such shares
or securities represent less than 5% of the competitors outstanding shares and securities. The Executive shall notify the Company in writing
of his interest in such shares or securities in a timely manner and with such details and particulars as the Company may reasonably require.

**4.** **NO BREACH OF CONTRACT** 

The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements entered into by and between the Executive and any member of the Group pursuant to applicable law, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his duties hereunder; (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.

**5.** **COMPENSATION AND BENEFITS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Base Salary.</u> The Executive's base salary shall be RMB180,000 annually, paid in accordance with the Company's regular
payroll practices, and such compensation is subject to annual review and adjustment by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Bonus</u>. The Executive shall be eligible for Bonuses determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Equity Incentives</u>. To the extent the Company adopts and maintains a share incentive plan, the Executive will be eligible to
participate in such plan pursuant to the terms thereof as determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Benefits</u>. The Executive is eligible for participation in any standard employee benefit plan of the Company that currently exists
or may be adopted by the Company in the future, including, but not limited to, any retirement plan, life insurance plan, health insurance
plan and travel/holiday plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Expenses</u>. The Executive shall be entitled to reimbursement by the Company for all reasonable ordinary and necessary travel
and other expenses incurred by the Executive in the performance of his duties under this Agreement; provided that he properly accounts
for such expenses in accordance with the Company's policies and procedures.

**6.** **TERMINATION OF THE AGREEMENT** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>By the Company.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>For Cause</u>. The Company may terminate the Employment for cause, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Executive has been grossly negligent or acted dishonestly to the detriment of the Company,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Executive has engaged in actions amounting to willful misconduct or failed to perform his duties hereunder and such failure continues after the Executive is afforded a reasonable opportunity to cure such failure; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4) the Executive violates Section 7 of this Agreement.

Upon termination for cause, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive's right to all other benefits will terminate, except as required by any applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>For death and disability</u>. The Company may also terminate the Employment, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1) the Executive has died, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his employment with the Company, with or without reasonable accommodation, for more than 120 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply.

Upon termination for death or disability, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive's right to all other benefits will terminate, except as required by any applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Without Cause</u>. The Company may terminate the Employment without cause, at any time, upon a prior written notice. Upon termination without cause, the Company shall provide the following severance payments and benefits to the Executive: (1) a lump sum cash payment equal to 12 months of the Executive's base salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of his target annual bonus for the year immediately preceding the termination, if any; (3) payment of premiums for continued health benefits under the Company's health plans for 12 months fo1lowing the termination, if any; and (4) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.

Upon termination without, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Change of Control Transaction</u>. If the Company or its successor terminates the Employment upon a merger, consolidation, or transfer or sale of all or substantially all of the assets of the Company with or to any other individual(s) or entity (the "<u>Change of Control Transaction</u>"), the Executive shall be entitled to the following severance payments and benefits upon such termination: (1) a lump sum cash payment equal to 12 months of the Executive's base salary at a rate equal to the greater of his/her annual salary in effect immediate1y prior to the termination, or his/her then current annua1 salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of his/her target annual bonus for the year immediately preceding the termination; and (3) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>By the Executive</u>. The Executive may terminate the Employment at any time with a prior written notice to the Company, if (1) there
is a material reduction in the Executive's authority, duties and responsibilities, or (2) there is a material reduction in
the Executive's annual salary. Upon the Executive's termination of the Employment due to either of the above reasons, the
Company shall provide compensation to the Executive equivalent to 12 months of the Executive's base salary that he is entitled to
immediately prior to such termination. In addition, the Executive may resign prior to the expiration of the Agreement if such resignation
is approved by the Board or an alternative arrangement with respect to the Employment is agreed to by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Notice of Termination.</u> Any termination of the Executive's employment under this Agreement shall be communicated by written
notice of termination from the terminating party to the other party.

**7.** **CONFIDENTIALITY AND NON-DISCLOSURE** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Confidentiality and Non-disclosure</u>. The Executive hereby agrees at all times during the term of the Employment and after his termination,
to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, corporation
or other entity without prior written consent of the Company, any Confidential Information. The Executive understands that " <u>Confidential Information</u> " means any proprietary or confidential information of the Company, its affiliates, or their respective clients,
customers or partners, including, without limitation, technical data, trade secrets, research and development information, product plans,
services, customer lists and customers, supplier lists and suppliers, software developments, inventions, processes, formulas, technology,
designs, hardware configuration information, personnel information, marketing, finances, information about the suppliers, joint ventures,
franchisees, distributors and other persons with whom the Company does business, information regarding the skills and compensation of
other employees of the Company or other business information disclosed to the Executive by or obtained by the Executive from the Company,
its affiliates, or their respective clients, customers or partners, either directly or indirectly, in writing, orally or otherwise, if
specifically indicated to be confidential or reasonably expected to be confidential. Notwithstanding the foregoing, Confidential Information
shall not include information that is generally available and known to the public through no fault of the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Company Property</u>. The Executive understands that all documents (including computer records, facsimile and e-mail) and materials
created, received or transmitted in connection with his work or using the facilities of the Company are property of the Company and subject
to inspection by the Company at any time. Upon termination of the Executive's employment with the Company (or at any other time
when requested by the Company), the Executive will promptly deliver to the Company all documents and materials of any nature pertaining
to his work with the Company and will provide written certification of his compliance with this Agreement. Under no circumstances will
the Executive have, following his termination, in his possession any property of the Company, or any documents or materials or copies
thereof containing any Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Former Employer Information</u>. The Executive agrees that he has not and will not, during the term of his employment, (i) improperly
use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive
has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of the
Company any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to
in writing by such former employer, person or entity. The Executive will indemnify the Company and hold it harmless from and against all
claims, liabilities, damages and expenses, including reasonable attorneys' fees and costs of suit, arising out of or in connection
with any violation of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Third Party Information</u>. The Executive recognizes that the Company may have received, and in the future may receive, from third
parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third
parties, during the Executive's employment by the Company and thereafter, a duty to hold all such confidential or proprietary information
in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited
purposes permitted by, the Company's agreement with such third party.

This Section 7 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 7, the Company shall have right to seek remedies permissible under applicable law.

**8.** **CONFLICTING EMPLOYMENT.** 

The Executive hereby agrees that, during the term of his employment with the Company, he or she will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the term of the Executive's employment, nor will the Executive engage in any other activities that conflict with his obligations to the Company without the prior written consent of the Company.

**9.** **WITHHOLDING TAXES** 

Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such national, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

**10.** **ASSIGNMENT** 

This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a Change of Control Transaction, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

**11.** **SEVERABILITY** 

If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

**12.** **ENTIRE AGREEMENT** 

This Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including any prior agreements between the Executive and a member of the Group. The Executive acknowledges that he or she has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement. Any amendment to this Agreement must be in writing and signed by the Executive and the Company.

**13.** **GOVERNING LAW; JURISDICTION** 

This Agreement shall be governed by and construed in accordance with the laws of the Cayman Islands.

**14.** **AMENDMENT** 

This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

**15.** **WAIVER** 

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

**16.** **NOTICES** 

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.

**17.** **COUNTERPARTS** 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

**18.** **NO INTERPRETATION AGAINST DRAFTER** 

Each party recognizes that this Agreement is a legally binding contract and acknowledges that it, he or she has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.

*[remainder of this page left intentionally blank]*

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

---

| | |
|:---|:---|
| **NETCLASS TECHNOLOGY INC** | **NETCLASS TECHNOLOGY INC** |
| By: | /s/ *Jianbiao Dai* |
| Name: | Jianbiao Dai |
| Title: | CEO |
| **Executive** | **Executive** |
| By: | /s/ *Lina Chen* |
| Name: | Lina Chen |

---

## Exhibit 10.3

**Exhibit 10.3**

**EMPLOYMENT AGREEMENT**

This EMPLOYMENT AGREEMENT (the "<u>Agreement"</u>), is entered into as of June 1, 2022, by and between NETCLASS TECHNOLOGY INC, a Cayman Islands corporation (the "<u>Company</u>"), and Yuxing Chen, an individual (the "<u>Executive</u>"). Except with respect to the direct employment of the Executive by the Company, the term "Company" as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its subsidiaries and affiliated entities (collectively, the "<u>Group</u>").

**RECITALS**

A. The Company desires to employ the Executive as its Chief Financial Officer and Director assure itself of the services of the Executive during the term of Employment (as defined below).

B. The Executive desires to be employed by the Company as its Chief Financial Officer and Director during the term of Employment and upon the terms and conditions of this Agreement.

**AGREEMENT**

The parties hereto agree as follows:

**1.** **POSITION** 

The Executive hereby accepts a position of Chief Financial Officer and Director (the "<u>Employment</u>") of the Company.

**2.** **TERM** 

Subject to the terms and conditions of this Agreement, the term of the Employment is from June 1, 2022 to May 31, 2023.

**3.** **DUTIES AND RESPONSIBILITIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Executive's duties at the Company will include all jobs assigned by the Company's Board of the Directors (the " <u>Board</u> ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Executive shall devote all of his working time, attention and skills to the performance of his duties at the Company and shall
faithfully and diligently serve the Company in accordance with this Agreement, the Certificate of Incorporation and Bylaws of the Company,
as amended and restated from time to time (the "Charter Documents"), and the guidelines, policies and procedures of the Company
approved from time to time by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Executive shall use his best efforts to perform his duties hereunder. The Executive shall not, without the prior written consent
of the Board, become an employee of any entity other than the Company and any subsidiary or affiliate of the Company, and shall not be
concerned or interested in any business or entity that engages in the same business in which the Company engages (any such business or
entity, a " <u>Competitor</u> "), provided that nothing in this clause shall preclude the Executive from holding any shares
or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere if such shares
or securities represent less than 5% of the competitors outstanding shares and securities. The Executive shall notify the Company in writing
of his interest in such shares or securities in a timely manner and with such details and particulars as the Company may reasonably require.

**4.** **NO BREACH OF CONTRACT** 

The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements entered into by and between the Executive and any member of the Group pursuant to applicable law, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his duties hereunder; (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.

