# EDGAR Filing Document

**Accession Number:** 0001946025
**File Stem:** 0001193125-23-087946
**Filing Date:** 2023-3
**Character Count:** 1251811
**Document Hash:** d6c658ef7ce179fdb9c0da2116e4f70f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-087946.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001193125-23-087946

**CONFORMED SUBMISSION TYPE**: F-1

**PUBLIC DOCUMENT COUNT**: 54

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Xuhang Holdings Ltd
- **CENTRAL INDEX KEY:** 0001946025
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-ADVERTISING [7310]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** F-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-271029
- **FILM NUMBER:** 23787234

**BUSINESS ADDRESS:**
- **STREET 1:** BLDG 2, 198 CULTURAL & CREATIVE PARK
- **STREET 2:** 198 SHENBAN RD, GONGSHU DISTRICT
- **CITY:** HANGZHOU CITY
- **STATE:** F4
- **ZIP:** 310000
- **BUSINESS PHONE:** 86-0571-86963000

**MAIL ADDRESS:**
- **STREET 1:** BLDG 2, 198 CULTURAL & CREATIVE PARK
- **STREET 2:** 198 SHENBAN RD, GONGSHU DISTRICT
- **CITY:** HANGZHOU CITY
- **STATE:** F4
- **ZIP:** 310000

##### [**Table of Contents**](#toc)
**As filed with the U.S. Securities and Exchange Commission on March 31, 2023** 

**Registration No. 333-[**●**]** 

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

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**FORM F-1** 

**REGISTRATION STATEMENT** 

***UNDER***

***THE SECURITIES ACT OF 1933***

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## XUHANG HOLDINGS LIMITED
**(Exact name of registrant as specified in its charter)** 

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| | | |
|:---|:---|:---|
| **Cayman Islands** | **7310** | **Not Applicable** |
| **(State or other jurisdiction of<br>incorporation or organization)** | **(Primary Standard Industrial<br>Classification Code Number)** | **(I.R.S. Employer<br>Identification Number)** |

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**Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road** 

**Gongshu District, Hangzhou City, Zhejiang Province** 

**The People's Republic of China, 310000** 

**+86-0571-88583100** 

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

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**Cogency Global Inc.** 

**122 East 42nd Street, 18th Floor** 

**New York, NY 10168** 

**800-221-0102** 

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

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***With a Copy to:***

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| | |
|:---|:---|
| **Ying Li, Esq.**<br> **Lisa Forcht, Esq.**<br> **Hunter Taubman Fischer & Li LLC<br>950 Third Avenue, 19th Floor<br>New York, NY 10022<br>212-530-2206** | **David Danovitch, Esq.**<br> **Angela Gomes, Esq.**<br> **Sullivan & Worcester LLP**<br> **1633 Broadway**<br> **New York, NY 10019**<br> **212-660-3060** |

---

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**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 U.S. 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. ☐

† 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.

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**The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.** 

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##### [**Table of Contents**](#toc)
**The information in this 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 it is 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 31, 2023** 

***[***●***] Ordinary Shares***

![LOGO](g403554g00m01.jpg)

**XUHANG HOLDINGS LIMITED** 

This is an initial public offering on a firm commitment basis of our ordinary shares, par value US$0.002 per share ("Ordinary Shares"). Prior to this offering, there has been no public market for our Ordinary Shares. We expect the initial public offering price to be in the range of US$[●] to US$[●] per Ordinary Share. The offering is being made on a "firm commitment" basis by the underwriters. See "Underwriting." We have applied to list our Ordinary Shares on the Nasdaq Global Select Market ("Nasdaq") under the symbol "SUNH". At this time, Nasdaq has not yet approved our application to list our Ordinary Shares. The closing of this offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our Ordinary Shares will be approved for listing on Nasdaq.

**Investing in our Ordinary Shares involves a high degree of risk, including the risk of losing your entire investment. See "[Risk Factors](#rom403554_2)" beginning on page 22 to read about factors you should consider before buying our Ordinary Shares.** 

Unless otherwise stated, as used in this prospectus, the terms "we," "us," "our," "Xuhang Cayman," "our Company," and the "Company" refer to XUHANG HOLDINGS LIMITED, a Cayman Islands exempted company; "Xuhang BVI" refers to XUHANG LTD, a company formed under the laws of the British Virgin Islands, which is wholly owned by Xuhang Cayman; "Xuhang HK" refers to XUHANG (HK) LIMITED, a Hong Kong corporation and a wholly owned subsidiary of Xuhang BVI; "Xuhang Network" refers to Hangzhou Xuhang Network Technology Co., Ltd., a limited liability company organized under the laws of the People's Republic of China (the "PRC"), which is wholly owned by Xuhang HK; and the terms "Huzhou Yinzhiya" and "Wuhan Yinzhiya" refer to Huzhou Yinzhiya Network Technology Co., Ltd., and Wuhan Yinzhiya Network Technology Co., Ltd., respectively, both limited liability companies organized under the laws of the PRC that are wholly owned by Xuhang HK.

We are a holding company incorporated in the Cayman Islands with no material operations of our own and are not a Chinese operating company. As a result, we conduct substantially all of our operations through our operating entities established in the PRC. The Ordinary Shares offered in this prospectus are shares of the Cayman Islands holding company instead of shares of our operating entities in the PRC. Holders of our Ordinary Shares do not directly own any equity interests in our PRC subsidiaries, but will instead own shares of a Cayman Islands holding company. The Chinese regulatory authorities could disallow our corporate structure, which would likely result in a material change in our operations and/or a material change in the value of our Ordinary Shares, including that it could cause the value of our Ordinary Shares to significantly decline or become worthless. See "Risk Factors—Risks Relating to Doing Business in the PRC—Chinese regulatory authorities could disallow our holding company structure, which may result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless."

We are subject to certain legal and operational risks associated with business operations of our PRC subsidiaries being based in China, which could cause the value of our securities to significantly decline or become worthless. Applicable PRC laws and regulations governing such current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of our PRC subsidiaries, significant depreciation or a complete loss of the value of our Ordinary Shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. On December 28, 2021, 13 governmental departments of the PRC, including the Cyberspace Administration of China (the "CAC"), issued the Cybersecurity Review Measures, which became effective on February 15, 2022. As of the date of this prospectus, neither we nor our subsidiaries have been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction related to cybersecurity review under the Cybersecurity Review Measures. As confirmed by our PRC counsel, AllBright Law Offices Hangzhou Office ("AllBright"), we are not subject to cybersecurity review or network data security review by the CAC under the Cybersecurity Review Measures, or if the draft Regulations on the Network Data Security Administration (Draft for Comments) (the "Security Administration Draft") are enacted as proposed, since our PRC subsidiaries are not critical information infrastructure operators ("CIIOs") or online platform operators with personal information of more than one million users. See "Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our PRC subsidiaries' business and our offering." As of the date of this prospectus, neither we nor our subsidiaries have received any inquiry, notice, warning, or sanction regarding our overseas listing from the China Securities Regulatory Commission (the "CSRC") or any other PRC governmental authorities. Since these statements and regulatory actions are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries, our ability to accept foreign investments, and our listing on a U.S. exchange. The Standing Committee of the National People's Congress (the "SCNPC") or PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that require us and our subsidiaries to obtain regulatory approval from Chinese authorities before listing in the U.S.

The same legal and operational risks associated with operations in China also apply to operations in Hong Kong. Hong Kong was established as a special administrative region of the PRC in accordance with Article 31 of the Constitution of the PRC. The Basic Law of the Hong Kong Special Administrative Region of the PRC (the "Basic Law") was adopted and promulgated on April 4, 1990 and became effective on July 1, 1997, when the PRC resumed the exercise of sovereignty over Hong Kong. Pursuant to the Basic Law, Hong Kong is authorized by the National People's Congress of the PRC to exercise a high degree of autonomy and enjoy executive, legislative, and independent judicial power, under the principle of "one country, two systems," and the PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to national defense, foreign affairs, and other matters that are not within the scope of autonomy). However, there is no assurance that there will not be any changes in the economic, political, and legal environment in Hong Kong in the future. Due to the uncertainty of the PRC legal system and changes in laws, regulations, or policies, the Basic Law may be revised in the future, and thus, we and our subsidiaries may face the same legal and operational risks associated with operating in the PRC. If there is a significant change to current political arrangements between mainland China and Hong Kong, or if the applicable laws, regulations, or interpretations change, our Hong Kong subsidiaries—which include Xuhang HK and Hong Kong Lehui Network Technology Co., Ltd. ("HK Lehui")—may become subject to PRC laws or authorities. As a result, our Hong Kong subsidiaries could incur material costs to ensure compliance, be subject to fines, experience devaluation of securities or delisting, no longer conduct offerings to foreign investors, and no longer be permitted to continue their current business operations. The main legislation in Hong Kong concerning data security is the Personal Data (Privacy) Ordinance (Cap. 486 of the Laws of Hong Kong) (the "PDPO"), which regulates the collection, usage, storage, and transfer of personal data and imposes a statutory duty on data users to comply with the six data protection principles contained therein. As of the date of this prospectus, we confirm that we and each of our Hong Kong subsidiaries have complied with the laws and requirements in respect of data security in Hong Kong. However, the laws on cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, may subject us or our Hong Kong subsidiaries to consequences, including government enforcement actions and investigations, fines, penalties, and suspension or disruption of our Hong Kong subsidiaries' operations. In addition, the Competition Ordinance (Cap. 619 of the Laws of Hong Kong) prohibits and deters undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting, or distorting competition in Hong Kong. It provides for general prohibitions in three major areas of anti-competitive conduct described as the first conduct rule, the second conduct rule, and the merger rule. As of the date of this prospectus, we and our Hong Kong subsidiaries have complied with all three areas of anti-competition laws and requirements in Hong Kong. As confirmed by our Hong Kong counsel, Ince & Co, neither the data security nor antimonopoly laws and regulations in Hong Kong restrict our ability to accept foreign investment or impose limitation on our ability to list on any U.S. stock exchange under Hong Kong laws and regulations. See "Risk Factors—Risks Relating to Doing Business in the PRC—Some of our subsidiaries are subject to various evolving Hong Kong laws and regulations regarding data security or antimonopoly, which could subject them to government enforcement actions and investigations, fines, penalties, and suspension or disruption of their operations."

In addition, our Ordinary Shares may be prohibited from trading on a national exchange under the Holding Foreign Companies Accountable Act (the "HFCA Act"), if the Public Company Accounting Oversight Board (United States) (the "PCAOB") is unable to inspect our auditors for three consecutive years beginning in 2022. On

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##### [**Table of Contents**](#toc)
December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions. Our auditor is headquartered in San Mateo, California, and has been inspected by the PCAOB on a regular basis, with the last inspection in October 2019. The PCAOB currently has access to inspect the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited under the HFCA Act 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 Ordinary Shares and trading in our Ordinary Shares could be prohibited. 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 accounting 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. 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 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 delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at such future time. See "Risk Factors—Risks Relating to Doing Business in the PRC—Recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the HFCA 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 continued listing or future offerings of our securities in the U.S."

As of the date of this prospectus, none of our subsidiaries have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from Xuhang BVI, which is dependent on receipt of funds from Xuhang HK, which will in turn rely on payments made from Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya, all of which are our PRC subsidiaries. However, as the PRC government imposes control over currency conversion, it has the authority to conduct exchange transfer reviews, which may impose certain limitations on our ability to transfer cash between our Company, our subsidiaries, and our investors, primarily reflected in the following aspects: (i) we are restricted from providing capital or loans to our PRC subsidiaries, which may adversely affect the operations of our PRC subsidiaries; (ii) our PRC subsidiaries may be restricted from paying dividends to us; and (iii) if we are unable to obtain dividends from our PRC subsidiaries, it may adversely impact our dividends distribution to investors. See "Summary of Risk Factors," "Risk Factors—Risks Relating to Doing Business in the PRC—PRC regulations relating to offshore investment activities by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us," "Risk Factors—Risks Relating to Doing Business in the PRC—PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of offshore offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect their liquidity and their ability to fund and expand their business," and "Risk Factors—Risks Relating to Doing Business in the PRC—Governmental control of currency conversion may affect the value of your investment and our payment of Dividends." Further, to the extent cash or assets in the business are in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash or assets. There is no assurance the PRC government will not intervene in or impose restrictions on the ability of our Company or our subsidiaries to transfer cash or assets. See "Prospectus Summary—Dividends or Distributions Made to Our Company and U.S. Investors and Tax Consequences," "Prospectus Summary—Business Overview—Summary of Risk Factors," and "Risk Factors—Risks Relating to Doing Business in the PRC—To the extent cash or assets in the business are in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash or assets." We have established controls and procedures for cash flows within our organization based on internal cash management policies established by our finance department, discussed, considered, and reviewed by the relevant departments in our Company, and approved by our Chairman of the Board of Directors. Specifically, our finance department supervises cash management, following the instructions of our management. Our finance department is responsible for establishing our cash operation plan and coordinating cash management matters among our subsidiaries and departments. Each subsidiary and department initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to our finance department. The finance department reviews the cash demand plan and prepares a summary for the management of our Company. Management examines and approves the allocation of cash based on the sources of cash and the priorities of the needs. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred. As of the date of this prospectus, no cash transfer or transfer of other assets has occurred between our Company and our subsidiaries except that during November and December 2022, Xuhang Cayman transferred an aggregate of US$151,945.44 to Xuhang HK for working capital purposes. See "Prospectus Summary—Asset Transfers Between Our Company and Our Subsidiaries," "Prospectus Summary—Dividends or Distributions Made to Our Company and U.S. Investors and Tax Consequences," and our audited consolidated financial statements for the years ended December 31, 2020 and 2021 and our unaudited condensed consolidated interim financial statements for the nine months ended September 30, 2022.

We are an "emerging growth company" as defined under the federal securities laws and will be subject to reduced public company reporting requirements. Please read the disclosures beginning on page 18 of this prospectus for more information.

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| | | | |
|:---|:---|:---|:---|
|  | **Per Share** | **Total Without<br>Over-Allotment<br>Option** | **Total With<br>Over-Allotment<br>Option** |
|  **Initial public offering price** | US$ | US$ | US$ |
|  **Underwriters' discounts<sup>(1)</sup>** | US$ | US$ | US$ |
|  **Proceeds to our company before expenses<sup>(2)</sup>** | US$ | US$ | US$ |

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(1) Represents underwriting discounts equal to 4.82% of the gross proceeds from the sale of Ordinary Shares in this
offering.

(2) In addition to the underwriting discounts listed above, we have agreed to issue, upon closing of this offering,
warrants to Univest Securities, LLC, as representative of the several underwriters (the "Representative"), exercisable commencing on the date of commencement of sales of Ordinary Shares in this offering for a period of three years,
entitling the Representative to purchase 5% of the total number of Ordinary Shares sold in this offering (including any Ordinary Shares sold as a result of the exercise of the Representative's over-allotment option) at a per share price equal
to 130% of the initial 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 Ordinary Shares issuable upon the
exercise thereof. See "Underwriting" for additional information regarding total underwriter compensation.

We have granted the Representative an option for a period of 30 days from the date of this prospectus to purchase up to 15% of the total number of the Ordinary Shares to be offered by us pursuant to this offering (excluding Ordinary Shares subject to this option), solely for the purpose of covering over-allotments, if any, at the public offering price less the underwriting discounts. If the Representative exercises the option in full, the total underwriting discounts payable will be US$[●], based on an assumed public offering price of US$[●] per Ordinary Share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, and the total gross proceeds to us, before underwriting discounts and expenses, will be US$[●]**.**

The underwriters expect to deliver the Ordinary Shares against payment in U.S. dollars in New York, New York on or about [●], 2023.

**Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body 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.**![LOGO](g403554g99y48.jpg)

Prospectus dated [●], 2023

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##### [**Table of Contents**](#toc)
**TABLE OF CONTENTS** 

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| | |
|:---|:---|
|  | **Page** |
|  [PROSPECTUS SUMMARY](#rom403554_1) | 1 |
|  [RISK FACTORS](#rom403554_2) | 22 |
|  [DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS](#rom403554_3) | 63 |
|  [ENFORCEABILITY OF CIVIL LIABILITIES](#rom403554_4) | 64 |
|  [USE OF PROCEEDS](#rom403554_5) | 66 |
|  [DIVIDEND POLICY](#rom403554_6) | 67 |
|  [CAPITALIZATION](#rom403554_7) | 69 |
|  [DILUTION](#rom403554_8) | 70 |
|  [CORPORATE HISTORY AND STRUCTURE](#rom403554_9) | 72 |
|  [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#rom403554_10) | 76 |
|  [INDUSTRY](#rom403554_11) | 96 |
|  [BUSINESS](#rom403554_12) | 105 |
|  [REGULATIONS](#rom403554_13) | 135 |
|  [MANAGEMENT](#rom403554_14) | 150 |
|  [PRINCIPAL SHAREHOLDERS](#rom403554_15) | 155 |
|  [RELATED PARTY TRANSACTIONS](#rom403554_16) | 157 |
|  [DESCRIPTION OF SHARE CAPITAL](#rom403554_17) | 164 |
|  [SHARES ELIGIBLE FOR FUTURE SALE](#rom403554_18) | 180 |
|  [MATERIAL INCOME TAX CONSIDERATION](#rom403554_19) | 182 |
|  [UNDERWRITING](#rom403554_20) | 190 |
|  [EXPENSES RELATING TO THIS OFFERING](#rom403554_21) | 196 |
|  [LEGAL MATTERS](#rom403554_22) | 197 |
|  [EXPERTS](#rom403554_23) | 197 |
|  [WHERE YOU CAN FIND ADDITIONAL INFORMATION](#rom403554_24) | 197 |
|  [INDEX TO CONSOLIDATED FINANCIAL STATEMENTS](#rom403554_25) | F-1 |

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##### [**Table of Contents**](#toc)
**ABOUT THIS PROSPECTUS** 

We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the Ordinary Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. For the avoidance of doubt, no offer or invitation to subscribe for Ordinary Shares is made to the public in the Cayman Islands. The information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date.

Neither we nor the underwriters have taken any action to permit a public offering of the Ordinary Shares outside the United States or to permit the possession or distribution of this prospectus or any filed free-writing prospectus outside the United States. Persons outside the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of the Ordinary Shares and the distribution of this prospectus or any filed free-writing prospectus outside the United States.

**Conventions that Apply to this Prospectus** 

Unless otherwise indicated or the context requires otherwise, references in this prospectus to:

• "China" or the "PRC" are to the People's Republic of China;

• "conversion rates" are to the proportion of visitors who take action to go beyond the casual content
view or web page visit and perform a designated action by the marketer, such as downloading an app, signing up a new account, or making a purchase, to the number of total visitors who viewed or clicked the marketing campaign. The calculation method
of the conversion rate varies among marketing campaigns and depends on the designated action that the marketers seek to achieve. For example, it may refer to the click-through rate as defined above, or the proportion of visitors who take specific
actions, such as downloading an app, to the total number of visitors who clicked the marketing campaign;

• "cooperative accounts" are to we-media accounts (i) that
are not self-operated accounts (defined below) but (ii) over which we have the operational or management authority through cooperative agreements with the accounts' actual owners;

• "CPA" are to a performance-based pricing model where marketers are charged based on the number of
designated actions performed by the user such as download, installation, or registration;

• "CPC" are to a pricing model where marketers are charged based on the number of clicks on the
advertisement, typically, a unit price is charged for each click;

• "CPM" are to a non-performance-based pricing model where
marketers are charged on the basis of thousand impressions (defined below);

• "followers" are to fans who follow an account/publisher on digital media platforms such as social media
platforms, short video platforms, live streaming platforms, and e-commerce platforms, and references to the number of followers in this prospectus are to the simple sum of the followers of the relevant
accounts on different digital media platforms, and therefore, a single fan may be included multiple times if the fan follows more than one accounts across different digital media platforms;

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##### [**Table of Contents**](#toc)
• "GMV" are to gross merchandise value, which represents the aggregate value of the merchandise ordered
in the live KOL/KOC (defined below) sales services provided by our PRC subsidiaries, regardless of whether the merchandise is actually sold, delivered, or returned, and GMV does not represent our revenue;

• "impressions" are to non-action-based exposures in which
an audience sees an advertisement (for example, an impression occurs any time a user opens an app or website and an advertisement is visible);

• "KOCs" are to key opinion customers;

• "KOLs" are to key opinion leaders;

• "live e-commerce" are to a form of digital commerce in which
individuals, such as KOLs and KOCs, use social media platforms and live-streaming platforms to promote and sell products to their followers;

• "MCN institutions" are to for-profit organizations or entities
that work with multiple channels and content creators on new media platforms (such as WeChat, Weibo, and Douyin) in a multi-channel network model, primarily by contracting with and incubating KOLs, as well as providing services such as planning,
positioning, content creation guidance, marketing, and seeking commercial endorsement opportunities for these KOLs and their new media accounts;

• "our we-media publisher base" are to we-media accounts wholly or partially controlled by our PRC subsidiaries, including our self-operated accounts (defined below) and cooperative accounts;

• "Renminbi" or "RMB" are to the legal currency of China;

• "SDKs" are to software development kits, typically a set of software development tools that allows the
creation of applications;

• "self-operated accounts" are to we-media accounts
(i) owned by our PRC subsidiaries or by MCN institutions registered thereunder, and (ii) over which our PRC subsidiaries have operational or management authority;

• "shares," "Shares," or "Ordinary Shares" are to the ordinary shares of Xuhang
Cayman, par value US$0.002 per share;

• "the PRC subsidiaries" or "our PRC subsidiaries" are to Xuhang Network and its subsidiaries,
Huzhou Yinzhiya, and Wuhan Yinzhiya;

• "U.S. dollars," "US$," or "dollars" are to the legal currency of the United States;

• "user traffic" are to the flow of audiences on media platforms, such as social media platforms, live
streaming platforms, and short video platforms;

• "we-media" are to a media form that allows everyone to spread
information independently, and unlike traditional media, we-media does not rely on the centralization of information—specifically, users of we-media could use media
platforms, including social media platforms, news platforms, live streaming platforms, and short video platforms, to share information and communicate with other users or followers in various format types, such as text, picture, audio, or video
content; and

• "we-media account" or "we-media publisher" are to an online account, which is registered by the user on media platforms (websites or apps) including social media platforms, news platforms, live streaming platforms, and
short video platforms, and publishes text, picture, audio, or video content to the public.

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the Representative of its over-allotment option.

iii

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**PROSPECTUS SUMMARY** 

*The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our Ordinary Shares, discussed under "Risk Factors," before deciding whether to buy our Ordinary Shares.* 

*Unless otherwise indicated, all share numbers and per share numbers in this prospectus have been presented giving effect to a subdivision of each of our existing issued and unissued shares of US$1.00 each at a ratio of 500-for-1 share approved by our shareholders and board of directors on December 2, 2022 (the "Subdivision").*

**Our Corporate Structure** 

We are a holding company incorporated in the Cayman Islands and not a Chinese operating company. As a result, we conduct substantially all of our operations through our operating entities established in the PRC. The Ordinary Shares offered in this prospectus are shares of the Cayman Islands holding company instead of shares of our operating entities in the PRC. Holders of our Ordinary Shares do not directly own any equity interests in our PRC subsidiaries, but will instead own shares of a Cayman Islands holding company. The Chinese regulatory authorities could disallow our corporate structure, which would likely result in a material change in our operations and/or a material change in the value of our Ordinary Shares, including that it could cause the value of our Ordinary Shares to significantly decline or become worthless. See "Risk Factors—Risks Relating to Doing Business in the PRC—Chinese regulatory authorities could disallow our holding company structure, which may result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless."

The following diagram illustrates our corporate structure as of the date of this prospectus and upon the completion of this offering, assuming the sale of all of the Ordinary Shares we are offering based on an assumed initial public offering price of US$[●] per share, which is the midpoint of the estimated range of the initial public offering price set forth on the cover page of this prospectus, and no exercise of the Representative's over-allotment option. For more details on our corporate history, please refer to "Corporate History and Structure."

![LOGO](g403554g62d52.jpg)

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Notes: all percentages reflect the equity interests held by each of our shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents 21,012,915 Ordinary Shares held by TIAN HANG GROUP LIMITED, a British Virgin Islands company, which
is 100% owned by XUHANG (BVI) LTD, which is 100% owned by Tianhang Xiao as of the date of this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Represents 3,403,616 Ordinary Shares held by MIGHTY HUGE INVESTMENT LIMITED, which is 100% owned by XH Fortune
Success Trust, a trust established under the laws of the Island of Jersey by Mr. Tianhang Xiao, managed by Trident Trust Company (HK) Limited, as trustee, with Mr. Tianhang Xiao being the trust's sole beneficiary as of the date of
this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Represents 1,948,622 Ordinary Shares held by Shanghai Qishu Enterprise Management Consulting L.P., a PRC
limited partnership that is 99% owned by Hangzhou Xuli Network Technology Limited, which is in turn 99% owned by Tianhang Xiao, as of the date of this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Represents 3,078,562 Ordinary Shares indirectly held by Congcong Wei, the 100% owner of WCC CAPITAL LIMITED, as
of the date of this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Represents an aggregate of 29,361,244 Ordinary Shares held by 33 shareholders, each one of which holds less
than 5% of our Ordinary Shares, as of the date of this prospectus.

Significant subsidiaries of Xuhang Network consist of the following entities:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place of**<br> **incorporation** | **Date of**<br> **incorporation**<br> **or acquisition** | **Percentage**<br>**of direct or**<br>**indirect<br>ownership** | **Principal**<br> **activities** |
| **1** | Horgos Xumi Network Technology Co., Ltd. | PRC | February 8, 2017 | 100% | Advertising design and production; technical services |
| **2** | Horgos Pinyue Network Technology Co., Ltd. | PRC | November 10, 2017 | 100% | Advertising design and production; technical services; digital advertising services |
| **3** | Hong Kong Lehui Network Technology Co., Ltd. | Hong Kong | November 10, 2017 | 100% | Digital advertising services |
| **4** | Horgos Weizan Network Technology Co., Ltd. | PRC | November 13, 2017 | 100% | Marketing planning and Advertising production |
| **5** | Hangzhou Xingkong Internet Culture Communication Co., Ltd. | PRC | November 13, 2020 | 100% | Advertising design and production |
| **6** | Hangzhou Jinting Conference Co., Ltd. ("Hangzhou Jinting") | PRC | November 13, 2020 | 100% | Conference services; cultural and artistic exchange activities planning |
| **7** | Jiangxi Ku'o Technology Co., Ltd. ("Jiangxi Ku'o") | PRC | March 16, 2020 | 100% | Advertising production; graphic design and production |
| **8** | Hangzhou Xingxiu Network Technology Co., Ltd. | PRC | June 16, 2021 | 51% | Advertising production and technical services |
| **9** | Jiangsu Xuhang New Economy Technology Co., Ltd. | PRC | September 29, 2020 | 80% | Advertising production and technical services |
| **10** | Qingdao Xuhang Digital New Economy Technology Co., Ltd. | PRC | October 29, 2020 | 61% | Advertising production and technical services |
| **11** | Shanghai Xumi Digital Technology Co., Ltd. | PRC | March 19, 2021 | 90% | Advertising production and technical services |
| **12** | Xiamen Xuhang Digital Technology Co., Ltd. | PRC | April 1, 2021 | 75% | Marketing planning and advertising production |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place of**<br> **incorporation** | **Date of**<br> **incorporation**<br> **or acquisition** | **Percentage**<br>**of direct or**<br>**indirect** | **Principal**<br> **activities** |
| **13** | Shanghai Pinzhang Network Technology Co., Ltd. | PRC | March 24, 2021 | 51% | Advertising production and technical services |
| **14** | Qingdao Pinzhang Network Technology Co., Ltd. | PRC | April 15, 2021 | 51% | Advertising production and technical services |
| **15** | Hangzhou Pusheng Network Technology Co., Ltd. | PRC | August 25, 2020 | 51% | Advertising production and technical services |
| **16** | Hangzhou Ruirong Network Technology Co., Ltd. | PRC | February 7, 2021 | 51% | Advertising production and technical services |
| **17** | Henan New Circle Network Technology Co., Ltd. | PRC | January 17, 2020 | 100% | Advertising production and technical services |
| **18** | Xuhang Shuzhiyun Technology (Hangzhou) Co., Ltd. | PRC | June 2, 2021 | 100% | Technical services and consultation; advertisement production |
| **19** | Xuhang Digital (Henan) Technology Co., Ltd. | PRC | January 22, 2021 | 51% | Technical services and consultation |
| **20** | Hangzhou Xiqi Cultural Tourism Technology Co., Ltd. | PRC | May 12, 2021 | 100% | Technical services and consultation |
| **21** | Yunnan Xumi Digital Technology Co., Ltd. | PRC | July 2, 2021 | 51% | Marketing planning and advertising production |
| **22** | Jiangxi Xuzhixing Technology Co., Ltd. | PRC | July 19, 2021 | 51% | Marketing planning and advertising production |
| **23** | Shanghai Huihang Network Technology Co., Ltd. | PRC | May 25, 2021 | 51% | Marketing planning and advertising production |
| **24** | Hangzhou Youyou Culture and Tourism Technology Co., Ltd. | PRC | July 14, 2021 | 51% | Marketing planning and advertising production |
| **25** | Anhui Jiayuan Information Technology Co., Ltd. | PRC | April 14, 2016 | 100% | Advertising production and technical services |
| **26** | Henan Xuhang Network Technology Co., Ltd. | PRC | November 29, 2019 | 99% | Internet advertising services |
| **27** | Wenzhou Xumi Network Technology Co., Ltd. | PRC | March 4, 2020 | 100% | Marketing planning and advertising production |
| **28** | Xumi (Fujian) Digital Technology Co., Ltd. | PRC | February 8, 2021 | 85% | Advertising production and technical services |
| **29** | Wuhan Xuhang Digital Technology Co., Ltd. | PRC | October 27, 2021 | 65% | Digital cultural creative content services; technical consultation |
| **30** | Huangshan Xumi Digital Technology Co., Ltd. | PRC | September 16, 2021 | 90% | Advertising design and production |
| **31** | Wuxi Xumi Creative Technology Co., Ltd. | PRC | September 10, 2021 | 75% | Marketing planning and advertising production |
| **32** | Yangzhou Xumi Digital Technology Co., Ltd. | PRC | November 2, 2021 | 56.7% | Marketing planning and branding management |
| **33** | Linyi Xumi Network Technology Co., Ltd. | PRC | August 26, 2021 | 60% | Marketing planning and advertising production |
| **34** | Suzhou New Circle Network Technology Co., Ltd. | PRC | July 29, 2020 | 100% | Technical services and consultation |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place of**<br> **incorporation** | **Date of**<br> **incorporation**<br> **or acquisition** | **Percentage**<br>**of direct or**<br>**indirect** | **Principal**<br> **activities** |
| **35** | Shanghai Xumi Digital Advertising Co., Ltd. | PRC | November 9, 2021 | 100% | Advertising design and production |
| **36** | Shanghai Suhang Digital Technology Co., Ltd. | PRC | July 27, 2021 | 51% | Marketing planning and advertising production |
| **37** | Hangzhou Xupai Technology Co., Ltd. | PRC | December 21, 2021 | 51% | Technical services and consultation |
| **38** | Shanghai Hexian Lianhai Technology Group Co., Ltd. | PRC | January 18, 2022 | 51% | Marketing planning and advertising production |
| **39** | Chengdu Xumi Digital Technology Co., Ltd. | PRC | February 28, 2022 | 80% | Technical services and consultation |
| **40** | Hubei Xuhang Shuzhi Culture Co., Ltd. | PRC | February 28, 2022 | 90% | Marketing planning and advertising production |
| **41** | Beijing Hexian Lianjing Technology Co., Ltd. | PRC | March 31, 2022 | 100% | Advertising design and production |
| **42** | Beijing Xuhangyi Visual Technology Co., Ltd. | PRC | April 25, 2022 | 51% | Advertising design and production |
| **43** | Beijing Yunjia Lianjing Network Technology Co., Ltd. | PRC | January 11, 2023 | 100% | Marketing planning and advertising production |

---

We are subject to certain legal and operational risks associated with business operations of our PRC subsidiaries being based in China, which could cause the value of our securities to significantly decline or become worthless. Applicable PRC laws and regulations governing such current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of our PRC subsidiaries, significant depreciation of the value of our Ordinary Shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this prospectus, neither we nor our subsidiaries have been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction related to cybersecurity review under the Cybersecurity Review Measures. On December 28, 2021, 13 governmental departments of the PRC, including the CAC, issued the Cybersecurity Review Measures, which became effective on February 15, 2022. As confirmed by our PRC counsel, AllBright, we are not subject to cybersecurity review or network data security review by the CAC under the Cybersecurity Review Measures or if the Security Administration Draft is enacted as proposed, because our PRC subsidiaries are not CIIOs or online platform operators with personal information of more than one million users. See "Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our PRC subsidiaries' business and our offering." As of the date of this prospectus, neither we nor our subsidiaries have received any inquiry, notice, warning, or sanctions regarding our overseas listing from the CSRC or any other PRC governmental authorities. Since these statements and regulatory actions are newly published, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries, our ability to accept foreign investments, and our listing on a U.S. exchange. The SCNPC or PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that require us and our subsidiaries to obtain regulatory approval from Chinese authorities for listing in the U.S. If we do not receive or maintain the approval, or inadvertently conclude that such approval is 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 an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our

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operations and the value of our Ordinary Shares, 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.

The same legal and operational risks associated with operations in China also apply to operations in Hong Kong. Hong Kong was established as a special administrative region of the PRC in accordance with Article 31 of the Constitution of the PRC. The Basic Law of the Hong Kong Special Administrative Region of the PRC (the "Basic Law") was adopted and promulgated on April 4, 1990 and became effective on July 1, 1997, when the PRC resumed the exercise of sovereignty over Hong Kong. Pursuant to the Basic Law, Hong Kong is authorized by the National People's Congress of the PRC to exercise a high degree of autonomy and enjoy executive, legislative, and independent judicial power, under the principle of "one country, two systems," and the PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to national defense, foreign affairs, and other matters that are not within the scope of autonomy). However, there is no assurance that there will not be any changes in the economic, political, and legal environment in Hong Kong in the future. Due to the uncertainty of the PRC legal system and changes in laws, regulations, or policies, the Basic Law may be revised in the future, and thus, we and our subsidiaries may face the same legal and operational risks associated with operating in the PRC. If there is a significant change to current political arrangements between mainland China and Hong Kong, or if the applicable laws, regulations, or interpretations change, our Hong Kong subsidiaries may become subject to PRC laws or authorities. As a result, our Hong Kong subsidiaries could incur material costs to ensure compliance, be subject to fines, experience devaluation of securities or delisting, no longer conduct offerings to foreign investors, and no longer be permitted to continue their current business operations. The main legislation in Hong Kong concerning data security is the PDPO, which regulates the collection, usage, storage, and transfer of personal data and imposes a statutory duty on data users to comply with the six data protection principles contained therein. As of the date of this prospectus, we confirm that we and each of our Hong Kong subsidiaries have complied with the laws and requirements in respect of data security in Hong Kong. However, the laws on cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, may subject us or our Hong Kong subsidiaries to consequences, including, but not limited to, government enforcement actions and investigations, fines, penalties, and suspension or disruption of our Hong Kong subsidiaries' operations. In addition, the Competition Ordinance (Cap. 619 of the Laws of Hong Kong) prohibits and deters undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting, or distorting competition in Hong Kong. It provides for general prohibitions in three major areas of anti-competitive conduct described as the first conduct rule, the second conduct rule, and the merger rule. As of the date of this prospectus, we and our Hong Kong subsidiaries have complied with all three areas of anti-competition laws and requirements in Hong Kong. As confirmed by our Hong Kong counsel, Ince & Co, neither the data security nor antimonopoly laws and regulations in Hong Kong restrict our ability to accept foreign investment or impose limitation on our ability to list on any U.S. stock exchange under Hong Kong laws and regulations. See "Risk Factors—Risks Relating to Doing Business in the PRC—Some of our subsidiaries are subject to various evolving Hong Kong laws and regulations regarding data security or antimonopoly, which could subject them to government enforcement actions and investigations, fines, penalties, and suspension or disruption of their operations."

In addition, our Ordinary Shares may be prohibited from trading on a national exchange under the HFCA Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2022. 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 Accelerating Holding Foreign Companies Accountable Act, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act

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from three years to two. On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions. Our auditor is headquartered in San Mateo, California, and has been inspected by the PCAOB on a regular basis, with the last inspection in October 2019. The PCAOB currently has access to inspect the working papers of our auditor and our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited under the HFCA Act 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 Ordinary Shares. On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol, governing inspections and investigations of accounting 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 Relating to Doing Business in the PRC—Recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the HFCA 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 continued listing or future offerings of our securities in the U.S."

**Business Overview** 

***Our Company***

We are a holding company incorporated in the Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct all of our operations primarily through our PRC subsidiaries.

Our PRC subsidiaries are content-driven marketing service providers that offer a package of integrated marketing solutions across a broad range of distribution channels with a primary focus on new media content marketing. Leveraging our PRC subsidiaries' expertise in content production and operation, extensive distribution channels, and cross-platform new media account base, our PRC subsidiaries aim to provide customers with efficient and effective integrated marketing solutions that address their marketing needs in the context of the new media era. Customers utilize our PRC subsidiaries' marketing services to achieve their branding and marketing goals across multiple channels with a primary focus on we-media platforms such as WeChat official accounts (微信公众号), Weibo (微博), Xiaohongshu (小红书), Toutiao (今日头条), Douyin (抖音), Kuaishou (快手), and Baidu Baijiahao (百度百家号). As of October 31, 2022, our PRC subsidiaries had delivered short videos and advertorials that generated over 156 billion views in total; our PRC subsidiaries' new media account base comprised 524 self-operated accounts and 491 cooperative accounts, which collectively reached approximately 207 million Internet followers. Customers of our PRC subsidiaries include large Internet platform companies and small- to medium-sized local businesses in all segments of urban life, including catering, entertainment, and travel. As of December 31, 2020 and 2021 and September 30, 2022, our PRC subsidiaries had a marketer base of 656, 810, and 867, respectively.