**5.** **COMPENSATION AND BENEFITS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Base Salary.</u> The Executive's base salary shall be RMB60,000 annually, paid in accordance with the Company's regular
payroll practices, and such compensation is subject to annual review and adjustment by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Bonus</u>. The Executive shall be eligible for Bonuses determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Equity Incentives</u>. To the extent the Company adopts and maintains a share incentive plan, the Executive will be eligible to
participate in such plan pursuant to the terms thereof as determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Benefits</u>. The Executive is eligible for participation in any standard employee benefit plan of the Company that currently exists
or may be adopted by the Company in the future, including, but not limited to, any retirement plan, life insurance plan, health insurance
plan and travel/holiday plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Expenses</u>. The Executive shall be entitled to reimbursement by the Company for all reasonable ordinary and necessary travel
and other expenses incurred by the Executive in the performance of his duties under this Agreement; provided that he properly accounts
for such expenses in accordance with the Company's policies and procedures.

**6.** **TERMINATION OF THE AGREEMENT** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>By the Company.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>For Cause</u>. The Company may terminate the Employment for cause, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Executive has been grossly negligent or acted dishonestly to the detriment of the Company,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Executive has engaged in actions amounting to willful misconduct or failed to perform his duties hereunder and such failure continues after the Executive is afforded a reasonable opportunity to cure such failure; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4) the Executive violates Section 7 of this Agreement.

Upon termination for cause, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive's right to all other benefits will terminate, except as required by any applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>For death and disability</u>. The Company may also terminate the Employment, at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided in accordance with applicable law), if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1) the Executive has died, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his employment with the Company, with or without reasonable accommodation, for more than 120 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply.

Upon termination for death or disability, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination. However, the Executive will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the Executive's right to all other benefits will terminate, except as required by any applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Without Cause</u>. The Company may terminate the Employment without cause, at any time, upon a prior written notice. Upon termination without cause, the Company shall provide the following severance payments and benefits to the Executive: (1) a lump sum cash payment equal to 12 months of the Executive's base salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of his target annual bonus for the year immediately preceding the termination, if any; (3) payment of premiums for continued health benefits under the Company's health plans for 12 months fo1lowing the termination, if any; and (4) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.

Upon termination without, the Executive shall be entitled to the amount of base salary earned and not paid prior to termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Change of Control Transaction</u>. If the Company or its successor terminates the Employment upon a merger, consolidation, or transfer or sale of all or substantially all of the assets of the Company with or to any other individual(s) or entity (the "<u>Change of Control Transaction</u>"), the Executive shall be entitled to the following severance payments and benefits upon such termination: (1) a lump sum cash payment equal to 12 months of the Executive's base salary at a rate equal to the greater of his/her annual salary in effect immediate1y prior to the termination, or his/her then current annua1 salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of his/her target annual bonus for the year immediately preceding the termination; and (3) immediate vesting of 100% of the then-unvested portion of any outstanding equity awards held by the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>By the Executive</u>. The Executive may terminate the Employment at any time with a prior written notice to the Company, if (1) there
is a material reduction in the Executive's authority, duties and responsibilities, or (2) there is a material reduction in
the Executive's annual salary. Upon the Executive's termination of the Employment due to either of the above reasons, the
Company shall provide compensation to the Executive equivalent to 12 months of the Executive's base salary that he is entitled to
immediately prior to such termination. In addition, the Executive may resign prior to the expiration of the Agreement if such resignation
is approved by the Board or an alternative arrangement with respect to the Employment is agreed to by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Notice of Termination.</u> Any termination of the Executive's employment under this Agreement shall be communicated by written
notice of termination from the terminating party to the other party.

**7.** **CONFIDENTIALITY AND NON-DISCLOSURE** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Confidentiality and Non-disclosure</u>. The Executive hereby agrees at all times during the term of the Employment and after his termination,
to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, corporation
or other entity without prior written consent of the Company, any Confidential Information. The Executive understands that " <u>Confidential Information</u> " means any proprietary or confidential information of the Company, its affiliates, or their respective clients,
customers or partners, including, without limitation, technical data, trade secrets, research and development information, product plans,
services, customer lists and customers, supplier lists and suppliers, software developments, inventions, processes, formulas, technology,
designs, hardware configuration information, personnel information, marketing, finances, information about the suppliers, joint ventures,
franchisees, distributors and other persons with whom the Company does business, information regarding the skills and compensation of
other employees of the Company or other business information disclosed to the Executive by or obtained by the Executive from the Company,
its affiliates, or their respective clients, customers or partners, either directly or indirectly, in writing, orally or otherwise, if
specifically indicated to be confidential or reasonably expected to be confidential. Notwithstanding the foregoing, Confidential Information
shall not include information that is generally available and known to the public through no fault of the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Company Property</u>. The Executive understands that all documents (including computer records, facsimile and e-mail) and materials
created, received or transmitted in connection with his work or using the facilities of the Company are property of the Company and subject
to inspection by the Company at any time. Upon termination of the Executive's employment with the Company (or at any other time
when requested by the Company), the Executive will promptly deliver to the Company all documents and materials of any nature pertaining
to his work with the Company and will provide written certification of his compliance with this Agreement. Under no circumstances will
the Executive have, following his termination, in his possession any property of the Company, or any documents or materials or copies
thereof containing any Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Former Employer Information</u>. The Executive agrees that he has not and will not, during the term of his employment, (i) improperly
use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive
has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of the
Company any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to
in writing by such former employer, person or entity. The Executive will indemnify the Company and hold it harmless from and against all
claims, liabilities, damages and expenses, including reasonable attorneys' fees and costs of suit, arising out of or in connection
with any violation of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Third Party Information</u>. The Executive recognizes that the Company may have received, and in the future may receive, from third
parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third
parties, during the Executive's employment by the Company and thereafter, a duty to hold all such confidential or proprietary information
in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited
purposes permitted by, the Company's agreement with such third party.

This Section 7 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 7, the Company shall have right to seek remedies permissible under applicable law.

**8.** **CONFLICTING EMPLOYMENT.** 

The Executive hereby agrees that, during the term of his employment with the Company, he or she will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the term of the Executive's employment, nor will the Executive engage in any other activities that conflict with his obligations to the Company without the prior written consent of the Company.

**9.** **WITHHOLDING TAXES** 

Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such national, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

**10.** **ASSIGNMENT** 

This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a Change of Control Transaction, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

**11.** **SEVERABILITY** 

If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

**12.** **ENTIRE AGREEMENT** 

This Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including any prior agreements between the Executive and a member of the Group. The Executive acknowledges that he or she has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement. Any amendment to this Agreement must be in writing and signed by the Executive and the Company.

**13.** **GOVERNING LAW; JURISDICTION** 

This Agreement shall be governed by and construed in accordance with the laws of the Cayman Islands.

**14.** **AMENDMENT** 

This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

**15.** **WAIVER** 

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

**16.** **NOTICES** 

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, or (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.

**17.** **COUNTERPARTS** 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

**18.** **NO INTERPRETATION AGAINST DRAFTER** 

Each party recognizes that this Agreement is a legally binding contract and acknowledges that it, he or she has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.

*[remainder of this page left intentionally blank]*

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

---

| | |
|:---|:---|
| **NETCLASS TECHNOLOGY INC** | **NETCLASS TECHNOLOGY INC** |
| By: | /s/ *Jianbiao Dai* |
| Name: | Jianbiao Dai |
| Title: | CEO |
| **Executive** | **Executive** |
| By: | /s/ *Yuxing Chen* |
| Name: | Yuxing Chen |

---

## Exhibit 10.4

**Exhibit 10.4**

![](tm224150d7_ex10-4img01.jpg)

**October 26** **, 2022**

**Re: Director Offer Letter** **– Xianghong Zhou**

Dear Xianghong Zhou:

NETCLASS TECHNOLOGY INC, a Cayman Islands limited liability company (the "Company" or "we"), is pleased to offer you a position as a Director of the Company. We believe your background and experience will be a significant asset to the Company and we look forward to your participation as a Director in the Company. Should you choose to accept this position as a Director, this letter agreement (the "Agreement") shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company. Your appointment shall begin upon Nasdaq's approval of Company's listing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Term</u>.** This Agreement is effective on the date of effectiveness of the registration statement in connection with the Company's initial public offering. Your term as a Director shall continue subject to the provisions in Section 9 below or until your successor is duly elected and qualified. The position shall be up for re-appointment every year at the annual meeting of shareholders of the Company (the "Board") and upon re-appointment, the terms and provisions of this Agreement shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Services</u>.** You shall render customary services as a Director, member of the Audit Committee, Nomination Committee and Compensation Committee (hereinafter, your "Duties"). During the term of this Agreement, you may attend and participate at each meeting regarding the business and operation issues of the Company as regularly or specially called, via teleconference, video conference or in person. You shall consult with the members of the Board and committee (if any) regularly and as necessary via telephone, electronic mail or other forms of correspondence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Services for Others</u>.** You shall be free to represent or perform services for other persons during the term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **<u>Compensation</u>.** As compensation for your services to the Company, you will receive upon execution of this Agreement a compensation of $30,000 in cash for each calendar year of service under this Agreement on a pro-rated basis, payable on a monthly basis; 5,000 Class A ordinary shares for each calendar year of service under this Agreement on a pro-rated basis, payable on a quarterly basis.