Currently, our PRC subsidiaries provide two categories of marketing services: (i) new media integrated content marketing services, which rely on creating and distributing relevant, engaging, and valuable content in order to

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attract and retain audiences to promote brands and sell products and services, and (ii) digital advertising services, which emphasize the need to choose better-matched ad distribution channels with the target audience to maximize marketing effectiveness.

Our PRC subsidiaries started their business in 2014 with digital advertising services, where they help marketers—typically app developers and operators and advertising agents thereof—optimize their marketing efforts by identifying, engaging, and activating target audiences for user acquisition. Our PRC subsidiaries publish advertisements for their customers' products or services via their digital advertising channels, which consist primarily of mobile apps embedded with their distribution software development kit (the "Xuhang SDK-embedded Apps"). With their analysis and optimization capabilities in advertisement placement, their industry expertise, and the distribution channel resources they have accumulated over the years, our PRC subsidiaries are able to provide customers with effective digital advertising services through better matching the products to be advertised with suitable distribution channels.

Since 2017, our PRC subsidiaries have launched and expanded their new media integrated marketing services that address the growing demands of marketers for social, entertaining, and trendy marketing content in the new media area. Specifically, our PRC subsidiaries' new media integrated marketing services are mainly composed of two models—the service-to-business ("S2B") model and the service-to-platform ("S2P") model. For the S2B business, our PRC subsidiaries provide customers with a package of new media integrated content marketing service solutions—specifically, our PRC subsidiaries (i) provide creative marketing services to merchants and brands by producing entertaining and trendy marketing content, such as promotional short videos and advertorials, and publishing them via their self-operated and cooperative we-media accounts; (ii) plan, organize, and implement live streaming events on behalf of marketers, such as e-commerce merchants and local businesses, for promoting their products or services on high-profile live streaming platforms, or provide them with new media live broadcast training services; and (iii) organize online and offline marketing activities for large brands, business centers, commercial complexes, and tourist attractions, based on their needs for an "online-offline-linkage" marketing strategy. In addition, to supplement their new media integrated content marketing services, our PRC subsidiaries have recently developed affiliated businesses, which currently account for a small percentage of their total revenue, but are expected to drive their future growth. Specifically, our PRC subsidiaries (a) license self-developed software products and services to third-party business, and (b) cooperate with cultural institutions, including museums and tourist attractions, such as Daming Palace National Heritage Park and Huashan Scenic Area, to help them issue, promote, and sell IP-related digital products that are becoming increasingly popular among young people on platforms such as Ali Auction (阿里拍卖), NetEase Planet (网易星球), and Xinhua Shucang (新华数藏).

With respect to the S2P business, our PRC subsidiaries provide online traffic services to large Internet media platforms by generating or directing user traffic to those media platforms through editing and producing captivating short videos from authorized TV dramas, movies, and variety shows and posting such short videos on high-profile media platforms, such as Toutiao, Douyin, Xigua Video (西瓜视频), Baidu Baijiahao, Kuaishou, Youku (优酷), Tencent Video (腾讯视频), and iQIYI (爱奇艺). As of September 30, 2022, our PRC subsidiaries had an in-house new media content production and operation team consisting of 185 employees, including senior media professionals, senior marketers, or people with professional backgrounds in design, journalism, and writing. This strong content team enables our PRC subsidiaries to consistently produce creative, entertaining, and interactive marketing content. With their in-depth industry insight and strong content production capabilities, our PRC subsidiaries provide a package of multi-channel marketing solutions that address their customers' different marketing needs. We believe that, with their extensive distribution channels and marketing methods, our PRC subsidiaries can maximize marketing effectiveness for their customers within their marketing budgets.

Our PRC subsidiaries' business has experienced rapid growth since their inception. For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, we had total revenue of

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RMB350.9 million, RMB471.4 million (US$66.3 million), and RMB339.3 million (US$47.7 million), respectively, and net income of RMB44.7 million, RMB69.2 million (US$9.7 million), and RMB52.4 million (US$7.4 million), respectively. Revenue derived from new media integrated content marketing services accounted for approximately 46.4%, 77.4%, and 87.5% of our total revenue for those years and period, respectively. Revenue derived from digital advertising services accounted for approximately 53.6%, 22.6%, and 12.5% of our total revenue for those years and period, respectively. For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, our cost of revenue was RMB243.5 million, RMB329.9 million (US$46.4 million), and RMB221.2 million (US$31.1 million), respectively.

***Competitive Strengths***

We believe the following competitive strengths are essential for our PRC subsidiaries' success and differentiate them from their competitors:

• content-driven new media integrated marketing enabled by our PRC subsidiaries' expertise in advertising idea
creation and content production;

• capability of offering a package of integrated marketing solutions of various forms;

• diverse network of we-media accounts with hundreds of millions of
followers;

• full stack technology solutions for new media businesses;

• business expansion mode through cooperation with local state-owned enterprises;

• solid marketer base spanning a wide range of industries; and

• visionary and experienced management and business teams with strong technical and operational expertise.

***Growth Strategies***

Our PRC subsidiaries intend to develop their business and strengthen brand loyalty by implementing the following strategies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• further expand our PRC subsidiaries' business scale and secure new marketers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• continue to invest in technology research and development to develop and commercialize new software systems and
expand business and profitability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• further expand we-media resources; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pursue additional strategic and financially attractive acquisitions.

***Corporate Information***

Our principal executive offices are located at Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Rd, Gongshu District, Hangzhou City, Zhejiang Province, China, and our phone number is +86-0571-88583100. Our registered office in the Cayman Islands is located at the offices of Conyers Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman KY1-1111, Cayman Islands, and the phone number of our registered office is +1 345 949 1040. We maintain a corporate website at www.sunhighgroup.com. The information contained in, or accessible from, our website or any other website is not incorporated into, and does not constitute a part of this prospectus or the registration statement of which it forms a part. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.

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***Summary of Risk Factors***

Investing in our Ordinary Shares involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in our Ordinary Shares. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully in the section titled "Risk Factors."

*Risks Relating to Doing Business in the PRC (for a more detailed discussion, see "Risk Factors—Risks Relating to Doing Business in the PRC" beginning on page 22 of this prospectus)* 

We face risks and uncertainties relating to doing business in the PRC in general, including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in China's economic, political, or social conditions or government policies could have a material
adverse effect on our PRC subsidiaries' business and operations (see page 22 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules,
and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us (see page 23 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• you may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing
actions in China against us or our management that reside outside the United States based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China (see page 23 of this
prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• given the Chinese government's significant oversight and discretion over the conduct of our PRC
subsidiaries' business, the Chinese government may intervene or influence their operations at any time, which could result in a material change in our PRC subsidiaries' operations and/or the value of our Ordinary Shares (see page 24 of
this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any actions by the Chinese government, including any decision to intervene or influence the operations of our PRC
subsidiaries or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiaries, may limit or completely hinder our
ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless (see page 24 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign
exchange, could adversely impact our PRC subsidiaries' business and our offering (see page 25 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Opinions recently adopted by the CSRC may cause additional compliance requirements in the future, and
Announcement No. 43 subjects us to additional procedural and disclosure requirements for this listing (see page 26 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the HFCA 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 continued listing or future offerings of our securities in the U.S. (see page 26 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to the extent cash or assets in the business are in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or
assets may not be available to fund operations or for other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to
transfer cash or assets (see page 28 of this prospectus);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increases in labor costs in the PRC may adversely affect our PRC subsidiaries' business and profitability
(see page 29 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries have not made adequate social insurance and housing fund contributions for all employees as
required by PRC regulations, which may subject them to penalties (see page 29 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PRC regulations relating to offshore investment activities by PRC residents may subject our PRC resident
beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us, or may
otherwise adversely affect us (see page 30 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may
delay or prevent us from using the proceeds of offshore offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect their liquidity and their ability to fund and expand their
business (see page 31 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in exchange rates could have a material and adverse effect on our results of operations and the
value of your investment (see page 33 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• under the PRC Enterprise Income Tax Law, we may be classified as a PRC "resident enterprise" for PRC
enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and
the value of your investment (see page 33 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies (see page 34 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may
have a material adverse effect on our ability to conduct our business (see page 35 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governmental control of currency conversion may affect the value of your investment and our payment of dividends
(see page 35 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• there are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC
subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits (see page 36 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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, stock price, and reputation (see page 36 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• according to Announcement No. 43, this prospectus is required to be submitted as one of our Filing Documents to
the CSRC, which may lead to the CSRC requiring further amendments to the disclosure content of our SEC submission documents (see page 37 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the approval of the CSRC may be required in connection with this offering under a regulation adopted in August
2006, and, if required, we cannot assure you that we will be able to obtain such approval, in which case we may face sanctions by the CSRC or other PRC regulatory agencies for failure to seek the CSRC approval for this offering (see page 37 of this
prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of
Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China (see page 38 of this prospectus); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Chinese regulatory authorities could disallow our holding company structure, which may result in a material
change in our operations and/or a material change in the value of the securities we are

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registering for sale, including that it could cause the value of such securities to significantly decline or become worthless (see page 38 of this prospectus).

*Risks Related to Our Business and Industry (for a more detailed discussion, see "Risk Factors—Risks Related to Our Business" beginning on page 39 of this prospectus)* 

Risks and uncertainties related to our business include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cutbacks on advertising budgets by marketers or failure to maintain and grow our PRC subsidiaries' marketer
base could materially and adversely affect our business and financial condition (see page 39 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to retain existing marketers and new media accounts or attract and grow new marketers and new media
accounts may negatively impact our PRC subsidiaries' revenue and business (see page 40 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to maintain the quality of our PRC subsidiaries' marketing content production may materially and
adversely impact their business and financial condition (see page 40 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the regulatory environment of the new media integrated content marketing industry and the digital advertising
industry is rapidly evolving. If our PRC subsidiaries fail to obtain and maintain the requisite licenses and approvals applicable to their businesses in China from time to time, their business, financial condition, and results of operations may be
materially and adversely affected (see page 41 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulation and censorship of information disseminated through we-media publishers and we-media platforms in the PRC may adversely affect our PRC subsidiaries' business (see page 41 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries are subject to, and may expend significant resources in defending against, government
actions and civil claims in connection with false, fraudulent, misleading, or otherwise illegal marketing content provided through our PRC subsidiaries' services (see page 41 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries are in the highly competitive new media integrated content marketing industry and the
digital advertising industry, and may not be able to compete successfully against existing or new competitors, which could reduce their market share and adversely affect their competitive position and financial performance (see page 42 of this
prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries rely on a number of digital media platforms to conduct their business. However, operators of
the platforms may curtail or inhibit their ability to use the platforms, or there may be material disruption of the platforms (see page 43 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may be subject to product liability claims that could be costly and time-consuming (see page
43 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may incur liability for counterfeit, unauthorized, illegal, or infringing products sold or
misleading information available through their live streaming sales (see page 44 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if our PRC subsidiaries fail to improve our services to keep up with the rapidly changing demand, preferences, or
advertising trends in the new media integrated content marketing industry or the digital advertising industry, their revenue and growth could be adversely affected (see page 44 of this prospectus);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if our PRC subsidiaries sustain cyber-attacks or other privacy or data security incidents that result in security
breaches, they could be subject to increased costs, liabilities, reputational harm, or other negative consequences (see page 45 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may experience systems disruption, software defects, computer viruses and breakdowns,
distributed denial of service attacks, or other hacking and phishing attacks on their systems (see page 45 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• non-compliance with laws and regulations on the part of any third parties with which our PRC subsidiaries conduct
business could expose our PRC subsidiaries to legal expenses, compensations to third parties, penalties, and disruption of their business, which may adversely affect their results of operations and financial performance (see page 46 of this
prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• seasonal fluctuations in advertising activities could have a material impact on our revenue, cash flow, and
operating results (see page 46 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries' business is subject to complex and evolving laws and regulations in countries in
addition to the PRC regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in increased compliance cost, changes to our PRC subsidiaries'
business practices, increased operating costs, and other harms to their business (see page 46 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries plan to continue expanding their operations globally so they may enter new international
markets where they have more limited operating experience, and this may subject them to increased business, economic, and legal risks that could affect their financial results (see page 47 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may not effectively manage their growth, which could materially harm their business (see
page 48 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may not be able to obtain the additional capital they need in a timely manner or on
acceptable terms, or at all (see page 48 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries' financial condition and operating results may be adversely affected by epidemics,
natural disasters, and other catastrophes including but not limited to the novel coronavirus (COVID-19) (see page 48 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ongoing COVID-19 pandemic in China may have a material adverse effect
on our PRC subsidiaries' business (see page 49 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any negative publicity about our PRC subsidiaries, their services, and their management may materially and
adversely affect their reputation and business (see page 50 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may be subject to intellectual property infringement claims, which may be expensive to
defend and may disrupt their business and operations (see page 50 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unauthorized use of our PRC subsidiaries' intellectual property by third parties and expenses incurred in
protecting our PRC subsidiaries' intellectual property rights may adversely affect their business, reputation, and competitive edges (see page 50 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if our PRC subsidiaries fail to manage their growth or execute their strategies and future plans effectively,
they may not be able to take advantage of market opportunities or meet the demand of their customers (see page 51 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries' business depends on the continued efforts of their senior management. If one or more
of their key executives were unable or unwilling to continue in their present positions, their business may be severely disrupted (see page 52 of this prospectus);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future acquisitions may have an adverse effect on our PRC subsidiaries' ability to manage their business
(see page 52 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may from time to time be subject to claims, controversies, lawsuits, and legal proceedings,
which could adversely affect their business, prospects, results of operations, and financial condition (see page 53 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries may be the subject of allegations, harassment, or other detrimental conduct by third
parties, which could harm their reputation and cause them to lose market share, users, and customers (see page 53 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our PRC subsidiaries current insurance policies may not provide adequate levels of coverage against all claims
and they may incur losses that are not covered by their insurance (see page 53 of this prospectus); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• some of our subsidiaries are subject to various evolving Hong Kong laws and regulations regarding data security
or antimonopoly, which could subject them to government enforcement actions and investigations, fines, penalties, and suspension or disruption of their operations (see page 54 of this prospectus).

*Risks Relating to this Offering and the Trading Market (for a more detailed discussion, see "Risk Factors—Risks Relating to this Offering and the Trading Market" beginning on page 55 of this prospectus)* 

In addition to the risks described above, we are subject to general risks and uncertainties relating to this offering and the trading market, including, but not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• there has been no public market for our Ordinary Shares prior to this offering, and you may not be able to resell
our Ordinary Shares at or above the price you pay for them, or at all (see page 55 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the initial public offering price for our Ordinary Shares may not be indicative of prices that will prevail in
the trading market and such market prices may be volatile (see page 55 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• you will experience immediate and substantial dilution in the net tangible book value of Ordinary Shares you
purchased (see page 55 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if we fail to implement and maintain an effective system of internal controls or fail to remediate the material
weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market
price of our Ordinary Shares may be materially and adversely affected (see page 55 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we will incur substantial increased costs as a result of being a public company (see page 56 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• because we are an "emerging growth company," we may not be subject to requirements that other public
companies are subject to, which could affect investor confidence in us and our Ordinary Shares (see page 57 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• substantial future sales of our Ordinary Shares or the anticipation of future sales of our Ordinary Shares in the
public market could cause the price of our Ordinary Shares to decline (see page 57 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we do not intend to pay dividends for the foreseeable future (see page 58 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if securities or industry analysts do not publish research or reports about our business, or if they publish a
negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline (see page 58 of this prospectus);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the market price of our 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 initial public offering price (see page 58 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 Ordinary Shares (see page 59 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting
requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer (see page 59 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• because we are a foreign private issuer and intend to take advantage of exemptions 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 (see page 60 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if we cannot continue to satisfy the listing requirements and other rules of Nasdaq, our securities may be
delisted, which could negatively impact the price of our securities and your ability to sell them  **** ** (see page 60 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• anti-takeover provisions in our fourth amended and restated memorandum and articles of association that we intend
to adopt may discourage, delay, or prevent a change in control (see page 60 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to
shareholders of corporations incorporated in the United States (see page 61 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• you may be unable to present proposals before annual general meetings or extraordinary general meetings not
called by shareholders (see page 61 of this prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if we are classified as a PFIC, United States taxpayers who own our Ordinary Shares may have adverse United
States federal income tax consequences (see page 62 of this prospectus); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our pre-IPO shareholders will be able to sell their shares upon completion of this offering subject to
restrictions under Rule 144 under the Securities Act and the lock-up agreements (see page 62 of this prospectus).

**Impact of COVID-19 on Our Operations and Financial Performance** 

From late January 2020 to the middle of April 2020, our PRC subsidiaries' business was moderately impacted by the COVID-19 pandemic, mainly due to a slowdown of the business of their marketer customers, which negatively affected those customers' marketing needs with our PRC subsidiaries. Nonetheless, their operations quickly resumed, starting from the second quarter of 2020, and achieved an increase in revenue in 2020 as compared to 2019. During the year ended December 31, 2021 and the nine months ended September 30, 2022, the COVID-19 pandemic did not have a material net impact on our financial positions and operating results. The extent of the impact on the operating entities' future financial results will depend on future developments, such as the length and severity of the pandemic, the potential resurgence of the pandemic, 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. Given this uncertainty, we are currently unable to quantify the expected impact of the COVID-19 pandemic on our future operations, financial condition, liquidity, and results of operations if the current situation continues. See "Risk Factors—Risks Relating to Our Business—The ongoing COVID-19 pandemic in China may have a material adverse effect on our business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—COVID-19 Pandemic Affecting Our Results of Operations."

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**Permissions or Approval Required from the PRC Authorities for Our Operations and Offering** 

Our PRC legal counsel, AllBright, has advised us that, in order to operate our business activities as currently conducted in China, each of our PRC subsidiaries is required to obtain a business license from the State Administration for Market Regulation ("SAMR"). As of the date of this prospectus, confirmed by AllBright, our PRC legal counsel, each of our PRC subsidiaries has obtained a valid business license from the SAMR and no application for any such license has been denied. Furthermore, some of our PRC subsidiaries have obtained Food Business Licenses and Import and Export Commodity Consignee and Consignor Customs Declaration Registration Certificates. According to the related PRC Laws and Regulations, such licenses and certificates are required to conduct food sales and import and export operations. Some of our PRC subsidiaries applied for such permits, in anticipation of engaging in related businesses in the future to supplement their current operations, rather than out of compliance with mandatory requirements of relevant PRC authorities for their existing business. As of the date of this prospectus, none of our PRC subsidiaries are conducting operations related to food sales or import and export. Therefore, under the requirements of PRC laws and regulations, despite such permits remaining valid, our PRC subsidiaries are not required to maintain such permits for their current operations. However, it is uncertain whether we or our PRC subsidiaries will be required to obtain additional approvals, licenses, or permits in connection with our business operations pursuant to evolving PRC laws and regulations, and whether we would be able to obtain and renew such approvals on a timely basis or at all. Failing to do so could result in a material change in our operations, and the value of our Ordinary Shares could depreciate significantly or become worthless. See "Risk Factors—Risks Relating to Our Business—The regulatory environment of the new media integrated content marketing industry and the digital advertising industry is rapidly evolving. If our PRC subsidiaries fail to obtain and maintain the requisite licenses and approvals applicable to their businesses in China from time to time, their business, financial condition, and results of operations may be materially and adversely affected."

As of the date of this prospectus, our PRC counsel, AllBright, has advised us that neither we nor our PRC subsidiaries (1) are required to obtain permission from any of the PRC authorities to operate and issue our Ordinary Shares to foreign investors, (2) are subject to approval requirements from the CSRC, the CAC, or any other entity to approve our operations, and (3) have been denied such permissions by any PRC authorities. Recently, however, 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. These Opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-concept overseas-listed companies and the demand for cybersecurity and data privacy protection. On February 17, 2023, the CSRC issued the Trial Administrative Measures for Overseas Securities Offering and Listing by Domestic Companies ("Announcement No. 43"), which became effective on March 31, 2023 (Beijing time). Under Announcement No. 43, we are required to file with CSRC for this offering. See "Regulations—Regulations Relating to Overseas Listing" and "Risk Factors—Risks Relating to Doing Business in the PRC—The Opinions recently adopted by the CSRC may cause additional compliance requirements in the future, and Announcement No. 43 subjects us to additional procedural and disclosure requirements for this listing."

The Cybersecurity Review Measures, which became effective on February 15, 2022, provides that, in addition to CIIOs that intend to purchase Internet products and services, online platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures further require that CIIOs and data processing operators that possess personal data of at least one million users must apply for a review by the Cybersecurity Review

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Office of the PRC before conducting listings in foreign countries. As of the date of this prospectus, we have not received any notice from any authorities identifying any of our PRC subsidiaries as a CIIO or requiring us to go through cybersecurity review or network data security review by the CAC. We believe the operations of our PRC subsidiaries will not be subject to cybersecurity review by the CAC for this offering, because our PRC subsidiaries are not CIIOs or online platform operators with personal information of more than one million users. There remains uncertainty, however, as to how the Cybersecurity Review Measures will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures. For further details, see "Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our PRC subsidiaries' business and our offering."

To operate business activities in Hong Kong, every company must register its business with the Business Registration Office of the Inland Revenue Department in Hong Kong and make an application for business registration within one month of commencement of business. Any person who fails to comply is subject to a maximum fine of HK$5,000 and one year of imprisonment. As of the date of this prospectus, we confirm that each of our Hong Kong subsidiaries has obtained a valid business registration certificate. There is no statutory or mandatory permission or regulatory approval required for the provision of new media integrated content marketing or digital advertising services in Hong Kong. As of the date of this prospectus, our Hong Kong counsel, Ince & Co, has advised us that neither we nor our Hong Kong subsidiaries are required to obtain (i) any permission or approval from Hong Kong authorities to offer the securities being registered to foreign investors outside Hong Kong, or (ii) any permission or approval from Hong Kong authorities to operate their business, except for the aforementioned business registration certificates. However, it is uncertain whether we or our Hong Kong subsidiaries will be required to obtain additional permissions or approval from Hong Kong authorities to operate business or offer securities to foreign investors in the future, and whether we would be able to obtain such permissions or approvals. If we are unable to obtain such permissions or approval if required in the future because applicable laws, regulations, or interpretations change, or inadvertently conclude that such permissions or approval are not required, then the value of our Ordinary Shares may depreciate significantly or become worthless.

**Asset Transfers Between Our Company and Our Subsidiaries** 

As of the date of this prospectus, no cash transfer or transfer of other assets has occurred between our Company and our subsidiaries, except that during November and December 2022, Xuhang Cayman transferred an aggregate of US$151,945.44 to Xuhang HK for working capital purposes. We have established controls and procedures for cash flows within our organization based on internal cash management policies established by our finance department, which were discussed, considered, and reviewed by the relevant departments in our Company, and approved by our Chairman of the Board of Directors. Specifically, our finance department supervises cash management, following the instructions of our management. Our finance department is responsible for establishing our cash operation plan and coordinating cash management matters among our subsidiaries and departments. Each subsidiary and department initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to our finance department. The finance department reviews the cash demand plan and prepares a summary for the management of our Company. Management examines and approves the allocation of cash based on the sources of cash and the priorities of the needs. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred.

**Dividends or Distributions Made to Our Company and U.S. Investors and Tax Consequences** 

As of the date of this prospectus, none of our subsidiaries have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep

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any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Subject to the passive foreign investment company ("PFIC") rules, the gross amount of distributions we make to investors with respect to our Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, 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.

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

If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from Xuhang BVI, which is dependent on receipt of funds from Xuhang HK. However, as the PRC government imposes control over currency conversion, it has the authority to conduct exchange transfer reviews, which may impose certain limitations on our ability to transfer cash between our Company, our subsidiaries, and our investors, primarily reflected in the following aspects: (i) we are restricted from providing capital or providing loans to our PRC subsidiaries, which may adversely affect the operations of our PRC subsidiaries; (ii) our PRC subsidiaries may be restricted from paying dividends to us; and (iii) if we are unable to obtain dividends from our PRC subsidiaries, it may adversely impact our dividends distribution to investors. See "Summary of Risk Factors," "Risk Factors—Risks Relating to Doing Business in the PRC—PRC regulations relating to offshore investment activities by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us," "Risk Factors—Risks Relating to Doing Business in the PRC—PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of offshore offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect their liquidity and their ability to fund and expand their business," and "Risk Factors—Risks Relating to Doing Business in the PRC—Governmental control of currency conversion may affect the value of your investment and our payment of Dividends." Further, to the extent cash or assets in the business are in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash or assets. There is no assurance the PRC government will not intervene in or impose restrictions on the ability of our Company or our subsidiaries to transfer cash or assets. See "—Business Overview—Summary of Risk Factors," and "Risk Factors—Risks Relating to Doing Business in the PRC—To the extent cash or assets in the business are in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash or assets."

Current PRC regulations permit our PRC subsidiaries to pay dividends to Xuhang HK only out of their accumulated profits, if any, determined in accordance with Chinese 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 its respective registered capital.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, or "SAFE Circular 3," issued on January 26, 2017, provides that banks shall, when dealing with dividend remittance transactions from a domestic enterprise to its offshore shareholders of more than US$50,000, review the relevant board resolutions, original tax filing form, and audited financial statements of such domestic enterprise based on the principle of genuine transaction.

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Furthermore, if our PRC subsidiaries 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 PRC subsidiaries are unable to receive all of the revenue from our operations, we may be unable to pay dividends on our Ordinary Shares.

Cash dividends, if any, on our Ordinary Shares will be paid in U.S. dollars. Xuhang HK may be considered a non-resident enterprise for tax purposes, so that any dividends Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya pay to Xuhang HK 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%. See "Material Income Tax Consideration—Enterprise Taxation in Mainland China."

In order for us to pay dividends to our shareholders, we will rely on payments made from Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya to Xuhang HK as dividends from these three PRC subsidiaries and the distribution of such payments to Xuhang BVI as dividends from Xuhang HK, and then the distribution of such payments to our Company as dividends from Xuhang BVI. If Huzhou Yinzhiya, Wuhan Yinzhiya, or Xuhang Network or its 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.

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 (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. The 5% withholding tax rate, however, 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. In current practice, a Hong Kong project 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 any dividends paid by Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya to their immediate holding company, Xuhang HK. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Xuhang HK intends to apply for the tax resident certificate if and when Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya plan to declare and pay dividends to Xuhang HK. See "Risk Factors—Risks Relating to Doing Business in the PRC—There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits."

**Implications of Being an "Emerging Growth Company"** 

As a company with less than US$1.235 billion in revenue during our last fiscal year, 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 reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• may present 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives
and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as "compensation discussion and analysis";

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• are not required to obtain an attestation and report from our auditors on our management's assessment of our
internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• are not required to obtain a non-binding advisory vote from our
shareholders on executive compensation or golden parachute arrangements (commonly referred to as the "say-on-pay," "say-on frequency," and "say-on-golden-parachute" votes);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• are eligible to claim longer phase-in periods for the adoption of new or
revised financial accounting standards under §107 of the JOBS Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• will not be required to conduct an evaluation of our internal control over financial reporting until our second
annual report on Form 20-F following the effectiveness of our initial public offering.

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. 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 US$1.235 billion in annual revenue, have more than US$700 million in market value of our Ordinary Shares held by non-affiliates, or issue more than US$1 billion in principal amount of non-convertible debt over a three-year period.

**Foreign Private Issuer Status** 

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:

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

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**THE OFFERING** 

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| **Ordinary Shares offered by us**  | [●] Ordinary Shares, based on an assumed offering price of US$[●] per Ordinary Share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus |

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| **Price per Ordinary Share**  | We currently estimate that the initial public offering price will be in the range of US$[●] to US$[●] per Ordinary Share. |

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| **Ordinary Shares outstanding prior to completion of this offering**  | 58,804,977 Ordinary Shares |

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| **Ordinary Shares outstanding immediately after this offering**  | [●] Ordinary Shares, assuming no exercise of the Representative's over-allotment option and excluding [●] Ordinary Shares underlying the Representative's Warrants |

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[●] Ordinary Shares, assuming full exercise of the Representative's over-allotment option and excluding [●] Ordinary Shares underlying the Representative's Warrants

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| **Listing**  | We have applied to list our Ordinary Shares on Nasdaq under the symbol "SUNH." At this time, Nasdaq has not yet approved our application to list our Ordinary Shares. The closing of this offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our Ordinary Shares will be approved for listing on Nasdaq. |

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| **Proposed ticker symbol**  | "SUNH" |

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| **Transfer Agent**  | Transhare Corporation |

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| **Over-allotment Option**  | We have granted to the Representative an option, exercisable within 30 days from the date of this prospectus, to purchase up to an aggregate of [●] additional Ordinary Shares |

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| **Use of proceeds**  | We intend to use the proceeds from this offering to expand our main business to further improve our integrated marketing services, invest in technology research and development, and acquire high-quality companies within the same industry or upstream and downstream entities across the new media integrated content marketing value chain, and for working capital and other general corporate purposes. See "Use of Proceeds" on page 66 for more information*.* |

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| **Lock-up**  | All of our directors and officers and substantially all of our pre-IPO shareholders have agreed with the Representative not to sell, transfer, or dispose of, directly or indirectly, any of our Ordinary Shares or securities convertible into or exercisable or exchangeable for our Ordinary Shares for a period of six months after the date of this prospectus. See "Shares Eligible for Future Sale" and "Underwriting" for more information. |

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| **Risk factors**  | The Ordinary Shares offered hereby involve a high degree of risk. You should read "Risk Factors," beginning on page 22 for a discussion of factors to consider before deciding to invest in our Ordinary Shares*.* |

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| **Representative's Warrants**  | The registration statement of which this prospectus is a part also registers for sale the Representative's Warrants to purchase Ordinary Shares equal to 5% of the total number of Ordinary Shares sold in this offering, including the number of Ordinary Shares upon the exercise of the Representative's over-allotment option, as a portion of the underwriting compensation payable to the underwriters in connection with this offering. The Representative's Warrants will be exercisable commencing on the date of commencement of sales of Ordinary Shares in this offering for a period of three years at a per share exercise price of US$[●] (130% of the public offering price of the Ordinary Shares, based on an assumed initial public offering price of US$[●] per Ordinary Share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus). Please see "Underwriting—The Representative's Warrants" for a description of these warrants. |

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**RISK FACTORS** 

*An investment in our Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Ordinary Shares, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations, or cash flow could be materially and adversely affected, which could cause the trading price of our Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks described below and discussed in other parts of this prospectus are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in our Ordinary Shares if you can bear the risk of loss of your entire investment.* 

**Risks Relating to Doing Business in the PRC** 

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

Substantially all of our PRC subsidiaries' assets and operations are currently located in China. Accordingly, our PRC subsidiaries' business, financial condition, results of operations, and prospects may be influenced to a significant degree by political, economic, and social conditions in China generally. The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange, and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, including 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 by 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. Any adverse changes in economic conditions in China, in the policies of the Chinese government, or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our PRC subsidiaries' business and operating results, reduce demand for their products, and weaken their competitive position. 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 have a negative effect on our PRC subsidiaries. For example, our PRC subsidiaries' 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 adjustments, to control the pace of economic growth. These measures may cause decreased economic activities in China, which may adversely affect our PRC subsidiaries' business and operating results.

Furthermore, our Company, our PRC subsidiaries, and our investors may face uncertainty about future actions by the government of China that could significantly affect our PRC subsidiaries' financial performance and operations. As of the date of this prospectus, neither our Company nor our PRC subsidiaries have received or were denied permission from Chinese authorities to list on U.S. exchanges. However, there is no guarantee that our Company or our PRC subsidiaries will receive or not be denied permission from Chinese authorities to list on U.S. exchanges in the future.

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***Uncertainties in the interpretation and enforcement of PRC laws and regulations and changes in policies, rules, and regulations in China, which may be quick with little advance notice, could limit the legal protection available to you and us.***

The PRC legal system is based on written statutes. Unlike common law systems, it is a system in which legal cases have limited value as precedents. In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The legislation over the past five decades has significantly increased the protection afforded to various forms of foreign or private-sector investment in China. Our PRC subsidiaries are subject to various PRC laws and regulations generally applicable to companies in China. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, however, the interpretations of many laws, regulations, and rules are not always uniform and enforcement of these laws, regulations, and rules involve uncertainties.

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

***You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management that reside outside the United States based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.***

As a company incorporated under the laws of the Cayman Islands, we conduct substantially all of our operations in China and substantially all of our assets are located in China. In addition, four out of our five directors and

officers, namely Tianhang Xiao, Huazhen Xu, Bo Lyu, and Xiaoyi Wang, reside in the PRC; another director,

Wenbing Wang, resides in the United States. All or a substantial portion of the assets of our directors and

officers are located outside the United States. As a result, it may be difficult for you to effect service of process upon those persons inside mainland China. It may be difficult for you to enforce judgements obtained in U.S. courts based on civil liability provisions of the U.S. federal securities laws against us and our officers and directors who do not currently reside in the U.S. or have substantial assets in the U.S. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC 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 U.S. or any state.

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws 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.

It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the

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authorities in China may establish a regulatory cooperation mechanism with counterparts of another country or region to monitor and oversee cross border securities activities, such regulatory cooperation with the securities regulatory authorities in the United States may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law ("Article 177"), which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory authority of the State Council and the competent departments of the State Council. While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

***Given the Chinese government's significant oversight and discretion over the conduct of our PRC subsidiaries' business, the Chinese government may intervene or influence their operations at any time, which could result in a material change in our PRC subsidiaries' operations and/or the value of our Ordinary Shares.***

The Chinese government has significant oversight and discretion over the conduct of our PRC subsidiaries' business and may intervene or influence their operations at any time as the government deems appropriate to further regulatory, political, and societal goals, which could result in a material change in our PRC subsidiaries' operations and/or the value of our Ordinary Shares.

The Chinese government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding the digital marketing industry that could adversely affect our PRC subsidiaries' business, financial condition, and results of operations. Furthermore, if China adopts more stringent standards with respect to certain areas such as environmental protection or corporate social responsibilities, our PRC subsidiaries' may incur increased compliance costs or become subject to additional restrictions in their operations. Certain areas of the law, including intellectual property rights and confidentiality protections, in China may also not be as effective as in the United States or other countries. In addition, our PRC subsidiaries cannot predict the effects of future developments in the PRC legal system on their business operations, including the promulgation of new laws, or changes to existing laws or the interpretation or enforcement thereof. These uncertainties could limit the legal protections available to us and our investors, including you.

***Any actions by the Chinese government, including any decision to intervene or influence the operations of our PRC subsidiaries or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiaries, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.***

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The ability of our subsidiaries to operate in China may be impaired by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, foreign investment limitations, and other matters. The central or local governments of China may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts for our PRC subsidiaries to ensure their compliance with such regulations or interpretations. As such, our PRC subsidiaries may be subject to various government and regulatory interference in the provinces in which they operate in China. They could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

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Furthermore, it is uncertain when and whether we 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 later denied or rescinded. Although we believe our Company and our PRC subsidiaries are currently not required to obtain permission from any Chinese authorities and have not received any notice of denial of permission to list on the U.S. exchange as of the date of this prospectus, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry, particularly in the event permission to list on U.S. exchanges may be later required, or withheld or rescinded once given.

Accordingly, government actions in the future, including any decision to intervene or influence the operations of our PRC subsidiaries at any time or to exert control over an offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiaries, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless.

***Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our PRC subsidiaries' business and our offering.***

On December 28, 2021, 13 governmental departments of the PRC, including the CAC, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to CIIO that intend to purchase Internet products and services, net platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.

On November 14, 2021, the CAC published the Security Administration Draft. The Security Administration Draft provides that data processors shall apply for a cybersecurity review under certain circumstances, such as mergers, restructurings, and divisions of Internet platform operators that hold large amount of data relating to national security, economic development, or public interest which affects or may affect the national security, overseas listings of data processors that process personal data for more than one million individuals, Hong Kong listings of data processors that affect or may affect national security, and other data processing activities that affect or may affect the national security. The deadline for public comments on the Security Administration Draft was December 13, 2021.

As of the date of this prospectus, we have not received any notice from any authorities identifying our PRC subsidiaries as CIIOs or requiring us to go through cybersecurity review or network data security review by the CAC. As confirmed by our PRC counsel, AllBright, neither the operations of our PRC subsidiaries, nor our listing are expected to be affected, and that we are not subject to cybersecurity review by the CAC under the Cybersecurity Review Measures, nor will any such entity be subject to the Security Administration Draft, if it is enacted as proposed, given that our PRC subsidiaries are not CIIOs or online platform operators with personal information of more than one million users. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we expect to take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that our PRC subsidiaries will not be subject to cybersecurity review and network data security review in the future. During such reviews, our PRC subsidiaries may be required to suspend their operations or experience other disruptions to their operations. Cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion of our managerial and

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financial resources, which could materially and adversely affect our business, financial conditions, and results of operations.