You shall be reimbursed for reasonable expenses incurred by you in connection with the performance of your Duties (including travel expenses for in-person meetings).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>D&O Insurance Policy</u>.** During the term under this Agreement, the Company shall include you as an insured under its officers and directors insurance policy, if available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>No Assignment</u>.** Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **<u>Confidential Information; Non-Disclosure</u>.** In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **<u>Definition</u>.** For purposes of this Agreement the term "Confidential Information" means: (i) any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; (ii) any information which is related to the business of the Company and is generally not known by non-Company personnel; and (iii) Confidential Information includes, without limitation, trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **<u>Exclusions</u>.** Notwithstanding the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available or is readily available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful possession of such information who is not restricted from disclosing such information; (iii) information known by you prior to receipt of such information from the Company, which prior knowledge can be documented and (iv) information you are required to disclose pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory organization having authority pursuant to the law; provided, however, that you shall first have given prior written notice to the Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information not be disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **<u>Documents</u>.** You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company's demand, upon termination of this Agreement, or upon your termination or Resignation (as defined in Section 9 herein).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **<u>Confidentiality</u>.** You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement. Notwithstanding the foregoing, you may disclose Confidential Information to your legal counsel and accounting advisors who have a need to know such information for accounting or tax purposes and who agree to be bound by the provisions of this paragraph (d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **<u>Ownership</u>.** You agree that the Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, "**Inventions"**) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Non-Solicitation</u>.** During the term of your appointment, you shall not solicit for employment any employee of the Company with whom you have had contact due to your appointment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Termination and Resignation</u>.** Your services as a Director may be terminated for any or no reason by the determination of the Board. You may also terminate your services as a Director for any or no reason by delivering your written notice of resignation to the Company ("Resignation"), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Governing Law; Arbitration</u>.** All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York. All disputes with respect to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the American Arbitration Association at its New York office in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be New York law. The seat of arbitration shall be in New York. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Entire Agreement; Amendment; Waiver; Counterparts</u>.** This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Indemnification</u>**. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney's fees, judgments, fines, settlements and other legally permissible amounts ("Losses"), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys' fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Acknowledgement</u>.** You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.

The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.

---

| | |
|:---|:---|
| Sincerely, | Sincerely, |
| NETCLASS TECHNOLOGY INC | NETCLASS TECHNOLOGY INC |
| By: | /s/ *Jianbiao Dai* |
|  | Jianbiao Dai |
|  | Chief Executive Officer and Chairman |

---

---

| |
|:---|
| **AGREED AND ACCEPTED:** |
| By: /s/ *Xianghong Zhou* |
| Xianghong Zhou |

---

## Exhibit 10.5

**Exhibit 10.5**

![](tm224150d7_ex10-5img01.jpg)

**October 26** **, 2022**

**Re: Director Offer Letter** **– Angel Colon**

Dear Angel Colon:

NETCLASS TECHNOLOGY INC, a Cayman Islands limited liability company (the "Company" or "we"), is pleased to offer you a position as a Director of the Company. We believe your background and experience will be a significant asset to the Company and we look forward to your participation as a Director in the Company. Should you choose to accept this position as a Director, this letter agreement (the "Agreement") shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company. Your appointment shall begin upon Nasdaq's approval of Company's listing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Term</u>.** This Agreement is effective on the date of effectiveness of the registration statement in connection with the Company's initial public offering. Your term as a Director shall continue subject to the provisions in Section 9 below or until your successor is duly elected and qualified. The position shall be up for re-appointment every year at the annual meeting of shareholders of the Company (the "Board") and upon re-appointment, the terms and provisions of this Agreement shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Services</u>.** You shall render customary services as a Director, member of the Audit Committee, Nomination Committee and Compensation Committee (hereinafter, your "Duties"). During the term of this Agreement, you may attend and participate at each meeting regarding the business and operation issues of the Company as regularly or specially called, via teleconference, video conference or in person. You shall consult with the members of the Board and committee (if any) regularly and as necessary via telephone, electronic mail or other forms of correspondence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Services for Others</u>.** You shall be free to represent or perform services for other persons during the term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **<u>Compensation</u>.** As compensation for your services to the Company, you will receive upon execution of this Agreement a compensation of $45,000 in cash for each calendar year of service under this Agreement on a pro-rated basis, payable on a monthly basis; 5,000 Class A ordinary shares for each calendar year of service under this Agreement on a pro-rated basis, payable on a quarterly basis.

You shall be reimbursed for reasonable expenses incurred by you in connection with the performance of your Duties (including travel expenses for in-person meetings).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>D&O Insurance Policy</u>.** During the term under this Agreement, the Company shall include you as an insured under its officers and directors insurance policy, if available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>No Assignment</u>.** Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **<u>Confidential Information; Non-Disclosure</u>.** In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **<u>Definition</u>.** For purposes of this Agreement the term "Confidential Information" means: (i) any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; (ii) any information which is related to the business of the Company and is generally not known by non-Company personnel; and (iii) Confidential Information includes, without limitation, trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **<u>Exclusions</u>.** Notwithstanding the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available or is readily available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful possession of such information who is not restricted from disclosing such information; (iii) information known by you prior to receipt of such information from the Company, which prior knowledge can be documented and (iv) information you are required to disclose pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory organization having authority pursuant to the law; provided, however, that you shall first have given prior written notice to the Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information not be disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **<u>Documents</u>.** You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company's demand, upon termination of this Agreement, or upon your termination or Resignation (as defined in Section 9 herein).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **<u>Confidentiality</u>.** You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement. Notwithstanding the foregoing, you may disclose Confidential Information to your legal counsel and accounting advisors who have a need to know such information for accounting or tax purposes and who agree to be bound by the provisions of this paragraph (d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **<u>Ownership</u>.** You agree that the Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, "**Inventions"**) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Non-Solicitation</u>.** During the term of your appointment, you shall not solicit for employment any employee of the Company with whom you have had contact due to your appointment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Termination and Resignation</u>.** Your services as a Director may be terminated for any or no reason by the determination of the Board. You may also terminate your services as a Director for any or no reason by delivering your written notice of resignation to the Company ("Resignation"), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Governing Law; Arbitration</u>.** All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York. All disputes with respect to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the American Arbitration Association at its New York office in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be New York law. The seat of arbitration shall be in New York. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Entire Agreement; Amendment; Waiver; Counterparts</u>.** This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Indemnification</u>**. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney's fees, judgments, fines, settlements and other legally permissible amounts ("Losses"), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys' fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Acknowledgement</u>.** You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.

The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.

---

| | |
|:---|:---|
| Sincerely, | Sincerely, |
| NETCLASS TECHNOLOGY INC | NETCLASS TECHNOLOGY INC |
| By: | /s/ *Jianbiao Dai* |
|  | Jianbiao Dai |
|  | Chief Executive Officer and Chairman |

---

---

| |
|:---|
| **AGREED AND ACCEPTED:** |
| /s/ *Angel Colon* |

---

Angel Colon

Address:

Phone Number:

Email: acolon17@yahoo.com

## Exhibit 10.6

**Exhibit 10.6**

![](tm224150d7_ex10-6img01.jpg)

**November 10** **, 2022**

**Re: Director Offer Letter** **– Xiao Fu**

Dear Xiao Fu:

NETCLASS TECHNOLOGY INC, a Cayman Islands limited liability company (the "Company" or "we"), is pleased to offer you a position as a Director of the Company. We believe your background and experience will be a significant asset to the Company and we look forward to your participation as a Director in the Company. Should you choose to accept this position as a Director, this letter agreement (the "Agreement") shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company. Your appointment shall begin upon Nasdaq's approval of Company's listing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **<u>Term</u>.** This Agreement is effective on the date of effectiveness of the registration statement in connection with the Company's initial public offering. Your term as a Director shall continue subject to the provisions in Section 9 below or until your successor is duly elected and qualified. The position shall be up for re-appointment every year at the annual meeting of of the Company (the "Board") and upon re-appointment, the terms and provisions of this Agreement shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **<u>Services</u>.** You shall render customary services as a Director, member of the Audit Committee, Nomination Committee and Compensation Committee (hereinafter, your "Duties"). During the term of this Agreement, you may attend and participate at each meeting regarding the business and operation issues of the Company as regularly or specially called, via teleconference, video conference or in person. You shall consult with the members of the Board and committee (if any) regularly and as necessary via telephone, electronic mail or other forms of correspondence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **<u>Services for Others</u>.** You shall be free to represent or perform services for other persons during the term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **<u>Compensation</u>.** As compensation for your services to the Company, you will receive upon execution of this Agreement a compensation of $30,000 in cash for each calendar year of service under this Agreement on a pro-rated basis, payable on a monthly basis; 5,000 Class A ordinary shares for each calendar year of service under this Agreement on a pro-rated basis, payable on a quarterly basis.

You shall be reimbursed for reasonable expenses incurred by you in connection with the performance of your Duties (including travel expenses for in-person meetings).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **<u>D&O Insurance Policy</u>.** During the term under this Agreement, the Company shall include you as an insured under its officers and directors insurance policy, if available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **<u>No Assignment</u>.** Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **<u>Confidential Information; Non-Disclosure</u>.** In consideration of your access to certain Confidential Information (as defined below) of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **<u>Definition</u>.** For purposes of this Agreement the term "Confidential Information" means: (i) any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; (ii) any information which is related to the business of the Company and is generally not known by non-Company personnel; and (iii) Confidential Information includes, without limitation, trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **<u>Exclusions</u>.** Notwithstanding the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available or is readily available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful possession of such information who is not restricted from disclosing such information; (iii) information known by you prior to receipt of such information from the Company, which prior knowledge can be documented and (iv) information you are required to disclose pursuant to any applicable law, regulation, judicial or administrative order or decree, or request by other regulatory organization having authority pursuant to the law; provided, however, that you shall first have given prior written notice to the Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information not be disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **<u>Documents</u>.** You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company's demand, upon termination of this Agreement, or upon your termination or Resignation (as defined in Section 9 herein).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **<u>Confidentiality</u>.** You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement. Notwithstanding the foregoing, you may disclose Confidential Information to your legal counsel and accounting advisors who have a need to know such information for accounting or tax purposes and who agree to be bound by the provisions of this paragraph (d).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **<u>Ownership</u>.** You agree that the Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, "**Inventions"**) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **<u>Non-Solicitation</u>.** During the term of your appointment, you shall not solicit for employment any employee of the Company with whom you have had contact due to your appointment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **<u>Termination and Resignation</u>.** Your services as a Director may be terminated for any or no reason by the determination of the Board. You may also terminate your services as a Director for any or no reason by delivering your written notice of resignation to the Company ("Resignation"), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any compensation that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **<u>Governing Law; Arbitration</u>.** All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of New York. All disputes with respect to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the American Arbitration Association at its New York office in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be New York law. The seat of arbitration shall be in New York. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **<u>Entire Agreement; Amendment; Waiver; Counterparts</u>.** This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Indemnification</u>**. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney's fees, judgments, fines, settlements and other legally permissible amounts ("Losses"), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your gross negligence or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys' fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **<u>Acknowledgement</u>.** You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of Directors of the Company of any questions arising under this Agreement.