***The Opinions recently adopted by the CSRC may cause additional compliance requirements in the future, and Announcement No. 43 subjects us to additional procedural and disclosure requirements for this listing.***

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, 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 supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. On February 17, 2023, the CSRC released Announcement No. 43, which took effect on March 31, 2023. Announcement No. 43 clearly defined a scope, including five circumstances in which a domestic enterprise cannot be listed overseas. See "Regulations—Regulations Relating to Overseas Listing." As confirmed by AllBright, our PRC counsel, we do not fall within any of such circumstances. Meanwhile, we are required to submit a series of documents to the CSRC for filing under Announcement No. 43 (the "Filling Documents"). According to the requirements of the CSRC, we must file with the CSRC for this listing and offering prior to the completion of this offering, and the content of our Filing Documents needs to meet the disclosure standard proposed by the CSRC. While we are currently not subject to any circumstance that may cause our Filing Documents to be deemed as unqualified by the CSRC, the interpretations and implementation of Announcement No. 43 remain uncertain in several respects at this time, considering that Announcement No. 43 has just been released. Therefore, there is no guarantee that our Filing Documents will meet the standards of the CSRC if we are required to file with CSRC, which could impede our ability to continue this offering.

***Recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the HFCA 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 continued listing or future offerings of our securities in the U.S.***

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 a minimum offering size requirement for companies primarily operating in a "Restrictive Market," (ii) adopt a new requirement relating to the qualification of management or the board of directors 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 auditor. On October 4, 2021, the SEC approved Nasdaq's revised proposal for the rule changes.

On May 20, 2020, the U.S. Senate passed the HFCA Act 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 national exchange. On December 2, 2020, the U.S. House of Representatives approved the HFCA Act. On December 18, 2020, the HFCA Act was signed into law.

On March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of the HFCA Act. In the announcement, the SEC clarifies that before any issuer will have to comply with the interim final amendments, the SEC must implement a process for identifying covered issuers. The announcement also states that the SEC staff is actively assessing how best to implement the other requirements of the HFCA Act, including the identification process and the trading prohibition requirements.

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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 delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at such future time.

On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, 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 HFCA Act, which became effective on January 10, 2022. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. For example, on December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions.

On December 16, 2021, the PCAOB issued a report on its determinations that the Board is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions. The Board made these determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the HFCA Act.

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 existing and potential investors in our Ordinary Shares to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is headquartered in San Mateo, California, and has been inspected by the PCAOB on a regular basis, with the last inspection in October 2019. The PCAOB currently has access to inspect the working papers of our auditor and our auditor is not 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 Nasdaq or regulatory authorities would apply additional and more stringent criteria to us since we are an emerging growth company and the majority of our operations are conducted in China. Furthermore, if the PCAOB is unable to inspect our accounting firm in the future, the HFCA Act, which requires that the PCAOB be permitted to inspect an issuer's public accounting firm within two years, as amended, will prohibit trading in our securities, and, as a result, an exchange may determine to delist our securities and trading in our securities could be prohibited.

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On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol, governing inspections and investigations of accounting 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.

***To the extent cash or assets in the business are in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash or assets.***

Relevant PRC laws and regulations permit the companies in the PRC to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, each of the companies in the PRC are 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. The companies in the PRC are also required to further set aside a portion of their after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at their discretion. These reserves are not distributable as cash dividends. Furthermore, in order for us to pay dividends to our shareholders, we will rely on payments made from Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya to Xuhang HK as dividends from these three PRC subsidiaries and the distribution of such payments to Xuhang BVI as dividends from Xuhang HK, and then the distribution of such payments to our Company as dividends from Xuhang BVI. If Huzhou Yinzhiya, Wuhan Yinzhiya, or Xuhang Network or its 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 payments to us.

Our cash dividends, if any, will be paid in U.S. dollars. If we are considered a tax resident enterprise of the PRC 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. See "—Risks Relating to Doing Business in the PRC—Under the PRC Enterprise Income Tax Law, we may be classified as a PRC 'resident enterprise' for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment."

The PRC government also imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The majority of our PRC subsidiaries' income is received in Renminbi and 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 ("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 the PRC 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 and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.

As of the date of this prospectus, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into, and out of Hong Kong (including funds from Hong Kong to mainland

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China), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future. There is no assurance the PRC government will not intervene in or impose restrictions on our ability to transfer cash or assets.

As a result of the above, to the extent cash or assets in the business are in the PRC/Hong Kong or a PRC/Hong Kong entity, such funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong, due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the competent government to the transfer of cash or assets.

***Increases in labor costs in the PRC may adversely affect our PRC subsidiaries' business and profitability.***

China's economy has experienced increases in labor costs in recent years. China's overall economy and the average wage in China are expected to continue to grow. The average wage level for our PRC subsidiaries' employees has also increased in recent years. We expect that their labor costs, including wages and employee benefits, will continue to increase. Unless our PRC subsidiaries are able to pass on these increased labor costs to their customers by increasing prices for their products or services, their profitability and results of operations may be materially and adversely affected.

In addition, our PRC subsidiaries have been subject to stricter regulatory requirements in terms of entering into labor contracts with their employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance to designated government agencies for the benefit of their employees. Pursuant to the *PRC Labor Contract Law,* or the "Labor Contract Law," that became effective in January 2008 and its amendments that became effective in July 2013 and its implementing rules that became effective in September 2008, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees' probation, and unilaterally terminating labor contracts. In the event that our PRC subsidiaries decide to terminate some of their employees or otherwise change their employment or labor practices, the Labor Contract Law and its implementation rules may limit their ability to effect those changes in a desirable or cost-effective manner, which could adversely affect their business and results of operations.

As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our PRC subsidiaries' employment practices do not and will not violate labor-related laws and regulations in China, which may subject our PRC subsidiaries to labor disputes or government investigations. If our PRC subsidiaries are deemed to have violated relevant labor laws and regulations, they could be required to provide additional compensation to their employees and their business, and, in such case, our financial condition, and results of operations could be materially and adversely affected.

***Our PRC subsidiaries have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations, which may subject them to penalties.***

According to the PRC Social Insurance Law and the Administrative Regulations on the Housing Funds, companies operating in China are required to participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance, maternity insurance (collectively known as "social insurance"), and housing funds plans, and the employers must pay all or a portion of the social insurance premiums and housing funds for their employees. For more details, please see "Regulations—Regulations Relating to Labor and Social Insurance." The requirement of social insurance and housing fund has not been implemented consistently by the local governments in China given the different levels of economic development in different locations.

Our PRC subsidiaries have not made adequate social insurance and housing fund contributions for all employees, and they may be required to make up for the shortfall in the social insurance contributions as well as to pay late fees at the rate of 0.05% per day of the outstanding amount from the due date. If they fail to make up for the

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shortfalls within the prescribed time limit, the relevant administrative authorities will impose a fine of one to three times the outstanding amount upon them. With respect to housing fund plans, our PRC subsidiaries may be required to pay and/or deposit housing funds in full and on time within the prescribed time limit. If they fail to do so, relevant authorities could impose a fine of not less than RMB10,000 nor more than RMB50,000 and file applications to competent courts for compulsory enforcement of payment and deposit. As of December 31, 2022, we estimate that the amount of outstanding social insurance premiums and housing funds was approximately RMB1,027,625 (US$148,968) and the amount of late fees and potential fines was in the range of RMB200,000 (US$28,993) and RMB1,000,000 (US$144,963). We have not made accruals for the expected amounts owed, including late fees and fines that may be imposed by the relevant local government authorities in the financial statements. There are a number of policies providing that local governmental authorities shall act carefully to avoid burdensome measures over the small- and medium-size entities. For example, pursuant to the Emergency Notice on Practicing Principles of the State Council Executive Meeting and Stabilizing Work on Collecting Social Insurance Premiums, promulgated by the Ministry of Human Resources and Social Security on September 21, 2018, local authorities are prohibited from recovering the unpaid social insurance premiums from enterprises without permission in a centralized manner. Although we have not received any inquiry, notice, warning, or sanctions regarding such late fees or fines, the interpretation and implementation of labor-related laws and regulations are still constantly evolving which may be further amended from time to time. If the relevant PRC authorities determine that our PRC subsidiaries shall make supplemental social insurance and housing fund contributions or that they are subject to fines and legal sanctions in relation to their failure to make social insurance and housing fund contributions in full for their employees, their business, financial condition, and results of operations may be adversely affected.

***PRC regulations relating to offshore investment activities by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.***

On July 4, 2014, SAFE issued the Circular on Issues Concerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or "SAFE Circular 37." According to SAFE Circular 37, prior registration with the local SAFE branch is required for PRC residents, (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose), in connection with their direct or indirect contribution of domestic assets or interests to offshore special purpose vehicles, or "SPVs." SAFE Circular 37 further requires amendments to the SAFE registrations in the event of any changes with respect to the basic information of the offshore SPV, such as change of a PRC individual shareholder, name, and operation term, or any significant changes with respect to the offshore SPV, such as an increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions. 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. In February 2015, SAFE promulgated a Circular on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or "SAFE Circular 13," effective in June 2015. Under SAFE Circular 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

In addition to SAFE Circular 37 and SAFE Circular 13, our ability to conduct foreign exchange activities in China may be subject to the interpretation and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007 (as amended and supplemented, the "Individual Foreign Exchange Rules"). Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such PRC individual to warnings, fines, or other liabilities.

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As of the date of this prospectus, our current shareholders who are subject to the SAFE Circular 37 or SAFE Circular 13 have completed the initial registrations with the qualified banks as required by the regulations.

Furthermore, according to the Administrative Measures on Overseas Investments adopted by the Ministry of Commerce (the "MOFCOM") and the Measures for the Administration of Overseas Investment of Enterprises (the "Enterprise Overseas Investment Measures") adopted by the National Development and Reform Commission (the "NDRC"), a PRC enterprise that intends to make overseas investments is required to obtain approvals from provincial commerce authorities and NDRC's local branches or to make filings with such authorities, depending on the type and the region of their investments. As confirmed by our PRC counsel, AllBright, our PRC enterprise shareholders are required to file with such provincial commerce authorities and NDRC's local branches. In addition, according to the SAFE Circular 13 adopted by SAFE, our PRC enterprise shareholders are obliged to register with qualified banks when they make overseas investments or financings. Generally, for an overseas direct investment, the fillings with the qualified bank at the request of SAFE, the fillings with the provincial commerce authorities, and the filling with the NDRC or its local branches are collectively referred to as the "ODI fillings." Pursuant to the aforementioned laws and regulations, if a PRC enterprise makes such overseas direct investments without obtaining all of the ODI filings, the relevant approval or filing authority has the authority to take corrective measures, such as ordering such enterprise to suspend or cease the implementation of the projects, issuing warnings, or imposing other penalties.

As of the date of this prospectus, we believe our current shareholders who are subject to the Administrative Measures on Overseas Investments, Enterprise Overseas Investment Measures, and other related laws and regulations have completed the ODI filings as required by the aforementioned regulations.

Under relevant laws and regulations regarding the ODI fillings, following the submission or approval of an enterprise's filings with the MOFCOM or provincial commerce authorities, the enterprise is required to file for modifications with the MOFCOM or the provincial commerce authorities that processed its original filing or approval, should there be any changes to the overseas direct investments provided in initial filing materials or the original certificates of overseas investments of enterprises. Likewise, for an overseas direct investment project that has been approved and filed with the NDRC, the investor shall file an application for modifications to the relevant authority in advance of certain circumstances, such as changes to the number of investors, project activities, or project scale.

Although it is our understanding that all of our current enterprise shareholders have completed the required the ODI filings, we may not be informed of the identities of all the PRC residents or enterprises holding direct or indirect interest in our Company, and we have no control over whether any of our future beneficial owners would complete such ODI filings. Furthermore, we cannot guarantee that all of our enterprise shareholders will renew their ODI fillings on a timely basis when required by law, and we cannot assure you that our shareholders' applications for renewal will be approved. Thus, we cannot provide any assurance that our current or future PRC resident beneficial owners, including PRC residents and enterprises, will comply with our request to make or obtain any applicable registrations or filings, or continue to comply with all registration and filing procedures set forth in the ODI filings. Such failure or inability of our PRC resident beneficial owners to comply with the ODI filings may subject us or our PRC resident beneficial owners to fines and legal sanctions, restrict our cross-border investment activities, limit our PRC subsidiaries' ability to distribute dividends to or obtain foreign-exchange-dominated loans from us, or prevent us from making distributions or pay dividends, which will materially and adversely affect our business operations and our ability to distribute profits to you.

***PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of offshore offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect their liquidity and their ability to fund and expand their business.***

We are an offshore holding company conducting our operations in China through our PRC subsidiaries, to which we can make loans and make additional capital contributions. Most of these loans or contributions are subject to

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PRC regulations and approvals or registration. For example, any loans to Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya, which are treated as foreign-invested enterprises under PRC law, are subject to PRC regulations and foreign exchange loan registrations. Furthermore, loans made by us to Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya to finance their activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE, or filed with SAFE in its information system. Pursuant to relevant PRC regulations, we may provide loans to Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya up to the larger amount of (i) the balance between the registered total investment amount and registered capital of these entities, or (ii) twice the amount of the net assets of these entities calculated in accordance with the PBOC Circular 9. Moreover, any medium or long-term loan to be provided by us to Xuhang Network, Huzhou Yinzhiya, Wuhan Yinzhiya, or other domestic PRC entities must also be filed and registered with the NDRC. We may also decide to finance Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya by means of capital contributions. These capital contributions are subject to registration with the SAMR or its local branch, reporting of foreign investment information with the MOFCOM, or registration with other governmental authorities in China.

On March 30, 2015, SAFE issued the Notice of the State Administration of Foreign Exchange on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange Capital of Foreign-invested Enterprises, or "SAFE Circular 19," which took effect and replaced previous regulations effective on June 1, 2015, and was amended on December 30, 2019. Pursuant to SAFE Circular 19, up to 100% of foreign currency capital of a foreign-invested enterprise may be converted into RMB capital according to the actual operation, and within the business scope, of the enterprise at its will. Although SAFE Circular 19 allows for the use of RMB converted from the foreign currency-denominated capital for equity investments in the PRC, the restrictions continue to apply as to foreign-invested enterprises' use of the converted RMB for purposes beyond their business scope, for entrusted loans or for inter-company RMB loans. On June 9, 2016, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or "SAFE Circular 16," effective on June 9, 2016, which reiterates some rules set forth in SAFE Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-affiliated enterprises. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from our offshore offerings, to Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya, which may adversely affect our liquidity and our ability to fund and expand our business in China. On October 23, 2019, SAFE issued the Notice of the State Administration of Foreign Exchange on Further Facilitating Cross-border Trade and Investment, or "SAFE Circular 28," which, among other things, expanded the use of foreign exchange capital to domestic equity investment area. Non-investment foreign-funded enterprises are allowed to lawfully make domestic equity investments by using their capital on the premise without violation to prevailing Special Administrative Measures for Access of Foreign Investments (Edition 2021), or the "Negative List," and the authenticity and compliance with the regulations of domestic investment projects. However, since SAFE Circular 28 is newly promulgated, it is unclear how SAFE and competent banks will carry it out in practice.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, including SAFE Circular 19, SAFE Circular 16, and other relevant rules and regulations, we cannot assure you that we will be able to complete the necessary registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans or capital contributions to Huzhou Yinzhiya, Wuhan Yinzhiya, and Xuhang Network and its subsidiaries. As a result, uncertainties exist as to our ability to provide prompt financial support to Huzhou Yinzhiya, Wuhan Yinzhiya, and Xuhang Network and its subsidiaries when needed. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we received or expect to receive from our offshore offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our PRC subsidiaries' business, including their liquidity and their ability to fund and expand their business.

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***Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.***

The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China's foreign exchange policies. On July 21, 2005, the PRC government changed its decade-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. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the U.S. dollar remained within a narrow band. Since June 2010, the RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. 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.

Our business is conducted in the PRC through our PRC subsidiaries, and their books and records are maintained in RMB. The financial statements that we file with the SEC and provide to our shareholders are partly presented in U.S. dollars. Changes in the exchange rates between the RMB and U.S. dollar affect the value of our PRC subsidiaries' assets and results of operations, when presented in U.S. dollars. The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue, and financial condition. Further, our Ordinary Shares offered in the U.S. are offered in U.S. dollars, we need to convert the net proceeds we receive into RMB in order to use the funds for our PRC subsidiaries' business. Changes in the conversion rate among the U.S. dollar and the RMB will affect the amount of proceeds we will have available for our PRC subsidiaries' business.

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 in an effort 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 and we may not be able to adequately hedge our exposure or at all. 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 your investment.

***Under the PRC Enterprise Income Tax Law, we may be classified as a PRC "resident enterprise" for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment.***

Under the PRC Enterprise Income Tax Law (the "EIT Law"), which became effective in January 2008, an enterprise established outside the PRC with "de facto management bodies" within the PRC is considered 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. Under the implementation rules to the EIT Law, a "de facto management body" is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances, and properties of an enterprise. In April 2009, the State Administration of Taxation (the "SAT") issued the Circular on Issues Concerning the Identification of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance with the Actual Standards of Organizational Management, or "SAT Circular 82," which was amended in December 2017. SAT Circular 82 specifies that certain offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if the following are located or resident in the PRC: senior management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision-making bodies; key properties, accounting books, company seal, and minutes of board meetings and shareholders' meetings; and half or more of the senior management or directors having voting rights. In addition to SAT Circular 82, the SAT issued the Measures for the

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Administration of Enterprise Income Tax of Chinese-Controlled Overseas Registered Enterprises as Resident Enterprises (for Trial Implementation), or "SAT Bulletin 45," which took effect in September 2011 and was amended in April 2015, to provide more guidance on the implementation of SAT Circular 82 and clarify the reporting and filing obligations of such "Chinese-controlled offshore incorporated resident enterprises." SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and administration on post-determination matters. Although both SAT Circular 82 and SAT Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreign individuals, the determining criteria set forth in SAT Circular 82 and SAT Bulletin 45 may reflect the SAT's general position on how the "de facto management body" test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, PRC enterprise groups, or by PRC or foreign individuals.

If the PRC tax authorities determine that the actual management organ of Xuhang Cayman is within the territory of China, Xuhang Cayman may be deemed to be a PRC resident enterprise for PRC enterprise income tax purposes and a number of unfavorable PRC tax consequences could follow. First, we will be subject to the uniform 25% enterprise income tax on our world-wide income, which could materially reduce our net income. In addition, we will also be subject to PRC enterprise income tax reporting obligations. Finally, dividends payable by us to our investors and gains on the sale of our shares may become subject to PRC withholding 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 in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in our shares. Although up to the date of this prospectus, Xuhang Cayman has not been notified or informed by the PRC tax authorities that it has been deemed to be a resident enterprise for the purpose of the EIT Law, we cannot assure you that it will not be deemed to be a resident enterprise in the future.

***We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.***

In February 2015, SAT issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or "SAT Circular 7." SAT Circular 7 provides comprehensive guidelines relating to indirect transfers of PRC taxable assets (including equity interests and real properties of a PRC resident enterprise) by a non-resident enterprise. In addition, in October 2017, SAT issued an Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or "SAT Circular 37," effective in December 2017, which, among others, amended certain provisions in SAT Circular 7 and further clarify the tax payable declaration obligation by non-resident enterprise. Indirect transfer of equity interest and/or real properties in a PRC resident enterprise by their non-PRC holding companies are subject to SAT Circular 7 and SAT Circular 37.

SAT Circular 7 provides clear criteria for an assessment of reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. As stipulated in SAT Circular 7, indirect transfers of PRC taxable assets are considered as reasonable commercial purposes if the shareholding structure of both transaction parties falls within the following situations: (i) the transferor directly or indirectly owns 80% or above equity interest of the transferee, or vice versa; (ii) the transferor and the transferee are both 80% or above directly or indirectly owned by the same party; and (iii) the percentages in bullet points (i) and (ii) shall be 100% if over 50% the share value of a foreign enterprise is directly or indirectly derived from PRC real properties. Furthermore, SAT Circular 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. Where a non-resident enterprise transfers PRC 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

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relevant tax authority and 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 is obligated to pay 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.

According to SAT Circular 37, where the non-resident enterprise fails to declare the tax payable pursuant to Article 39 of the EIT Law, the tax authority may order it to pay the tax due within required time limits, and the non-resident enterprise shall declare and pay the tax payable within such time limits specified by the tax authority. If the non-resident enterprise, however, voluntarily declares and pays the tax payable before the tax authority orders it to do so within required time limits, it shall be deemed that such enterprise has paid the tax in time.

We face uncertainties as to the reporting and assessment of reasonable commercial purposes and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries, and investments. In the event of being assessed as having no reasonable commercial purposes in an indirect transfer transaction, we may be subject to filing obligations or taxed if we are a transferor in such transactions, and may be subject to withholding obligations (to be specific, a 10% withholding tax for the transfer of equity interests) if we are a transferee in such transactions, under SAT Circular 7 and SAT Circular 37. For transfer of shares by investors who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under the SAT circulars. As a result, we may be required to expend valuable resources to comply with the SAT circulars or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that we should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

***Our PRC subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct our business.***

We are a holding company incorporated in the Cayman Islands. We may need dividends and other distributions on equity from our PRC subsidiaries to satisfy our liquidity requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If 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.

Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our PRC subsidiaries may also allocate a portion of their respective after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends. These 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.

***Governmental control of currency conversion may affect the value of your investment and our payment of dividends.***

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 revenue in RMB. Under our current corporate structure, Xuhang Cayman may rely on dividend payments from Xuhang Network, Huzhou

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Yinzhiya, and Wuhan Yinzhiya 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 our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents. Approval from or registration with appropriate government authorities is, however, required where the RMB is to be 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 also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demand, we may not be able to pay dividends in foreign currencies to our shareholders.

***There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.***

Under the EIT Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to the Double Tax Avoidance Arrangement, a withholding tax rate of 10% may be lowered to 5% if the enterprise in mainland China is at least 25% held by a Hong Kong enterprise for at least 12 consecutive months prior to distribution of the dividends and is determined by the relevant PRC tax authority to have satisfied other conditions and requirements under the Double Tax Avoidance Arrangement and other applicable PRC laws.

However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the "SAT Circular 81," which became effective on February 20, 2009, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. According to Circular on Several Issues regarding the "Beneficial Owner" in Tax Treaties, which became effective as of April 1, 2018, when determining an applicant's status as the "beneficial owner" regarding tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors will be taken into account. Such factors include whether the business operated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax, grant tax exemption on relevant incomes, or levy tax at an extremely low rate. This circular further requires any applicant who intends to be proved of being the "beneficial owner" to file relevant documents with the relevant tax authorities. Our PRC subsidiaries is wholly owned by Xuhang HK. However, we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority or we will be able to complete the necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC subsidiaries to Xuhang HK, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received.

***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, stock 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

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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. As a result of the scrutiny, criticism, and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, have 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 the price of our Ordinary Shares. If 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 could distract our management from developing our business. If 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 Ordinary Shares.

***According to Announcement No. 43, this prospectus is required to be submitted as one of our Filing Documents to the CSRC, which may lead to the CSRC requiring further amendments to the disclosure content of our SEC submission documents.***

We are regulated by the SEC, and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. The Announcement No. 43 adopted by the CSRC took effect on March 31, 2023. According to the Announcement No. 43, we are required to submit the Filling Documents, such as a filing report and legal opinions. This prospectus also falls under the scope of the Filling Documents. We believe that the purpose of the CSRC's request to submit this prospectus is to understand our business operation. To the best of our knowledge, if the CSRC has further comments on the content of the Filing Documents, we will be required to modify our Filling Documents. However, if a conflict occurs between CSRC's comments and the disclosure in our documents submitted or filed with the SEC, we may need to modify such documents accordingly.

***The approval of the CSRC may be required in connection with this offering under a regulation adopted in August 2006, and, if required, we cannot assure you that we will be able to obtain such approval, in which case we may face sanctions by the CSRC or other PRC regulatory agencies for failure to seek the CSRC approval for this offering.***

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the "M&A Rules," adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas SPV formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the CSRC, prior to the listing and trading of such SPV's securities on an overseas stock exchange. In September 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted to it by an SPV seeking the CSRC approval of its overseas listings. The application of the M&A Rules remains unclear.

Our PRC legal counsel has advised us, based on their understanding of the current PRC law, rules, and regulations that the CSRC's approval is not required for the listing and trading of our Ordinary Shares on Nasdaq in the context of this offering, given that (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings under this prospectus are subject to the M&A Rule; and (ii) we established our PRC subsidiaries by means of direct investment rather than by merger with or acquisition of PRC domestic companies as defined in the M&A Rules.

Our PRC legal counsel, however, 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, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant PRC governmental agencies, including the CSRC, would reach the same conclusion as we have. If it is determined that the CSRC approval is required for our offerings in the U.S., we may face sanctions by the CSRC or other PRC regulatory agencies for failure to seek the CSRC approval for our offerings in the U.S. These sanctions may include fines and penalties on our

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operations in the PRC, limitations on our operating privileges in the PRC, delays in or restrictions on the repatriation of the proceeds from our offerings in the U.S. into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our PRC subsidiaries, 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 Ordinary Shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt our offerings in the U.S. before the settlement and delivery of the 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 shares we are offering, you would be doing so at the risk that the settlement and delivery may not occur.

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

The M&A Rules and recently adopted PRC 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 have or may have impact on the 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. Mergers or acquisitions that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to MOFCOM when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the "Prior Notification Rules," issued by the State Council in August 2008 is triggered. In addition, the Provisions of the Ministry of Commerce on the Implementation of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "Security Review Rules") issued by MOFCOM 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 MOFCOM, and the Security Review 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 MOFCOM or its local counterparts may delay or inhibit our ability to complete such transactions. It is clear that our PRC subsidiaries' business would not be deemed to be in an industry that raises "national defense and security" or "national security" concerns. MOFCOM or other government agencies, however, may publish explanations in the future determining that our PRC subsidiaries' business is in an industry subject to the security review, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited. Our PRC subsidiaries' ability to expand their business or maintain or expand their market share through future acquisitions would as such be materially and adversely affected.

***Chinese regulatory authorities could disallow our holding company structure, which may result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.***

We indirectly hold the equity of our PRC subsidiaries through Xuhang HK, and thus our PRC subsidiaries are directly or indirectly foreign-invested enterprises. Although the PRC government has increasingly open attitude towards absorbing foreign investment in general, it still implements the Negative List, which restricts or prohibits overseas enterprises from holding the equity of Chinese companies whose operations are included in the Negative List. As the boundaries stipulated in the Negative List are relatively vague, they are subject to further

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determination and clarification by the Chinese government. As of the date of this prospectus, the business operated by our PRC subsidiaries has not been included in the Negative List, but we cannot fully guarantee that the Chinese government will not make a different interpretation, so as to disallow our holding corporate structure. Moreover, the Chinese government revises the Negative List from time to time; although the scope of the Negative List is narrowing as a whole, it remains uncertain whether our existing business or future business will be included in future revisions. If the business of our PRC subsidiaries is deemed as a restricted or prohibited business based on the Negative List, our existing corporate structure may be considered illegal and required to be restructured by the Chinese government, which may adversely affect our operations and the value of the securities we are registering for sale.

If any PRC residents intend to directly or indirectly invest in us, they are required to perform foreign exchange registration and ODI fillings in accordance with the requirements of the Chinese government, see "—PRC regulations relating to offshore investment activities by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us." If any of our PRC resident shareholders did not take relevant actions in accordance with the requirements of the Chinese government, our company structure may be disallowed by the Chinese governments. As of this prospectus, it is our understanding that all of our current PRC resident shareholders have completed the required the foreign exchange registration and ODI filings.

If any of our shareholders who is a PRC resident or enterprise fails to fulfill the required foreign exchange registration or ODI filings, it will be deemed illegal for such shareholder to directly or indirectly hold our equity under the PRC laws. Furthermore, if PRC authorities disallow such shareholder to own our equity, our PRC subsidiaries may be prohibited from distributing dividends to us or from carrying out other subsequent cross-border foreign exchange activities, and we may be restricted in our ability to contribute additional capital to our PRC subsidiaries, which may adversely affect our operations and our values of the securities we are registering for sale.

Furthermore, if future laws, administrative regulations, or provisions mandate further actions to be taken by us or our PRC subsidiaries with respect to our existing corporate structure, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, resulting in a material change in our operations and/or a material change in the value of our Ordinary Shares, including that it could cause the value of our Ordinary Shares to significantly decline or become worthless.

**Risks Related to Our Business and Industry** 

***Cutbacks on advertising budgets by marketers or failure to maintain and grow our PRC subsidiaries' marketer base could materially and adversely affect our business and financial condition.***

Our PRC subsidiaries derive their revenue primarily from both performance-based and non-performance-based service fees for their new media integrated content marketing services and digital advertising services (depending on the specific services provided), which are essentially the fees they charge their marketer customers. As such, our PRC subsidiaries' revenue base and profitability are primarily driven by their gross billing with their marketers. The willingness of marketers to spend their advertising budget through our PRC subsidiaries is critical to their business and their ability to generate grossing billing. The demand of our PRC subsidiaries' marketers for advertising services can be influenced by a variety of factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• macro-economic and social factors: domestic, regional, and global social, economic, and political conditions
(such as concerns over a severe or prolonged slowdown in China's economy and threats of political unrest), economic and geopolitical challenges (such as trade disputes between countries such as the United States and China), economic, monetary,
and fiscal policies (such as the introduction and winding-down of qualitative easing programs);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• industry-related factors: such as the trends, preferences, and habits of audiences towards online media and their
receptiveness towards digital advertising as well as the development of emerging and varying forms of online media and content; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• marketer-specific factors: marketers' specific development strategies, business performance, financial
condition, and sales and marketing plans.

A change in any of the above factors may result in significant cutbacks on advertising budgets by our PRC subsidiaries' marketers, which would in turn result in a reduction of their revenue. As a result, our PRC subsidiaries' business, results of operations, and financial condition could be materially and adversely affected.

***Failure to retain existing marketers and new media accounts or attract and grow new marketers and new media accounts may negatively impact our PRC subsidiaries' revenue and business.***

During the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, 46.4%, 77.4%, and 87.5% of our PRC subsidiaries' revenue was generated from their new media integrated content marketing services, respectively, which, to a large extent, rely on our PRC subsidiaries' we-media account base for publication and distribution of their marketing content. See "Business—New Media Integrated Content Marketing Services—Ad Distribution Channels." Our PRC subsidiaries' ability to generate sustainable revenue depends on their ability to retain existing marketers, deepen or expand their relationships with those marketers, as well as attract new business. In order to do so, our PRC subsidiaries need to ensure that their marketer customers are satisfied with the effectiveness of their services. These marketers may have business relationships with a number of marketing service providers at the same time. If they determine that their expenditures on our PRC subsidiaries' marketing services do not generate sufficient returns, they may reduce their marketing budgets or terminate marketing arrangements with our PRC subsidiaries. Failure to retain existing marketers or attract new marketers may materially and adversely affect our PRC subsidiaries' business, financial condition, and results of operations.

While our PRC subsidiaries benefit from a diverse network of self-operated and cooperative we-media accounts at their disposal, they need to timely provide and update more appealing and entertaining content on those new media accounts to expand their follower bases and retain their value as marketing platforms. These efforts in production of creative content are costly and time-consuming, and there can be no guarantee that these efforts will be effective. Further, from time to time, our PRC subsidiaries source online traffic from other third-party media publishers as deemed suitable for their marketing campaigns. For that reason, our PRC subsidiaries' marketing services also rely on those third-party new media publishers for access to a suitable network of ad distribution channels, but there is no assurance that our PRC subsidiaries will continue to maintain the business cooperation with them at the same level, or at all. In the event that our PRC subsidiaries lose those we-media publishers or access to their traffic inventories, our PRC subsidiaries may not be able to complete their services for marketers in a timely manner or at all, and may incur significant costs in finding new publishers or new traffic inventories, which may adversely affect their business, financial condition, results of operations and prospects.

***Failure to maintain the quality of our PRC subsidiaries' marketing content production may materially and adversely impact their business and financial condition.***

As content-driven marketing service providers, our PRC subsidiaries pride themselves on their ability to consistently design and produce original, customized, and appealing marketing ideas, content, and materials catering to potential customers. Our PRC subsidiaries' continued growth will primarily depend on their ability to leverage their expertise in content production to offer effective marketing service solutions, which facilitate high conversion rates. As of September 30, 2022, our PRC subsidiaries had an in-house new media content production and operation team consisting of 185 employees, including senior media professionals, senior marketers, or people with professional backgrounds in design, journalism, and writing. However, there is no assurance that our

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PRC subsidiaries will continue to maintain their content production and operation team or that the team will maintain the quality of their content production at the same level, given that the demand of audiences in the new media integrated content marketing is changing rapidly and the loss of any key personnel in the content production and operation team could be detrimental to our PRC subsidiaries' service quality, financial performance, and business prospects. If our PRC subsidiaries failed to provide appealing and creative marketing content in a timely or cost-effective manner, their reputation may be damaged and their services may become less attractive to marketers. As a result, our PRC subsidiaries' business, financial condition, and results of operations may be adversely affected.

***The regulatory environment of the new media integrated content marketing industry and the digital advertising industry is rapidly evolving. If our PRC subsidiaries fail to obtain and maintain the requisite licenses and approvals applicable to their businesses in China from time to time, their business, financial condition, and results of operations may be materially and adversely affected.***

As confirmed by our PRC counsel, AllBright, our PRC subsidiaries have obtained all material licenses, permits, or approvals from the regulatory authorities in China that are required for their business undertakings. However, the regulatory requirements within the new media integrated content marketing industry and the digital advertising industry, particularly in China, are constantly evolving and subject to the interpretation of the competent authorities, and our PRC subsidiaries may be subject to more stringent regulatory requirements due to changes in the political or economic policies in the relevant jurisdictions. There can be no guarantee that our PRC subsidiaries will be able to satisfy such regulatory requirements and they may be unable to retain, obtain, or renew relevant licenses, permits, or approvals in the future, and as a result, their business operations may be materially and adversely affected.

***Regulation and censorship of information disseminated through we-media publishers and we-media platforms in the PRC may adversely affect our PRC subsidiaries' business.***

A substantial portion of our PRC subsidiaries' marketing services rely on their we-media resources. See "Business—Our Business Model" and "Business—New Media Integrated Content Marketing Services." The we-media industry is subject to stringent rules, regulations, policies, and requirements on information disseminated through we-media publishers and we-media platforms. In enforcing these rules, regulations, policies, and requirements, relevant government authorities may suspend services or revoke licenses of any service provider or we-media publisher that is deemed to provide illicit content, and such activities may be intensified in connection with any ongoing government actions to eliminate prohibited content.

Our PRC subsidiaries endeavor to eliminate illicit content provided through their services. However, government standards and interpretations may change in a manner that could render their current monitoring efforts insufficient. There is no assurance that our PRC subsidiaries' business and operations will not be subject to government actions or sanctions in the future. If government actions or sanctions are brought against our PRC subsidiaries or their we-media publishers, or if there are widespread rumors that government actions or sanctions have been brought against our PRC subsidiaries, their marketers, or their we-media publishers, our PRC subsidiaries' ability to generate sustainable and increased revenue and their reputation and brand could be harmed. Our PRC subsidiaries may lose their marketers and we-media publishers, and their revenue and results of operation may be materially and adversely affected.

***Our PRC subsidiaries are subject to, and may expend significant resources in defending against, government actions and civil claims in connection with false, fraudulent, misleading, or otherwise illegal marketing content provided through our PRC subsidiaries' services.***

Under the Advertising Law of the PRC (the "Advertising Law"), where an advertising operator provides advertising design, production, or agency services with respect to an advertisement when it knows or should have known that the advertisement is false, fraudulent, misleading, or otherwise illegal, the competent PRC authority

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may confiscate the advertising operator's advertising revenue from such services, impose penalties, order it to cease dissemination of such false, fraudulent, misleading, or otherwise illegal advertisement, or correct such advertisement, or suspend or revoke its business licenses under certain serious circumstances. See "Regulations—Regulation Relating to Advertisement Advertising Business."

Under the Advertising Law, "advertising operators" include any natural person, legal person, or other organization that provides advertising design, production, or agency services to advertisers for their advertising activities. Since our PRC subsidiaries' services involve the provision of advertising design, production, and agency services to marketers, including helping them create content catering to their potential audiences and identify, engage, and convert audiences across suitable media and platforms, our PRC subsidiaries are deemed to be "advertising operators" under the PRC Advertising Law. Therefore, our PRC subsidiaries are required to examine advertising content for which they provide marketing services for compliance with applicable laws.

Although our PRC subsidiaries have established internal policies to review the advertising content before distribution to ensure compliance with applicable laws, there is no assurance that each advertisement for which our PRC subsidiaries provide marketing services complies with all PRC laws and regulations relevant to advertising activities, that supporting documentation provided by our PRC subsidiaries' advertisers is authentic or complete, or that our PRC subsidiaries are able to identify and rectify all instances of non-compliance in a timely manner. Moreover, civil claims may be filed against our PRC subsidiaries for fraud, defamation, subversion, negligence, copyright or trademark infringement, or other violations due to the nature and content of the information for which our PRC subsidiaries provide marketing services. In the event our PRC subsidiaries are subject to government actions or civil claims in connection with false, fraudulent, misleading, or otherwise illegal marketing content for which they provide marketing services, their reputation and operating results may be materially and adversely affected.

***Our PRC subsidiaries are in the highly competitive new media integrated content marketing industry and the digital advertising industry, and may not be able to compete successfully against existing or new competitors, which could reduce their market share and adversely affect their competitive position and financial performance.***

There are numerous companies that specialize in the provision of new media integrated content marketing services or digital advertising services in China. Our PRC subsidiaries compete primarily with their competitors and potential competitors for access to the quality advertiser base and ad inventory. The new media integrated content marketing industry and the digital advertising industry in China are rapidly evolving. Competition can be increasingly intensive and is expected to increase significantly in the future. Increased competition may result in price reductions for advertising services and reduced margins and loss of our PRC subsidiaries' market share. Our PRC subsidiaries compete with other competitors in China primarily on the following bases:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• brand recognition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• quality of services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• effectiveness of sales and marketing efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• creativity in the design and content of advertisements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• optimization capability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• strategic relationships; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• hiring and retention of talented staff.

Our PRC subsidiaries' existing competitors may in the future achieve greater market acceptance and recognition, secure authorized agency status with an increasing number of popular media, and gain a greater market share. It is also possible that potential competitors may emerge and acquire a significant market share. If our PRC

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subsidiaries' existing and potential competitors enjoy competitive advantages, such as longer operating history, greater brand recognition, larger advertiser base, greater access to ad inventory, and significantly greater financial, technical, and marketing resources, our PRC subsidiaries' business, results of operations, and financial condition would be negatively affected. In addition, our PRC subsidiaries also compete with traditional forms of media, such as newspapers, magazines, and radio and television broadcast, for advertisers and advertising revenue. If our PRC subsidiaries fail to compete successfully, they could lose out in procuring advertisers or acquiring access to ad inventory, which could result in an adverse impact to their business, results of operations, and prospects. There is also no assurance that our PRC subsidiaries' strategies will remain competitive or that they will continue to be successful in the future. Increasing competition could result in pricing pressure and loss of our PRC subsidiaries' market share, either of which could have a material adverse effect on their financial condition and results of operations.

***Our PRC subsidiaries rely on a number of digital media platforms to conduct their business. However, operators of the platforms may curtail or inhibit their ability to use the platforms, or there may be material disruption of the platforms.***

Our PRC subsidiaries provide their new media integrated content marketing services primarily through multiple digital media platforms, such as social media platforms, short video platforms, live streaming platforms, and e-commerce platforms. Over the years, our PRC subsidiaries have grown a wide-ranging portfolio of text-based or video-based we-media publishers, currently encompassing multiple WeChat public accounts, short video accounts, and other new media accounts on high-profile media platforms in China, such as Douyin, Weibo, Kuaishou, and Xiaohongshu. See "Business—New Media Integrated Content Marketing Services—Ad Distribution Channels—Distribution Through We-Media Publishers/Accounts." While these digital media platforms are generally open to all users, they have no obligation to allow our PRC subsidiaries to use their platforms in the long term. The platform operators may decide at any time to curtail or inhibit our PRC subsidiaries' ability to use such platforms if our PRC subsidiaries breach the terms of use of such platforms or for any other reason, for example, by banning or closing our PRC subsidiaries' user accounts. Additionally, these platforms may increase their fees or make changes to their respective business models, terms of use, policies, or systems, and those changes could impair or restrict our PRC subsidiaries' ability to post content and sell products. Further, digital media platforms including social media platforms, live streaming platforms, and e-commerce platforms could cease operations unexpectedly due to a number of events, including interruptions in telecommunication services, computer viruses, and security breaches. Any of the above could reduce our PRC subsidiaries' ability to post marketing content, drive user traffic, and reach target audiences, and thus impair our PRC subsidiaries' ability to service their marketers, any of which could affect their ability to achieve profitability or have a material adverse effect on their business, financial condition and results of operations.

***Our PRC subsidiaries may be subject to product liability claims that could be costly and time-consuming.***

As part of our PRC subsidiaries' new media integrated content marketing services, they promote and sell third-party brands' products via live streaming sales on media platforms, such as Douyin. If any product that our PRC subsidiaries sell were to cause personal injury or injury to property, the injured party or parties could bring claims against them. Our PRC subsidiaries could also be subject to claims that consumers were harmed due to their reliance on our PRC subsidiaries' promotion of products and services of third-party brands and merchants. If a successful claim were brought against our PRC subsidiaries, it could adversely affect their business. Our PRC subsidiaries may have the right under applicable laws, rules, and regulations to recover from the relevant manufacturers or third-party brands or merchants compensation that our PRC subsidiaries are required to make to consumers in connection with product liability, personal injury, or a similar claim, if such relevant party is found responsible. However, there can be no assurance that our PRC subsidiaries will be able to recover all or any amounts from these parties. Although our PRC subsidiaries have indemnity clauses in most of their contracts with such third-party brands and merchants, the reputation of their services may be adversely affected. Any product liability claim, regardless of its merit or success, could result in the expenditure of funds and management time and adverse publicity and could have a negative impact on our PRC subsidiaries' reputation, business, financial condition, and results of operations.

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***Our PRC subsidiaries may incur liability for counterfeit, unauthorized, illegal, or infringing products sold or misleading information available through their live streaming sales.***

For their live e-commerce services, our PRC subsidiaries help third-party brands and merchants conduct live streaming sales and receive service fees based on the effective gross merchandise value (the "Effective GMV") generated, which represents the aggregate value of the merchandise actually ordered and paid for by consumers in the live KOL/KOC sales services provided by our PRC subsidiaries, after deducting the value underlying cancelled orders and returned merchandise. However, such third-party brands' and merchants' measures of safeguarding against counterfeit, unauthorized, illegal, or infringing products sold through live-streaming platforms or e-commerce platforms may not be adequate. Although our PRC subsidiaries have indemnity clauses in most of their contracts with third-party brands and merchants, their reputation may be adversely affected. Our PRC subsidiaries may be subject to sanctions under applicable laws and regulations if they are deemed to have participated or assisted in infringement activities associated with counterfeit goods, which may include injunctions to cease infringing activities, rectification, compensation, administrative penalties, and even criminal liability, depending on the gravity of such misconduct. Furthermore, counterfeit products may be defective or inferior in quality as compared to authentic products and may pose safety risks to consumers. If consumers are injured by counterfeit, unauthorized, illegal, or infringing products sold via our PRC subsidiaries' live streaming sales, our PRC subsidiaries may be subject to lawsuits, severe administrative penalties, and criminal liability. See "—Our PRC subsidiaries may be subject to product liability claims that could be costly and time-consuming." Our PRC subsidiaries believe their reputation is extremely important to their success and competitive position. The discovery of counterfeit, unauthorized, illegal, or infringing products promoted or sold through our PRC subsidiaries' live streaming sales may damage their reputation among brand partners, who may refrain from using our PRC subsidiaries' services in the future, which would materially and adversely affect our PRC subsidiaries' operations and financial results.

***If our PRC subsidiaries fail to improve their services to keep up with the rapidly changing demand, preferences, or advertising trends in the new media integrated content marketing industry or the digital advertising industry, their revenue and growth could be adversely affected.***

The new media integrated content marketing industry and the digital advertising industry are growing and changing rapidly, as our PRC subsidiaries face (i) constant changes in audiences' interests, preferences, and receptiveness over different advertisement formats, (ii) evolution of the needs of marketers in response to shifts in their business needs and marketing strategies, and (iii) innovations in the means on digital advertising. As a result, our PRC subsidiaries' success depends not only on their ability to offer creative advertising ideas and content, provide proper ad distribution channels, and deliver effective optimization services, but also on their ability to adapt to rapidly changing online trends and technologies to enhance the quality of existing services and develop and introduce new services to address advertisers' changing demands.

As the new media advertising market boomed, our PRC subsidiaries enjoyed rapid business growth as one of the early movers in the market, but there is no assurance that our PRC subsidiaries will be able to timely identify and respond to new trends and market demand in the future. The new services our PRC subsidiaries introduce may not achieve widespread market acceptance, and their investment in such services may not achieve the level of returns that they anticipated. Our PRC subsidiaries may experience difficulties that could delay or prevent the successful development, introduction, or marketing of their new services. If our PRC subsidiaries fail to keep up with changing trends, continue to offer creative advertising ideas to the satisfaction of their advertisers, or introduce successful and well-accepted services for their existing and potential advertisers, our PRC subsidiaries may lose their advertisers and their revenue and growth could be adversely affected.

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***If our PRC subsidiaries sustain cyber-attacks or other privacy or data security incidents that result in security breaches, they could be subject to increased costs, liabilities, reputational harm, or other negative consequences.***

Our PRC subsidiaries' information technology may be subject to cyber-attacks, viruses, malicious software, break-ins, theft, computer hacking, phishing, employee error or malfeasance, or other security breaches. Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automatic hacks. Experienced computer programmers and hackers may be able to penetrate our PRC subsidiaries' security controls and misappropriate or compromise sensitive proprietary or confidential information, create system disruptions, or cause shutdowns. They also may be able to develop and deploy malicious software programs that attack our PRC subsidiaries' systems or otherwise exploit any security vulnerabilities. Our PRC subsidiaries' systems and the data stored on those systems also may be vulnerable to security incidents or security attacks, acts of vandalism or theft, coordinated attacks by activist entities, misplaced or lost data, human errors, or other similar events that could negatively affect our PRC subsidiaries' systems and the data stored on or transmitted by those systems, including the data of our PRC subsidiaries' marketers.

Although our PRC subsidiaries take measures to protect sensitive data from unauthorized access, use, or disclosure, their protective measures may not be effective and their information technology may still be vulnerable to attacks. In the event of such attacks, the costs to eliminate or address the foregoing security threats and vulnerability before or after a cyber-incident could potentially be significant. Our PRC subsidiaries' remediation efforts may not be successful and could result in interruptions or delays of services. As threats related to cyber-attacks develop and grow, our PRC subsidiaries may also find it necessary to take further steps to protect their data and infrastructure, which could be costly and therefore impact their results of operations. In the event that our PRC subsidiaries are unable to prevent, detect, and remediate the foregoing security threats and vulnerabilities in a timely manner, their operations could be interrupted or they could incur financial, legal, or reputational losses arising from misappropriation, misuse, leakage, falsification, or intentional or accidental release or loss of information maintained in their systems. The number and complexity of these threats continue to increase over time. Although our PRC subsidiaries have not experienced any cyber-attacks or other privacy or data security incidents as of the date of this prospectus, and they inspect their systems on a regular basis to prevent these events from occurring, the possibility of these events occurring cannot be eliminated entirely.

***Our PRC subsidiaries may experience systems disruption, software defects, computer viruses and breakdowns, distributed denial of service attacks, or other hacking and phishing attacks on their systems.***

The stable operation of our PRC subsidiaries' technologies and software (such as Xuhang Live Streaming E-commerce Cloud and Xuhang Conference Cloud), telecommunication networks, computer systems, servers, and other hardware, are critical to our PRC subsidiaries' business. Our PRC subsidiaries rely on the uninterrupted and secure operation of their technologies and systems and the safekeeping of user information and historical marketing records. Any system outage or data loss or other disruption that may be beyond their control would cause damage to our PRC subsidiaries' business and reputation and expose them to liability to third parties.

Our PRC subsidiaries are susceptible to computer viruses, system breakdowns, power loss, or telecommunications failure. In addition, their infrastructure may be subject to distributed denial of service attacks or other hacking and phishing attacks on their systems in the future. There can be no guarantee that any applicable recovery system, security protocol, network protection mechanisms, or other defense procedures are or will be adequate to prevent such network or service interruptions, system failures, or data losses. Our PRC subsidiaries' infrastructure and systems may also be breached if any vulnerabilities therein are exploited by unauthorized third parties. If our PRC subsidiaries fail to repair or maintain their systems in a timely manner, their business may have to be temporarily disrupted, which could have a material adverse impact on their business.

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***Non-compliance with laws and regulations on the part of any third parties with which our PRC subsidiaries conduct business could expose our PRC subsidiaries to legal expenses, compensations to third parties, penalties, and disruption of their business, which may adversely affect their results of operations and financial performance.***

Third parties with which our PRC subsidiaries conduct business may be subject to regulatory penalties or punishments because of their regulatory compliance failures or may be infringing upon other parties' legal rights, which may, directly or indirectly, disrupt our PRC subsidiaries' business. Our PRC subsidiaries cannot be certain whether such third parties have violated any regulatory requirements or infringed or will infringe any other parties' legal rights, which could expose our PRC subsidiaries to legal expenses or compensation to third parties.

Our PRC subsidiaries, therefore, cannot rule out the possibility of incurring liabilities or suffering losses due to any non-compliance by third parties. There is no assurance that our PRC subsidiaries will be able to identify irregularities or non-compliance in the business practices of third parties our PRC subsidiaries conduct business with, or that such irregularities or non-compliance will be corrected in a prompt and proper manner. Any legal liabilities and regulatory actions affecting third parties involved in our PRC subsidiaries' business may affect their business activities and reputations, and may in turn affect their business, results of operations, and financial performance.

Moreover, regulatory penalties or punishments against our PRC subsidiaries' business stakeholders such as marketers and third party media publishers and platforms, even without resulting in any legal or regulatory implications upon our PRC subsidiaries, may nonetheless cause business interruptions or even suspension of these business stakeholders of our PRC subsidiaries, and may result in abrupt changes in our PRC subsidiaries' business emphasis, such as changes in advertising and/or ad inventory offering strategies, any of which could disrupt our PRC subsidiaries' usual course of business with their business stakeholders and result in a material negative impact on their financial condition and results of operations.

***Seasonal fluctuations in advertising activities could have a material impact on our PRC subsidiaries' revenue, cash flow, and operating results.***

Our PRC subsidiaries' revenue, cash flow, operating results, and other key operating and performance metrics may vary from quarter to quarter due to the seasonal nature of their marketers' budgets and spending on advertising campaigns. For example, advertising expenditure tends to rise in holiday seasons with consumer holiday spending, or closer to end-of-year in fulfillment of their annual advertising budgets, which may lead to an increase in our PRC subsidiaries' revenue and cash flow. Moreover, advertising inventory in holiday seasons may be more expensive due to increased demand for advertising inventory. While our PRC subsidiaries' historical revenue growth may have, to some extent, masked the impact of seasonality, if their growth rate declines or seasonal spending becomes more pronounced, seasonality could have a material impact on their revenue, cash flow, and operating results from period to period.

***Our PRC subsidiaries' business is subject to complex and evolving laws and regulations in countries in addition to the PRC regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in increased compliance cost, changes to our PRC subsidiaries' business practices, increased operating costs, and other harms to their business.***

Although the majority of our PRC subsidiaries' business is conducted in the PRC, they endeavor to continue their international expansion of business operations into countries including Indonesia and other Southeast Asian countries or regions as needed. As a result, certain jurisdictions may claim that our PRC subsidiaries are required to comply with their laws, including even jurisdictions where our PRC subsidiaries have no local entity, employees, or infrastructure.

This may subject our PRC subsidiaries to a variety of laws and regulations in the countries in addition to the PRC that involve matters central to our PRC subsidiaries' business, including advertising, marketing, data protection

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and security, intellectual property, user privacy, rights of publicity, competition, consumer protection, and taxation. The expansion of our PRC subsidiaries' services and activities in certain jurisdictions, or other actions that they may take may subject them to additional laws, regulations, or other government scrutiny.

These laws and regulations in countries around the world are constantly evolving and can be subject to significant change. Thus, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which our PRC subsidiaries operate. For example, our PRC subsidiaries are also subject to evolving laws and regulations that guard against false, fraudulent, misleading, or otherwise illegal marketing content, or that dictate whether, how, and under what circumstances they can transfer, process, and/or receive certain data that is critical to their operations, including data shared between countries or regions in which they operate and data shared among their products and services. These laws and regulations, as well as any associated claims, inquiries, investigations, or any other government actions, have in the past led to, and may in the future lead to, unfavorable outcomes including increased compliance costs, delays or impediments in the development of new services, negative publicity and reputational harm, increased operating costs, diversion of management time and attention, and remedies that harm our PRC subsidiaries' business, including fines or demand or orders that they modify or cease existing business practices.

***Our PRC subsidiaries plan to continue expanding their operations globally so they may enter new international markets, where they have more limited operating experience, and this may subject them to increased business, economic, and legal risks that could affect their financial results.***

As of the date of this prospectus, the overseas business operations of our PRC subsidiaries are limited to Indonesia, which contributed approximately 0.0%, 0.3%, and 0.0% to the total revenue for the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, respectively. Our PRC subsidiaries plan to continue expanding their business operations globally. Our PRC subsidiaries may enter new international markets where they have limited or no experience in selling and deploying their new media integrated content marketing services and digital advertising services. If they fail to deploy, manage, or oversee their international operations successfully, their business may suffer. In addition, our PRC subsidiaries are subject to a variety of risks inherent in doing business internationally, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• political, social, or economic instability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks related to legal, regulatory, and other government scrutiny applicable to them, with respect to
marketing, advertising, privacy, tax, law enforcement, content, trade compliance, competition, consumer protection, and intellectual property matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential damage to their brand and reputation due to compliance with local laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in currency exchange rates and compliance with currency controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• foreign exchange controls and tax and other regulations and orders that might prevent them from repatriating cash
earned in countries or otherwise limit their ability to move cash freely, and impede their ability to invest such cash efficiently;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• burdens of complying with a variety of foreign laws, including laws related to marketing, advertising, taxation,
data collection, live e-commerce, and regulatory oversight;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced protection for intellectual property rights in some countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulties in staffing, managing, and overseeing global operations and the increased travel, infrastructure,
and legal compliance costs associated with multiple international locations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• geopolitical events affecting our PRC subsidiaries, their marketers, or their industry, including trade disputes
and pandemics.

If our PRC subsidiaries are unable to expand internationally and manage the complexity of their global operations successfully, their financial results could be adversely affected.

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***Our PRC subsidiaries may not effectively manage their growth, which could materially harm their business.***

Our PRC subsidiaries' business has become increasingly complex in terms of both the type and scale of their operations, which may place a significant strain on their management, personnel, systems, and resources. As our PRC subsidiaries expect to scale up their new media integrated content marketing services and digital advertising services domestically and internationally, they must continue to improve their operational and financial systems and managerial controls and procedures, and they will need to continue to expand, train, and manage their technology and workforce. There is no assurance that our PRC subsidiaries will manage their growth effectively. If they fail to do so, their business could be materially harmed.

Our PRC subsidiaries' continued growth will require their increased investment in technology, facilities, personnel, and financial and management systems and controls. This also will require expansion of their procedures for monitoring and assuring their compliance with applicable regulations, and they will need to integrate, train, and manage a growing employee base. The expansion of our PRC subsidiaries' existing businesses and the resulting growth of their employee base will increase the need for more extensive internal audit and monitoring processes. Our PRC subsidiaries may not be successful in identifying or implementing all of the necessary processes. Further, unless our PRC subsidiaries' growth results in a revenue increase proportionate to the increase in their associated costs, their operating margins and profitability will be adversely affected.

***Our PRC subsidiaries may not be able to obtain the additional capital they need in a timely manner or on acceptable terms, or at all.***

Although our PRC subsidiaries believe that their anticipated cash flows from operating activities, together with cash on hand and short-term or long-term borrowings, will be sufficient to meet their anticipated working capital requirements and capital expenditures in the ordinary course of business for the next twelve months, there is no assurance that further on our PRC subsidiaries would not have needs for additional capital and cash resources for their growth and expansion plan. Our PRC subsidiaries may also need additional cash resources in the future if they find and wish to pursue opportunities for investment, acquisition, capital expenditure, or similar actions. If they determine that their cash requirements exceed the amount of cash and cash equivalents they have on hand at the time, they may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to their shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict their operations. There is no assurance that additional financing will be available in amounts or on terms acceptable to our PRC subsidiaries, if at all.

***Our PRC subsidiaries' financial condition and operating results may be adversely affected by epidemics, natural disasters, and other catastrophes including but not limited to the novel coronavirus (COVID-19).***

Our PRC subsidiaries' business could be materially and adversely affected by the outbreak of epidemics, including COVID-19, swine influenza, avian influenza, middle east respiratory syndrome (MERS-CoV), severe acute respiratory syndrome (SARS-CoV), and other catastrophes. Their business could be materially and adversely affected in the event that any slowdown or suspension due to any such event is sustained for a long period of time. During such an epidemic outbreak, China may adopt certain hygiene measures, including quarantining visitors from places where any of the contagious diseases were rampant. Those restrictive measures may adversely affect and slow down the national economic development during that period. Any prolonged restrictive measures implemented in order to control the contagious disease or other adverse public health developments in China or our PRC subsidiaries' other targeted markets may have a material and adverse effect on their 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

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accidents, as well as geopolitical uncertainty and international conflict, will affect travel volume and may in turn have a material adverse effect on our PRC subsidiaries' business and results of operations. In addition, our PRC subsidiaries may not be adequately prepared in contingency planning or recovery capability in relation to a major incident or crisis, and as a result, their operational continuity may be adversely and materially affected, which in turn may harm their reputation.

***The ongoing COVID-19 pandemic in China may have a material adverse effect on our PRC subsidiaries' business.***

Our PRC subsidiaries' business operations could be materially and adversely affected by the ongoing COVID-19 pandemic. The pandemic has resulted in the implementation of significant governmental measures in China, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus. Such governmental actions, together with the development of the COVID-19 pandemic, could materially disrupt our PRC subsidiaries' business and operations, slow down the overall economy, curtail consumer spending, and make it difficult to adequately staff their operations.

From late January 2020 to the middle of April 2020, our PRC subsidiaries' business was moderately impacted by the COVID-19 pandemic, mainly due to a slowdown in the business of marketer customers who need offline marketing services. Despite this, our PRC subsidiaries quickly resumed operations starting from the second quarter of 2020 and they achieved an increase in revenue in 2020 as compared to 2019, which was primarily attributable to: (i) a significant surge in demand for online businesses and new media integrated content marketing services in lieu of offline transactions as a result of lock-downs and social distancing measures that led to a higher demand for our PRC subsidiaries' services in general; and (ii) an increase in demand for certain industry verticals, such as games, food, fast-moving consumer goods, and e-commerce, which boosted the demand of marketers in those industries for our PRC subsidiaries' services. In response to the COVID-19 pandemic, our PRC subsidiaries have taken a series of precautionary measures in compliance with the government's requirements and maintained a safe and hygienic working environment for their employees, including (i) distributing free hand sanitizers and facemasks regularly to employees, (ii) implementing remote working policies and arrangements and, where necessary, switching offline meetings to online meetings to reduce the risk of COVID-19 exposure, (iii) conducting a complete cleanup and disinfection of their offices on a regular basis, (iv) keeping all employees informed of their COVID-19 precautions and handling measures, and (v) closely following up with and requiring any employees who have been to an affected area or in contact with any suspicious case to promptly notify them, conduct COVID-19 tests or quarantines as required by the government. During the year ended December 31, 2021 and the nine months ended September 30, 2022, the COVID-19 pandemic did not have a material impact on our PRC subsidiaries' financial positions and operating results.

However, the emergence of regional recurrences of the COVID-19 pandemic and the corresponding restrictive measures are beyond our control. The extent to which the COVID-19 pandemic may impact our PRC subsidiaries will depend on future developments, which are highly uncertain and cannot be predicted, including new information on the effectiveness of the mitigation strategies, the duration, spread, severity, and recurrence of COVID-19, and the efficacy of COVID-19 vaccines, which may also take an extended period of time to be widely and adequately distributed. After the initial outbreak of COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the infections caused by the Omicron variants in 2022, and varying levels of temporary restrictions and other measures were reinstated to contain the infections, including those in Shanghai in March 2022. A potential COVID-19 resurgence may negatively affect the execution of client contracts and the collection of client payments. In addition, the continued uncertainties associated with COVID-19 may cause our PRC subsidiaries' revenue and cash flows to underperform in the next 12 months. The extent of any future impact of COVID-19 on our PRC subsidiaries' business operations is still highly uncertain and cannot be predicted as of the date of this prospectus.

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***Any negative publicity about our PRC subsidiaries, their services, and their management may materially and adversely affect their reputation and business.***

Our PRC subsidiaries may from time to time receive negative publicity about them, or their management or business. Certain of such negative publicity may be the result of malicious harassment or unfair competition acts by third parties. Our PRC subsidiaries may even be subject to government or regulatory investigation as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to defend themselves against such third-party conduct, and our PRC subsidiaries may not be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Harm to their reputation can also arise for other reasons, including misconduct of their employees or any third-party business partners with whom they conduct business. Our PRC subsidiaries may be materially and adversely affected as a result of any negative publicity, which in turn may cause them to lose market share, marketing customers, industry partners, and other business partnerships.

***Our PRC subsidiaries may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt their business and operations.***

There is no assurance that our PRC subsidiaries' operations or any aspects of their business do not or would not infringe upon or otherwise violate trademarks, patents, copyrights, or other intellectual property rights held by third parties. Our PRC subsidiaries may from time to time become subject to legal proceedings and claims relating to the intellectual property rights of others. In addition, there may be other third-party intellectual property that is infringed by our PRC subsidiaries' products, services, or other aspects of their business, such as their self-developed technology, data management system, and/or their specific marketing content. There could also be existing intellectual property of which our PRC subsidiaries are not aware that their products and services may inadvertently infringe.

If any third-party infringement claims are brought against our PRC subsidiaries, they may be forced to divert management's time and other resources from their business and operations to defend against these claims, regardless of the merits of the claims. Additionally, the application and interpretation of intellectual property laws and the procedures and standards for granting trademarks, patents, copyrights, know-how, or other intellectual property rights are evolving and may be uncertain, and there is no assurance that courts or regulatory authorities would agree with their analysis. Such claims, even if they do not result in liability, may harm our PRC subsidiaries' reputation. If our PRC subsidiaries were found to have violated the intellectual property rights of others, they may be subject to liability for their infringement activities or may be prohibited from using such intellectual property, and they may incur licensing fees or be forced to develop alternatives of their own. As a result, our PRC subsidiaries' business and financial performance may be materially and adversely affected.

***Unauthorized use of our PRC subsidiaries' intellectual property by third parties and expenses incurred in protecting our PRC subsidiaries' intellectual property rights may adversely affect their business, reputation, and competitive edges.***

Our PRC subsidiaries regard their software copyrights, trademarks, domain names, and similar intellectual property as important to their success, and they rely on a combination of intellectual property laws and contractual arrangements, including confidentiality and non-compete agreements with their employees and others to protect their proprietary rights. For details, please refer to "Business — Intellectual property."

Despite these measures, any of their intellectual property rights could be challenged, invalidated, circumvented, or misappropriated, or such intellectual property may not be sufficient to provide our PRC subsidiaries with competitive advantages. It may be difficult to maintain and enforce intellectual property rights in China. Statutory laws and regulations are subject to judicial interpretation and enforcement and may not be applied consistently. Confidentiality, invention assignment, and non-compete agreements may be breached by counterparties, and there may not be adequate remedies available to our PRC subsidiaries for any such breach. Accordingly, our PRC subsidiaries may not be able to effectively protect their intellectual property rights or enforce their contractual rights in all jurisdictions.

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Preventing any unauthorized use of their intellectual property is difficult and costly and the steps they take may be inadequate to prevent the misappropriation of their intellectual property. In the event that our PRC subsidiaries resort to litigation to enforce their intellectual property rights, such litigation could result in substantial costs and a diversion of their managerial and financial resources. There can be no guarantee that our PRC subsidiaries will prevail in such litigation.

In addition, our PRC subsidiaries' trade secrets may be leaked or otherwise become available to, or be independently discovered by, their competitors. To the extent that their employees use intellectual property owned by others in their work for our PRC subsidiaries, disputes may arise as to the rights in related know-how and inventions. Any failure in protecting or enforcing their intellectual property rights could have a material adverse effect on our PRC subsidiaries' business, reputation, and competitive edges.

***If our PRC subsidiaries fail to manage their growth or execute their strategies and future plans effectively, they may not be able to take advantage of market opportunities or meet the demand of their customers.***

Our PRC subsidiaries' business has grown substantially since their inception, and they expect to continue to grow in terms of the scale and diversity of operations. For example, our PRC subsidiaries endeavor to attract more high-profile and sizeable marketers from various industries and plan to expand and diversify their we-media account base by establishing more we-media accounts on various platforms. In addition, they plan to continue expanding their business through the Star Project in the future. See "Business — Our Competitive Strengths — Business Expansion Mode Through Cooperation with Local State-Owned Enterprises." These endeavors increase the complexity of their operations and may cause strain on their managerial, operational, and financial resources. Our PRC subsidiaries must continue to hire, train, and effectively manage new employees. In the event that their new hires fail to perform as expected, or if our PRC subsidiaries fail to hire, train, manage, and integrate new employees, their business, financial condition, and results of operations may be materially adversely affected. Their expansion will also require them to maintain consistency in the quality of their marketing services so that their reputation is not damaged by any deviations in quality, whether actual or perceived.

Our PRC subsidiaries' future results of operations also depend largely on their ability to execute their future plans successfully. In particular, their continued growth may subject them to the following additional challenges and constraints:

• our PRC subsidiaries face challenges in ensuring the productivity of a large employee base and recruiting,
training, and retaining highly skilled personnel, including areas of procurement, sales and marketing, and information technology for their growing operations;

• our PRC subsidiaries face challenges in responding to evolving industry standards and government regulations that
impact their business and the new media integrated content marketing industry and the digital advertising industry in general;

• technological or operational challenges may arise from the expansion of business operations;

• the execution of the future plan will be subject to the availability of funds to support the relevant capital
investment and expenditures; and

• the successful execution of our PRC subsidiaries' strategies is subject to factors beyond their control,
such as general market conditions, and economic and political development in China and globally.

All of these endeavors involve risks and will require significant management, financial, and human resources. We cannot assure you that our PRC subsidiaries will be able to effectively manage their growth or implement their strategies successfully. Besides, there is no assurance that the investment to be made by our PRC subsidiaries as contemplated under their future plans will be successful and generate the expected return. If our PRC subsidiaries are not able to manage their growth or execute their strategies effectively, or at all, their business, results of operations, and prospects may be materially and adversely affected.

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***Our PRC subsidiaries' business depends on the continued efforts of their senior management. If one or more of their key executives were unable or unwilling to continue in their present positions, their business may be severely disrupted.***

Our PRC subsidiaries' future success depends significantly on the continued services of their senior executives, senior management, and other key employees who have valuable experience, knowledge, and connection in the new media integrated content marketing industry and the digital advertising industry. In particular, our PRC subsidiaries rely on the expertise and experience of Mr. Tianhang Xiao (our Chief Executive Officer and Chairman of the Board of Directors), Mr. Congcong Wei (the head of the new media S2B business sector of Xuhang Network), Mr. Yang Yang (the head of the new media S2P business sector of Jiangxi Ku'o), Ms. Lilian Liu (the head of the new-media and conference services of Hangzhou Jinting), and Mr. Xiaowen Wang (the head of the technology center of Xuhang Network), especially in the areas of mobile Internet, creative content production, technology research and development, and financial management. There is no assurance that these key personnel will not voluntarily terminate their employment with our PRC subsidiaries. The loss of any of these key personnel could be detrimental to our PRC subsidiaries' ongoing operations. If they lose the services of any senior management, our PRC subsidiaries may not be able to identify suitable or qualified replacements in a timely manner, or at all, and may incur additional expenses to recruit and train new personnel, which could severely disrupt their business and prospects and prolong their expansion strategies and plans. Furthermore, if any of our PRC subsidiaries' executive officers joins a competitor or forms a competing company, they may lose a significant number of marketer customers, crucial business secrets, and other valuable resources, notwithstanding their contractual arrangements designed to mitigate this loss. As a result, our PRC subsidiaries' business, financial condition, and results of operations may be adversely affected.

***Our PRC subsidiaries' failure to conduct research and development could render their technologies obsolete and may adversely affect their business, financial condition, and results of operations.***

Our PRC subsidiaries have been investing in technology research and development to support the rapid growth of their business and to establish a technology-driven growth edge for the future. Based on current market demand, technology development trends, and our actual development needs, we plan to invest approximately 20% of the net proceeds received from this offering in research and development to attract and retain experienced talent and professionals and provide crucial support for the development of our products. Because we account for research and development costs as operating expenses, these expenditures will adversely affect our earnings in the future. Further, during the implementation of research and development projects, we may encounter uncertainties such as research failures and unmet project expectations. For example, research and development involving new technologies may not result in the expected results, or may even fail entirely; a project's economic benefits may not meet expectations if the products developed do not achieve widespread market acceptance; and new research and development expenses may also result in a decrease in return on net assets. All of such uncertainties may lead to the failure of our PRC subsidiaries' research and development efforts, which may adversely affect their business, financial condition, and results of operations.

***Future acquisitions may have an adverse effect on our PRC subsidiaries' ability to manage their business.***

Our PRC subsidiaries may acquire businesses, technologies, services, or products that are complementary to their new media integrated content marketing and digital advertising businesses. Future acquisitions may expose them to potential risks, including risks associated with the integration of new operations, services, and personnel, unforeseen or hidden liabilities, the diversion of resources from their existing business and technology, their potential inability to generate sufficient revenue to offset new costs, the expenses of acquisitions, or the potential loss of or harm to relationships with both employees and customers resulting from their integration of new businesses.

Any of the potential risks listed above could have a material adverse effect on our PRC subsidiaries' ability to manage their business, revenue, and net income. Our PRC subsidiaries may need to raise additional debt funding

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or sell additional equity securities to make such acquisitions. The raising of additional debt funding by our PRC subsidiaries, if required, would result in increased debt service obligations and could result in additional operating and financing covenants, or liens on their assets, that would restrict their operations. As a result, their business, financial condition, and results of operations may be adversely affected.

***Our PRC subsidiaries may from time to time be subject to claims, controversies, lawsuits, and legal proceedings, which could adversely affect their business, prospects, results of operations, and financial condition.***

Our PRC subsidiaries may from time to time become subject to or involved in various claims, controversies, lawsuits, and legal proceedings. However, claims and threats of lawsuits are subject to inherent uncertainties, and our PRC subsidiaries are uncertain whether any of these claims would develop into a lawsuit. Lawsuits, or any type of legal proceeding, may cause them to incur defense costs, utilize a significant portion of their resources, and divert management's attention from day-to-day operations, any of which could harm their business. Any settlements or judgments against our PRC subsidiaries could have a material adverse impact on their financial condition, results of operations, and cash flows. In particular, our PRC subsidiaries have been involved in contract disputes arising in the ordinary course of their business with various customers and third parties, which nonetheless did not result in any payment liabilities or overdue payments our PRC subsidiaries are unable to collect. Although these contract disputes and proceedings did not materially adversely affect the business of our PRC subsidiaries or their financial condition and results of operations, our PRC subsidiaries may, in the future, be subject to allegations, claims, and legal actions that result in judgments, fines, or settlements involving payment of a material sum of money. As a result, it could materially and adversely affect our PRC subsidiaries' business, financial condition, and results of operations. In addition, negative publicity could adversely affect the reputation and brand of our PRC subsidiaries. Even the successful defense of these proceedings may cause our PRC subsidiaries to incur substantial legal costs and may divert management's attention and resources.

***Our PRC subsidiaries may be the subject of allegations, harassment, or other detrimental conduct by third parties, which could harm their reputation and cause them to lose market share, users, and customers.***

Our PRC subsidiaries may be subject to allegations by third parties or purported former employees, negative Internet postings, and other adverse public exposure on their business, operations, and staff compensation. Our PRC subsidiaries may also become the target of harassment or other detrimental conduct by third parties or disgruntled former or current employees. Such conduct may include complaints to regulatory agencies, media, or other organizations. Our PRC subsidiaries may be subject to government or regulatory investigation or other proceedings as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to address such third-party conduct, and there is no assurance that our PRC subsidiaries will be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Additionally, allegations, directly or indirectly against our PRC subsidiaries, may be posted on the Internet, including on social media platforms by anyone on an anonymous basis. Any negative publicity on our PRC subsidiaries or their management can be quickly and widely disseminated. Social media platforms and devices immediately publish the content often without filters or checks on the accuracy of the content posted. The information posted may be inaccurate and may harm our PRC subsidiaries' reputation and business prospects. The harm may be immediate without affording them an opportunity for redress or correction. Our PRC subsidiaries' reputation may be negatively affected as a result of the public dissemination of negative and potentially false information about their business and operations, which in turn may cause them to lose market share, users, or customers.

***Our PRC subsidiaries' current insurance policies may not provide adequate levels of coverage against all claims and they may incur losses that are not covered by their insurance.***

We believe our PRC subsidiaries maintain insurance coverage that is customary for businesses of their sizes and types. See "Business—Insurance." However, they may be unable to insure against certain types of losses or claims, or the cost of such insurance may be prohibitive. Uninsured losses or claims, if they occur, could have a

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material adverse effect on our PRC subsidiaries' reputation, business, results of operations, financial condition, or prospects.

***Some of our subsidiaries are subject to various evolving Hong Kong laws and regulations regarding data security or antimonopoly, which could subject them to government enforcement actions and investigations, fines, penalties, and suspension or disruption of their operations.***

Our Hong Kong subsidiaries, including Xuhang HK and HK Lehui, operate in Hong Kong and are thus subject to laws and regulations in Hong Kong in respect of data privacy, data security, and data protection. The main legislation in Hong Kong concerning data security is the PDPO, which regulates the collection, usage, storage, and transfer of personal data and imposes a statutory duty on data users to comply with the six data protection principles contained therein. Pursuant to section 33 of the PDPO, the PDPO is applicable to the collection and processing of personal data if such activities take place in Hong Kong, or if the personal data is collected by a data user whose principal place of business is in Hong Kong. As of the date of this prospectus, we confirm that our Hong Kong subsidiaries have complied with the laws and requirements in respect of data security in Hong Kong. Our directors confirm that: (i) each of our directors and our Hong Kong subsidiaries has not been involved in any litigation or regulatory action relating to breach of the PDPO; and (ii) they are not aware of any non-compliance incidents relating to breach of the PDPO since the date of incorporation of our Hong Kong subsidiaries. Since our PRC subsidiaries conduct substantially all of their business operations in mainland China, we believe that the incumbent data security statutory requirements under Hong Kong laws do not materially affect their business. However, the laws on cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, may subject us or our Hong Kong subsidiaries to consequences, including, but not limited to, government enforcement actions and investigations, fines, penalties, and suspension or disruption of our Hong Kong subsidiaries' operations.