The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.

---

| | |
|:---|:---|
| Sincerely, | Sincerely, |
| NETCLASS TECHNOLOGY INC | NETCLASS TECHNOLOGY INC |
| By: | /s/ *Jianbiao Dai* |
|  | Jianbiao Dai |
|  | Chief Executive Officer and Chairman |

---

---

| |
|:---|
| **AGREED AND ACCEPTED:** |
| By: /s/ *Xiao Fu* |

---

Xiao Fu

## Exhibit 10.7

**Exhibit 10.7**

**Standardized Contract of Software/Application Development**

Project name: Software/courseware/application/system/product development

Party A: [Customer Name]

Party B: Shanghai Netclass Information Technology Co., Ltd.

Place of signing：[·]

Signing date：[·][·], [·]

According to the provisions of the Contract Law of the People's Republic of China, both parties to the contract have reached an agreement on the technical development of software/courseware production and signed this contract.

Article 1: The technical content, form and requirements of the subject matter

From the date of signing the contract, Party A will entrust Party B to develop certain software/application/system (the "product") and deliver it to Party A for use after the development of product is completed (the "project").

Article 2: The technical indicators and parameters that should be achieved.

Party A shall provide the technical requirement and development data such as Party A's needs, materials, courseware format, etc.

Party B shall design and develop the product according to Party A's needs, inform Party A for inspection after product development is completed and delivers the product to Party A for product inspection.

Additional instructions are available in Appendix A attached hereto.

Article 3: Research and Development schedule

Party B shall develop the product within six months according to Party A's requirements.

Article 4: Research and Development Funds and Settlement Methods.

Party A shall pay Party B the technical development service fee, RMB [·]on a fixed-price basis.

Payment shall be made in the following installments：

First installment: 40% of the total amount, payable within two weeks after the agreement is signed.

Second installment: 40% of the total amount.

The remainder shall be paid within two weeks after the product delivery.

Article 5: Duration, place and method of contract performance

This contract will be performed in [location].

The development project shall be finished in [·] months after the signed date of this contract.

How to perform this contract: From the date of signing the contract, Party A will entrust Party B to develop the product pursuant to the term of the contract and deliver it to Party A for use after the development is completed.

Article 6: Confidential terms

The two parties have obligations to keep technical information and data of product development confidential. Without the consent of the other party, any technical information and data of the product development shall not be disclosed to a third party.

Article 7: Standards and methods of acceptance:

After Party B design and develop the product based on Party A's needs and technical requirement according to Article 2 of this contract and the custom and practice in the online education software/courseware/application development industry as stipulated in the Product Confirmation Form as Appendix B , Party A shall inspect the product according to the Product Confirmation Form. If the product meets all the requirements in the Product Confirmation Form, Party A shall accept the product after inspection.

Article 8: Resolution of contract disputes

Disputes arising during the performance of this contract may be resolved by both parties through settlement or mediation. If the parties are unwilling to reconcile or mediate, or if the reconciliation or mediation fails, both parties agree that the arbitration shall be conducted by the [·] Arbitration Commission.

Article 9: Other terms

1) In the event of human force majeure factors, such as war, natural disasters and other factors, and the product cannot be completed and delivered normally, neither party shall bear any responsibilities;

2) During the performance of the agreement, both parties may, according to the actual situation, supplement and negotiate and conclude a supplementary agreement on matters not covered in the agreement. In the event of a breach of contract, each party has the right to require the breaching party to compensate for the economic losses caused thereby;

3) This agreement is made in duplicate, each party A and B will hold one copy, which will become effective after being signed and sealed by representatives of both parties.

Party A [Seal]

Representative sign [·]

Date [·][·], [·]

Party B [seal]

Representative sign [·]

Date [·][·], [·]

Appendix A

Additional Instructions

Appendix B

Product Development Demand Letter

## Exhibit 14.1

**Exhibit 14.1**

**NETCLASS TECHNOLOGY INC**

**Code of Ethics and Business Conduct**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Introduction</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 The Board of Directors (the "**Board**") of NETCLASS TECHNOLOGY INC (the "**Company**") has adopted this Code of Ethics and Business Conduct (the "**Code**") in order to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the "**SEC**") and in other public communications made by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) promote compliance with applicable governmental laws, rules and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) promote the protection of Company assets, including corporate opportunities and confidential information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) promote fair dealing practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) deter wrongdoing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) ensure accountability for adherence to the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 All directors, officers and employees are required to be familiar with the Code, comply with its provisions and report any suspected violations as described below in Section 10, Reporting and Enforcement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Honest and Ethical Conduct</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 The Company's policy is to promote high standards of integrity by conducting its affairs honestly and ethically.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company's customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Conflicts of Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 A conflict of interest occurs when an individual's private interest (or the interest of a member of his or her family) interferes, or even appears to interfere, with the interests of the Company as a whole. A conflict of interest can arise when an employee, officer or director (or a member of his or her family) takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest also arise when an employee, officer or director (or a member of his or her family) receives improper personal benefits as a result of his or her position in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Loans by the Company to, or guarantees by the Company of obligations of, employees or their family members are of special concern and could constitute improper personal benefits to the recipients of such loans or guarantees, depending on the facts and circumstances. Loans by the Company to, or guarantees by the Company of obligations of, any director or executive officer or their family members are expressly prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Whether or not a conflict of interest exists or will exist can be unclear. Conflicts of interest should be avoided unless specifically authorized as described in Section 3.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 Persons other than directors and executive officers who have questions about a potential conflict of interest or who become aware of an actual or potential conflict should discuss the matter with, and seek a determination and prior authorization or approval from, their supervisor or the Chief Financial Officer. A supervisor may not authorize or approve conflict of interest matters or make determinations as to whether a problematic conflict of interest exists without first providing the Chief Financial Officer with a written description of the activity and seeking the Chief Financial Officer's written approval. If the supervisor is himself involved in the potential or actual conflict, the matter should instead be discussed directly with the Chief Financial Officer.

Directors and executive officers must seek determinations and prior authorizations or approvals of potential conflicts of interest exclusively from the Audit Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compliance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Employees, officers and directors should comply, both in letter and spirit, with all applicable laws, rules and regulations in the cities, states and countries in which the Company operates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Although not all employees, officers and directors are expected to know the details of all applicable laws, rules and regulations, it is important to know enough to determine when to seek advice from appropriate personnel. Questions about compliance should be addressed to the Legal Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 No director, officer or employee may purchase or sell any Company securities while in possession of material nonpublic information regarding the Company, nor may any director, officer or employee purchase or sell another company's securities while in possession of material nonpublic information regarding that company. It is against Company policies and illegal for any director, officer or employee to use material nonpublic information regarding the Company or any other company to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) obtain profit for himself or herself; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) directly or indirectly "tip" others who might make an investment decision on the basis of that information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Disclosure</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 The Company's periodic reports and other documents filed with the SEC, including all financial statements and other financial information, must comply with applicable federal securities laws and SEC rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 Each director, officer and employee who contributes in any way to the preparation or verification of the Company's financial statements and other financial information must ensure that the Company's books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company's accounting and internal audit departments, as well as the Company's independent public accountants and counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 Each director, officer and employee who is involved in the Company's disclosure process must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) be familiar with and comply with the Company's disclosure controls and procedures and its internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) take all necessary steps to ensure that all filings with the SEC and all other public communications about the financial and business condition of the Company provide full, fair, accurate, timely and understandable disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Protection and Proper Use of Company Assets</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 All directors, officers and employees should protect the Company's assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company's profitability and are prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 All Company assets should be used only for legitimate business purposes. Any suspected incident of fraud or theft should be reported for investigation immediately.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 The obligation to protect Company assets includes the Company's proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business and marketing plans, engineering and manufacturing ideas, designs, databases, records and any nonpublic financial data or reports. Unauthorized use or distribution of this information is prohibited and could also be illegal and result in civil or criminal penalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Corporate Opportunities</u>. All directors, officers and employees owe a duty to the Company to advance its interests when the opportunity arises. Directors, officers and employees are prohibited from taking for themselves personally (or for the benefit of friends or family members) opportunities that are discovered through the use of Company assets, property, information or position. Directors, officers and employees may not use Company assets, property, information or position for personal gain (including gain of friends or family members). In addition, no director, officer or employee may compete with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Confidentiality</u>. Directors, officers and employees should maintain the confidentiality of information entrusted to them by the Company or by its customers, suppliers or partners, except when disclosure is expressly authorized or is required or permitted by law. Confidential information includes all nonpublic information (regardless of its source) that might be of use to the Company's competitors or harmful to the Company or its customers, suppliers or partners if disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Fair Dealing</u>. Each director, officer and employee must deal fairly with the Company's customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. No director, officer or employee may take unfair advantage of anyone through manipulation, concealment, abuse or privileged information, misrepresentation of facts or any other unfair dealing practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Reporting and Enforcement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 Reporting and Investigation of Violations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Actions prohibited by this Code involving directors or executive officers must be reported to the Audit Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Actions prohibited by this Code involving anyone other than a director or executive officer must be reported to the reporting person's supervisor or the Chief Financial Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) After receiving a report of an alleged prohibited action, the Audit Committee, the relevant supervisor or the Chief Financial Officer must promptly take all appropriate actions necessary to investigate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All directors, officers and employees are expected to cooperate in any internal investigation of misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Enforcement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company must ensure prompt and consistent action against violations of this Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If, after investigating a report of an alleged prohibited action by a director or executive officer, the Audit Committee determines that a violation of this Code has occurred, the Audit Committee will report such determination to the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If, after investigating a report of an alleged prohibited action by any other person, the relevant supervisor or the Chief Financial Officer determines that a violation of this Code has occurred, the supervisor or the Chief Financial Officer will report such determination to the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Upon receipt of a determination that there has been a violation of this Code, the Board will take such preventative or disciplinary action as it deems appropriate, including, but not limited to, reassignment, demotion, dismissal and, in the event of criminal conduct or other serious violations of the law, notification of appropriate governmental authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 Waivers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board may, in its discretion, waive any violation of this Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any waiver for a director or an executive officer shall be disclosed as required by SEC and Nasdaq rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 Prohibition on Retaliation.