The Competition Ordinance (Cap. 619 of the Laws of Hong Kong) prohibits and deters undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting, or distorting competition in Hong Kong. It provides for general prohibitions in three major areas of anti-competitive conduct described as the first conduct rule, the second conduct rule, and the merger rule. The first conduct rule prohibits undertakings from making or giving effect to agreements or decisions or engaging in concerted practices that have as their object or effect the prevention, restriction, or distortion of competition in Hong Kong. The second conduct rule prohibits undertakings that have a substantial degree of market power in a market from engaging in conduct that has as its object or effect the prevention, restriction, or distortion of competition in Hong Kong. The merger rule prohibits mergers that have or are likely to have the effect of substantially lessening competition in Hong Kong. The scope of application of the merger rule is limited to carrier licenses issued under the Telecommunications Ordinance (Cap. 106 of the Laws of Hong Kong). As of the date of this prospectus, we and our Hong Kong subsidiaries have complied with all three areas of anti-competition laws and requirements in Hong Kong. Our Hong Kong subsidiaries have not engaged in any concerted practices that have an object or effect to prevent, restrict, or distort competition in Hong Kong. Additionally, neither we nor our Hong Kong subsidiaries possess a substantial degree of market power in the Hong Kong market that could trigger the second conduct rule. The merger rule is equally not applicable to us or our Hong Kong subsidiaries since neither we nor our Hong Kong subsidiaries hold any carrier license issued under the Telecommunications Ordinance.

Accordingly, as confirmed by our Hong Kong counsel, Ince & Co, the data security or antimonopoly laws and regulations in Hong Kong do not restrict our ability to accept foreign investment or impose limitation on our ability to list on any U.S. stock exchange under Hong Kong laws and regulations.

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**Risks Relating to this Offering and the Trading Market** 

***There has been no public market for our Ordinary Shares prior to this offering, and you may not be able to resell our Ordinary Shares at or above the price you pay for them, or at all.***

Prior to this offering, there has not been a public market for our Ordinary Shares. We have applied to list our Ordinary Shares on Nasdaq. At this time, Nasdaq has not yet approved our application to list our Ordinary Shares. The closing of this offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our Ordinary Shares will be approved for listing on Nasdaq. In addition, an active public market for our Ordinary Shares, however, may not develop or be sustained after the offering, in which case the market price and liquidity of our Ordinary Shares will be materially and adversely affected.

***The initial public offering price for our Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.***

The initial public offering price for our Ordinary Shares will be determined by negotiations between us and the underwriters and may not bear a direct relationship to our earnings, book value, or any other indicia of value. We cannot assure you that the market price of our Ordinary Shares will not decline significantly below the initial public offering price. The financial markets in the United States and other countries have experienced significant price and volume fluctuations in the last few years. Volatility in the price of our Ordinary Shares may be caused by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.

***You will experience immediate and substantial dilution in the net tangible book value of Ordinary Shares purchased.***

The initial public offering price of our Ordinary Shares is substantially higher than our net tangible book value per share of our Ordinary Shares. Consequently, when you purchase our Ordinary Shares in the offering, upon completion of the offering you will incur immediate dilution of US$[●] per share, assuming an initial public offering price of US$[●], which is the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus. See "Dilution." In addition, you may experience further dilution to the extent that additional Ordinary Shares are issued upon exercise of outstanding options we may grant from time to time.

***If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our Ordinary Shares may be materially and adversely affected.***

Prior to this offering, we have been a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in preparing our consolidated financial statements as of and for the years ended December 31, 2021 and 2020, we have identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the PCAOB, and other control deficiencies. The material weaknesses identified included (i) a lack of sufficient skilled staff with U.S. GAAP knowledge and the SEC reporting knowledge for the purpose of financial reporting as well as a lack of formal accounting policies and procedures manual to ensure proper financial reporting in accordance with U.S. GAAP and SEC reporting requirements; (ii) a lack of formal policies and procedures to establish risk assessment process and internal control framework; and (iii) information technology-related deficiencies in the areas of: a) risk and vulnerability assessment, b) third-party (service organization) vendor management, c) backup management, disaster recovery, and proper equipment in physical environment control, and d) system security and access.

Following the identification of the material weaknesses and control deficiencies, we have taken the following remedial measures: (i) setting up an internal audit function as well as engaging an external consulting firm to

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assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control; and (ii) adopting directors' resolutions to appoint independent directors, establish an audit committee, and strengthen corporate governance.

We plan to take additional remedial measures, including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; and (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel.

However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to correct the material weaknesses or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our Ordinary Shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.

Upon completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F. In addition, once we cease to be an "emerging growth company," as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified, if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.

***We will incur substantial increased costs as a result of being a public company.***

Upon consummation of this offering, we will incur significant legal, accounting, and other expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. We will incur additional costs in obtaining director and officer liability insurance. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. Moreover, while we currently expect to qualify as a foreign private issuer immediately following the completion of this offering, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations. See "—If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer."

We are an "emerging growth company," as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion

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of this offering, (b) in which we have total annual gross revenue of at least US$1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Ordinary Shares that is held by non-affiliates exceeds US$700 million as of the prior December 31, and (2) the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company's internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

After we are no longer an "emerging growth company," or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures.

We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

***Because we are an "emerging growth company," we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Ordinary Shares.***

For as long as we remain an "emerging growth company," as defined in the JOBS Act, we will elect to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of shareholder approval of any golden parachute payments not previously approved. Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of more mature companies. Further, we elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares and our share price may be more volatile. See "Implications of Our Being an Emerging Growth Company."

***Substantial future sales of our Ordinary Shares or the anticipation of future sales of our Ordinary Shares in the public market could cause the price of our Ordinary Shares to decline.***

Sales of substantial amounts of our Ordinary Shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our Ordinary Shares to decline. An aggregate of 58,804,977 Ordinary Shares are outstanding before the consummation of this offering. An aggregate of [●] Ordinary Shares will be outstanding immediately after the consummation of this offering, assuming no exercise of the Representative's over-allotment option, and [●] Ordinary Shares will be outstanding immediately after the consummation of this offering, assuming the full exercise of the over-allotment option. Sales of these shares into the market could cause the market price of our Ordinary Shares to decline.

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***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 Ordinary Shares if the market price of our Ordinary Shares increases.

***If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.***

Any trading market for our Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline.

***The market price of our 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 initial public offering price.***

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated fluctuations in our revenue and other operating results;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements by us or our competitors of significant products or features, technical innovations, acquisitions,
strategic partnerships, joint ventures, or capital commitments;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• lawsuits threatened or filed against us; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 litigation following periods of market volatility. If 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.

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***The price of our Ordinary Shares could be subject to rapid and substantial volatility.***

There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent initial public offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with a relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume, and less liquidity than large-capitalization companies. In particular, our Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades, and large spreads in bid and ask prices. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares.

In addition, if the trading volumes of our Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence the price of our Ordinary Shares. This low volume of trades could also cause the price of our Ordinary Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Ordinary Shares. A decline in the market price of our Ordinary Shares also could adversely affect our ability to issue additional Ordinary Shares or other of our securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our Ordinary Shares will develop or be sustained. If an active market does not develop, holders of our Ordinary Shares may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

***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 Ordinary Shares.***

We anticipate that we will use the net proceeds from this offering to expand our main business to further improve our integrated marketing services, invest in technology research and development, and acquire high-quality companies within the same industry or upstream and downstream entities across the new media integrated content marketing value chain, and for working capital and other general corporate purposes. Our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of our Ordinary Shares.

***If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.***

We expect to qualify as a foreign private issuer upon the completion of this offering. As a foreign private issuer, we will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we will not be required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently expect to qualify as a foreign private issuer immediately following the completion of this offering, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations.

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***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 rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, 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 our 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, 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. 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. We may, however, 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.

***If we cannot continue to satisfy the listing requirements and other rules of Nasdaq, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.***

We have applied to list our Ordinary Shares on Nasdaq upon consummation of this offering. It is a condition to the closing of this offering that our Ordinary Shares qualify for listing on a national securities exchange. Following this offering, in order to maintain our listing on Nasdaq, we will be required to comply with certain rules of Nasdaq, including those regarding minimum stockholders' equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we initially meet the listing requirements and other applicable rules of Nasdaq, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy Nasdaq criteria for maintaining our listing, our securities could be subject to delisting.

If Nasdaq subsequently delists our securities from trading, we could face significant consequences, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a limited availability for market quotations for our securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced liquidity with respect to our securities;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limited amount of news and analyst coverage; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decreased ability to issue additional securities or obtain additional financing in the future.

***Anti-takeover provisions in our fourth amended and restated memorandum and articles of association that we intend to adopt may discourage, delay, or prevent a change in control.***

Some provisions of our fourth amended and restated memorandum and articles of association, which will become effective immediately prior to the effectiveness of the registration statement of which this prospectus is a part, may discourage, delay, or prevent a change in control of our Company or management that shareholders may consider favorable, including, among other things, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provisions that authorize our board of directors to issue shares with preferred, deferred, or other special
rights or restrictions without any further vote or action by our shareholders; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provisions that restrict the ability of our shareholders to call meetings and to propose special matters for
consideration at shareholder meetings.

***The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.***

We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and by the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands and from English common law. Decisions of the Privy Council (which is the final Court of Appeal for British overseas territories such as the Cayman Islands) are binding on a court in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court and the Court of Appeal are generally of persuasive authority but are not binding in the courts of the Cayman Islands. Decisions of courts in other Commonwealth jurisdictions are similarly of persuasive but not binding authority. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws relative to the United States. Therefore, our public shareholders may have more difficulty protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies. Our directors have discretion under our fourth amended and restated articles of association to determine whether or not, and under what conditions, our register of members may be inspected by our shareholders, but are not obliged to make it available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act of the Cayman Islands and the laws applicable to companies incorporated in the United States and their shareholders, see "Description of Share Capital—Differences in Corporate Law."

***You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.***

Cayman Islands law does not provide shareholders with any right to requisition a general meeting or put any proposal before a general meeting. These rights, however, may be provided in a company's articles of association. Our fourth amended and restated articles of association allow our shareholders holding shares representing in aggregate not less than one-third of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting. Advance notice of at least 10 clear days is required for the convening of our annual general shareholders' meeting and any other general meeting of our shareholders. A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third of the total issued shares carrying the right to vote at a general meeting of our Company. For these purposes, "clear days" means that period excluding (a) the day when the notice is given or deemed to be given and (b) the day for which it is given or on which it is to take effect.

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***If we are classified as a PFIC, United States taxpayers who own our Ordinary Shares may have adverse United States federal income tax consequences.***

A non-U.S. corporation such as ourselves will be classified as a PFIC for any taxable year if, for such year, either

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• At least 75% of our gross income for the year is passive income; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The average percentage of our assets (determined at the end of each quarter) during the taxable year which
produce passive income or which are held for the production of passive income is at least 50%.

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.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our Ordinary Shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

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 2022 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse U.S. federal income tax consequences for U.S. taxpayers who are shareholders. We will make this determination following the end of any particular tax year. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see "Material Income Tax Consideration—United States Federal Income Taxation—PFIC."

***Our pre-IPO shareholders will be able to sell their shares upon completion of this offering subject to restrictions under Rule 144 under the Securities Act and the lock-up agreements.***

All of our directors and officers and substantially all of our pre-IPO shareholders have agreed with the Representative not to sell, transfer, or dispose of, directly or indirectly, any of our Ordinary Shares or securities convertible into or exercisable or exchangeable for our Ordinary Shares for a period of six months after the date of this prospectus. See "Underwriting—Lock-up Agreements." Our pre-IPO shareholders may be able to sell their Ordinary Shares under Rule 144 after the completion of this offering and following the expiration of that lock-up period, if applicable. See "Shares Eligible for Future Sale." Because these shareholders have paid a lower price per Ordinary Share than participants in this offering, when they are able to sell their pre-IPO shares under Rule 144 and following the expiration of the lock-up period, if applicable, they may be more willing to accept a lower sales price than the IPO price. This fact could impact the trading price of the Ordinary Shares following the completion of the offering, to the detriment of participants in this offering. Under Rule 144, before our pre-IPO shareholders can sell their shares, in addition to meeting other requirements, they must meet the required holding period. We do not expect any of the Ordinary Shares to be sold pursuant to Rule 144 during the pendency of this offering.

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**DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS** 

This prospectus contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions in this prospectus. These statements are likely to address our growth strategy, financial results and product and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assumptions about our future financial and operating results, including revenue, income, expenditures, cash
balances, and other financial items;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to execute our growth, and expansion, including our ability to meet our goals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• current and future economic and political conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our capital requirements and our ability to raise any additional financing which we may require;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract clients and further enhance our brand recognition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to hire and retain qualified management personnel and key employees in order to enable us to develop
our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the lasting impacts of the COVID-19 pandemic;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• trends and competition in the new media integrated content marketing industry and the digital advertising
industry; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other assumptions described in this prospectus underlying or relating to any forward-looking statements.

We describe certain material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under "Risk Factors." We base our forward-looking statements on our management's beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.

**Industry Data and Forecasts** 

This prospectus contains data related to the new media integrated marketing industry in China that we obtained from various government and private entity publications, including the industry report of Frost & Sullivan (Beijing) Inc., Shanghai Branch Co. ("Frost & Sullivan") which we commissioned. This industry data includes projections that are based on a number of assumptions which have been derived from industry and government sources which we believe to be reasonable. The new media integrated marketing industry may not grow at the rate projected by industry data, or at all. The failure of the industry to grow as anticipated is likely to have a material adverse effect on our business and the market price of our Ordinary Shares. In addition, the rapidly changing nature of the new media integrated marketing industry subjects any projections or estimates relating to the growth prospects or future condition of our industry to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions.

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**ENFORCEABILITY OF CIVIL LIABILITIES** 

We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated under the laws of the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. The Cayman Islands, however, has a less developed body of securities laws as compared to the United States and provides significantly less protection for investors than the United States. Additionally, Cayman Islands companies may not have standing to sue in the Federal courts of the United States.

Substantially all of our assets are located in the PRC. In addition, four of our five directors and officers, namely Tianhang Xiao, Huazhen Xu, Bo Lyu, and Xiaoyi Wang, are nationals or residents of the PRC. All or a substantial portion of the assets of our directors and officers are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon these four directors and officers, or to enforce against us or them 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. See "Risk Factors—Risks Relating to Doing Business in the PRC— You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our directors and officers that reside outside the United States based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China."

We have appointed Cogency Global Inc. as our agent to receive service of process with respect to 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 in 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.

Conyers Dill & Pearman, our counsel with respect to the laws of the Cayman Islands, AllBright, our counsel with respect to PRC law, and Ince & Co, our counsel with respect to the laws of Hong Kong, have advised us that there is uncertainty as to whether the courts of the Cayman Islands or the PRC or Hong Kong would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in the Cayman Islands or the PRC or Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

Conyers Dill & Pearman has further advised us that there is currently no statutory enforcement or treaty between the United States and the Cayman Islands providing for enforcement of judgments. A judgment obtained in the United States, however, may be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination on 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) is final; (iii) is not in respect of taxes, a fine or a penalty; and (iv) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or public policy of the Cayman Islands. Furthermore, it is uncertain that Cayman Islands courts would enforce: (1) judgments of U.S. courts obtained in actions against us or other persons that are predicated upon the civil liability provisions of the U.S. federal securities laws; or (2) original actions brought against us or other persons predicated upon the Securities Act. Conyers Dill & Pearman has informed us that there is uncertainty with regard to Cayman Islands law relating to whether a judgment obtained from the U.S. courts under civil liability provisions of the securities laws will be determined by the courts of the Cayman Islands as penal or punitive in nature.

AllBright has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. 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

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where the judgment is made or on reciprocity between jurisdictions. There are no treaties or other forms of reciprocity between China and the United States for the mutual recognition and enforcement of court judgments. AllBright has further advised us that under PRC law, PRC courts will not enforce a foreign judgment against us or our officers and directors if the court decides that such judgment violates the basic principles of PRC law or national sovereignty, security or public interest, thus making the recognition and enforcement of a U.S. court judgment in China difficult.

Ince & CO has further advised us that there are currently no treaties or other arrangements between Hong Kong and the United States that provide reciprocal enforcement of foreign judgments. However, Hong Kong's common law permits an action to be brought upon a foreign judgment. A foreign judgment itself may form the basis for a cause of action as judgment may be regarded as creating a debt between the parties. In a common law action for the enforcement of a foreign judgment in Hong Kong, enforcement is subject to various conditions, including, but not limited to: (i) the foreign judgment is final, (ii) the foreign judgment is for a liquidated amount in a civil matter and not in respect of taxes, fines, penalties, or similar charges, (iii) the proceedings in which the judgment was obtained were not contrary to natural justice, and (iv) the enforcement of the judgment is not contrary to the public policy of Hong Kong. Such a judgment must be for a fixed sum and come from a competent court as determined by the private international law applied by the Hong Kong courts. The defenses available to a defendant in a common law action brought on the basis of a foreign judgment include lack of jurisdiction, breach of natural justice, fraud, and contrary to public policy. However, a separate legal action for debt must be commenced in Hong Kong in order to recover such debt from the judgment debtor.

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**USE OF PROCEEDS** 

We estimate that the net proceeds from the sale of [●] Ordinary Shares in this offering, based on the assumed initial public offering price of [●] per Ordinary Share, the midpoint of the estimated price range set forth on the cover page of this prospectus, will be approximately US$[●], after deducting the underwriting discounts and estimated offering expenses payable by us. If the Representative exercises its over-allotment option in full, we estimate that the net proceeds to us from this offering will be approximately US$[●], after deducting the underwriting discounts and estimated offering expenses payable by us.

We intend to use the net proceeds we receive from this offering for the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approximately 50% for expanding our business, such as enhancing our content production capability, to further
improve our integrated marketing services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approximately 20% for investing in technology research and development;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approximately 20% for mergers and acquisitions of high-quality companies within the same industry, as well as
upstream and downstream entities across the new media integrated content marketing value chain, although we have not yet identified nor entered into preliminary negotiations with any specific acquisition target as of the date of this prospectus; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the remainder to fund working capital and for other general corporate purposes.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of 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. See "Risk Factors—Risks Relating to this Offering and the Trading Market—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 Ordinary Shares." 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.

In using the proceeds of this offering, we are permitted under PRC laws and regulations to utilize the proceeds from this offering to fund our PRC subsidiaries by making loans or additional capital contributions, subject to applicable government registration and approval requirements. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all. See "Risk Factors—Risks Relating to Doing Business in the PRC—PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of offshore offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business."

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**DIVIDEND POLICY** 

As of the date of this prospectus, none of our PRC subsidiaries have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Subject to the PFIC rules, the gross amount of distributions we make to investors with respect to our Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, 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.

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

If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from Xuhang HK.

Current PRC regulations permit Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya, all of which are our PRC subsidiaries, to pay dividends to Xuhang HK only out of their accumulated profits, if any, determined in accordance with Chinese 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 its registered capital.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. For instance, SAFE Circular 3 issued on January 26, 2017, provides that banks shall, when dealing with dividend remittance transactions from a domestic enterprise to its offshore shareholders of more than US$50,000, review the relevant board resolutions, original tax filing form, and audited financial statements of such domestic enterprise based on the principle of genuine transaction. Furthermore, if our PRC subsidiaries 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 PRC subsidiaries are unable to receive all of the revenue from our operations, we may be unable to pay dividends on our Ordinary Shares.

Cash dividends, if any, on our Ordinary Shares will be paid in U.S. dollars. Xuhang HK may be considered a non-resident enterprise for tax purposes, so that any dividends Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya pay to Xuhang HK 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%. See "Material Income Tax Consideration—Enterprise Taxation in Mainland China."

In order for us to pay dividends to our shareholders, we will rely on payments made from Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya to Xuhang HK as dividends from these three PRC subsidiaries and the distribution of such payments to Xuhang BVI as dividends from Xuhang HK, and then the distribution of such payments to our Company as dividends from Xuhang BVI. If Huzhou Yinzhiya, Wuhan Yinzhiya, or Xuhang Network or its 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.

Pursuant to 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. The 5% withholding tax rate, however, 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. In current practice, a Hong Kong project 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

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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 any dividends paid by Xuhang Network, Huzhou Yinzhiya, and Wuhan Yinzhiya to their immediate holding company, Xuhang HK. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Xuhang HK intends to apply for the tax resident certificate if and when Xuhang Network, Huzhou Yinzhiya, and/or Wuhan Yinzhiya plan to declare and pay dividends to Xuhang HK. See "Risk Factors—Risks Relating to Doing Business in the PRC—There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits."

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**CAPITALIZATION** 

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on an actual basis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on an as adjusted basis to reflect the issuance and sale of [●] Ordinary Shares by us in this offering
based on the assumed initial public offering price of US$[●] per Ordinary Share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, after deducting the estimated discounts
to the underwriters and the estimated offering expenses payable by us and assuming no exercise of the Representative's over-allotment option or Representative's Warrants.

You should read this capitalization table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.

---

| | | |
|:---|:---|:---|
|  | **September 30, 2022** | **September 30, 2022** |
|  | **Actual** | **As adjusted** |
|  | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** |
|  Loans | 3514 |  |
|  Stockholders' Equity: |  |  |
|  Ordinary Shares, US$0.002 par value, 500,000,000 Ordinary Shares authorized, 58,804,977 Ordinary Shares issued and outstanding\*; [●] Ordinary Shares issued and outstanding, as adjusted | 118 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital<sup>(1)</sup> | 39900 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Statutory reserves | 710 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 43273 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | 958 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interest | 7467 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Shareholders' Equity | 92308 |  |
|  Total Capitalization | 95822 |  |

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\* Retrospectively restated for the Subdivision.

(1) Reflects the sale of [●] Ordinary Shares in this offering based on an assumed initial
public offering price of US$[●] per Ordinary Share, and after deducting the estimated underwriting discounts and estimated offering expenses payable by us. The as adjusted information is illustrative only, and we will
adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing. Additional paid-in capital reflects the net proceeds we
expect to receive, after deducting the underwriting discounts and estimated offering expenses payable by us. We estimate that such net proceeds will be approximately US$[●].

A US$1.00 increase (decrease) in the assumed initial public offering price of US$[●] per Ordinary Share would increase (decrease) each of additional paid-in capital, total shareholders' equity and total capitalization by US$[●] million, assuming the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and estimated expenses payable by us.

An increase (decrease) of 1.0 million in the number of Ordinary Shares offered by us in this offering, as set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately US$[●] million, assuming the initial public offering price of US$[●] per Ordinary Share remains the same, and after deducting the underwriting discounts payable by us.

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**DILUTION** 

*Unless otherwise indicated, all share numbers and per share numbers in this prospectus have been presented giving effect to the Subdivision.*

If you invest in our Ordinary Shares, your ownership interest will be diluted to the extent of the difference between the initial public offering price per Ordinary Share and our net tangible book value per Ordinary Share after this offering. Dilution results from the fact that the initial public offering price per Ordinary Share is substantially in excess of the net tangible book value per Ordinary Share attributable to the existing shareholders for our presently outstanding Ordinary Shares.

Our net tangible book value as of September 30, 2022, was US$[●], or US$[●] per Ordinary Share. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting the net tangible book value per Ordinary Share (as adjusted for the offering) from the initial public offering price per Ordinary Share and after deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

After giving effect to our sale of [●] Ordinary Shares offered in this offering based on the initial public offering price of US$[●] per Ordinary Share, which is the midpoint of the estimated range of initial offering price set forth on the cover page of this prospectus, assuming no exercise of the Representative's over-allotment option or Representative's Warrants, and after deducting the estimated underwriting discounts and the estimated offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2022, would have been US$[●], or US$[●] per outstanding Ordinary Share. This represents an immediate increase in net tangible book value of US$[●] per Ordinary Share to the existing shareholders, and an immediate dilution in net tangible book value of US$[●] per Ordinary Share to investors purchasing Ordinary Shares in this offering. The as adjusted information discussed above and below is illustrative only.

The following table illustrates such dilution:

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| | |
|:---|:---|
|  | **Post-Offering** |
|  Assumed initial public offering price per Ordinary Share | US$ |
|  Net tangible book value per Ordinary Share as of September 30, 2022 | US$ |
|  Increase in net tangible book value per Ordinary Share attributable to payments by new investors | US$ |
|  As adjusted net tangible book value per Ordinary Share immediately after this offering<sup>(1)</sup> | US$ |
|  Amount of dilution in net tangible book value per Ordinary Share to new investors in the offering<sup>(1)</sup> | US$ |

---

(1) Each US$1.00 increase (decrease) in the assumed initial public offering price of US$[●] per Ordinary
Share, the midpoint of the estimated range of initial public offering price set forth on the cover page of this prospectus, would increase our as adjusted net tangible book value per share after this offering of Ordinary Shares by US$[●] per
Ordinary Share and the dilution per share to new investors participating in this offering by US$[●] per Ordinary Share, 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. Similarly, each 1.0 million increase (decrease) in the number of Ordinary Shares offered by us would increase (decrease) our as adjusted net tangible
book value per share after this offering by US$[●] per Ordinary Share and the dilution per share to new investors participating in this offering by US$[●] per Ordinary Share, assuming that the assumed initial public offering price
remains the same, after deducting underwriting discounts and estimated offering expenses payable by us.

The as adjusted net tangible book value per Ordinary Share after this offering would be US$[●], the increase in as adjusted net tangible book value per Ordinary Share to existing shareholders would be US$[●], and the

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immediate dilution in net tangible book value per Ordinary Share to new investors in this offering would be US$[●].

The following tables summarize, on an as adjusted basis as of September 30, 2022, the differences between existing shareholders and the new investors with respect to the number of Ordinary Shares purchased from us, the total consideration paid and the average price per Ordinary Share before deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares**<br>**purchased** | **Ordinary Shares**<br>**purchased** | **Total consideration** | **Total consideration** | **Average**<br>**price per**<br>**Ordinary<br>Share** |
|  | **Number** | **Percent** | **Amount** | **Percent** | **Average**<br>**price per**<br>**Ordinary<br>Share** |
|  | **(US$ in thousands)** | **(US$ in thousands)** | **(US$ in thousands)** | **(US$ in thousands)** | **(US$ in thousands)** |
|  Existing shareholders% |  |  | US$% |  | US$ |
|  New investors% |  |  | US$% |  | US$ |
|  Total% |  |  | US$% |  | US$ |

---

The as adjusted information as discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our Ordinary Shares and other terms of this offering determined at the pricing.

To the extent the Representative's over-allotment option or the Representative's Warrants are exercised or to the extent that we issue new securities which result in the issuance of additional Ordinary Shares, new investors would experience further dilution.

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**CORPORATE HISTORY AND STRUCTURE** 

**Our Corporate History** 

Xuhang Network was established on September 16, 2014, as a limited liability company organized under the laws of the PRC. Xuhang Network has formed or acquired 42 wholly or partially owned subsidiaries pursuant to PRC and Hong Kong laws, as specifically disclosed in "—Our Corporate Structure."

In connection with this offering, we have undertaken a reorganization of our corporate structure (the "Reorganization") in the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On June 16, 2020, we incorporated Xuhang Cayman under the laws of the Cayman Islands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On July 31, 2020, we incorporated Xuhang BVI pursuant to the laws of the British Virgin Islands as a wholly
owned subsidiary of Xuhang Cayman;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 2, 2020, we incorporated Xuhang HK in Hong Kong as a wholly owned subsidiary of Xuhang BVI;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On June 7, 2021, Xuhang HK incorporated Huzhou Yinzhiya as a limited liability company organized under the
laws of the PRC and a wholly owned subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On September 23, 2021, Xuhang HK incorporated Wuhan Yinzhiya as a limited liability company organized under
the laws of the PRC and a wholly owned subsidiary; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of October 27, 2021, Xuhang HK had acquired 100% of the equity interests in Xuhang Network from Xuhang
Network's original shareholders. Consequently, Xuhang HK, through a restructuring which is accounted for as a reorganization of entities under common control, became the ultimate holding company of all other PRC entities mentioned above.

**Our Corporate Structure** 

The following diagram illustrates our corporate structure as of the date of this prospectus and upon completion of this offering, assuming the sales of all of the Ordinary Shares we are offering at based an assumed initial public offering price of US$[●] per share, which is the midpoint of the estimated range of the initial public offering price set forth on the cover page of this prospectus, and no exercise of the Representative's over-allotment option.

![LOGO](g403554g62d52.jpg)

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Notes: all percentages reflect the equity interests held by each of our shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents 21,012,915 Ordinary Shares held by TIAN HANG GROUP LIMITED, a British Virgin Islands company, which
is 100% owned by XUHANG (BVI) LTD, which is 100% owned by Tianhang Xiao as of the date of this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Represents 3,403,616 Ordinary Shares held by MIGHTY HUGE INVESTMENT LIMITED, which is 100% owned by XH Fortune
Success Trust, a trust established under the laws of Island of Jersey by Mr. Tianhang Xiao, managed by Trident Trust Company (HK) Limited, as trustee, with Mr. Tianhang Xiao being the trust's sole beneficiary as of the date of this
prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Represents 1,948,622 Ordinary Shares held by Shanghai Qishu Enterprise Management Consulting L.P., a PRC
limited partnership that is 99% owned by Hangzhou Xuli Network Technology Limited, which is in turn 99% owned by Tianhang Xiao, as of the date of this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Represents 3,078,562 Ordinary Shares indirectly held by Congcong Wei, the 100% owner of WCC CAPITAL LIMITED, as
of the date of this prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Represents an aggregate of 29,361,262 Ordinary Shares held by 33 shareholders, each one of which holds less
than 5% of our Ordinary Shares, as of the date of this prospectus.

For details of our principal shareholders' ownership, please refer to the beneficial ownership table in the section captioned "Principal Shareholders."

Significant subsidiaries of Xuhang Network consist of the following entities:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place of**<br> **incorporation** | **Date of**<br> **incorporation**<br> **or acquisition** | **Percentage**<br> **of direct or**<br> **indirect<br>ownership** | **Principal**<br> **activities** |
| **1** | Horgos Xumi Network Technology Co., Ltd. | PRC | February 8, 2017 | 100% | Advertising design and production; technical services |
| **2** | Horgos Pinyue Network Technology Co., Ltd. | PRC | November 10, 2017 | 100% | Advertising design and production; technical services; digital advertising services |
| **3** | Hong Kong Lehui Network Technology Co., Ltd. | Hong Kong | November 10, 2017 | 100% | Digital advertising services |
| **4** | Horgos Weizan Network Technology Co., Ltd. | PRC | November 13, 2017 | 100% | Marketing planning and Advertising production |
| **5** | Hangzhou Xingkong Internet Culture Communication Co., Ltd. | PRC | November 13, 2020 | 100% | Advertising design and production |
| **6** | Hangzhou Jinting | PRC | November 13, 2020 | 100% | Conference services; cultural and artistic exchange activities planning |
| **7** | Jiangxi Ku'o | PRC | March 16, 2020 | 100% | Advertising production; graphic design and production |
| **8** | Hangzhou Xingxiu Network Technology Co., Ltd. | PRC | June 16, 2021 | 51% | Advertising production and technical services |
| **9** | Jiangsu Xuhang New Economy Technology Co., Ltd. | PRC | September 29, 2020 | 80% | Advertising production and technical services |
| **10** | Qingdao Xuhang Digital New Economy Technology Co., Ltd. | PRC | October 29, 2020 | 61% | Advertising production and technical services |
| **11** | Shanghai Xumi Digital Technology Co., Ltd. | PRC | March 19, 2021 | 90% | Advertising production and technical services |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place of**<br> **incorporation** | **Date of**<br> **incorporation**<br> **or acquisition** | **Percentage**<br> **of direct or**<br> **indirect<br>ownership** | **Principal**<br> **activities** |
| **12** | Xiamen Xuhang Digital Technology Co., Ltd. | PRC | April 1, 2021 | 75% | Marketing planning and advertising production |
| **13** | Shanghai Pinzhang Network Technology Co., Ltd. | PRC | March 24, 2021 | 51% | Advertising production and technical services |
| **14** | Qingdao Pinzhang Network Technology Co., Ltd. | PRC | April 15, 2021 | 51% | Advertising production and technical services |
| **15** | Hangzhou Pusheng Network Technology Co., Ltd. | PRC | August 25, 2020 | 51% | Advertising production and technical services |
| **16** | Hangzhou Ruirong Network Technology Co., Ltd. | PRC | February 7, 2021 | 51% | Advertising production and technical services |
| **17** | Henan New Circle Network Technology Co., Ltd. | PRC | January 17, 2020 | 100% | Advertising production and technical services |
| **18** | Xuhang Shuzhiyun Technology (Hangzhou) Co., Ltd. | PRC | June 2, 2021 | 100% | Technical services and consultation; advertisement production |
| **19** | Xuhang Digital (Henan) Technology Co., Ltd. | PRC | January 22, 2021 | 51% | Technical services and consultation |
| **20** | Hangzhou Xiqi Cultural Tourism Technology Co., Ltd. | PRC | May 12, 2021 | 100% | Technical services and consultation |
| **21** | Yunnan Xumi Digital Technology Co., Ltd. | PRC | July 2, 2021 | 51% | Marketing planning and advertising production |
| **22** | Jiangxi Xuzhixing Technology Co., Ltd. | PRC | July 19, 2021 | 51% | Marketing planning and advertising production |
| **23** | Shanghai Huihang Network Technology Co., Ltd. | PRC | May 25, 2021 | 51% | Marketing planning and advertising production |
| **24** | Hangzhou Youyou Culture and Tourism Technology Co., Ltd. | PRC | July 14, 2021 | 51% | Marketing planning and advertising production |
| **25** | Anhui Jiayuan Information Technology Co., Ltd. | PRC | April 14, 2016 | 100% | Advertising production and technical services |
| **26** | Henan Xuhang Network Technology Co., Ltd. | PRC | November 29, 2019 | 99% | Internet advertising services |
| **27** | Wenzhou Xumi Network Technology Co., Ltd. | PRC | March 4, 2020 | 100% | Marketing planning and advertising production |
| **28** | Xumi (Fujian) Digital Technology Co., Ltd. | PRC | February 8, 2021 | 85% | Advertising production and technical services |
| **29** | Wuhan Xuhang Digital Technology Co., Ltd. | PRC | October 27, 2021 | 65% | Digital cultural creative content services; technical consultation |
| **30** | Huangshan Xumi Digital Technology Co., Ltd. | PRC | September 16, 2021 | 90% | Advertising design and production |
| **31** | Wuxi Xumi Creative Technology Co., Ltd. | PRC | September 10, 2021 | 75% | Marketing planning and advertising production |
| **32** | Yangzhou Xumi Digital Technology Co., Ltd. | PRC | November 2, 2021 | 56.7% | Marketing planning and branding management |
| **33** | Linyi Xumi Network Technology Co., Ltd. | PRC | August 26, 2021 | 60% | Marketing planning and advertising production |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name** | **Place of**<br> **incorporation** | **Date of**<br> **incorporation**<br> **or acquisition** | **Percentage**<br> **of direct or**<br> **indirect<br>ownership** | **Principal**<br> **activities** |
| **34** | Suzhou New Circle Network Technology Co., Ltd. | PRC | July 29, 2020 | 100% | Technical services and consultation |
| **35** | Shanghai Xumi Digital Advertising Co., Ltd. | PRC | November 9, 2021 | 100% | Advertising design and production |
| **36** | Shanghai Suhang Digital Technology Co., Ltd. | PRC | July 27, 2021 | 51% | Marketing planning and advertising production |
| **37** | Hangzhou Xupai Technology Co., Ltd. | PRC | December 21, 2021 | 51% | Technical services and consultation |
| **38** | Shanghai Hexian Lianhai Technology Group Co., Ltd. | PRC | January 18, 2022 | 51% | Marketing planning and advertising production |
| **39** | Chengdu Xumi Digital Technology Co., Ltd. | PRC | February 28, 2022 | 80% | Technical services and consultation |
| **40** | Hubei Xuhang Shuzhi Culture Co., Ltd. | PRC | February 28, 2022 | 90% | Marketing planning and advertising production |
| **41** | Beijing Hexian Lianjing Technology Co., Ltd. | PRC | March 31, 2022 | 100% | Advertising design and production |
| **42** | Beijing Xuhangyi Visual Technology Co., Ltd. | PRC | April 25, 2022 | 51% | Advertising design and production |
| **43** | Beijing Yunjia Lianjing Network Technology Co., Ltd. | PRC | January 11, 2023 | 100% | Marketing planning and advertising production |

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

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See "Disclosure Regarding Forward-Looking Statements" for a discussion of the uncertainties, risks, and assumptions associated with these statements. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this prospectus.* 

*Unless otherwise indicated, all share numbers and per share numbers in this prospectus have been presented giving effect to the Subdivision.* 

**Overview** 

We are a holding company incorporated in the Cayman Islands. As a holding company with no substantive operations of our own, we conduct all of our operations primarily through our PRC subsidiaries, which are content-driven marketing companies that provide comprehensive marketing services across a broad range of distribution channels with a primary focus on new media integrated content marketing. Leveraging their expertise in content production and operation, extensive distribution channels, and cross-platform new media account base, our PRC subsidiaries aim to provide customers with efficient and effective integrated marketing solutions that address their specific needs in the context of the new media era.