The Company does not tolerate acts of retaliation against any director, officer or employee who makes a good faith report of known or suspected acts of misconduct or other violations of this Code.

## Exhibit 21.1

**Exhibit 21.1**

**NETCLASS TECHNOLOGY INC**

**List of Subsidiaries**

---

| | |
|:---|:---|
| **Name of Subsidiary** | **Jurisdiction of Incorporation or Organization** |
| Dragonsoft Group (China) Limited | Hong Kong |
| Shanghai Zhima information Technology Co., Ltd. | People's Republic of China |
| Shanghai Netwide Enterprise Management Co., Ltd. | People's Republic of China Virgin Islands |
| Shanghai NetClass Information Technology Co., Ltd. | People's Republic of China |
| NetClass Training (Shanghai) Co., Ltd. | People's Republic of China |
| Shanghai Chuangyuan Education Technology Co., Ltd. | People's Republic of China |
| Shanghai NetClass Enterprise Management Co., Ltd | People's Republic of China |
| Shanghai NetClass Human Resource Co., Ltd. | People's Republic of China |

---

## Exhibit 23.1

**Exhibit 23.1**

![](image_003.jpg)

<u>Independent Registered Public Accounting Firm's Consent</u>

We consent to the inclusion in this Registration Statement of NetClass Technology Inc on Form F-1 of our report dated March 28, 2023, with respect to our audits of the consolidated balance sheets of NetClass Technology Inc as of September 30, 2022 and 2021, the related consolidated statements of income and comprehensive income (loss), changes in equity and cash flows for the years ended September 30, 2022 and 2021, appearing in the Prospectus. We also consent to the reference to our firm under the heading "Experts" in the Prospectus, which is part of this Registration Statement.

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

Beijing, China

March 28, 2023

BEIJING OFFICE • Unit 2419-2422 • Kerry Center South Tower • 1 Guang Hua Road • Chaoyang District, Beijing • 100020

Phone 8610.8518.7992 • Fax 8610.8518.7993 • www.marcumasia.com

## Exhibit 23.2

**Exhibit 23.2**

**CONSENT OF Xianghong Zhou** 

NETCLASS TECHNOLOGY INC (the "Company") intends to file a Registration Statement on Form F-1 (together with any amendments or supplements thereto, the "Registration Statement") registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.

Dated: March 28, 2023

---

| |
|:---|
| By: /s/ Xianghong Zhou |
| Xianghong Zhou |

---

## Exhibit 23.3

**Exhibit 23.3**

**CONSENT OF Angel Colon** 

NETCLASS TECHNOLOGY INC (the "Company") intends to file a Registration Statement on Form F-1 (together with any amendments or supplements thereto, the "Registration Statement") registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.

Dated: March 28, 2023

---

| |
|:---|
| /s/ Angel Colon |
| Angel Colon |

---

## Exhibit 23.4

**Exhibit 23.4**

**CONSENT OF Xiao Fu** 

NETCLASS TECHNOLOGY INC (the "Company") intends to file a Registration Statement on Form F-1 (together with any amendments or supplements thereto, the "Registration Statement") registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.

Dated: March 28, 2023

---

| |
|:---|
| By: /s/ Xiao Fu |
| Xiao Fu |

---

## Exhibit 23.5

**Exhibit 23.5**

Address: 48 Ping Jiang Road, Shanghai 200032, P.R. CHINA

Tel: -21-54657955

---

| | |
|:---|:---|
| ![](tm2224158d7_ex23-5img01.jpg) | **Shanghai Association for Informatization Development Research** |

---

August 16, 2022

**N**ETCLASS TECHNOLOGY INC**

6F, Building A

1118 Wan Rong Road Shanghai

People's Republic of China 200436

**Re: Consent of** **Shanghai Association for Informatization Development Research**

Ladies and Gentlemen,

We understand that NETCLASS TECHNOLOGY INC (the **"Company")** intends to file a draft registration statement (the **"Registration Statement")** with the United States Securities and Exchange Commission (the **"SEC")** in connection with its proposed initial public offering (the **"Proposed IPO").**

We hereby consent to the references to our name and the inclusion of information, data, and statements from our research reports and amendments thereto, including but not limited to the industry research report titled "Shanghai Online Education Information Platform Development Trend Report " (the **"Report"),** and any subsequent amendments to the Report, as well as the citation of our research report and amendments thereto, (i) in the Registration Statement and any amendments thereto, (ii) in any written correspondences with the SEC, (iii) in any other future filings with the SEC by the Company, including, without limitation, filings on Form 20-F, Form 6-K or other SEC filings (collectively, the **"SEC Filings"),** (iv) on the websites of the Company and its subsidiaries and affiliates, (v) in institutional and retail road shows and other activities in connection with the Proposed IPO, and in other publicity materials in connection with the Proposed IPO.

We further hereby consent to the filing of this letter as an exhibit to the Registration Statement and any amendments thereto and as an exhibit to any other SEC Filings. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the rules and regulations of the SEC thereunder.

Yours faithfully, For and on behalf of

Shanghai Association for Informatization Development Research

---

| |
|:---|
| /s/ Xu Longzhang |
| Name: Xu Longzhang |
| Title: Secretary General |

---

## Exhibit 99.1

**Exhibit 99.1**

<u>Legal Opinion</u>   <u>Grandall Law Firm (Shanghai)</u>

![](tm2224158d3_ex99-1img001.jpg)

上海市北京西路 968 号嘉地中心 27 层 邮编：200041

27th Floor, Garden Square, No. 968 West Beijing Road, Shanghai 200041, China

电话/Tel: (+86)(21) 5234 1668 传真/Fax: (+86)(21) 5234 1670

网址/Website: http://www.grandall.com.cn

**To: NetClass Technology Inc** 

701 - 21, No. 912, Gonghexin Rd, Jing'an District, Shanghai People's <br> Republic of China

Dear Sirs/Madams,

We are lawyers qualified in the People's Republic of China (the "**PRC**") and are qualified to issue opinions on the PRC Laws (as defined below). For the purpose of this legal opinion (this "**Opinion**"), the PRC does not include the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan.

We are acting as PRC counsel to NetClass Technology Inc (the "**Company**"), a company incorporated under the laws of the Cayman Islands, in connection with (i) the proposed public offering (the "**Offering**") of certain number of Class A ordinary shares (the "**Ordinary Shares**"), par value $0.00025 per share, of the Company, in accordance with the Company's registration statement on Form F-1, including all amendments or supplements thereto (the "**Class A Registration Statement**"), filed by the Company with the U.S. Securities and Exchange Commission (the "**SEC**") under the U.S. Securities Act of 1933, as amended, and (ii) the Company's proposed listing of the Class A Ordinary Shares on the Nasdaq Capital Market.

In so acting, we have examined the Registration Statement, the originals or copies certified or otherwise identified to our satisfaction, of documents provided to us by the Company and such other documents, corporate records, certificates, approvals and other instruments as we have deemed necessary for the purpose of rendering this Opinion, including but not limited to originals or copies of the agreements and certificates issued by PRC authorities and officers of the Company (the "**Documents**").

In examining the Documents and for the purpose of giving this Opinion, we have assumed without further inquiry:

&nbsp;&nbsp;&nbsp;&nbsp;1. the genuineness of all the signatures, seals and chops, the authenticity of the Documents
submitted to us as original and the conformity with authentic original documents submitted to us as copies and the authenticity of such
originals;

&nbsp;&nbsp;&nbsp;&nbsp;2. the truthfulness, accuracy and completeness of the Documents, as well as the factual
statements contained in the Documents;

<u>Legal Opinion</u>   <u>Grandall Law Firm (Shanghai)</u>

&nbsp;&nbsp;&nbsp;&nbsp;3. that the Documents provided to us remain in full force and effect up to the date of
this Opinion and that none of the Documents has been revoked, amended, varied or supplemented except as otherwise indicated in such documents;

&nbsp;&nbsp;&nbsp;&nbsp;4. that information provided to us by the Company, the WFOE (as defined below), Shanghai
Netwide (as defined below), NetClass China (as defined below), and the PRC Subsidiaries (as defined below) in response to our enquiries
for the purpose of this Opinion is true, accurate, complete and not misleading, and that the Company, the WFOE, Shanghai Netwide, NetClass
China, and the PRC Subsidiaries have not withheld anything that, if disclosed to us, would reasonably cause us to alter this Opinion in
whole or in part;

&nbsp;&nbsp;&nbsp;&nbsp;5. all Governmental Authorizations and other official statement or documentation are
obtained by lawful means in due course;

&nbsp;&nbsp;&nbsp;&nbsp;6. that each of the parties other than PRC entities (as defined below) is duly organized
and is validly existing in good standing under the laws of its jurisdiction of organization and/or incorporation (as the case may be);

&nbsp;&nbsp;&nbsp;&nbsp;7. that all parties other than the PRC entities have the requisite power and authority
to enter into, execute, deliver and perform all the Documents to which they are parties and have duly executed, delivered, performed,
and will duly perform their obligations under all the Documents to which they are parties; and

&nbsp;&nbsp;&nbsp;&nbsp;8. all documents submitted to us are legal, valid, binding and enforceable under all
such laws as govern or relate to them other than PRC Laws.

For the purpose of rendering this Opinion, where important facts were not independently established to us, we have relied upon certificates issued by Governmental Authorities and representatives of the shareholders of the Company, the WFOE, Shanghai Netwide, NetClass China, and the PRC Subsidiaries with proper authority and upon representations, made in or pursuant to the Documents.