Customers utilize our PRC subsidiaries' marketing services to achieve their branding and marketing goals across multiple channels with a primary focus on we-media platforms such as Weibo, WeChat official, Douyin, Kuaishou, and Xiaohongshu. As of October 31, 2022, our PRC subsidiaries' new media account base comprised 524 self-operated accounts and 491 cooperative accounts, which collectively reached approximately 207 million Internet followers. As of December 31, 2020 and 2021 and September 30, 2022, our PRC subsidiaries had a marketer base of 656, 810, and 867, respectively.

Our PRC subsidiaries started their business in 2014 with digital advertising services, where they help marketers—typically app developers and operators and advertising agents thereof—optimize their marketing efforts by identifying, engaging, and activating target audiences for user acquisition.

Since 2017, our PRC subsidiaries have launched and expanded their new media integrated content marketing services that address the growing demands of marketers for social, entertaining, and trendy marketing content in the new media area. Specifically, our PRC subsidiaries' new media integrated content marketing services are mainly composed of two models—the S2B model and the S2P model. For the S2B business, our PRC subsidiaries provide customers with a package of new media integrated content marketing service solutions—specifically, our PRC subsidiaries (i) provide creative marketing services to merchants and brands by producing entertaining and trendy marketing content, such as promotional short videos and advertorials, and publishing them via their self-operated and cooperative we-media accounts; (ii) plan, organize, and implement live streaming events on behalf of marketers, such as e-commerce merchants and local businesses, for promoting their products or services on high-profile live streaming platforms, or provide them with new media live broadcast training services; and (iii) organize online and offline marketing activities for large brands, business centers, commercial complexes, and tourist attractions, based on their needs for an "online-offline-linkage" marketing strategy. In addition, our PRC subsidiaries have recently developed new businesses. First, they have continually improved their research and development capabilities, and are committed to launching technological services enabled by low-code and user-experience-driven development. Currently, our PRC subsidiaries have independently developed multiple business software products for new media live streaming broadcasting and conference/event services, and have licensed the self-developed software products and services to third-party businesses. Second, as our PRC subsidiaries closely monitor industry developments to combine their advantages to expand their business, they have collaborated, since October 2021, with cultural institutions, such as museums and tourist attractions, to help them issue, promote, and sell IP-related digital products that are becoming

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increasingly popular among young people on platforms such as Ali Auction, NetEase Planet, and Xinhua Shucang. Such digital products are similar to non-fungible token ("NFT") products, except they cannot be exchanged upon issuance in the PRC.

With respect to the S2P business, our PRC subsidiaries provide online traffic services to large Internet media platforms by generating or directing user traffic to those media platforms through editing and producing captivating short videos from authorized TV dramas, movies, and variety shows and posting such short videos on high-profile media platforms Toutiao, Douyin, Xigua Video, Baidu Baijiahao, Kuaishou, Youku, Tencent Video, and iQIYI.

Our PRC subsidiaries' business has experienced rapid growth since their inception. For the years ended December 31, 2020 and 2021, we had total revenue of RMB350.9 million and RMB471.4 million (US$66.3 million), respectively, and net income of RMB44.7 million and RMB69.2 million (US$9.7 million), respectively. Revenue derived from new media integrated content marketing services accounted for approximately 46.4% and 77.4% of our total revenue for those years, respectively. Revenue derived from digital advertising services accounted for approximately 53.6% and 22.6% of our total revenue for those fiscal years, respectively. For the nine months ended September 30, 2021 and 2022, we had total revenue of RMB313.0 million and RMB339.3 million (US$47.7 million), respectively, and net income of RMB41.4 million and RMB52.4 million (US$7.4 million), respectively. Revenue derived from new media integrated content marketing services accounted for approximately 71.2% and 87.5% of our total revenue for those periods, respectively. Revenue derived from digital advertising services accounted for approximately 28.8% and 12.5% of our total revenue for those periods, respectively. For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, our cost of revenue was RMB243.5 million, RMB329.9 million (US$46.4 million), and RMB221.2 million (US$31.1 million), respectively.

**Key Factors Affecting Our Results of Operations** 

In addition to the general factors affecting the Chinese and global economy and our industry, our results of operations and financial condition are affected by a number of industry- and company-specific factors, including those set out below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Risk of changing marketing media and methods</u>* : The Internet era has brought about the emergence and
constant evolution of different social media platforms with varying characteristics facing different consumer groups. In recent years, our PRC subsidiaries have closely followed the development of social media platforms, from social media with both
communication and sharing functions, such as Weibo and WeChat, to social media specializing in original video content, such as Douyin (抖音), Bilibili, and Kuaishou, and further to
content community channels, such as Zhihu and Xiaohongshu. By doing so, our PRC subsidiaries have continually expanded their coverage of mainstream social media platforms. If, however, our PRC subsidiaries are unable to cope with rapidly changing
new media, exploit relevant new media platform resources, or adjust research and development orientations, resource allocations, and business expansion strategies on a timely basis, they will not be able to meet the diversified needs of their
customers, thus adversely affecting the profitability of our Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Risk of rising prices of media resources</u>* : **  Our PRC subsidiaries have accumulated massive
media resources on major mainstream social media platforms. Additionally, they have established long-term, stable relationships with mainstream media resource suppliers and have accumulated their own purchasing advantages. Due to China's
continuous and rapid growth of social media marketing, the bargaining power of high-quality media resources may improve further, resulting in higher prices for media resources. Our PRC subsidiaries' operating performance may be adversely
impacted if the price level of social media resources continues to rise in the future, and they have no effective means to transmit or digest the rising costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Risk of rising labor costs and expenses</u>* : **  As a social media marketing company, we must
attract and retain talent in the technical, marketing, management, and other key areas to ensure sustainable growth.

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In recent years, social media platforms have become increasingly popular, and their commercial value has increased. Consequently, social media marketing is becoming increasingly competitive for human resources. To remain competitive and sustainable, our PRC subsidiaries may face higher human capital costs if the cost of high-quality human capital rises substantially in the industry. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Risk of market competition</u>* : The new media integrated content marketing industry and the digital
advertising industry are highly competitive. Increasing penetration of the Internet will lead to an increase in advertisers' demand for new media integrated content marketing services and digital advertising services, which will attract more
capital into the industry. Furthermore, some traditional advertising companies have also entered the new media integrated marketing business, resulting in a more diversified market and increased competition. We may face greater competitive pressure
in the future if our PRC subsidiaries fail to enhance their service quality, technological innovation, and customer service capabilities.

**COVID-19 Pandemic Affecting Our Results of Operations** 

The COVID-19 pandemic has had a material adverse impact on the global economy since the beginning of 2020. In response, the PRC government has implemented numerous measures to contain the virus, including travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. Although our PRC subsidiaries never suspended their business operations during the pandemic, their service capabilities have been affected by such restrictive measures, resulting in delays in procurement and service delivery, as well as restrictions on customer development and other marketing activities. The COVID-19 pandemic in places where our PRC subsidiaries' customers and suppliers are located may affect the daily business activities of upstream and downstream companies across the new media integrated content marketing value chain, which may in turn affect the implementation of our PRC subsidiaries' marketing projects, causing delays in service delivery and sometimes even the cancellation of offline businesses. From late January 2020 to the middle of April 2020, our PRC subsidiaries' business was moderately impacted by the COVID-19 pandemic, mainly due to a slowdown of the business of their marketer customers, which negatively affected those customers' marketing needs with our PRC subsidiaries. Nonetheless, their operations quickly resumed starting from the second quarter of 2020, and achieved an increase in revenue in 2020 as compared to 2019, which was primarily attributable to: (i) a significant surge in demand for online businesses and new media integrated content marketing services in lieu of offline transactions as a result of lock-downs and social distancing measures that led to a higher demand for our PRC subsidiaries' services in general and (ii) an increase in demand for certain industry verticals, such as games, food, fast-moving consumer goods, and e-commerce, which boosted the demand of marketers in those industries for our PRC subsidiaries' services. During the year ended December 31, 2021 and the nine months ended September 30, 2022, the COVID-19 pandemic did not have a material net impact on our financial positions and operating results.

The extent to which the COVID-19 pandemic may impact our PRC subsidiaries' future financial results will depend on future developments, such as new information on the effectiveness of the mitigation strategies, the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel advisories and restrictions, the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy of COVID-19 vaccines, which may also take extended time to be widely and adequately distributed, all of which remain highly uncertain and unpredictable. Restrictive measures implemented by government authorities may remain in place for a significant period of time and may adversely affect downstream customers' marketing budgets, our PRC subsidiaries' ability to deliver their products and services on time, as well as their market development, especially cross-regional expansion. After the initial outbreak of COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the infections caused by the Omicron variants in early 2022, and varying levels of temporary restrictions and other measures were reinstated to contain the infections, including those in Shanghai in March 2022. Given this uncertainty, our PRC subsidiaries are currently unable to quantify the expected impact of the COVID-19 pandemic on their future operations, financial condition, liquidity, and results of operations if the current situation continues.

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**Results of Operations** 

The following table sets forth our selected consolidated profit or loss data, both in absolute amount and as a percentage of total revenue, for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this prospectus. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
|  | **2020** | **2020** | **2021** | **2021** | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  **Net revenues:** |  |  |  |  |  |  |  |  |  |  |
|  Digital advertising services | 188192 | 53.6% | 106316 | 14946 | 22.6% | 90191 | 28.8% | 42466 | 5970 | 12.5% |
|  New media content marketing services | 162712 | 46.4% | 365130 | 51329 | 77.4% | 222824 | 71.2% | 296864 | 41732 | 87.5% |
|  **Total net revenues** | **350904** | 100.0% | **471446** | **66275** | 100.0% | **313015** | 100.0% | **339330** | **47702** | 100.0% |
|  Cost of revenues | (243546) | -69.4% | (329888) | (46374) | -70.0% | (215919) | -69.0% | (221772) | (31176) | -65.4% |
|  **Gross profit** | **107358** | 30.6% | **141558** | **19900** | 30.0% | **97096** | 31.0% | **117558** | **16526** | 34.6% |
|  Sales and marketing expenses | (4649) | -1.3% | (6984) | (982) | -1.5% | (4906) | -1.6% | (3721) | (523) | -1.1% |
|  General and administrative expenses | (35071) | -10.0% | (59827) | (8410) | -12.7% | (42624) | -13.6% | (53674) | (7545) | -15.8% |
|  Research and development expenses | (7448) | -2.1% | (2926) | (411) | -0.6% | (2190) | -0.7% | (1938) | (272) | -0.6% |
|  Allowance for doubtful debt and inventory | (318) | -0.1% | 5073 | 713 | 1.1% |  | 0.0% | (935) | (132) | -0.2% |
|  **Total operating expenses** | **(47486)** | -13.5% | **(64664)** | **(9090)** | -13.7% | **(49720)** | -15.9% | **(60268)** | **(8472)** | -17.7% |
|  **Operating income** | **59872** | 17.1% | **76894** | **10810** | 16.3% | **47376** | 15.1% | **57290** | **8054** | 16.9% |
|  Other income | 1657 | 0.5% | 4420 | 621 | 0.9% | 4939 | 1.6% | 3781 | 532 | 1.1% |
|  Other expenses | (280) | -0.1% | (993) | (140) | -0.2% | (974) | -0.3% | (1088) | (153) | -0.3% |
|  Interest income | 274 | 0.1% | 264 | 37 | 0.1% | 241 | 0.1% | 160 | 22 | 0.0% |
|  Interest expense | (11707) | -3.3% | (7562) | (1063) | -1.6% | (7309) | -2.3% | (128) | (18) | 0.0% |
|  Government subsidy | 962 | 0.3% | 4204 | 591 | 0.9% | 1083 | 0.3% | 1023 | 144 | 0.3% |
|  Impairment of long-term investment |  | 0.0% |  |  | 0.0% |  | 0.0% | (1628) | (229) | -0.5% |
|  Investment income | (115) | -0.1% | 135 | 19 | 0.1% | 64 | 0.0% | 1619 | 228 | 0.4% |
|  **Income before income taxes** | **50663** | 14.4% | **77362** | **10875** | 16.4% | **45420** | 14.5% | **61029** | **8580** | 18.0% |
|  Income tax expense | (5944) | -1.7% | (8116) | (1141) | -1.8% | (4003) | -1.3% | (8607) | (1210) | -2.5% |
|  **Net Income** | **44719** | 12.7% | **69246** | **9734** | 14.7% | **41417** | 13.2% | **52422** | **7370** | 15.4% |
|  Less: net loss attributable to non-controlling interest | 206 | 0.1% | 8057 | 1133 | 1.7% | 4492 | 1.5% | 5194 | 731 | 1.5% |
|  **Net income attributable to the Company's ordinary shareholders** | **44925** | 12.8% | **77303** | **10867** | 16.4% | **45909** | 14.7% | **57616** | **8101** | 17.0% |

---

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##### [**Table of Contents**](#toc)
***Revenue***

Revenue represented the services provided to customers in our digital advertising services and new media integrated content marketing services. The following table sets forth the breakdown of our revenue by category, both in absolute amount and as a percentage of total revenue for each category for the periods indicated:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year ended December 31,** | **For the Year ended December 31,** | **For the Year ended December 31,** | **For the Year ended December 31,** | **For the Year ended December 31,** | **For the Nine months ended September 30,** | **For the Nine months ended September 30,** | **For the Nine months ended September 30,** | **For the Nine months ended September 30,** | **For the Nine months ended September 30,** |
|  | **2020** | **2020** | **2021** | **2021** | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Digital advertising services | 188192 | 53.6% | 106316 | 14946 | 22.6% | 90191 | 28.8% | 42466 | 5970 | 12.5% |
|  New media content marketing services | 162712 | 46.4% | 365130 | 51329 | 77.4% | 222824 | 71.2% | 296864 | 41732 | 87.5% |
|  **Total** | **350904** | **100.0%** | **471446** | **66275** | **100.0%** | **313015** | **100.0%** | **339330** | **47702** | **100.0%** |

---

Revenue from digital advertising services primarily included revenue from the provision of digital advertising services by us. The revenue is recognized when the related services are delivered based on the specific terms of the contract, which are commonly based on specified actions (such as CPA or other preferences agreed upon with advertisers).

New media integrated content marketing services targeted social networks and applications to spread brand awareness or promote particular products. We provide integrated marketing solutions to customers by utilizing media resources. Market solutions generally include the following: (i) formulation of marketing strategies, (ii) establishment and/or operation of new media accounts as requested and on behalf of the customers, (iii) content production of marketing materials, and (iv) identifying the media resources and organizing the new media integrated content marketing campaigns.

Our net revenue increased by approximately RMB120.5 million, or 34.4%, from approximately RMB350.9 million for the year ended December 31, 2020 to approximately RMB471.4 million (US$66.3 million) for the year ended December 31, 2021. The increase in net revenue was mainly due to the following:

Our digital advertising services revenue accounted for 53.6% and 22.6% of our total revenue for the years ended December 31, 2020 and 2021, respectively. Revenue from digital advertising services decreased by approximately RMB81.9 million, or 43.5%, from RMB188.2 million for the year ended December 31, 2020 to RMB106.3 million (US$14.9 million) for the year ended December 31, 2021. The decrease in revenue from digital advertising services was mainly attributable to our new business strategy to increase the portion of new media integrated content marketing services and contract the digital advertising business.

Our new media integrated content marketing services revenue accounted for 46.4% and 77.4% of our total revenue for the years ended December 31, 2020 and 2021, respectively. Revenue from new media integrated content marketing services increased by approximately RMB202.4 million, or 124.4%, from RMB162.7 million for the year ended December 31, 2020 to RMB365.1 million (US$51.3 million) for the year ended December 31, 2021. The increase in revenue from new media integrated content marketing services was mainly attributable to (i) the acquisition of Hangzhou Xingkong Internet Culture Communication Co., Ltd. ("Hangzhou Xingkong") in November 2020, which contributed approximately RMB99.9 million; and (ii) the establishment of new subsidiaries in several cities in China to operate local new media services, which contributed the remaining.

Our net revenue increased by approximately RMB26.3 million, or 8.4%, from approximately RMB313.0 million for the nine months ended September 30, 2021 to approximately RMB339.3 million (US$47.7 million) for the nine months ended September 30, 2022. The increase in net revenue was mainly due to a decrease in revenue from digital advertising services by approximately RMB47.7 million, or 52.9%, from RMB90.2 million for the nine

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##### [**Table of Contents**](#toc)
months ended September 30, 2021 to RMB42.5 million (US$6.0 million) for the nine months ended September 30, 2022. Our digital advertising services revenue accounted for 28.8% and 12.5% of our total revenue for the nine months ended September 30, 2021 and 2022, respectively.

The decrease in revenue from digital advertising services was mainly attributable to the change of our new business strategy as mentioned above.

Our new media integrated content marketing services revenue accounted for 71.2% and 87.5% of our total revenue for the nine months ended September 30, 2021 and 2022, respectively. Revenue from new media integrated content marketing services increased by approximately RMB74.0 million, or 33.2%, from RMB222.8 million for the nine months ended September 30, 2021 to RMB296.9 million (US$41.7 million) for the nine months ended September 30, 2022. The increase in revenue from new media integrated content marketing services was mainly attributable to the increase in the number of our clients from 579 for the nine months ended September 30, 2021 to 847 for the nine months ended September 30, 2022.

***Cost of Revenue***

The following table sets forth the breakdown of our cost of revenue by category, both in absolute amount and as a percentage of the cost of revenue, for the periods indicated:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
|  | **2020** | **2020** | **2021** | **2021** | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Digital advertising services | 158549 | 65.1% | 91206 | 12821 | 27.6% | 78949 | 36.6% | 33022 | 4642 | 14.9% |
|  New media content marketing services | 84997 | 34.9% | 238682 | 33553 | 72.4% | 136970 | 63.4% | 188750 | 26534 | 85.1% |
|  **Total** | **243546** | **100.0%** | **329888** | **46374** | **100.0%** | **215919** | **100.0%** | **221772** | **31176** | **100.0%** |

---

Cost of revenue consists primarily of (i) staff and welfare costs; (ii) costs of new media integrated content marketing services procured from suppliers and traffic intermediary costs procured from suppliers; (iii) amortization of official accounts; (iv) lease expenses for office space; and (v) taxes and surcharges.

Cost of revenue increased by 35.5% from RMB243.5 million in 2020 to RMB329.9 million (US$46.4 million) in 2021, which was primarily attributable to (i) the increase in staff headcount due to our business expansion in 2021; and (ii) the increase in procured new media integrated content marketing services costs to fulfill our revenue growth in 2021.

Cost of revenue increased by 2.7% from RMB215.9 million for the nine months ended September 30, 2021 to RMB221.7 million (US$31.2 million) for the nine months ended September 30, 2022, which was primarily attributable to the combined impact that: (i) RMB42.6 million decrease in digital advertising services due to the contraction of our digital advertising business, and (ii) RMB48.5 million increase in new media content marketing services to fulfill our revenue growth in new media content marketing business.

***Gross Profit***

As a result of changes in net revenue and cost of revenue, our gross profit increased by RMB34.2 million, or 31.9% from RMB107.4 million for the year ended December 31, 2020 to RMB141.6 million (US$19.9 million) for the year ended December 31, 2021. Our gross profit increased by RMB20.4 million, or 21.0%, from RMB97.1 million for the nine months ended September 30, 2021 to RMB117.6 million (US$16.5 million) for the nine months ended September 30, 2022.

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The following table sets forth a breakdown of gross profit by services offered for the periods indicated:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** |
|  | **2020** | **2021** | **2021** | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** | **RMB** | **RMB** | **US$** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Digital advertising services | 29643 | 15110 | 2124 | 11242 | 9444 | 1328 |
|  New media content marketing services | 77715 | 126448 | 17776 | 85854 | 108114 | 15198 |
|  **Total** | **107358** | **141558** | **19900** | **97096** | **117558** | **16526** |

---

***Operating expenses***

The following table sets forth our operating expenses, both in absolute amount and as a percentage of the total operating expenses, for the periods indicated:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
|  | **2020** | **2020** | **2021** | **2021** | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Sales and marketing expenses | 4649 | 9.8% | 6984 | 982 | 10.8% | 4906 | 9.9% | 3721 | 523 | 6.2% |
|  General and administrative expenses | 35071 | 73.9% | 59827 | 8410 | 92.5% | 42624 | 85.7% | 53674 | 7545 | 89.1% |
|  Research and development expenses | 7448 | 15.7% | 2926 | 411 | 4.5% | 2190 | 4.4% | 1938 | 272 | 3.2% |
|  Allowance/(reversal) for doubtful debt and inventory | 318 | 0.7% | (5073) | (713) | -7.8% |  | 0.0% | 935 | 132 | 1.6% |
|  **Total** | 47486 | 100.0% | 64664 | 9090 | 100.0% | 49720 | 100.0% | 60268 | 8472 | 100.0% |

---

*Sales and marketing expenses* 

Sales and marketing expenses included (i) salaries and benefits of our sales and marketing staff; (ii) advertising fees; and (iii) other expenses, such as transportation expenses and entertainment expenses for our sales office. The sales expenses increased by 50.2% from RMB4.6 million in 2020 to RMB7.0 million (US$1.0 million) in 2021. This increase was primarily attributable to the increase in advertising fees for the promotion activities.

The sales expenses decreased by 24.2% from RMB4.9 million for the nine months ended September 30, 2021 to RMB3.7 million (US$0.5 million) for the nine months ended September 30, 2022. This decrease was primarily attributable to a decrease in advertising fees for cost saving purposes.

The following table sets forth the breakdown of sales expenses, both in absolute amount and as a percentage of the total sales expenses, for the periods indicated:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
|  | **2020** | **2020** | **2021** | **2021** | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Staff salaries and benefits | 4574 | 98.4% | 4967 | 698 | 71.1% | 3618 | 73.7% | 3178 | 447 | 85.4% |
|  Advertising fee | 50 | 1.1% | 994 | 140 | 14.2% | 755 | 15.4% | 213 | 30 | 5.7% |
|  Others | 25 | 0.5% | 1023 | 144 | 14.6% | 533 | 10.9% | 330 | 46 | 8.9% |
|  **Total** | 4649 | 100.0% | 6984 | 982 | 100.0% | 4906 | 100.0% | 3721 | 523 | 100.0% |

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##### [**Table of Contents**](#toc)
*General and administrative expenses* 

General and administrative expenses primarily include research and development expenses and administrative expenses. Administrative expenses include (i) salaries and benefits of our management, finance, operations, and other administrative staff; (ii) professional service fees such as audit fees and legal fees; (iii) rental expense; (iv) depreciation and amortization; (v) office expense; (vi) entertainment fee; (vii) transportation fee and (viii) other expenses. General and administrative expenses increased by 70.6% from RMB35.1 million in 2020 to RMB59.8 million (US$8.4 million) in 2021. This increase was primarily attributable to the increase in our headcount which led to the increase in staff cost and rental and office expense as the result of our business expansion.

General and administrative expenses increased by 25.9% from RMB42.6 million for the nine months ended September 30, 2021 to RMB53.7 million (US$7.5 million) for the nine months ended September 30, 2022. This increase was primarily attributable to (i) RMB3.8 million increase in our staff cost and (ii) RMB3.6 million increase in depreciation and amortization expense related to our leasehold improvement in new offices.

The following table sets forth the breakdown of general and administrative expenses, both in absolute amount and as a percentage of the total general and administrative expenses, for the periods indicated:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
|  | **2020** | **2020** | **2021** | **2021** | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Staff salaries and benefits | 10624 | 30.3% | 20803 | 2924 | 34.8% | 15072 | 35.4% | 18862 | 2652 | 35.1% |
|  Professional service fees | 12129 | 34.6% | 12389 | 1742 | 20.7% | 10865 | 25.5% | 10325 | 1451 | 19.2% |
|  Rental expense | 4226 | 12.0% | 7492 | 1053 | 12.5% | 5396 | 12.7% | 6345 | 892 | 11.8% |
|  Depreciation and amortization expense | 1772 | 5.1% | 6090 | 856 | 10.2% | 2415 | 5.7% | 6035 | 848 | 11.2% |
|  Office expense | 1799 | 5.1% | 6074 | 854 | 10.2% | 3343 | 7.8% | 2920 | 410 | 5.4% |
|  Entertainment fee | 2328 | 6.6% | 3176 | 446 | 5.3% | 2312 | 5.4% | 3388 | 476 | 6.3% |
|  Transportation fee | 715 | 2.0% | 1742 | 245 | 2.9% | 1384 | 3.2% | 1196 | 168 | 2.2% |
|  Others | 1478 | 4.2% | 2061 | 290 | 3.4% | 1837 | 4.3% | 4603 | 648 | 8.6% |
|  **Total** | **35071** | **100.0%** | **59827** | **8410** | **100.0%** | **42624** | **100.0%** | **53674** | **7545** | **100.0%** |

---

*Research and development expenses* 

Research and development expenses include (i) salaries and benefits of our research and development staff; (ii) outsourced development expenses; and (iii) other expenses such as transportation expenses for our research and development office. The research and development expense decreased by 60.7% from RMB7.4 million in 2020 to RMB2.9 million (US$0.4 million) in 2021, primarily because the majority of our research and development projects were completed in 2020.

The research and development expense decreased by 11.5% from RMB2.2 million for the nine months ended September 30, 2021 to RMB1.9 million (US$0.3 million) for the nine months ended September 30, 2022, primarily due to a decrease in outsourced development costs.

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##### [**Table of Contents**](#toc)
The following table sets forth the breakdown of research and development expenses, both in absolute amount and as a percentage of the total research and development expenses, for the periods indicated:

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** |
|  | **2020** | **2020** | **2021** | **2021** | **2021** | **2021** | **2021** | **2022** | **2022** | **2022** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Staff salaries and benefits | 787 | 10.6% | 2405 | 338 | 82.2% | 1673 | 76.4% | 1938 | 272 | 100.0% |
|  Outsourced development cost | 6604 | 88.7% | 513 | 72 | 17.5% | 513 | 23.4% |  |  | 0.0% |
|  Others | 57 | 0.8% | 8 | 1 | 0.3% | 4 | 0.2% |  |  | 0.0% |
|  **Total** | **7448** | **100.0%** | **2926** | **411** | **100.0%** | **2190** | **100.0%** | **1938** | **272** | **100.0%** |

---

Our research and development in 2019 focused primarily on developing products and tools relating to digital advertising technology. In 2020, our research and development focused primarily on developing tools and products for new media marketing management. Our research and development in 2021 mainly focused on software product commercialization, and we developed Xuhang Live Streaming E-commerce Cloud and Xuhang Conference Cloud. In the future, we plan to establish new growth points through the commercialization of software products, and further develop technological services and software covering more business scenarios pertaining to city life, including living, traveling, and entertaining business scenarios. In summary, we currently focus our research and development efforts primarily on our new media integrated content marketing business, along with developing new products and pursuing new markets. As of the date of this prospectus, our research and development investment is relatively small, having a limited impact on our current financial condition—during the year ended December 31, 2019, 2020, and 2021 and the nine months ended September 30, 2022, our research and development expenditure amounted to RMB1.2 million, RMB7.4 million, RMB2.9 million, and RMB1.9 million, respectively. However, to achieve the rapid growth of our business and to establish a technology-driven growth edge for the future, the current research and development environment, equipment, and personnel will not be enough to support our future research and development needs. For a detailed discussion of our future research and development needs, please refer to "Business—Our Growth Strategies—Continue to Invest in Technology Research and Development to Develop and Commercialize New Software Systems and Expand business and Profitability." Based on current market demand, technology development trends, and our actual development needs, we plan to invest approximately 20% of the net proceeds received from this offering in research and development to attract and retain experienced talent and professionals and provide crucial support for the development of our products. Nonetheless, during the implementation of research and development projects, we may encounter uncertainties such as research failures and unmet project expectations. For example, research and development involving new technologies may not result in the expected results, or even fail entirely; a project's economic benefits may not meet expectations if the products developed do not achieve widespread market acceptance; and new research and development expenses and/or depreciation and amortization may also result in a decrease in return on net assets. See "Risk Factors—Risks Relating to Our Business—Our PRC subsidiaries' failure to conduct research and development could render their technologies obsolete and may adversely affect their business, financial condition, and results of operations."

*Allowance/(reversal) for doubtful debt and inventory* 

Reversal for doubtful debt and inventory were RMB5.1 million (US$0.7 million) for the year ended December 31, 2021, as compared to allowance for doubtful debt and inventory of RMB0.3 million for the year ended December 31, 2020, which was mainly attributable to our collection of the bad debts during 2021.

Allowance for doubtful debt and inventory were RMB0.9 million (US$0.1 million) for the nine months ended September 30, 2022, as compared to allowance for doubtful debt and inventory of nil for the nine months ended September 30, 2021, which was mainly attributable to our Company's recognition of bad debts for the nine months ended September 30, 2022.

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***Other income***

Other income increased by 166.7%, from RMB1.7 million for the year ended December 31, 2020 to RMB4.4 million (US$0.7 million) for the year ended December 31, 2021, which was mainly attributable to our one-off additional accessory revenue related to our new media integrated content marketing services customers.

Other income decreased by 23.4%, from RMB4.9 million for the nine months ended September 30, 2021 to RMB3.8 million (US$0.5 million) for the nine months ended September 30, 2022, which was mainly attributable to a decrease in one-off additional accessory revenue related to our new media integrated content marketing services customers.

***Interest expenses***

Interest expenses decreased by 35.4%, from RMB11.7 million for the year ended December 31, 2020 to RMB7.6 million (US$1.1 million) for the year ended December 31, 2021, mainly because part of our loan was converted into shares in 2021, resulting in a decrease in the average loan balance from 2020 to 2021.

Interest expenses decreased by 98.2%, from RMB7.3 million for the nine months ended September 30, 2021 to

RMB0.1 million (US$0.02 million) for the nine months ended September 30, 2022, which was mainly attributable to the conversion of our convertible promissory notes in December, 2021.

***Government subsidy***

Government subsidy increased by 337.0%, from RMB1.0 million for the year ended December 31, 2020 to RMB4.2 million (US$0.6 million) for the year ended December 31, 2021, which was mainly attributable to the amortization of our government grant for the decoration of our new offices.

Government subsidy maintained stable for the nine months ended September 30, 2022 as compared to the same period in 2021.

***Income tax expense***

Income tax provisions were RMB8.1 million (US$1.1 million) for the year ended December 31, 2021, as compared to RMB5.9 million for the year ended December 31, 2020. The increase was primarily attributable to our business expansion in 2021.

Income tax provisions were RMB8.6 million (US$1.2 million) for the nine months ended September 30, 2022, as compared to RMB4.0 million for the nine months ended September 30, 2021. The increase was primarily attributable to our continuous business expansion in 2022.

***Net Income***

As a result of the foregoing, we reported a net income of RMB69.2 million (US$9.7 million) for the year ended December 31, 2021, as compared to RMB44.7 million for the year ended December 31, 2020.

As a result of the foregoing, we reported a net income of RMB52.4 million (US$7.4 million) for the nine months ended September 30, 2022, as compared to RMB41.4 million for the nine months ended September 30, 2021.

**Liquidity and Capital Resources** 

Our primary source of liquidity historically has been cash generated from our business operations, bank loans, equity contributions from our shareholders and borrowings, which have historically been sufficient to meet our working capital and capital expenditure requirements.

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As of December 31, 2020, 2021 and September 30, 2022, our cash and cash equivalents were RMB57.1 million, RMB113.4 million and RMB85.7 million (US$12.1 million), respectively. Our cash and cash equivalents primarily consist of cash on hand and highly liquid investments placed with banks, which are unrestricted to withdrawal and use and have original maturities of less than twelve months.

On February 23, 2021, Xuhang Network obtained a line of credit of RMB20.0 million (US$2.8 million) from Hangzhou Branch of China Merchants Bank Co., Ltd. Through this line of credit, Xuhang Network borrowed a total of RMB7.0 million (US$1.0 million) with a loan period from February 23, 2021 to February 22, 2022. The loan was repaid in advance by Xuhang Network on December 22, 2021. Additionally, China Merchants Bank Co., Ltd. provided another loan of RMB7.0 million (US$1.0 million) to Xuhang Network on December 24, 2021 on the basis of the original credit line, which expired on August 22, 2022. As of the date of this prospectus, the loan has been repaid.

On September 1, 2021, Hangzhou Pusheng Network Technology Co., Ltd., one of our PRC subsidiaries, borrowed RMB5.0 million (US$0.7 million) from Shangtang Branch of Hangzhou United Rural Commercial Bank Co., Ltd., with a maturity date of August 31, 2022. As of the date of this prospectus, the loan has been repaid.

On September 1, 2021, Hangzhou Jinting, one of our PRC subsidiaries, borrowed RMB5.0 million (US$0.7 million) from Shangtang Branch of Hangzhou United Rural Commercial Bank Co., Ltd., with a maturity date of August 31, 2022. This loan has been repaid as of the date of this prospectus.

On July 19, 2022, Beijing Hexian Lianjing Technology Co., Ltd. ("Hexian Lianjing"), one of our PRC subsidiaries, entered into revolving lines of credit in the form of overdraft agreements with Huaxia Bank Beijing Shangdi branch to obtain aggregate maximum loans of up to RMB15.0 million (US$2.1 million). Through these lines of credit, Hexian Lianjing borrowed a total of RMB15.0 million (US$2.1 million) with a loan period from July 19, 2022 to July 8, 2023, with an interest rate of 4.785% per annum. Hexian Lianjing expects to repay such loans upon maturity.

On September 5, 2022, Xuhang Network entered into revolving lines of credit in the form of overdraft agreements with Shangtang Branch of Hangzhou United Rural Commercial Bank Co., Ltd. to obtain aggregate maximum loans of up to RMB10.0 (US$1.4 million). Through these lines of credit, Xuhang Network and its subsidiaries borrowed a total of RMB10.0 million (US$1.4 million) with a loan period from September 5, 2021 to September 1, 2023, with interest rates ranging from 4.70% to 5.20% per annum. Xuhang Network and its subsidiaries expect to repay the loans upon maturity.

We believe that our existing cash and cash equivalents, anticipated cash raised from financings, and anticipated cash flow from operations, together with the net proceeds from this offering, will be sufficient to meet our anticipated cash needs for the next 12 months from the date of this prospectus. We intend to use a portion of the net proceeds from this offering to fund our operations over the next 12 months. See "Use of Proceeds." However, the exact amount of proceeds we use for our operations and expansion plans will depend on the amount of cash generated from our operations and any strategic decisions we may make that could alter our expansion plans and the amount of cash necessary to fund these plans. We may, however, decide to enhance our liquidity position or increase our cash reserve for future investments through additional capital and finance funding. We may need additional cash resources in the future if we experience changes in business conditions or other developments, or if we find and wish to pursue opportunities for investments, acquisitions, capital expenditures, or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

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Our ability to manage our working capital, including receivables and other assets and liabilities and accrued liabilities, may materially affect our financial condition and results of operations.

The following table sets forth our selected consolidated cash flow data for the periods indicated:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** |
|  | **2020** | **2021** | **2021** | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** | **RMB** | **RMB** | **US$** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Net cash (used in) provided by operating activities | (5042) | 38656 | 5434 | (19147) | (2222) | (312) |
|  Net cash used in investing activities | (21412) | (82062) | (11536) | (87932) | (50415) | (7087) |
|  Net cash (used in) provided by financing activities | (5055) | 98907 | 13904 | 105591 | 17718 | 2491 |
|  Effect of exchange rate changes | (230) | 812 | 114 | (632) | 7288 | 1023 |
|  Net (decrease)/increase in cash, cash equivalents and restricted cash | (31739) | 56313 | 7916 | (2120) | (27631) | (3885) |
|  Cash and cash equivalents at the beginning of the year | 88826 | 57087 | 8026 | 57087 | 113400 | 15942 |
|  **Cash and cash equivalents at the end of the year** | 57087 | 113400 | 15942 | 54967 | 85769 | 12057 |

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***Operating Activities***

Net cash used in operating activities for 2020 was RMB5.0 million, which primarily reflected our net profit of RMB44.7 million as mainly adjusted for (i) depreciation and amortization of RMB3.0 million, and (ii) non-cash interest expenses of RMB10.8 million as the interest expense was related to conversion of the convertible promissory notes to the shares of our Company in December 2021. Net income was further adjusted by the changes in working capital. Adjustment for changes in working capital primarily consisted of (i) RMB23.8 million decrease in advance to suppliers as our prepayment for procurement of we-media accounts that mainly occurred in 2018 and 2019 while we continued to use these accounts in 2020, (ii) RMB32.4 million increase in accounts payables, as the result of business expansion and increase in purchases, partially offset by (i) RMB28.8 million increase in account receivables, net as we expanded our business and the revenue increased compared to 2019, (ii) RMB48.9 million increase in other receivables related to our investment deposit, (iii) RMB28.1 million decrease of accrued expenses and other payables attributable to the settlement of our daily operating payables, and (iv) RMB23.5 million increase in other non-current assets as we provided a loan to a third party in 2020.