The following terms as used in this Opinion are defined as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp;"**China**" or "**PRC**" | means the People's Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau for the purposes of this Opinion only. |
| &nbsp;&nbsp;"**PRC Laws**" | means any and all officially published laws, regulations, statutes, rules, decrees, notices, and supreme court's judicial interpretations currently in force and publicly available in the PRC as of the date hereof. |
| &nbsp;&nbsp;"**Governmental **Authorities**"** | means any national, provincial or local court, governmental agency or body, stock exchange authorities or any other regulator in the PRC. |
| &nbsp;&nbsp;"**Governmental **Authorizations**"** | means licenses, consents, authorizations, sanctions, permissions, declarations, approvals, orders, registrations, clearances, annual inspections, waivers, qualifications, certificates and permits from, and the reports to and filings with, PRC Governmental Authorities pursuant to any applicable PRC Laws. |

---

<u>Legal Opinion</u>   <u>Grandall Law Firm (Shanghai)</u>

---

| | |
|:---|:---|
| &nbsp;&nbsp;**"M&A Rules"** | means the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly promulgated by the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration of Industry and Commerce, China Securities Regulatory Commission (the "CSRC") and the State Administration of Foreign Exchange of the PRC on August 8, 2006 and became effective on September 8, 2006, as amended by the Ministry of Commerce on June 22, 2009. |
| &nbsp;&nbsp;**"NetClass HK"** | means Dragonsoft Group (China) Limited, a wholly-owned subsidiary of Netclass (defined below) under the laws of Hong Kong. |
| &nbsp;&nbsp;**"WFOE"** | means Shanghai Zhima information Technology Co., Ltd. (上海职 马 信 息 技 术 有 限 公 司), a wholly foreign-owned subsidiary of NetClass HK under the laws of the People's Republic of China. |
| &nbsp;&nbsp;**"NetClass"** | means NETCLASS TECHNOLOGY INC, a Cayman Islands exempted company. |
| &nbsp;&nbsp;**"Shanghai Netwide"** | **means Shanghai Netwide Enterprise Management Co., Ltd. (上海网 宽企业管理有限公司), a wholly-owned subsidiary of WFOE under the laws of the People's Republic of China** |
| &nbsp;&nbsp;**"NetClass China"** | **means Shanghai NetClass Information Technology Co., Ltd. (上海 网班信息科技股份有限公司) incorporated under the laws of the People's Republic of China. WFOE owns 21.46% equity interest and Shanghai Netwide owns 78.54% equity interest** |
| &nbsp;&nbsp;**"PRC Subsidiaries"** | means Shanghai Chuangyuan Education Technology Co., Ltd. (上海 创远教育科技有限公司), Shanghai NetClass Human Resource Co., Ltd. (上海网班人力资源有限公司), Shanghai NetClass Enterprise Management Co., Ltd. (上海网班企业管理服务有限公司), and NetClass Training (Shanghai) Co., Ltd. (网班(上海)教育培训有限 公司), all of which are limited liability companies organized under the laws of the PRC. |
| &nbsp;&nbsp;**"PRC Entities"** | means the WFOE, Shanghai Netwide, NetClass China, and PRC Subsidiaries |
| &nbsp;&nbsp;**"Prospectus"** | means the prospectus, including all amendments or supplements thereto, that forms part of the Registration Statement. |
| &nbsp;&nbsp;**"shares", "Shares" or<br> "Class A Ordinary Shares"** | means the Class A ordinary shares of NetClass, par value $0.00025 per share. |

---

Capitalized terms used herein and not otherwise defined herein shall have the same meanings described in the Registration Statement.

<u>Legal Opinion</u>   <u>Grandall Law Firm (Shanghai)</u>

Based upon and subject to the foregoing and the disclosures contained in the Registration Statement and the qualifications set out below, we are of the opinion that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The description of the ownership structure described under the caption "Corporate Structure"
in the Prospectus is true and accurate in all material respects and insofar as related to PRC Laws, nothing has been omitted from such
description which would make the same misleading in any material respects. Based on our understanding of the currently effective PRC Laws,
the ownership structures of the PRC Entities, both currently and immediately after giving effect to the Offering, will not result in any
violation of the PRC Laws. However, there are substantial uncertainties regarding the interpretation and application of the PRC Laws and
future PRC laws and regulations, and there can be no assurance that in the future the PRC authorities will not take a view that is contrary
to or otherwise different from our opinion stated above.

&nbsp;&nbsp;&nbsp;&nbsp;2. The M&A Rules purport, among other things, to require an offshore special purpose vehicles controlled
by PRC companies or individuals and formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC
companies or individuals, to obtain the approval from the CSRC prior to publicly listing their securities on an overseas stock exchange.
Based on our understanding of the currently effective PRC Laws, the CSRC's approval is not required for the approval of the listing
and trading of the Company's shares on the Nasdaq Capital Market, given that (i) the CSRC currently has not issued any definitive
rule or interpretation concerning whether offerings under the Prospectus are subject to the M&A Rules; and (ii) the WFOE was
incorporated as a wholly foreign-owned enterprise by means of direct investment rather than by merger or acquisition of equity interest
or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rules. However, uncertainties still
exist as to how the M&A Rules will be interpreted and implemented in the future and our opinions summarized above are subject to any
new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.

&nbsp;&nbsp;&nbsp;&nbsp;3. The statements set forth under the caption "*Taxation* - *People's Republic of China Enterprise Taxation*" in the Registration Statement insofar as they constitute statements of PRC tax law and regulations, are
accurate in all material respects and constitute our opinion.

&nbsp;&nbsp;&nbsp;&nbsp;4. The recognition and enforcement of foreign judgments are subject to compliance with the PRC Civil Procedures
Law and relevant civil procedure requirements in PRC. PRC courts may recognize and enforce foreign judgments in accordance with the requirements
of PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between
jurisdictions. China does not have any treaties or other form of reciprocity with the United States or the Cayman Islands that provide
for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in
China will not enforce a foreign judgment against the Company or its directors and officers if they decide that the judgment violates
the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what
basis a PRC court would enforce a judgment rendered by a court in the United States or in the Cayman Islands.

<u>Legal Opinion</u>   <u>Grandall Law Firm (Shanghai)</u>

&nbsp;&nbsp;&nbsp;&nbsp;5. The statements in the Prospectus under the captions "Prospectus Summary", "Risk Factors",
 "Corporate Structure", "Business", "Legal Proceedings", "Enforceability of Civil Liabilities",
 "Regulations", "Dividend Policy" and "Legal Matters" insofar as such statements constitute summaries
of the PRC legal matters, documents or proceedings referred to therein, as confirmed by us, in each case to the extent, and only to the
extent, governed by the PRC Laws, fairly present the information and summarize in all material respects the matters referred to therein;
and such statements are true, correct and accurate in all material aspects, and nothing has been omitted from such statements which would
make the same misleading in any material respect.

This Opinion is subject to the following qualifications:

&nbsp;&nbsp;&nbsp;&nbsp;a) This Opinion relates only to currently effective PRC Laws and we express no opinion as to any other laws
and regulations. There is no guarantee that any of the PRC Laws, or the interpretation thereof or enforcement therefor, will not be changed,
amended or replaced in the immediate future or in the longer term with or without retrospective effect.

&nbsp;&nbsp;&nbsp;&nbsp;b) We have not verified, and express no opinion on, the truthfulness, accuracy and completeness of all factual
statements expressly made in the Documents.

&nbsp;&nbsp;&nbsp;&nbsp;c) This Opinion is intended to be used in the context which is specifically referred to herein and each section
should be looked on as a whole regarding the same subject matter, and no part shall be extracted for interpretation separately from this
Opinion.

&nbsp;&nbsp;&nbsp;&nbsp;d) This Opinion is subject to the effects of (i) certain legal or statutory principles affecting the enforceability
of contractual rights generally under the concepts of public interest, national security, good faith and fair dealing, applicable statutes
of limitation, and the limitations by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditor's
rights generally; (ii) any circumstance in connection with formulation, execution or performance of any legal documents that would
be deemed materially mistaken, clearly unconscionable or fraudulent; (iii) judicial discretion with respect to the availability of
injunctive relief, the calculation of damages, and the entitlement of attorneys' fees and other costs; and (iv) the discretion
of any competent PRC legislative, administrative or judicial bodies in exercising their authority in connection with the interpretation,
implementation and application of relevant PRC Laws.

This Opinion is rendered to you for the purpose hereof only, and save as provided herein, this Opinion shall not be quoted nor shall a copy be given to any person (apart from the addressee) without our express prior written consent except where such disclosure is required to be made by applicable law or is requested by the SEC or any other regulatory agencies.

We hereby consent to the use of this Opinion in, and the filing hereof as an exhibit to, the Registration Statement, and to the reference of our name in the Registration Statement.

[The remainder of this page is intentionally left blank]

<u>Legal Opinion</u>   <u>Grandall Law Firm (Shanghai)</u>

[This is the signature page of PRC Legal Opinion regarding certain legal matters of the initial public offering of NETCLASS TECHNOLOGY INC.]

Yours faithfully

*/seal/ Grandall Law Firm (Shanghai)*

Grandall Law Firm (Shanghai)

Date: 2022.11.17

## Exhibit 99.2

**Exhibit 99.2**

**CHARTER OF THE AUDIT COMMITTEE OF**

**NETCLASS TECHNOLOGY INC**

**<u>Membership</u>**

The Audit Committee (the "**Committee**") of the board of directors (the "**Board**") of NETCLASS TECHNOLOGY INC (the "**Company**") shall consist of three or more directors. Each member of the Committee shall be independent in accordance with the requirements of Rule 10A-3 of the Securities Exchange Act of 1934 and the rules of the Nasdaq Stock Market. No member of the Committee can have participated in the preparation of the Company's or any of its subsidiaries' financial statements at any time during the past three years.

Each member of the Committee must be able to read and understand fundamental financial statements, including the Company's balance sheet, income statement and cash flow statement. At least one member of the Committee must have past employment experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background that leads to financial sophistication. At least one member of the Committee must be an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K. A person who satisfies this definition of audit committee financial expert will also be presumed to have financial sophistication.

The members of the Committee shall be appointed by the Board based on recommendations from the nominating and corporate governance committee of the Board. The members of the Committee shall serve for such term or terms as the Board may determine or until earlier resignation or death. The Board may remove any member from the Committee at any time with or without cause.

**<u>Purpose</u>**

The purpose of the Committee is to oversee the Company's accounting and financial reporting processes and the audit of the Company's financial statements.

The primary role of the Committee is to oversee the financial reporting and disclosure process. To fulfill this obligation, the Committee relies on: management for the preparation and accuracy of the Company's financial statements; for establishing effective internal controls and procedures to ensure the Company's compliance with accounting standards, financial reporting procedures and applicable laws and regulations; and the Company's independent auditors for an unbiased, diligent audit or review, as applicable, of the Company's financial statements and the effectiveness of the Company's internal controls. The members of the Committee are not employees of the Company and are not responsible for conducting the audit or performing other accounting procedures.

**<u>Duties and Responsibilities</u>**

The Committee shall have the following authority and responsibilities:

To (1) select and retain an independent registered public accounting firm to act as the Company's independent auditors for the purpose of auditing the Company's annual financial statements, books, records, accounts and internal controls over financial reporting, (2) set the compensation of the Company's independent auditors, (3) oversee the work done by the Company's independent auditors and (4) terminate the Company's independent auditors, if necessary.

To select, retain, compensate, oversee and terminate, if necessary, any other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company.

To approve all audit engagement fees and terms; and to pre-approve all audit and permitted non-audit and tax services that may be provided by the Company's independent auditors or other registered public accounting firms, and establish policies and procedures for the Committee's pre-approval of permitted services by the Company's independent auditors or other registered public accounting firms on an on-going basis.

At least annually, to obtain and review a report by the Company's independent auditors that describes (1) the accounting firm's internal quality control procedures, (2) any issues raised by the most recent internal quality control review, peer review or Public Company Accounting Oversight Board review or inspection of the firm or by any other inquiry or investigation by governmental or professional authorities in the past five years regarding one or more audits carried out by the firm and any steps taken to deal with any such issues, and (3) all relationships between the firm and the Company or any of its subsidiaries; and to discuss with the independent auditors this report and any relationships or services that may impact the objectivity and independence of the auditors.

At least annually, to evaluate the qualifications, performance and independence of the Company's independent auditors, including an evaluation of the lead audit partner; and to assure the regular rotation of the lead audit partner at the Company's independent auditors and consider regular rotation of the accounting firm serving as the Company's independent auditors.

To review and discuss with the Company's independent auditors (1) the auditors' responsibilities under generally accepted auditing standards and the responsibilities of management in the audit process, (2) the overall audit strategy, (3) the scope and timing of the annual audit, (4) any significant risks identified during the auditors' risk assessment procedures and (5) when completed, the results, including significant findings, of the annual audit.

To review and discuss with the Company's independent auditors (1) all critical accounting policies and practices to be used in the audit; (2) all alternative treatments of financial information within generally accepted accounting principles ("**GAAP**") that have been discussed with management, the ramifications of the use of such alternative treatments and the treatment preferred by the auditors; and (3) other material written communications between the auditors and management.

To review and discuss with the Company's independent auditors and management (1) any audit problems or difficulties, including difficulties encountered by the Company's independent auditors during their audit work (such as restrictions on the scope of their activities or their access to information), (2) any significant disagreements with management and (3) management's response to these problems, difficulties or disagreements; and to resolve any disagreements between the Company's auditors and management.

To review with management and the Company's independent auditors: any major issues regarding accounting principles and financial statement presentation, including any significant changes in the Company's selection or application of accounting principles; any significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including the effects of alternative GAAP methods; and the effect of regulatory and accounting initiatives and off-balance sheet structures on the Company's financial statements.

To keep the Company's independent auditors informed of the Committee's understanding of the Company's relationships and transactions with related parties that are significant to the company; and to review and discuss with the Company's independent auditors the auditors' evaluation of the Company's identification of, accounting for, and disclosure of its relationships and transactions with related parties, including any significant matters arising from the audit regarding the Company's relationships and transactions with related parties.

To review with management and the Company's independent auditors the adequacy and effectiveness of the Company's financial reporting processes, internal control over financial reporting and disclosure controls and procedures, including any significant deficiencies or material weaknesses in the design or operation of, and any material changes in, the Company's processes, controls and procedure] and any special audit steps adopted in light of any material control deficiencies, and any fraud involving management or other employees with a significant role in such processes, controls and procedures, and review and discuss with management and the Company's independent auditors disclosure relating to the Company's financial reporting processes, internal control over financial reporting and disclosure controls and procedures, the independent auditors' report on the effectiveness of the Company's internal control over financial reporting and the required management certifications to be included in or attached as exhibits to the Company's annual report on Form 20-F, as applicable.

To review and discuss with the Company's independent auditors any other matters required to be discussed by applicable requirements of the PCAOB and the SEC.

To review and discuss with the Company's independent auditors and management the Company's annual audited financial statements (including the related notes), the form of audit opinion to be issued by the auditors on the financial statements and the disclosure under "Operating and Financial Review and Prospects" to be included in the Company's annual report on Form 20-F before the Form 20-F is filed.

To recommend to the Board that the audited financial statements be included in the Company's Form 20-F and whether the Form 20-F should be filed with the SEC; and to produce the audit committee report required to be included in the Company's proxy statement.

To establish and oversee procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.

To monitor compliance with the Company's Code of Business Conduct and Ethics (the "**Code**"), to investigate any alleged breach or violation of the Code, and to enforce the provisions of the Code.

To review, with the General Counsel and outside legal counsel, legal and regulatory matters, including legal cases against or regulatory investigations of the Company and its subsidiaries, that could have a significant impact on the Company's financial statements.

To review, approve and oversee any transaction between the Company and any related person (as defined in Item 404 of Regulation S-K) and any other potential conflict of interest situations on an ongoing basis, in accordance with Company policies and procedures, and to develop policies and procedures for the Committee's approval of related party transactions.

**<u>Outside Advisors</u>**

The Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of independent outside counsel and such other advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. The Committee shall set the compensation, and oversee the work, of any outside counsel and other advisors.

The Committee shall receive appropriate funding from the Company, as determined by the Committee in its capacity as a committee of the Board, for the payment of compensation to the Company's independent auditors, any other accounting firm engaged to perform services for the Company, any outside counsel and any other advisors to the Committee.

**<u>Structure and Operations</u>**

The Board shall designate a member of the Committee as the chairperson. The Committee shall meet at least two times a year at such times and places as it deems necessary to fulfill its responsibilities. The Committee shall report after each committee meeting to the Board on its discussions and actions, including any significant issues or concerns that arise at its meetings, and shall make recommendations to the Board as appropriate. The Committee is governed by the same rules regarding meetings (including meetings in person or by telephone or other similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.

The Committee shall meet separately, and periodically, with management, and representatives of the Company's independent auditors, and shall invite such individuals to its meetings as it deems appropriate, to assist in carrying out its duties and responsibilities. However, the Committee shall meet regularly without such individuals present.

The Committee shall review this Charter at least annually and recommend any proposed changes to the Board for approval.

**<u>Delegation of Authority</u>**

The Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion.

**<u>Performance Evaluation</u>**

The Committee shall conduct an annual evaluation of the performance of its duties under this Charter and shall present the results of the evaluation to the Board. The Committee shall conduct this evaluation in such manner as it deems appropriate.

## Exhibit 99.3

**Exhibit 99.3**

**CHARTER OF THE COMPENSATION COMMITTEE OF** 

**NETCLASS TECHNOLOGY INC**

**<u>Membership</u>**

The Compensation Committee (the "**Committee**") of the board of directors (the "**Board**") of NETCLASS TECHNOLOGY INC (the "**Company**") shall consist of three or more directors. Each member of the Committee shall be independent in accordance with the rules of the Nasdaq Stock Market.

Each member of the Committee must qualify as "non-employee directors" for the purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "**Exchange Act**").

The members of the Committee shall be appointed by the Board based on recommendations from the nominating and corporate governance committee of the Board. The members of the Committee shall serve for such term or terms as the Board may determine or until earlier resignation or death. The Board may remove any member from the Committee at any time with or without cause.

**<u>Purpose</u>**

The purpose of the Committee is to carry out the responsibilities delegated by the Board relating to the review and determination of executive compensation.

**<u>Duties and Responsibilities</u>**

The Committee shall have the following authority and responsibilities:

To review and approve annually the corporate goals and objectives applicable to the compensation of the chief executive officer ("**CEO**"), evaluate at least annually the CEO's performance in light of those goals and objectives, and recommend to the Board for approval the CEO's compensation level based on this evaluation. The CEO cannot be present during any voting or deliberations by the Committee on his or her compensation.

To review and make recommendations to the Board regarding the compensation of all other executive officers.

To review, and make recommendations to the Board regarding, incentive compensation plans and equity-based plans, and where appropriate or required, recommend for approval by the shareholders of the Company, which includes the ability to adopt, amend and terminate such plans. The Committee shall also have the authority to administer the Company's incentive compensation plans and equity-based plans, including designation of the employees to whom the awards are to be granted, the amount of the award or equity to be granted and the terms and conditions applicable to each award or grant, subject to the provisions of each plan.

To review, and make recommendations to the Board regarding, any employment agreements and any severance arrangements or plans, including any benefits to be provided in connection with a change in control, for the CEO and other executive officers, which includes the ability to adopt, amend and terminate such agreements, arrangements or plans.

To review all director compensation and benefits for service on the Board and Board committees at least once a year and to recommend any changes to the Board as necessary.

To oversee, in conjunction with the Board, engagement with shareholders and proxy advisory firms on executive compensation matters.

**<u>Outside Advisors</u>**

The Committee shall have the authority, in its sole discretion, to select, retain and obtain the advice of a compensation consultant as necessary to assist with the execution of its duties and responsibilities as set forth in this Charter. The Committee shall set the compensation, and oversee the work, of the compensation consultant. The Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of outside legal counsel and such other advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. The Committee shall set the compensation, and oversee the work, of its outside legal counsel and other advisors. The Committee shall receive appropriate funding from the Company, as determined by the Committee in its capacity as a committee of the Board, for the payment of compensation to its compensation consultants, outside legal counsel and any other advisors. However, the Committee shall not be required to implement or act consistently with the advice or recommendations of its compensation consultant, legal counsel or other advisor to the compensation committee, and the authority granted in this Charter shall not affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of its duties under this Charter.

In retaining or seeking advice from compensation consultants, outside counsel and other advisors (other than the Company's in-house counsel), the Committee must take into consideration the factors specified in Nasdaq Listing Rule 5605(d)(1)(D). The Committee may retain, or receive advice from, any compensation advisor they prefer, including ones that are not independent, after considering the specified factors. The Committee is not required to assess the independence of any compensation consultant or other advisor that acts in a role limited to consulting on any broad-based plan that does not discriminate in scope, terms or operation in favor of executive officers or directors and that is generally available to all salaried employees or providing information that is not customized for a particular company or that is customized based on parameters that are not developed by the consultant or advisor, and about which the consultant or advisor does not provide advice.