Net cash provided by operating activities for the year ended December 31, 2021 was RMB38.7 million (US$5.4 million), which primarily reflected our net income of RMB69.2 million (US$9.7 million) as mainly adjusted for (i) depreciation and amortization of RMB2.3 million (US$0.3 million), (ii) RMB5.1 million (US$0.8 million) reversal of bad debt allowance, and (iii) non-cash interest expenses of RMB6.7 million (US$0.9 million) as the interest expenses were related to convertible promissory notes converted into our Ordinary Shares in December 2021. Net income was further adjusted by the changes in working capital. Adjustment for changes in working capital primarily consisted of (i) RMB10.3 million (US$1.4 million) increase in accrued liabilities and other payables attributable to an increase in customer deposit as a result of our business expansion, (ii) RMB9.7 million (US$1.4 million) decrease in amounts due from related parties as we collected the related parties receivables that occurred in 2020, (iii) RMB12.1 million (US$1.7 million) decrease in other non- current assets as we collected part of a loan from a third party, partially offset by (i) RMB38.3 million (US$5.4 million) increase in account receivables, net as our revenue increased by RMB120.5 million from 2020 to 2021, (ii) RMB15.1 million (US$2.1 million) decrease in accounts payables as we settled part of payables related to digital advertising business as a result of contraction in digital advertising business, and (iii) RMB13.7 million (US$1.9 million) increase in other receivables attributable to an increase in project deposit related to our new media business.

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Net cash used in operating activities was RMB5.0 million for the year ended December 31, 2020, changed from RMB38.7 million provided by operating activities for the year ended December 31, 2021, which was primarily due to the RMB24.5 million increase in net income as the result of our business expansion and collection of receivables from related parties in 2021.

Net cash used in operating activities for the nine months ended September 30, 2021 was RMB19.1 million, which primarily reflected our net profit of RMB41.4 million as mainly adjusted for (i) depreciation and amortization of RMB0.7 million, and (ii) non-cash interest expenses of RMB6.7 million as the interest expense was related to the conversion of convertible promissory notes the shares of our Company in December 2021. Net income was further adjusted by the changes in working capital. Adjustment for changes in working capital primarily consisted of RMB12.6 million decrease in other non-current assets as we collected part of a loan from a third party, offset by (i) RMB32.2 million increase in account receivables, net as we expanded our business and the revenue increased compared to 2020, (ii) RMB39.3 million increase in other receivables related to the increase in project deposit related to our new media business, (iii) RMB13.3 million decrease in accounts payables attributable to the settlement of part of payables related to digital advertising business as a result of contraction in digital advertising business, and (iv) RMB8.9 million increase in advance to suppliers attributable to the increase of payment related to our new media content integrated marketing business.

Net cash used in operating activities for the nine months ended September 30, 2022 was RMB2.2 million (US$0.3 million), which primarily reflected our net income of RMB52.4 million (US$7.4 million) as mainly adjusted for depreciation and amortization of RMB6.6 million (US$0.9 million). Net income was further adjusted by the changes in working capital. Adjustment for changes in working capital primarily consisted of (i) RMB9.0 million (US$1.3 million) decrease in other non-current assets as we collected part of a loan from a third party, (ii) RMB11.9 million (US$1.7 million) increase in account payables attributable to the expansion of procurement related to our new media content integrated marketing business, partially offset by (i) RMB65.4 million (US$9.2 million) increase in account receivables due to the increase of our account receivable turnover days as a result of the deteriorating economic conditions in China, and (ii) RMB23.3 million (US$3.2 million) increase in advance to suppliers attributable to the increase of payment for preparing marketing activities related to the fourth quarter shopping season in China.

Net cash used in operating activities decreased by 88.4% from RMB19.1 million for the nine months ended September 30, 2021 to RMB2.2 million for the nine months ended September 30, 2022. This decrease was primarily due to the decrease in the project deposits in other receivables after a number of large projects were completed that required large amounts of deposit payments.

We recorded negative operating cash flows for the nine months ended September 30, 2022, primarily due to an increase in our account receivable turnover days as a result of the deteriorating economic conditions in China. To meet our cash requirements, we intend to decrease our receivable turnover days by establishing a more effective account receivable management policy.

We expect our negative cash flows to turn positive in 2023. The general economic environment in China is expected to recover in 2023 as a result of the easing of COVID-19 prevention and control policies, which may facilitate our collection of accounts receivable from our customers.

***Investing Activities***

Net cash used in investing activities for the year ended December 31, 2020 was RMB21.4 million, mainly attributable to the proceeds from short-term investments of RMB10.0 million and payments for the acquisitions of RMB30.0 million.

Net cash used in investing activities for the year ended December 31, 2021 was RMB82.1 million (US$12.9 million), mainly attributable to the purchase of property and equipment of RMB21.2 million (US$3.0 million) and cash paid for the acquisitions of RMB46.9 million (US$6.6 million).

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Net cash used in investing activities for the nine months ended September 30, 2021 was RMB87.9 million, mainly attributable to (i) the purchase of property and equipment of RMB19.6 million, (ii) the payment for short-term investments of RMB14.3 million, and (iii) payments for the acquisitions of RMB46.9 million.

Net cash used in investing activities for the nine months ended September 30, 2022 was RMB50.4 million (US$7.1 million), mainly attributable to the payment for short-term investment of RMB28.3 million (US$3.9 million) and cash paid for the acquisitions of RMB20.0 million (US$2.8 million).

***Financing Activities***

Net cash used in financing activities for the year ended December 31, 2020 was RMB5.0 million, mainly attributable to proceeds from (i) proceeds from loans in the amount of RMB17.2 million, (ii) cash contribution from minority shareholders in the amount of RMB12.5 million, and (iii) repayment to related parties, net in the amount of RMB34.8 million.

Net cash provided by financing activities for the year ended December 31, 2021 was RMB98.9 million (US$13.9 million), mainly attributable to the proceeds from cash contribution from minority shareholders in the amount of RMB56.9 million (US$8.0 million) and proceeds from related parties, net in the amount of RMB38.5 million (US$5.4 million).

Net cash provided by financing activities for the nine months ended September 30, 2021 was RMB105.6 million, mainly attributable to the proceeds from cash contribution from minority shareholders in the amount of RMB54.1 million and proceeds from related parties, net in the amount of RMB48.0 million.

Net cash provided by financing activities for the nine months ended September 30, 2022 was RMB17.7 million (US$2.5 million), mainly attributable to (i) the proceeds from loans in the amount of RMB8.0 million (US$1.1 million), (ii) the proceeds from cash contribution from minority shareholders in the amount of RMB6.2 million (US$0.9 million), and (iii) the proceeds from related parties, net in the amount of RMB3.6 million (US$0.5 million).

***Capital Expenditures***

For the years ended December 31, 2020 and 2021, we made capital expenditures of RMB5.5 million and RMB21.2 million (US$3.3 million), respectively. In these periods, our capital expenditures were mainly used for (i) procurement of equipment such as office equipment and electronic products, and (ii) addition of leasehold improvements.

For the nine months ended September 30, 2021 and 2022, we made capital expenditures of RMB19.6 million and RMB1.5 million (US$0.2 million), respectively. In these periods, our capital expenditures were mainly used for

(i) procurement of equipment such as office equipment and electronic products, and (ii) addition of leasehold improvements.

We plan to fund our future capital expenditures with our existing cash balance and proceeds from this offering. We will continue to make capital expenditures to meet the expected growth of our business, including for office equipment, intangible assets, and leasehold improvements.

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**Contractual Obligations and Commitments** 

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payment due by period** | **Payment due by period** | **Payment due by period** | **Payment due by period** | **Payment due by period** |
|  | **Total** | **Less<br>than<br>one<br>year** | **One<br>to<br>three<br>years** | **Three<br>to<br>five<br>years** | **More<br>than<br>five<br>years** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
|  Loan | 25000 | 25000 |  |  |  |
|  Operating lease obligations | 12343 | 2242 | 9361 | 740 |  |
|  **Total** | **37343** | **27242** | **9361** | **740** |  |

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***Off Balance Sheet Commitments and Arrangements***

We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us.

**Quantitative and Qualitative Disclosures about Market Risks** 

***Concentration of Credit Risk***

Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We place our cash and cash equivalents with financial institutions with high credit ratings and quality.

We conduct credit evaluations of our customers, and generally do not require collateral or other security from them. We establish an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.

***Liquidity Risk***

Our policy is to regularly monitor our liquidity requirements and our compliance with lending covenants, to ensure that we maintain sufficient reserves of cash and readily realizable marketable securities and adequate committed lines of funding from major financial institutions to meet our liquidity requirements in the short and longer term. See "—Liquidity and Capital Resources" for details.

***Currency Risk***

Our operations are primarily in China. Our reporting currency is denominated in Renminbi. We are exposed to currency risk primarily through sales and purchases which give rise to receivables, payables, and cash balances that are denominated in a currency other than the functional currency of the operations to which the transactions relate. Thus, our revenue and results of operations may be impacted by exchange rate fluctuations between RMB, Hong Kong dollars, and U.S. dollars. We incurred a foreign currency translation gain of RMB0.4 million and a translation loss of RMB0.2 million (US$0.02 million) in the years ended December 31, 2020 and 2021, respectively. We also incurred a foreign currency translation gain of RMB3.0 million and RMB5.2 million (US$0.7 million) in the nine months ended September 30, 2021 and 2022, as a result of changes in the exchange rate.

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***Inflation***

To date, inflation in mainland China and Hong Kong has not materially affected our results of operations. According to the National Bureau of Statistics of China, the consumer price index in mainland China increased by 0.2% and 0.9% year-over-year in December 2020 and 2021, respectively. Although we have not been materially affected by inflation in the past, we may be affected if mainland China experiences higher rates of inflation in the future.

**Critical Accounting Estimates** 

An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.

We prepare our financial statements in conformity with the U.S. GAAP, which requires us to make judgments, estimates, and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences, and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.

The following descriptions of critical accounting policies, judgments, and estimates 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 our selection of critical accounting policies, the judgments and other uncertainties affecting the application of such policies, and the sensitivity of reported results to changes in conditions and assumptions.

The consolidated financial statements include the financial statements of our Company and our subsidiaries for which we or a subsidiary of ours is the primary beneficiary.

***Revenue Recognition***

We have adopted the new revenue standard, ASC 606, Revenue from Contracts with Customers (Topic 606) for all periods presented. Consistent with the criteria of Topic 606, we recognize revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which we expect to receive in exchange for those services. Value-added tax that we collect concurrent with revenue-producing activities is excluded from revenue.

We recognize revenue as it satisfies a performance obligation when its customer obtains control of promised services, in an amount that reflects the consideration that the entity expects to receive in exchange for those services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the services it transfers to the customer.

Once a contract is determined to be within the scope of ASC 606 at contract inception, we review the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. We recognize revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied.

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Our Company is a principal and records revenue on a gross basis, since our Company (a) is primarily responsible for fulfilling the service, (b) has discretion in establishing pricing, and (c) controls the promised service before transferring that service to customers. Otherwise, we record revenue at the net amounts as commissions.

The following is a description of the accounting policy for the principal revenue streams of our Company:

*Digital advertising services* 

Digital advertising services revenue primarily includes revenue from the provision of digital advertising services by the Company. The revenue is recognized when the related services are delivered based on the specific terms of the contract, which are commonly based on specified actions, such as cost per action ("CPA"), cost per mille ("CPM"), cost per click ("CPC") or other preferences agreed upon with advertisers. When entering into contracts with customers, the Company will stipulate the method of measure (such as CPA, CPM or CPC) by defining those units of measure and setting the unit price for type of unit of measure; these terms and conditions are found in the annex of the contract. The unit price of each type of actions is determined through negotiation between the Company and its customers. The Company typically determines the unit price of each type of actions based on the type of marketing product, which distribution channel to be deployed, and the length and timing of advertising campaign. The Company will also consider the prevailing market prices in the industry when providing quotations to its customers.

Revenue is earned at each point in time when the customers' end users execute the agreed upon actions as set forth in the sales contracts, such as a download or installation, or advertisements have reached a mille, or a banner or link has been clicked. The settlement of the fees earned from selling digital advertising services occurs one month following a monthly statement of the services provided has been furnished to and accepted by the clients, at which point the Company will enter revenue recognition journal entries into its accounting system to record the relevant revenue. The monthly statement is calculated based on the unit price of each type of actions, mille or click multiplied by the cumulative number of each type of actions, mille, or click completed in the month. The Company counts the cumulative completion quantity of each type of actions, mille, or click on a monthly basis, and states the cumulative completion quantity of each type of actions and the unit price for the applicable month in the statement. While none of the factors individually are considered presumptive or determinative, because the Company is the primary obligor and is responsible for (i) identifying and contracting with third-party advertisers that the Company views as customers; (ii) identifying media publishers to provide ad inventory (media space) where the Company views the media publishers as suppliers; (iii) establishing the selling prices of CPA, CPM, or CPC pricing model; (iv) performing all billing and collection activities, including retaining credit risk; and (v) bearing sole responsibility for fulfillment of the advertising, the Company acts as the principal of these arrangements and therefore recognizes revenue earned and costs incurred related to these transactions on a gross basis.

*New media integrated content marketing services* 

New media integrated content marketing services target social networks and applications to spread brand awareness or promote certain products. The Company offers a service package comprising of a variety of integrated marketing solutions, including marketing strategy and creativity consulting, writing advertorials, shooting and producing promotional videos/short videos, managing and operating customers' social media accounts or online stores, planning and implementing live e-commerce events, and organizing offline marketing events or public relations activities. Customers may select one or more types of integrated marketing services for the Company to implement based on their respective marketing targets, demand, budgets, and other factors.

The process of the new media integrated content marketing services refers to the following:

(i) The Company signs contracts with customers, which normally are framework contracts with terms typically within
one year; however, in certain circumstances, the terms may be longer, such as two years. According to the framework contracts, the Company is required to carry out marketing activities on a regular or

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irregular basis according to customers' specific requirements. The framework contracts generally stipulate the scope of service, length of contract period, method of measurement including but not limited to fixed price project, and a revenue share from products sales generating through the marketing campaign, or a combination of those all, method of settlement, and the rights and obligations of both parties.

(ii) After signing the contract, the Company usually communicates with the customers on specific requirements and
provides the customers with a specific marketing campaign plan that is expected to be implemented within a certain period of time. The plan is a new media integrated marketing service product package, which includes a variety of services. After the
specific marketing activity plan for the period is confirmed by the customer, the two parties will decide the transaction price, including unit price, quantity (including, but not limited to, the number of articles, short videos or activity
frequency) and the calculation method of service fees for specific marketing activities during the period, through supplementary forms such as annexes to the agreement, purchase order slips or emails.

(iii) The Company provides related services to the customers as agreed upon in the aforementioned subsection (ii),
including but not limited, training of the customers' employees who participate in the new media integrated content marketing campaign, marketing content production, setting up new media accounts, marketing channel procurement, release of new
media marketing content, and monitoring and evaluating the result and effectiveness of the marketing campaigns.

(iv) After provision of all the related services in the period of time specified in the contracts, we send customers
working reports or other acceptable references to confirm whether new media integrated content marketing campaign fulfilled the requirements of the signed contracts.

(v) Revenue derived from the provision of new media integrated content marketing services is recognized at the
point in time when the new media integrated content marketing campaigns are implemented and accepted by customers (all the new media marketing services included in a particular service package have been implemented), according to the terms of the
contracts, and the satisfaction of the performance obligation is measured based on the implementation of new media integrated content marketing services.

We generally ask customers to pay for the services after all the services have been completed and accepted by the customers. Occasionally, we receive partial payment in advance from customers (typically no more than 30%). The advance payment is generally paid after a contract is signed. The remaining balance will be paid after all the services have been completed and accepted by the customers.

We are a principal and record revenue on a gross basis when we are primarily responsible for fulfilling the new media integrated content marketing services. When we purchase ancillary services related to new media integrated content marketing campaigns on behalf of customers, such as purchasing air tickets and hotels for customers, we recognize revenue at the net amount deducted from the purchasing amount as commissions.

We do not provide warranties, refunds, discounts, or rebates. The services provided by us are fully delivered when they have been completed and accepted by the customer (namely, the quality of the services has been approved by the customer). We do not have any after-sales guarantee obligations.

***Accounts Receivable and Allowance for Doubtful Accounts***

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts.

We maintain an allowance for doubtful accounts which reflects our best estimate of amounts that potentially will not be collected. We determine the allowance for doubtful accounts taking into consideration various factors including historical collection experience, the creditworthiness of the debtors, and the age of the individual receivables balance. Additionally, we make specific bad debt provisions based on any specific knowledge we have acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require us to use substantial judgment in assessing its collectability.

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***Operating Leases***

We adopted ASC Topic 842, *Lease* ("ASC 842") on January 1, 2020, using the modified retrospective method. We determine if an arrangement is a lease at inception. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. Our leases do not contain any material residual value guarantees or material restrictive covenants.

We have elected the package of practical expedients, which allows us not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. Lastly, we elected the short-term lease exemption for all contracts with a lease term of 12 months or less.

At the commencement date of a lease, we determine the classification of the lease based on the relevant factors present and record a right-of-use ("ROU") asset and lease liability for operating lease. ROU assets acquired through the lease represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. If the rate implicit in our leases is not readily available, we use an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which we could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancellable term of the lease.

Leases with an initial lease term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term.

***Business combinations and asset acquisitions***

Business combinations are recorded using the acquisition method of accounting. The purchase price of the acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired, and non-controlling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses are expensed as incurred. The consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Transaction costs directly attributable to the acquisition are expensed as incurred.

If investment involves the acquisition of an asset or group of assets that does not meet the definition of a business, the transaction is accounted for as an asset acquisition. An asset acquisition is recorded at cost, which includes capitalized transaction costs, and does not result in the recognition of goodwill. The cost of the acquisition is allocated to the assets acquired on the basis of relative fair values.

Fair value is determined based upon the guidance of ASC Topic 820, Fair Value Measurements and Disclosures, and is generally determined using Level 2 inputs and Level 3 inputs. The determination of fair value involves the use of significant judgment and estimates. We utilize the assistance of a third-party appraiser to determine the fair value as of the date of acquisition.

***Goodwill***

Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. In accordance with ASC Topic 350, Goodwill and Other Intangible Assets ("ASC 350"), recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present.

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In accordance with ASC 350, we assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. As of December 31, 2021 and 2020, our Company as a whole is one reporting unit.

Pursuant to ASC 350, in 2020 and 2021, we evaluated all relevant factors, including macroeconomic conditions, industry and market conditions, and financial performance. We weighed all factors in their entirety and concluded that it was not more-likely-than-not the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary. No impairment loss of goodwill was recognized for the years ended December 31, 2020 and 2021.

***Recently accounting pronouncements***

The Company is an emerging growth company as defined by the JOBS Act, which provides that an emerging growth company can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an emerging growth company to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the extended transition periods. However, this election will not apply should the Company cease to be classified as an emerging growth company.

On December 18, 2019, the FASB issued ASU No. 2019-12, Income taxes (Topic 740), Simplifying the Accounting for Income Taxes. This guidance amends ASC Topic 740 and addresses several aspects including 1) evaluation of step-up tax basis of goodwill when there is not a business combination, 2) policy election to not allocate taxes on a separate entity basis to entities not subject to income tax, 3) accounting for tax law changes or rates during interim periods, 4) ownership changes from equity method investment to subsidiary or vice versa, 5) elimination of exception to intrapetrous allocation when there is gain in discontinued operations and a loss from continuing operations, and 6) treatment of franchise taxes that are partially based on income. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is evaluating the impact of this guidance on its financial statements and related disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's balance sheets, statements of income and statements of cash flows.

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**INDUSTRY** 

*All the information and data presented in this section have been derived from the industry report of Frost & Sullivan commissioned by us in September 2022 entitled "China Digital Marketing Market Study, Independent Market Research Report" (the "Frost & Sullivan Report") unless otherwise noted. Frost & Sullivan has advised us that the statistical and graphical information contained herein is drawn from its database and other sources. The following discussion contains projections for future growth, which may not occur at the rates that are projected or at all.* 

**Overview of China's Integrated Marketing Market** 

***Definition and Classification***

Integrated marketing is a type of marketing activity intended to help brands or enterprises approach and interact with their target customers by unifying all aspects of marketing communication such as advertising, sales promotion campaigns, and public relations events. Typically, integrated marketing is designed to ensure that all messages and communication strategies are consistent across all channels and are centered on the customers. Integrated marketing is implemented by formulating a comprehensive marketing plan, evaluating the strategic roles of a variety of communication channels, and combining them to provide clarity, consistency, and maximum marketing impact. In practice, the strategies of integrated marketing mainly consist of experiential marketing, digital marketing, public relations, and offline marketing. Typically, a company involved in more than one type of marketing service will be classified as an integrated marketing services provider.

Experiential marketing, also known as event marketing, refers to a promotion strategy that involves face-to-face contact and interaction between companies and their customers at special events like conferences, trade shows, seminars, and roundtables. There are many forms of event marketing and each can be catered to address a marketer's specific goals, including introducing new products or services, improving brand awareness, and generating immediate feedback from target customers.

Digital marketing refers to the promotion of products or services through digital channels, such as social media, mobile apps, and websites, including short video marketing, Key Opinions Leader ("KOL") marketing, and social media marketing. These emerging marketing approaches utilize the latest trend to help promote brand awareness and boost sales. Compared with traditional marketing channels, such as newspapers, magazines, and televisions, digital media is so pervasive that consumers have access to advertising information at any fragmented time and at any place. Meanwhile, digital marketing could assist advertisers or their agencies to measure the performance of marketing activities. Lastly, digital advertising serves as a pivotal subset of digital marketing during the process of implementing digital marketing strategies.

Public relations generally refer to the practice of managing the spread of information between an individual or an organization and the public, and the individual or organization may gain exposure to its target audiences through the topics of public interest and new items.

Offline marketing refers to marketing activities that aim to help brand advertisers establish and enhance their brand image as well as promote their products via common marketing channels, such as newspapers, magazines, TV, and out-of-home media.

***Value Chain Analysis***

In general, integrated marketing service providers serve as the intermediaries between advertisers and distribution channels. They serve on behalf of advertisers to liaise with distribution channels and offer a wide spectrum of services and solutions to help advertisers match publishing resources and efficiently implement marketing campaigns to the target audience. Compared to normal marketing service providers, integrated marketing service providers are able to provide a suite of marketing services for advertisers to carry out accurate and efficient campaigns.

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**Value Chain Analysis of the Integrated Marketing Industry**![LOGO](g403554g80a69.jpg)

*Source: Frost & Sullivan Analysis* 

***Market Size of China's Integrated Marketing Market***

For brands or companies, marketing strategy is a long-term and forward-looking approach to planning with the fundamental goal of achieving sustainable competitive advantages. High-quality strategic marketing planning involves the thorough analysis of the company's strategic initial situation prior to the formulation, evaluation, and selection of a market-oriented competitive position that contributes to the brands' goals and marketing objectives. Professional integrated marketing service providers usually draft a specialized marketing and communication plan and utilize direct or indirect media to help the brands or companies create and maintain a positive image and a strong relationship with their target audience. Currently, an increasing number of brands or companies tend to acquire professional integrated marketing services to build positive social reputation and promote products and services.

The market size of the integrated marketing market in China experienced rapid growth at a compound annual growth rate ("CAGR") of 17.8% between 2016 and 2020, increasing from approximately RMB571.7 billion to approximately RMB1,100.5 billion. Integrated marketing plays an increasingly significant role in public perception of a brand by influencing the media and maintaining relationships with stakeholders. Meanwhile, along with the proliferation of the Internet, particularly on mobile terminals, digital marketing has become a preferred choice of many brands and companies. The rapidly growing advertising platforms in each marketing channel have created difficulties for brands to select the most effective advertising platforms and engage them at a low cost. Given integrated marketing service providers' expertise in this field and their ability to negotiate favorable terms with the advertising platforms, brands have started to delegate integrated marketing service providers to select and engage the advertising platforms in different marketing channels on their behalf. Therefore, digitalization is likely to serve as the critical driving force behind the sustainable growth of the integrated marketing market. The market size of the integrated marketing market in China is forecasted to reach approximately RMB1,941.1 billion by 2025, yielding a CAGR of approximately 12.0% between 2020 and 2025.

**Integrated Marketing Services Market Breakdown (China), 2016-2025E** 

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***CAGR*** | ***Total*** | ***Public Relations*** | ***Digital Marketing*** | ***Offline Marketing*** | ***Experiential Marketing*** |
| 2016-2020 | 17.8% | 8.7% | 30.7% | -2.2% | 6.9% |
| 2020-2025E | 12.0% | 6.8% | 15.0% | 0.9% | 4.0% |

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![LOGO](g403554g81m00.jpg)

*Note: The market size refers to the total expenditure of advertisers on integrated marketing services.* 

*Source: Frost & Sullivan Analysis and Estimates* 

Digital marketing plays a critical role in integrated marketing strategies, thereby accounting for the largest proportion, approximately 71.6%, of the total market size in 2020. Meanwhile, digital marketing has shown the greatest growth momentum compared with other types of integrated marketing services, and its market size increased at an impressive CAGR of approximately 30.7% between 2016 and 2020. By 2025, the market size of digital marketing is projected to reach approximately RMB1583.2 billion, yielding a CAGR of approximately 15.0% between 2020 and 2025.

Due to the COVID-19 pandemic, people's living style has changed substantially. Due to the implementation of significant governmental measures intended to control the spread of the virus, including lockdowns, closures, quarantines, and travel bans, in the context of a less dynamic economy where consumers are less willing to spend, the advertisers' budgets have been adversely impacted by the pandemic and decreased significantly since 2020. In general, advertisers have been striving to reach more consumers with diversified distribution channels and less capital investment. Attributable to the convenience of bulk programmatic advertising purchases and the high efficiency of enormous user acquisition and traffic aggregation, integrated marketing plays an essential role in content distribution and consumer attraction. Also, since brands and advertisers are expected to place a strong emphasis on online portals, integrated marketing service providers are able to capture such opportunities through utilizing their competitive edges and comprehensive services to customers.

***Market Driver Analysis***

*Consumption Upgrade Promotes Rising Brand Awareness of Consumers* 

As the economic model gradually transformed into a consumption-driven one, Chinese consumers have shown rising purchasing power and ever-changing consumption needs. In the early stage of economic development, Chinese consumers focused more on the ingredients, price, and value-in-use of products and services. Along with continuous economic development, increasing income levels of consumers, and affluent product supply available in the market, Chinese consumers have extended their focus to the appearance, quality, experience, and brand image of goods and services. In such cases, Chinese consumers have shown increasing consumption demands with the purpose of reflecting their social status, and therefore pay more attention to the brand and concept of the products and services. The consumption upgrade and personalized consumption habits of Chinese consumers contribute to their growing brand awareness and brand loyalty, driving the rising demand for marketing and brand building for companies.

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*Integrated Marketing Industry Evolves More Diverse Tools and Channels* 

Presently, the market economy in China has become more mature, which is characterized by intensified market competition and the entrance to an information explosion era. The increase of Internet and mobile Internet penetration rates and the emergence of diverse mobile devices such as portable watches, and out-of-home televisions in the elevators and buses have largely extended the time consumers spend on media channels. Emerging media channels such as social media, online videos, and out-of-door televisions boost the exposure of the advertisers and target marketing towards different customer segments. In addition, the introduction of diverse marketing tools including KOL marketing, digital marketing, and native advertising have completed and enlarged the strategy and tool profiles of integrated marketing, better meeting various marketing demands of advertisers.

*Technological Innovations Enable Better Integrated Marketing Experiences and Performance* 

With the enlarging base of Internet users and the advance of innovative technologies, more intelligent integrated marketing activities with precise customer targeting and more convenient integrated marketing services, such as programmatic buying which creates real-time and accurate connections between advertisers and media channels have gradually replaced the dominant role of traditional marketing and become a new driver behind the growth of the integrated marketing industry in China. Given the nature of unlimited usage of space and time with mobile devices, big data and AI technologies are able to gather tremendous data and information about customer behaviors and realize targeting integrated marketing based on customer profiles. As a result, integrated marketing services are able to provide more effective marketing results and better marketing experiences, which in turn encourage companies to invest in integrated marketing activities.

***Entry Barriers Analysis***

*Abundant Industry Expertise.* Sophisticated industry know-how and management capability are key success factors for marketing companies. To establish a marketing company requires professional management of various operation processes, including but not limited to designing advertisement or campaign events, organizing marketing activities, and designing integrated branding strategies for the target customer segment on diverse media channels. Abundant industry expertise requires a long period of time to accumulate and this may pose a barrier for the new entrants.

*Client and Media Resources Accumulation. E*asy access to advertisers and marketing channels is critical for integrated marketing companies. Such access is built through years of providing appropriate infrastructure and investments in market know-how, social connection, and customer behavior tracking to establish an integrated and efficient resource network. Existing players have established integrated advertisers and media networks while new entrants, due to the limited capital support, experience, and low bargaining power, are expected to face difficulties in obtaining advertisers and media resources to support their business within a short period of time.

*Application of Marketing Technology.* The ability to adopt or develop advanced technologies serve as the core competency of integrated marketing companies. An experienced integrated marketing service provider with a sizable market share and business scale tends to have more technology establishment covering multiple business types, including CRM systems and public opinion monitoring tools. An experienced market player is likely to provide more financial support to strengthen their R&D and technology development to support and drive their business growth, and such technical capacities are likely to pose barriers for the new entrants.

***Future Trends Analysis***

*Comprehensive Utilization of Multiple Media and Marketing Channels.* With the increasing Internet penetration rate, lower-tiered cities have shown strong demand for social media marketing services, including leisure, cultural and lifestyle aspects. In parallel, local brands and advertisers start to cooperate with new media

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integrated marketing service providers to promote and market their brands through short videos, public accounts, and other channels with high-profile content distribution and enormous user traffic. Besides, due to the long-tailed nature of media resources and continuous diversification of outdoor exposure tools and Internet platforms, publishing channels and media resources are expected to enrich continuously and become more diversified in the future to meet advertisers' demands.

*More Diversified Advertisers.* With the development of the macro-economy and expansion of business entities, an increasing number of Chinese advertisers have shown growing demands for integrated marketing services and the types of advertisers have gradually extended to different business sectors such as finance, healthcare, and entertainment. As traditional industries gradually develop recognition and awareness of brand image management and integrated marketing, the affluence of advertisers is expected to continue to increase. In the long run, integrated marketing service providers will continue to help advertisers to capture the value of their customer base and strengthen their monetization capacities.

*Technology-Enabled Integrated Marketing.* Technology capacity has become the core competency for integrated marketing service providers. Presently, well-established service providers have been striving to offer one-step integral marketing solutions to advertisers. For instance, programmatic buying has become one of the most over-hyped technologies in marketing. Real-time bidding enables more precise targeting by constantly monitoring consumers' real time purchasing behaviors and browsing habits. Big data and cloud computing technologies allow marketing companies to gather a large amount of customer behavior information and establish comprehensive customer profiles for integrated marketing services based on multiple tools and platforms. As more advanced technologies emerge and become prevalent in the market, marketing companies are likely to become more integrated and technology-oriented.

*Performance-Based Marketing solutions.* Technology has radically changed the marketing industry and empowered advertisers to become specific about how they target potential consumers. Advertisers are able to aggregate search data and social media data to paint precise customer profiles. With the increasing Internet penetration rate, both advertisers and integrated marketing service providers are expected to shift their focus from offline to online and the marketing campaigns distributed online have become increasingly performance-oriented. In the future, the prevalence of marketing technologies is projected to further help advertisers to enhance campaign efficiency and effectiveness in order to maximize their return on investment.

***Competitive Landscape Overview***

The integrated marketing market in China is relatively concentrated, since the top five leading companies accounted for more than a 50% market share in 2020. These major companies possess strong capabilities and resources in respect of premium advertising content, traffic conversion, and market influence. Although the integrated marketing market in China is highly competitive, medium-and small-scale participants still have considerable potential to grow and capture demand by proactively leveraging their capabilities and customized marketing solutions in respect of brand building and promotion, creative planning, and project implementation and execution.

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**Ranking for the Integrated Marketing Service Providers (China), 2020**![LOGO](g403554g83l69.jpg)

*Source: Frost & Sullivan Analysis and Estimates* 

**Overview of China's Digital Marketing Market** 

***Market Size of China's Digital Marketing Market***

Promoting Internet technology innovation has become one of the main items on the Chinese government's agenda in recent years. In 2020, the number of Internet users and mobile internet users reached approximately 989.0 million and approximately 985.5 million, respectively. The increasing penetration rates of Internet and mobile Internet lay the foundation for China's digital marketing due to the favorable nature of Internet and mobile internet, including inclusiveness, promptness, and unlimited geographic coverage.

The digital marketing market in China reached approximately RMB788.4 billion in 2020. The market is further expected to grow at a CAGR of approximately 15.0% between 2020 and 2025 to reach a value of approximately RMB1,583.2 billion by 2025. The future growth prospects of the digital marketing market are projected to be high due to the rising population of consumers and the widespread application of digital marketing technologies.

The market size of digital marketing through mobile channels in China was valued at approximately RMB608.0 billion in 2020 and is expected to grow at a CAGR of approximately 18.0% from 2020 to 2025. Mobile marketing is one of the key digital marketing strategies adopted by organizations to promote their products and services. It enables the integration of new, innovative methods of advertisements with the same marketing strategies to increase their impact and approachability in terms of target users.

**Digital Marketing Market Breakdown by Terminal (China), 2016-2025E** 

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| | | | |
|:---|:---|:---|:---|
| ***CAGR*** | ***Total*** | ***Personal Computer*** | ***Mobile*** |
| 2016-2020 | 30.7% | 7.9% | 45.1% |
|  2020-2025E | 15.0% | 1.4% | 18.0% |

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![LOGO](g403554g84m84.jpg)

*Source: Frost & Sullivan Analysis and Estimates* 

There are multiple digital marketing methods provided by integrated marketing service providers to help advertisers to effectively connect with clients and maximize marketing impacts, such as short video marketing, social media marketing, ad inventory purchasing, and KOL marketing. 

Short videos, typically lasting between 15 seconds to a few minutes, have gained popularity rapidly in China, with a multitude of apps emerging in the market that focus on this particular form of content. Short-video content is expected to drastically change the way users consume content. The period of 2018-2020 was the first period when digital marketers in China began taking advantage of short videos for their marketing effort. In 2020, the revenue of the online short video advertising market in China amounted to approximately RMB133.5 billion, and is poised to gain momentum between 2020 and 2025, recording a CAGR of approximately 32.4%. The leading online video platforms have incorporated e-commerce marketing into their video content.

KOL marketing refers to the partnership between a brand and people with expertise on a specific subject to distribute content featuring the brand's products. KOL marketing often occurs on social networks or social video sites. In some cases, the KOL have built their names on popular blogs. In 2020, the KOL digital marketing in China was valued at approximately RMB131.5 billion and it is expected to reach approximately RMB419.5 billion by the end of 2025, with a CAGR of approximately 26.1% between 2020 and 2025. In addition, the decline of celebrity KOLs and the rising power of micro-influencers is one digital marketing trend in China that will have a huge impact on KOL marketing for the next few years.

**Overview of China's We-Media Marketing Market** 

***Market Size of China's We-Media Marketing Market***

Driven by the popularity of top we-media platforms, including Douyin, Kuaishou, WeChat, Weibo, and Xiaohongshu, that increasingly attracted the attention of mobile internet users, marketers have devoted more time and resources to we-media marketing. The market size of the we-media marketing market increased from approximately RMB47.7 billion to approximately RMB242.8 billion with a CAGR of 50.2% between 2016 and 2020. As we-media platforms penetrate more aspects of users' lives, we-media marketing is expected to grow at a CAGR of 20.4% between 2020 and 2025, rising from approximately RMB242.8 billion to RMB776.2 billion.

**We-Media Marketing Market (China), 2016-2025E** 

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| | | |
|:---|:---|:---|
|  ***CAGR*** | 2016-2020 | 2020-2025E |
|  We-Media Marketing Market | 50.2% | 26.2% |

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![LOGO](g403554g85m85.jpg)

**Overview of China's Live Streaming Market** 

***Definition***

Live streaming refers to a type of online streaming media that is simultaneously being recorded and broadcast in real-time. Typically, live-streaming platforms encompass various types, including game live-streaming platforms, social media live-streaming platforms, and sports live-streaming platforms, where users are engaged in a wide spectrum of topics and interact with streamers. Traditionally, live-streaming platforms monetize primarily through a reward-based model, where viewers purchase virtual gifts for streamers who could later exchange virtual assets for money.

***Value Chain Analysis***

The participants in the upstream consist of various types of content providers, including retailers, brands, and other content copyright owners. In the midstream, the live-streaming platforms, which allow streamers to interact with viewers, are responsible for the platforms' operation, management, and traffic attraction. There are diversified live-streaming platforms, namely entertainment live-streaming platforms, long video and short video live-streaming platforms, game live-streaming platforms, sports live-streaming platforms, and education live-streaming platforms. In the downstream, content providers cooperate with KOLs, celebrities, and live-streaming platforms to reach out to their target viewers. In addition, there are other third-party service providers engaged through the whole value chain, covering from technological support to payment solutions to operation management.

***Market Size of China's Live Streaming Market***

In the past few years, China's live-streaming market grew rapidly with a CAGR of 61.7%, increasing from approximately RMB25.2 billion in 2016 to approximately RMB174.5 billion in 2020, attributable to the substantial growth of the Internet users with increasing willingness to pay and gradually matured monetization models during the period. By 2025, the live-streaming market in China is expected to reach approximately RMB569.3 billion at a CAGR of 26.7% between 2020 and 2025.