The Committee shall evaluate whether any compensation consultant retained or to be retained by it has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K. Any compensation consultant retained by the Committee to assist with its responsibilities relating to executive compensation or director compensation shall not be retained by the Company for any compensation or other human resource matters.

**<u>Structure and Operations</u>**

The Board shall designate a member of the Committee as the chairperson. The Committee shall meet at least two times a year at such times and places as it deems necessary to fulfill its responsibilities. The Committee shall report regularly to the Board regarding its actions and make recommendations to the Board as appropriate. The Committee is governed by the same rules regarding meetings (including meetings in person or by telephone or other similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.

The Committee may invite such members of management to its meetings as it deems appropriate. However, the Committee shall meet regularly without such members present, and in all cases the CEO and any other such officers shall not be present at meetings at which their compensation or performance is discussed or determined.

The Committee shall review this Charter at least annually and recommend any proposed changes to the Board for approval.

**<u>Delegation of Authority</u>**

The Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion.

**<u>Performance Evaluation</u>**

The Committee shall conduct an annual evaluation of the performance of its duties under this charter and shall present the results of the evaluation to the Board. The Committee shall conduct this evaluation in such manner as it deems appropriate.

## Exhibit 99.4

**Exhibit 99.4**

**CHARTER OF THE NOMINATING COMMITTEE OF** 

**NETCLASS TECHNOLOGY INC**

**<u>Membership</u>**

The Nominating Committee (the "**Committee**") of the board of directors (the "**Board**") of NETCLASS TECHNOLOGY INC (the "**Company**") shall consist of three or more directors. Each member of the Committee shall be independent in accordance with the rules of the Nasdaq Stock Market.

The members of the Committee shall serve for such term or terms as the Board may determine or until earlier resignation or death. The Board may remove any member from the Committee at any time with or without cause.

**<u>Purpose</u>**

The purpose of the Committee is to carry out the responsibilities delegated by the Board relating to the Company's director nominations process and procedures, developing and maintaining the Company's corporate governance policies and any related matters required by the federal securities laws.

**<u>Duties and Responsibilities</u>**

The Committee shall have the following authority and responsibilities:

To identify and screen individuals qualified to become members of the Board, consistent with criteria approved by the Board. The Committee shall consider any director candidates recommended by the Company's shareholders pursuant to the procedures set forth in the Company's described in the Company's proxy statement.

To make recommendations to the Board regarding the selection and approval of the nominees for director to be submitted to a shareholder vote at the annual meeting of shareholders.

To oversee the Company's corporate governance practices and procedures, including identifying best practices and reviewing and recommending to the Board for approval any changes to the documents, policies and procedures in the Company's corporate governance framework, including its certificate of incorporation and by-laws.

To review the Board's committee structure and composition and to make recommendations to the Board regarding the appointment of directors to serve as members of each committee and committee chairmen annually.

If a vacancy on the Board and/or any Board committee occurs, to identify and make recommendations to the Board regarding the selection and approval of candidates to fill such vacancy either by election by shareholders or appointment by the Board.

To develop and recommend to the Board for approval standards for determining whether a director has a relationship with the Company that would impair its independence.

To review and discuss with management disclosure of the Company's corporate governance practices, including information regarding the operations of the Committee and other Board committees, director independence and the director nominations process, and to recommend that this disclosure be, included in the Company's proxy statement or annual report on Form 20-F, as applicable.

To develop and recommend to the Board for approval a Company Code of Business Conduct and Ethics (the "**Code**"), to monitor compliance with the Company's Code, to investigate any alleged breach or violation of the Code, to enforce the provisions of the Code and to review the Code periodically and recommend any changes to the Board.

**<u>Outside Advisors</u>**

The Committee shall have the authority, in its sole discretion, to select, retain and obtain the advice of a director search firm as necessary to assist with the execution of its duties and responsibilities as set forth in this Charter. The Committee shall set the compensation and oversee the work of the director search firm. The Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of outside counsel, an executive search firm and such other advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. The Committee shall set the compensation and oversee the work of its outside counsel, the executive search firm and any other advisors. The Committee shall receive appropriate funding from the Company, as determined by the Committee in its capacity as a committee of the Board, for the payment of compensation to its search consultants, outside counsel and any other advisors.

**<u>Structure and Operations</u>**

The Board shall designate a member of the Committee as the chairperson. The Committee shall meet at least two times a year at such times and places as it deems necessary to fulfill its responsibilities. The Committee shall report regularly to the Board regarding its actions and make recommendations to the Board as appropriate. The Committee is governed by the same rules regarding meetings (including meetings in person or by telephone or other similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.

The Committee shall review this Charter at least annually and recommend any proposed changes to the Board for approval.

**<u>Delegation of Authority</u>**

The Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion.

**<u>Performance Evaluation</u>**

The Committee shall conduct an annual evaluation of the performance of its duties under this charter and shall present the results of the evaluation to the Board. The Committee shall conduct this evaluation in such manner as it deems appropriate.

## Ex-Filing

**Ex-filing fees**

**Calculation of Filing Fee Tables**

(Form Type)

NETCLASS TECHNOLOGY INC.

(Exact Name of Registrant as Specified in its Charter)

(Translation of Registrant's Name into English)

<u>Table 1: Newly Registered and Carry Forward Securities</u>

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Security<br> Type** | **Security<br> Class<br> Title** | **Fee<br> Calculation<br> or Carry<br> Forward<br> Rule** | **Amount<br> Registered** | **Proposed<br> Maximum<br> Offering<br> Price Per<br> Unit** | **Maximum<br> Aggregate<br> Offering<br> Price** | **Fee<br> Rate** | **Amount of<br> Registration<br> Fee** | **Carry <br> Forward <br> Form<br> Type** | **Carry<br> Forward<br> File<br> Number** | **Carry<br> Forward<br> Initial<br> effective<br> date** | **Filing Fee<br> Previously<br> Paid In<br> Connection<br> with Unsold<br> Securities to<br> be Carried<br> Forward** |
| **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** |
| Fees to Be <br>Paid | Equity | Ordinary Shares, no par value(1) | 457(o) | 4312500 | $5.00 | $21562500 | $0.0001102 | $2376.19 |  |  |  |  |
| Fees to Be <br>Paid | Other | Underwriter Warrants(2) | other |  |  |  |  |  |  |  |  |  |
| Fees to Be <br>Paid | Equity | Ordinary Shares, no par value, underlying the Underwriter' warrants(2) | 457(o) | 215625 | $6 | $1293750 | $0.0001102 | $142.57 |  |  |  |  |
| Fees <br>Previously <br>Paid |  |  |  |  |  |  |  |  |  |  |  |  |
| **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** |
| Carry <br>Forward <br>Securities |  |  |  |  |  |  |  |  |  |  |  |  |
|  | **Total Offering Amounts** | **Total Offering Amounts** | **Total Offering Amounts** | **Total Offering Amounts** |  | $22856250 |  |  |  |  |  |  |
|  | **Total Fees Previously Paid** | **Total Fees Previously Paid** | **Total Fees Previously Paid** | **Total Fees Previously Paid** |  | $0 |  |  |  |  |  |  |
|  | **Total Fee Offsets** | **Total Fee Offsets** | **Total Fee Offsets** | **Total Fee Offsets** |  | $0 |  |  |  |  |  |  |
|  | **Net Fee Due** | **Net Fee Due** | **Net Fee Due** | **Net Fee Due** |  | $2518.76 |  |  |  |  |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) The registration
 fee for securities is based on an estimate of the Proposed Maximum Aggregate Offering Price of the securities, assuming the sale
 of the Class A Ordinary Shares at the highest expected offering price, and such estimate is solely for the purpose of calculating
 the registration fee pursuant to Rule 457(o). In accordance with Rule 416(a), the Registrant is also registering an indeterminate
 number of additional Class A Ordinary Shares that shall be issuable pursuant to Rule 416 to prevent dilution resulting
 from share splits, share dividends or similar transactions.

(2) The Registrant
 will issue to the Underwriter warrants to purchase a number of Ordinary Shares equal to an aggregate of 5% of the Ordinary Shares
 sold in the offering (the "Underwriter' Warrants"). The exercise price of the Underwriter' Warrants is equal
 to 120% of the offering price of the Ordinary Shares offered hereby. The Underwriter' Warrants are exercisable at any time,
 and from time to time, in whole or in part, within 5 years from the commencement of sales of the offering. See "Underwriting."

<u>Table 2: Fee Offset Claims and Sources</u>

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Registrant<br> or Filer<br> Name** | **Form<br> or<br> Filing<br> Type** | **File<br> Number** | **Initial<br> Filing<br> Date** | **Filing<br> Date** | **Fee Offset<br> Claimed** | **Security<br> Type<br> Associated<br> with Fee<br> Offset<br> Claimed** | **Security<br> Title<br> Associated<br> with Fee<br> Offset<br> Claimed** | **Unsold<br> Securities<br> Associated<br> with Fee<br> Offset<br> Claimed** | **Unsold<br> Aggregate<br> Offering<br> Amount<br> Associated<br> with Fee<br> Offset<br> Claimed** | **Fee Paid <br> with Fee <br> Offset <br> Source** |
| **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** |
| Fee Offset<br> Claims |  |  |  |  |  |  |  |  |  |  |  |
| Fee Offset<br> Sources |  |  |  |  |  |  |  |  |  |  |  |
| **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** | **Rule 457(p)** |
| Fee Offset<br> Claims |  |  |  |  |  |  |  |  |  |  |  |
| Fee Offset<br> Sources |  |  |  |  |  |  |  |  |  |  |  |

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<u>Table 3: Combined Prospectuses</u>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Security Type** | **Security Class Title** | **Amount of Securities<br> Previously<br> Registered** | **Maximum Aggregate <br> Offering<br> Price of Securities<br> Previously<br> Registered** | **Form<br> Type** | **File<br> Number** | **Initial Effective<br> Date** |

---