***Market Driver Analysis***

*Consumption Demand for Diversified Entertainment Products and Services.* With the robust economic growth in China over time, the increase in disposable income of residents has facilitated the consumption need in the

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culture and entertainment field. People are more willing to pay for entertainment products. The per capita annual consumption expenditure on education, culture, and entertainment increased from approximately RMB2,847 to RMB3,322 at a CAGR of 3.9% between 2017 and 2021. Nowadays, people care more about their spiritual entertainment activities, whether through user contributions for the pleasure of live interaction or a high willingness to purchase live streaming items recommended by streamers, demonstrating the enormous potential for traffic monetization in the live streaming market. Therefore, spiritual entertainment activities have become a key driving force behind the market's expansion.

*Better Experiences Enabled by Technological Innovation.* With the development of communication technologies, the live-streaming industry has benefited a lot from technological innovation in terms of reducing the cost of traffic and content distribution networks. For instance, live-streaming platforms adopted technological innovation applications such as PCDN, narrow-band High Definition, and High-Efficiency Video Coding (H.265), continuously to enhance viewing experience and interaction. On the other hand, the live-streaming industry has been more convenient and intelligent for streamers under the waves of technological innovation as well as reducing the threshold of live-streaming, which brings a boom in user generated content production.

*The Rise of Diversified Live-streaming Content.* Taking advantage of short-video applications and platforms, the live-streaming market, which originates from the gaming industry, has proactively expanded its business scope to include e-commerce, social media, and other pan-entertainment fields in order to gain market presence. The emergence of diversified live-streaming applications and platforms has driven the prosperity and development of the whole industry. On the other hand, customer experiences have become a critical factor for platforms to retain and gain new viewers. As the platforms' focus shifts to customer experiences, diversified content helps enhance viewers' experiences and improve monetization capability.

***Future Trends analysis***

*Application of 5G Technology.* As one of the main application areas of 5G technology, the live streaming market will be significantly benefited and boosted by 5G technology innovation. 5G's ultra-high definition ("UHD") technology brings low latency and high broadband to the live streaming industry. UHD technology will eliminate lag and enhance picture quality during live streaming, which will improve user experiences and enhance user retention rate. Along with the maturity and popularity of VR, the development of the Internet of Things ("IoT"), AI, and other in-depth applications in the field of live streaming, platforms are able to diversify revenue streams. Moreover, the upgrade of live streaming technology will, to a certain extent, promote the continuous development of the industry, and will also redefine the content production methods and forms.

*Diverse Content and Monetization Methods.* The live streaming market in China gradually matures and diversifies, enriching the content and monetization methods of the market players. Attributable to the strong marketing functions and huge traffic influence of live streaming, various industries start to explore new business models combined with live streaming and these industries are presenting great synergy, including but not limited to e-commerce, social media, and audio and live broadcast. Taking the real-time connection function, for example, potential customers through live streaming e-commerce are able to get answers to post questions and gain a more comprehensive impression of the products, making promotional activities more convincing and effective. In addition, live streaming has gradually been embraced by mainstream media in China and is playing a positive role in solving social problems.

*Intensified Competition for Existing Viewers.* In the foreseeable future, live-streaming platforms might witness the stagnant growth of new viewers and the increasingly fierce competition in the market. Live-streaming platforms take methods to attract more viewers by focusing on streamer resources, platform features, and original content, which are all essential factors to survive the fast-growing live-streaming market. Therefore, it is important for live-streaming platforms to enhance their differentiated strategies to increase user activity, while actively exploring new opportunities to catch up with the evolving live streaming industry. Various live streaming platforms began to explore and broaden the industry both horizontally and vertically. Platforms continue to develop new business models to improve user retention rates, such as synergizing live-streaming with e-commerce, live-streaming with social media, and live-streaming with audio to maintain long-term loyalty between platforms and viewers.

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**BUSINESS** 

**Overview** 

We are a holding company incorporated in the Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own, we conduct all of our operations primarily through our PRC subsidiaries.

Our PRC subsidiaries are content-driven marketing service providers that offer a package of integrated marketing solutions across a broad range of distribution channels with a primary focus on new media content marketing. Leveraging our PRC subsidiaries' expertise in content production and operation, extensive distribution channels, and cross-platform new media account base, our PRC subsidiaries aim to provide customers with efficient and effective integrated marketing solutions that address their marketing needs in the context of the new media era. Customers utilize our PRC subsidiaries' marketing services to achieve their branding and marketing goals across multiple channels with a primary focus on we-media platforms such as WeChat official accounts, Weibo, Xiaohongshu, Toutiao, Douyin, Kuaishou, and Baidu Baijiahao. As of October 31, 2022, our PRC subsidiaries had delivered short videos and advertorials that generated over 156 billion views in total; our PRC subsidiaries' new media account base comprised 524 self-operated accounts and 491 cooperative accounts, which collectively reached approximately 207 million Internet followers. Customers of our PRC subsidiaries include large Internet platform companies and small- to medium-sized local businesses in all segments of urban life, including catering, entertainment, and travel. As of December 31, 2020 and 2021 and September 30, 2022, our PRC subsidiaries had a marketer base of 656, 810, and 867, respectively.

Currently, our PRC subsidiaries provide two categories of marketing services: (i) new media integrated content marketing services, which rely on creating and distributing relevant, engaging, and valuable content in order to attract and retain audiences to promote brands and selling products and services, and (ii) digital advertising services, which emphasize the need to choose better-matched ad distribution channels with the target audience to maximize marketing effectiveness.

Our PRC subsidiaries started their business in 2014 with digital advertising services, where they help marketers—typically app developers and operators and advertising agents thereof—optimize their marketing efforts by identifying, engaging, and activating target audiences for user acquisition. Our PRC subsidiaries publish advertisements for their customers' products or services via their digital advertising channels, which consist primarily of Xuhang SDK-embedded Apps. With their analysis and optimization capabilities in advertisement placement, their industry expertise, and the distribution channel resources they have accumulated over the years, our PRC subsidiaries are able to provide customers with effective digital advertising services through better matching the products to be advertised with suitable distribution channels.

Since 2017, our PRC subsidiaries have launched and expanded their new media integrated content marketing services that address the growing demands of marketers for social, entertaining, and trendy marketing content in the new media area. Specifically, our PRC subsidiaries' new media integrated content marketing services are mainly composed of two models—the S2B model and the S2P model. For the S2B business, our PRC subsidiaries provide customers with a package of new media integrated content marketing service solutions—specifically, our PRC subsidiaries (i) provide creative marketing services to merchants and brands by producing entertaining and trendy marketing content, such as promotional short videos and advertorials, and publishing them via their self-operated and cooperative we-media accounts; (ii) plan, organize, and implement live streaming events on behalf of marketers, such as e-commerce merchants and local businesses, for promoting their products or services on high-profile live streaming platforms, or provide them with new media live broadcast training services; and (iii) organize online and offline marketing activities for large brands, business centers, commercial complexes, and tourist attractions, based on their needs for an "online-offline-linkage" marketing strategy. In addition, to supplement their new media integrated content marketing services, our PRC subsidiaries have recently developed affiliated businesses, which currently account for a small percentage of their

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total revenue, but are expected to drive their future growth. Specifically, our PRC subsidiaries (a) license self-developed software products and services to third-party business, and (b) cooperate with cultural institutions, including museums and tourist attractions, such as Daming Palace National Heritage Park and Huashan Scenic Area, to help them issue, promote, and sell IP-related digital products that are becoming increasingly popular among young people on platforms such as Ali Auction, NetEase Planet, and Xinhua Shucang.

With respect to the S2P business, our PRC subsidiaries provide online traffic services to large Internet media platforms by generating or directing user traffic to those media platforms through editing and producing captivating short videos from authorized TV dramas, movies, and variety shows and posting such short videos on high-profile media platforms, such as Toutiao, Douyin, Xigua Video, Baidu Baijiahao, Kuaishou, Youku, Tencent Video, and iQIYI. As of September 30, 2022, our PRC subsidiaries had an in-house new media content production and operation team consisting of 185 employees, including senior media professionals, senior marketers, or people with professional backgrounds in design, journalism, and writing. This strong content team enables our PRC subsidiaries to consistently produce creative, entertaining, and interactive marketing content. With their in-depth industry insight and strong content production capabilities, our PRC subsidiaries provide a package of multi-channel marketing solutions that address their customers' different marketing needs. We believe that, with their extensive distribution channels and marketing methods, our PRC subsidiaries can maximize marketing effectiveness for their customers within their marketing budgets.

Our PRC subsidiaries' business has experienced rapid growth since their inception. For the years ended December 31, 2020 and 2021 and September 30, 2022, we had total revenue of RMB350.9 million, RMB471.4 million (US$66.3 million), and RMB339.3 million (US$47.7 million), respectively, and net income of RMB44.7 million, RMB69.2 million (US$9.7 million), and RMB52.4 million (US$7.4 million), respectively. Revenue derived from new media integrated content marketing services accounted for approximately 46.4%, 77.4%, and 87.5% of our total revenue for those years and period, respectively. Revenue derived from digital advertising services accounted for approximately 53.6%, 22.6%, and 12.5% of our total revenue for those years and period, respectively. For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, our cost of revenue was RMB243.5 million, RMB329.9 million (US$46.4 million), and RMB221.2 million (US$31.1 million), respectively.

**Our Competitive Strengths** 

We believe the following competitive strengths are essential for our PRC subsidiaries' success and differentiate them from their competitors:

***Content-Driven New Media Integrated Marketing Enabled by Our PRC Subsidiaries' Expertise in Advertising Idea Creation and Content Production***

Our PRC subsidiaries are early movers focusing on content marketing by leveraging the increasing popularity of we-media platforms. They understand that Internet technology and content are changing the marketing industry and everyone involved in it. As content marketing has become a widely established practice, consumers expect to obtain fun, entertaining, and even educational and interactive content from advertising and have become accustomed to such standards set by the most innovative marketing campaigns.

In contrast to traditional media, which relies heavily on channels, new media integrated content marketing focuses primarily on content that appeals to the target audience. In the era of new media, anyone can produce and disseminate content. While abstract and tedious content may be valuable from a professional perspective, content that is friendly, interesting, and eye-catching is more likely to be loved by the public and gain significant Internet traffic.

Since 2017, we have been researching consumer behavior and preferences, thus gathering an in-depth understanding of market trends, and have built an experienced team to meet customers' constantly changing

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needs. Compared with their competitors, our PRC subsidiaries are better equipped to develop a marketing strategy that targets end consumers while offering attractive, customized marketing solutions that maximize marketing returns. As of September 30, 2022, our PRC subsidiaries had 185 employees in their in-house new media content production and operation team, which consisted of senior media people, senior marketers, and professionals in design, journalism, and writing. Their team's size and diversity allow them to produce professional, intriguing, and approachable content and marketing ideas. Currently, our PRC subsidiaries are capable of producing 160,966 short videos and 188 advertisements per month. Their expertise in content production sets them apart from their competitors.

Our PRC subsidiaries provide creative marketing services for merchants and brands, and produce entertaining and fashionable marketing content, including advertorials, short videos, and other marketing materials. As of October 31, 2022, they have produced over 19,310 advertorials and over 4,329,144 short videos, which have been published through over 14 content distribution platforms. Our PRC subsidiaries also provide online traffic services to Internet media platforms by generating or directing user traffic to those media platforms through editing and producing captivating short videos from authorized TV dramas, movies, and variety shows, and posting such short videos on high-profile media platforms, such as Douyin, Toutiao, Xigua Video, Baidu Baijiahao, Youku, and Tencent Video. Customers we serve include ByteDance (Toutiao, Xigua Video, Douyin), Alibaba (UC and Youku), Tencent (Tencent Video and WeChat Official Account), Baidu (Haokan Video and Quanmin Video); Bilibili, Kuaishou, NetEase, and iQIYI. As of October 31, 2022, our PRC subsidiaries are capable of producing 5,365 short videos each day, and have produced more than 4,329,144 short videos in total since their incorporation, generating over 155.56 billion views in total.

***Capability of Offering a Package of Integrated Marketing Solutions of Various Forms***

Integrated marketing refers to the marketing activities that help brands or enterprises reach and interact with their target customers through multiple marketing methods and marketing channels. A typical integrated marketing strategy includes digital marketing, content promotion, live streaming events, public relations, and offline event marketing.

Our PRC subsidiaries are committed to providing customers with a package of integrated marketing solutions through multiple marketing channels and in different forms. They have therefore attracted customers with a variety of needs by enabling them to select the most appropriate and effective marketing methods. With their diverse marketing services—including creative marketing planning consultation, writing advertorials, producing promotional videos, operating social media accounts, implementing live streaming sales, and organizing offline marketing activities—our PRC subsidiaries help marketers reach their target audiences and maximize their return on marketing investment. For example, our PRC subsidiaries offer digital advertising services for Alibaba's Taobao App to help customers better identify the App so as to attract and engage target audiences. Furthermore, their new media integrated content marketing capabilities enable them to provide short video content operation services for Alibaba's Youku Video and UC browser. Specifically, our PRC subsidiaries help Youku Video and UC browser increase online views and attract and retain new users through editing, producing, and posting captivating short videos on high-profile media platforms and thereby directing large user traffic therefrom to their customers. Additionally, our PRC subsidiaries also provide new media advertising and offline activity services based on an "online-offline-linkage" marketing strategy for Taobao, Tmall's "618," "Double 11," "Double 12," and other promotional campaigns.

With their multi-channel marketing solutions that address different marketing needs, we believe our PRC subsidiaries can maximize marketing effectiveness for their customers within their marketing budgets. We expect our PRC subsidiaries' integrated marketing solutions strategy to increase the stability of their client base and sustain their growth in the future.

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***Diverse Network of We-Media Accounts with Hundreds of Millions of Followers***

Our PRC subsidiaries' high-quality and diverse network of we-media accounts, including self-operated and cooperative we-media accounts, is crucial to their business. See "*—Ad Distribution Channels—Distribution Through We-Media Publishers/Accounts*." Our PRC subsidiaries have a diverse network of we-media accounts across multiple we-media platforms, which primarily cater to new media formats and are rapidly gaining popularity and user base in China. As of October 31, 2022, our PRC subsidiaries operated over 1010 new media accounts, representing online traffic of approximately 207 million Internet followers—specifically, approximately 70.97 million followers from Toutiao, approximately 61.90 million followers from Douyin, approximately 40.35 million from Baidu Baijiahao, approximately 20.54 million from Kuaishou, approximately 7.96 million from WeChat public accounts, approximately 5.21 million followers from other Internet media and e-commerce platforms (including Dayu (大鱼号), Bilibili(哔哩哔哩), and Qi'e Hao (企鹅号). We believe that our PRC subsidiaries' ability to operate these next-generation we-media accounts will benefit them in their business expansion in the future.

***Full Stack Technology Solutions for New Media Businesses***

We provide full-stack technology solutions with an experienced IT R&D team. Our self-developed technologies are based on low-code and user-experience-driven development, where we apply well-designed user interface components and data processing techniques to improve development efficiency and platform stability. We have developed software to support different lines of business for our PRC subsidiaries, including the live streaming broadcast, conference hosting, and local life live broadcast. Meanwhile, our PRC subsidiaries have licensed self-developed software products and services to third-party businesses.

***Business Expansion Mode Through Cooperation with Local State-Owned Enterprises***

In order to (i) fully utilize our expertise in digital marketing, (ii) cater to the growing demand for digital marketing in traditional industries due to the COVID-19 pandemic, and (iii) capitalize on local governments' desire to promote local economic growth through digital marketing, our PRC subsidiaries launched the Star Project in 2020, a key business initiative to further develop our new media integrated content marketing business in the local and regional markets of first- and second-tier cities in China. Specifically, Xuhang Network, one of our PRC subsidiaries, has been seeking cooperation with local governments or state-owned enterprises through the establishment of joint ventures (the "Project Companies"), in which Xuhang Network is responsible for day-to-day operations, local governments provide financial support, business referrals, business premises, and tax benefits, and both parties are entitled to share profits based on their equity interests in the Project Companies. The established Project Companies are partially owned by Xuhang Network, and thus are also our subsidiaries in the PRC. In a typical cooperation agreement entered into between Xuhang Network and a local government, Xuhang Network is required to manage a Project Company's day-to-day operations to achieve predetermined revenue and profit targets and to provide new media marketing services and other related services to serve local merchants and communities, while the local government is required to (i) designate a state-owned enterprise to provide initial capital contributions to the Project Company in exchange for an equity interest therein; (ii) provide business support and referrals of local customers through coordination of local customer and media resources including related state-owned enterprises and local media organizations, and prioritizing the purchase of Project Company services when comparable services are available; (iii) provide office space with rent subsidies for the Project Company, usually 100% rent subsidies for the first three years and 50% rent subsidies for the following two years, depending on specific local policies; (iv) offer applicable tax deductions or benefits, such as a 100% tax exemption of local taxes for the first three years followed by a 50% exemption for the next two years, depending on local tax policies; and (v) provide subsidies for talent recruitment as well as other support, pursuant to favorable policies, to facilitate Xuhang Network's growth and expansion in local markets. Generally, the cooperation agreements have a term of up to five years and are renewable upon mutual consent of the parties. The agreements may be terminated upon certain default events by either party. Additionally, some of the agreements allow early termination by the local government partners upon certain conditions, such as Xuhang

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Network's failure to meet the profit guarantee clause. The cooperation agreements typically do not contain terms of revenue-sharing arrangements. Rather, the parties to the cooperation agreements are entitled to the distribution of profits of the Project Companies based on their respective equity interests. In some cooperation agreements, local governments are promised a profit guarantee for a prescribed period of time. Through referrals of local customer resources by local governments, coupled with Xuhang Network' expertise in content production and marketing services, the Project Companies are able to rapidly expand their business by gaining corporate orders to serve local cultural and tourist attractions, commercial complexes, and local brands or merchants. In addition to achieving rapid market expansion and customer acquisition, the Project Companies help improve urban consumption and industrial digitalization while serving the local economy. The referred local corporate customers typically operate in traditional industries and lack marketing experience suitable for the Internet era. Leveraging their expertise in new media integrated content marketing, the Project Companies help such local companies in traditional industries to promote their brand, increase sales, and achieve operating efficiencies. Meanwhile, the Project Companies help local governments create new IPs with respect to culture, tourism, and sports to promote their cities' identity and improve their reputation and visibility in China. To date, Xuhang Network has established nine Project Companies in several Chinese cities, including Shanghai, Nanjing, Qingdao, Chengdu, Wuhan, Wuxi, Linyi, and Huangshan. For the year ended December 31, 2021 and the nine months ended September 30, 2022, Xuhang Network served 63 and 82 customers through the joint venture companies established under the Star Project, which represented 7.8% and 9.5% of our total customers, respectively. For the year ended December 31, 2021 and the nine months ended September 30, 2022, Xuhang Network generated RMB16.6 million and RMB17.1 million in revenue under the Star Project, which represented 3.5% and 5.0% of our total revenue in those periods, respectively. For the year ended December 31, 2021 and the nine months ended September 30, 2022, Xuhang Network served eight and nine customers that were introduced through government referrals, which represented 0.1% and 0.1% of our total customers, respectively. For the year ended December 31, 2021 and the nine months ended September 30, 2022, Xuhang Network generated RMB0.3 million and RMB0.3 million in revenue from customers introduced through government referrals, which accounted for 0.1% and 0.1% of our total revenue in those periods, respectively. Due to the relatively low percentage of revenue generated from the Star Project and the relatively low number of customers introduced through government referrals, the Star Project did not have a material impact on our PRC subsidiaries' operations and financial results for the year ended December 31, 2021 and the nine months ended September 30, 2022. Our PRC subsidiaries plan to continue expanding their business through the Star Project in the future.

***Solid Marketer Base Spanning a Wide Range of Industries***

Our PRC subsidiaries' marketer base grew substantially during 2020 and 2021. The number of marketers our PRC subsidiaries served grew from 656 in 2020 to 810 in 2021, and to 867 as of September 30, 2022. Our PRC subsidiaries' marketer base includes media platforms and corporate clients. The industries of our PRC subsidiaries' marketer base vary from e-commerce, commercial complex, retailing, catering, and online media platforms, to tourism, leisure and entertainment, and games apps, including well-known brands such as Alibaba, Intime City, 3M, Walmart, Starbucks, KFC, ByteDance, Huawei, China Construction Bank, and Shanghai Tower.

We believe our PRC subsidiaries' broad and diverse marketer base helps them compete with other service providers. Our PRC subsidiaries' relationships with marketers of a broad industry spectrum also enable them to understand the demands and requirements of the marketers and communicate with their marketers in an accurate and efficient manner, which serves as their primary source to stay informed of the trends and evolutions of the new media integrated content marketing industry.

We believe our PRC subsidiaries' relationships with their marketers help them build a reputation of quality services featuring creative advertising ideas and appealing content production via new media, which helps attract and secure potential marketers, thus forming a virtuous cycle for our PRC subsidiaries' growth. As our PRC subsidiaries continue to build and optimize their marketer base, we are confident that they will be seen by merchants as a desirable place for marketers who look for digital marketing of their products and services and a valuable source and channel to drive consumer demand, increase sales, and achieve operating efficiencies.

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***Visionary and Experienced Management and Business Teams with Strong Technical and Operational Expertise***

Our success is attributable to the deep industry experience and proven execution track record of our senior management and business teams, with global perspectives and insightful knowledge of the Internet and media industries. Mr. Tianhang Xiao, our founder and Chairman of the Board of Directors with over 12 years of experience in media marketing and digital advertising, served as a senior product manager at Hangzhou Sky Network Technologies Co., Ltd., and co-founded Hangzhou Zhenqu Network Technology Co., Ltd., a company specializing in mobile advertisement placement and game services. With deep connections and extensive experience in the field of mobile Internet operations, Mr. Xiao spearheaded our growth with his valuable insight in corporate internal control and high-level strategizing and business planning.

Members of the business teams have extensive and complementary experiences in a wide range of fields, covering Internet technology, media, and digital marketing. Mr. Congcong Wei, the head of the new media S2B business sector of Xuhang Network, has more than 11 years of advertising and marketing experience. As an entrepreneur in the we-media industry, Mr. Wei excels at content production, traffic management, and brand marketing on platforms such as Weibo, Douyin, and WeChat. Mr. Yang Yang, the head of the new media S2P business sector of Jiangxi Ku'o, has more than 10 years of experience in advertising and marketing. As one of the high-quality content creators on multiple well-known We-media platforms, Mr. Yang is skilled at creating and operating short video content, and well versed in monetization and operation of online traffic. Ms. Lilian Liu, the head of the new-media and conference services of Hangzhou Jinting, has 15 years of experience in media and conference services and is an expert In the Internet media Industry and conference management. Mr. Xiaowen Wang, the head of the technology center of Xuhang Network, has more than 20 years of experience in product architecture and R&D management and he is an all-around management expert with a technical background as well as expertise in user experience, product management, and business operations. We rely on our visionary, experienced, and passionate senior management team to drive our business growth. Under the leadership of the management, our PRC subsidiaries have successfully identified and capitalized on the opportunities for growth in the digital advertising and new media industries.

**Our Growth Strategies** 

Our PRC subsidiaries intend to develop their business and strengthen brand loyalty by implementing the following strategies:

***Further Expand Our PRC Subsidiaries' Business Scale and Secure New Marketers***

The integrated marketing industry in China is evolving rapidly. According to the Frost & Sullivan Report, the market size of the integrated marketing industry in China has increased from approximately RMB571.7 billion in 2016 to approximately RMB1,255.8 billion in 2021, representing a CAGR of approximately 14.01%, and it is expected to further increase to approximately RMB1,941.1 billion in 2025, with a CAGR of approximately 9.10%. See "Industry—Overview of China's Integrated Marketing Market." We believe the growth of the digital advertising market will fuel the need for new media content marketing and digital advertising services, as marketers seek to optimize their digital marketing strategies, which will create an enormous opportunity for digital advertising service providers like our PRC subsidiaries.

To capture the potential growth of the digital advertising service market, our PRC subsidiaries will continue to actively endeavor to attract new marketers to plan and implement their integrated marketing and digital advertising campaigns and seek to increase the advertising spend of their existing marketers. Our PRC subsidiaries will also seek to include more high-profile and sizeable marketers from various industries. We believe this will reinforce our PRC subsidiaries' reputation as reliable digital advertising service providers in different industries, which we believe would extend their reach to marketers in those industries. In particular, our PRC subsidiaries have conducted a variety of sales and marketing activities, such as increasing their social media presence and attending industry conferences and business development activities. In addition, they have

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collaborated with local government partners for business referrals and market expansion opportunities, by launching the Star Project in 2020, a key business initiative to further develop their new media creative marketing business in the local and regional markets of first- and second-tier cities in China. See "—Our Competitive Strengths—Business Expansion Mode Through Cooperation with Local State-Owned Enterprises." We believe that such strategies have contributed to our PRC subsidiaries' significant revenue growth in 2020 and 2021, and will continue to do so in the future.

***Continue to Invest in Technology Research and Development to Develop and Commercialize New Software Systems and Expand Business and Profitability***

Our PRC subsidiaries' continuous investment in technology research and development supports the rapid growth of the business and establishes a technology-driven growth edge for the future. Our PRC subsidiaries are developing software products for related industries and will establish new growth points through the commercialization of software products in the future. Research and development in the future will focus on the following areas:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Software product commercialization. Our PRC subsidiaries will (i) continue to develop software products for
related industries, including Xuhang Live Streaming E-commerce Cloud and Xuhang Conference Cloud, while optimizing technology solutions, integrating upstream and downstream services, and improving the one-stop user experience; and (ii) promote and
commercialize software products and establish an operation team and a customer growth team to ensure business growth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• New business expansion. Our PRC subsidiaries will further develop technological services and software covering
more businesses pertaining to city life, traveling, and entertaining businesses, including developing applications that provide living solutions for intelligent communities and intelligent hotels, and metaverse city businesses. Intelligent
communities are a new form of community governance that integrates a wide range of resources within the community through leveraging big data, cloud computing, artificial intelligence, and other information technologies, and intelligent hotels
utilize big data, the IoT, voice artificial intelligence, augmented reality, and other technologies to achieve hotel digitalization and intelligence, enhance customer interaction, and enhance hotel management and service levels. As to metaverse city
businesses, we will further develop an immersive virtual world that enhances the interaction between consumers and merchants in different business districts by leveraging modeling, augmented reality, and other technologies. Our PRC subsidiaries
expect to expand their technology team. If and when the technology team is capable of independently taking on business from customers and meeting their specific needs, our PRC subsidiaries expect to create special business and operation teams for
further expansion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Developing an advanced data system and improving the data team*. Our PRC subsidiaries will (i) build a
database to screen potential merchant customers and conduct consumer portraits, as well as build membership systems for both merchants and consumers; and (ii) develop a data-driven intelligent business engine to achieve business intelligence
and automation (*e.g.*, supplier and project scoring systems and customer dimension analysis system) to optimize related industry services.

***Further Expand We-media Resources***

To strengthen their capabilities in providing high-quality new media integrated content marketing services, our PRC subsidiaries plan to expand and diversify their we-media account base by establishing more we-media accounts on various platforms and developing specific-interest we-media resources, such as multiple we-media accounts focusing on more trendy topics, including food, entertainment, and cultural tourism. Meanwhile, by leveraging their advantages in content production and operation, our PRC subsidiaries plan to continue to create engaging and interesting content to grow the follower base for their existing and prospective we-media accounts. Further, our PRC subsidiaries plan to increase collaboration with popular third-party we-media publishers to direct their user traffic to our PRC subsidiaries' self-operated and cooperative we-media accounts. In this regard, our PRC subsidiaries also plan to establish strategic cooperation with upstream and downstream industry participants, such as agents of large we-media platforms.

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***Pursue Additional Strategic and Financially Attractive Acquisitions***

Our PRC subsidiaries have a track record of successfully identifying, acquiring, and integrating businesses that complement and expand their marketing offerings, ad distribution channels, and client relationships while achieving synergies and generating attractive returns that are well in excess of their cost of capital. Using their disciplined approach for screening and evaluating potential opportunities, our PRC subsidiaries intend to continue to seek strategically and financially attractive acquisition targets that provide them with new capabilities. Our PRC subsidiaries have significant internal resources dedicated to tracking potential acquisition prospects which are formally reviewed by senior management on a regular basis. We believe that our PRC subsidiaries will continue to be an acquirer of choice in their industry and transact with smaller players at valuation levels that are attractive on a relative basis.

**Our Business Model** 

Our PRC subsidiaries currently generate revenue from the following principal sources:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *New Media Integrated Content Marketing Services.* Our PRC subsidiaries provide marketers with integrated
marketing solutions across a wide spectrum of marketing channels, both online and offline, with a primary focus on content creation of entertaining and trendy marketing materials, such as promotional short videos and advertorials, to be published
via their self-operated and cooperative we-media accounts. Our PRC subsidiaries also plan, organize, and implement live streaming events on behalf of marketers, such as e-commerce merchants and local businesses, for promoting their products or services on high-profile media platforms. In addition, our PRC subsidiaries help generate or direct vast amounts of user traffic to
those media platforms by editing and producing captivating short videos based on authorized TV dramas, movies, and variety shows, and posting such short videos on high-profile video-sharing platforms such as Douyin. Our PRC subsidiaries typically
receive non-performance-based service fees for their integrated marketing services, and performance-based service fees for their live streaming services and online traffic services. In addition, our PRC
subsidiaries operate affiliated businesses including (a) licensing self-developed software products and services to marketing agencies, and (b) cooperating with cultural institutions, such as museums, to issue IP-based digital products on e-commerce platforms and receive a portion of the sales revenue as service fees for their services. Overall, our PRC subsidiaries offer a service
package comprising a variety of integrated marketing solutions, including marketing strategy and creativity consulting, drafting advertorials, producing promotional short videos, managing and operating their customers' social media accounts,
planning and implementing live e-commerce events, and organizing offline marketing events or public relations activities. Customers may select one or more types of services based on their respective marketing targets, demand, budgets, and other
factors. As different customers tend to have different goals and focuses in their marketing campaigns, our PRC subsidiaries provide customized services to meet their specific needs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Digital Advertising Services.* Our PRC subsidiaries provide marketers—typically app developers and
operators, and their advertising agents—with services to identify, engage, and activate target audiences for user acquisition, by leveraging their insight and experience in digital advertising and their understanding of customer needs and the
characteristics of ad distribution channels. Marketers are typically charged with performance-based service fees for our PRC subsidiaries' advertising services.

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The following tables present our revenue and gross profit for the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022. See also "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations."

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Revenue** | **Revenue** | **Revenue** | **Gross Profit** | **Gross Profit** | **Gross Profit** |
|  | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
|  | **2020** | **2021** | **2021** | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** | **RMB** | **RMB** | **US$** |
|  | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** |
|  Digital advertising services | 188192 | 106316 | 14946 | 29643 | 15110 | 2124 |
|  New media integrated content marketing services | 162712 | 365130 | 51329 | 77715 | 126448 | 17776 |
|  **Total** | **350904** | **471446** | **66275** | **107358** | **141558** | **19900** |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Revenue** | **Revenue** | **Revenue** | **Gross Profit** | **Gross Profit** | **Gross Profit** |
|  | **For the Nine Months**<br>**Ended September 30,** | **For the Nine Months**<br>**Ended September 30,** | **For the Nine Months**<br>**Ended September 30,** | **For the Nine Months<br>Ended September 30,** | **For the Nine Months<br>Ended September 30,** | **For the Nine Months<br>Ended September 30,** |
|  | **2021** | **2022** | **2022** | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** | **RMB** | **RMB** | **US$** |
|  | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** | **(in thousands, except for<br>percentages)** |
|  Digital advertising services | 90191 | 42466 | 5970 | 11242 | 9444 | 1328 |
|  New media integrated content marketing services | 222824 | 296864 | 41732 | 85854 | 108114 | 15198 |
|  **Total** | **313015** | **339330** | **47702** | **97096** | **117558** | **16526** |

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**New Media Integrated Content Marketing Services** 

New media integrated content marketing services are and will be the primary focus of our PRC subsidiaries' business. Our PRC subsidiaries commenced their new media integrated content marketing services in China in 2017 when they established and started operating multiple we-media accounts designed to be potential marketing platforms. Over the years, our PRC subsidiaries have grown a wide-ranging portfolio of we-media accounts, currently encompassing WeChat public accounts, short video accounts, and other new media accounts on high-profile media platforms in China, such as Douyin, Weibo, Kuaishou, and Xiaohongshu, which provide a variety of vibrant and engaging content to their followers. These we-media accounts have become the gateway for follower acquisition and traffic aggregation in connection with our PRC subsidiaries' new media integrated content marketing business. They also provide monetization opportunities as our PRC subsidiaries utilize the sizable online traffic generated from these new media accounts for serving the marketing needs of customers, including brands, merchants, and media platforms. As part of the new media integrated content marketing services, our PRC subsidiaries help marketers operate, or provide operational strategies for, their new media accounts. While those accounts are not owned by us, they become our cooperative new media accounts, which contribute to our we-media account base for new media integrated content marketing campaigns. See "—Ad Distribution Channels—Distribution Through We-Media Publisher/Accounts."

In addition, with the emergence of popular live e-commerce and live streaming platforms attracting numerous viewers and consumers, marketers are increasingly receptive to the idea of conducting their marketing campaigns through live streaming events, such as live streaming sales and live video broadcasts, where viewers can share an immersive and interactive experience with the streamer/broadcaster. Blending entertainment with instant purchasing, live e-commerce offers retailers, brands, and digital platforms a new channel with enormous scope for creating value. Similarly, live video broadcasts are changing the way brands and merchants interact with their audiences by engaging viewers in immediate and authentic ways that other social media formats cannot. In this regard, by leveraging their expertise in the production of marketing content, our PRC subsidiaries also plan,

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organize, and implement live streaming events on behalf of marketers, including e-commerce merchants and local businesses, for promoting those marketers' products or services on new media platforms such as Douyin and Kuaishou. Our PRC subsidiaries have a professional live video broadcast team and operate two full-fledged live streaming bases for the provision of high-quality live streaming services. Having accumulated extensive experience in local-life related live video broadcasts and live streaming sales, our PRC subsidiaries are able to plan and implement effective live streaming marketing campaigns, including services of live video idea creation, scriptwriting, and filming, and live streaming account maintenance, which have been highly recognized by their customers.

For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, our PRC subsidiaries' revenue from new media integrated marketing services was RMB162.7 million, RMB365.1 million (US$51.3 million), and RMB296.9 million (US$41.7 million), respectively, accounting for 46.4%, 77.4%, and 87.5% of their total revenue for the respective years and period, respectively.

***Types of Services***

Our PRC subsidiaries offer multi-channel marketing services with a primary focus on content-driven we-media marketing. Their new media integrated content marketing services are organized into two principal models, the S2B model and the S2P model.

*S2B model* 

Our PRC subsidiaries provide marketers with integrated marketing solutions across a wide spectrum of marketing channels, both online and offline, with a primary focus on we-media marketing. Our PRC subsidiaries primarily focus on conducting entertaining and trendy new media integrated content marketing via their we-media account base including self-operated and cooperative accounts. Our PRC subsidiaries' creative marketing services generally include (i) formulation of marketing strategies, (ii) establishment and/or operation of we-media accounts as requested and on behalf of the marketers, (iii) content production of marketing materials, such as promotional short videos and advertorials, (iv) identifying and sourcing the most appropriate media resources and formats to maximize the marketing effects, (v) organizing and coordinating the implementation of the new media integrated content marketing campaigns, (vi) monitoring and evaluating the result and effectiveness of the marketing campaigns, and (vii) organizing offline marketing events to meet customers' needs for an integrated "online-offline-linkage" marketing strategy. Our PRC subsidiaries typically receive service fees that vary according to the scope of service for each marketing campaign as determined by advertiser customers in accordance with their respective demand and budgets. In addition, our PRC subsidiaries plan, organize, and implement live streaming events on behalf of marketers, such as e-commerce merchants and local life businesses, for promoting their products or services on media platforms such as Douyin and Kuaishou. The live streaming services provided by our PRC subsidiaries mainly include (i) live e-commerce services and (ii) local life live video broadcast services. For live e-commerce services, our PRC subsidiaries typically enter into cooperation agreements with brands and merchants for specified terms, under which our KOLs or KOCs will promote and sell the marketers' products or services on a live streaming platform. The marketers are charged with service fees, which generally represent a pre-determined percentage of the Effective GMV generated from the live streaming sales, which represents the aggregate value of the merchandise actually sold and delivered to consumers in the live KOL/KOC sales services provided by our PRC subsidiaries, after deducting the value underlying cancelled orders and returned merchandise. The percentage, typically ranging from 10% to 25%, is determined based on a variety of factors, including the Effective GMV sold in such live streaming sales, types of products and services facilitated, live streaming time, the popularity of the KOL/KOC, and other market factors. For example, our PRC subsidiaries have organized and implemented 450 live streaming sales events on Douyin for Teenie Weenie KIDS ("TW KIDS"). See "—New Media Integrated Content Marketing Services—Representative New Media Integrated Content Marketing Projects—Case Study for S2B Live Streaming Services: Project for TW KIDS." As of June 30, 2022, our PRC subsidiaries had performed more than 2,930 live streaming sales events for 36 customers, including apparel, electronics, and home furnishings since May 2021. In

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addition, our PRC subsidiaries plan and broadcast local life live videos for purposes of promoting local businesses such as restaurants and tourist attractions, through which viewers can enjoy an immersive and interactive exploration of local businesses with the streamer/broadcaster. As of June 30, 2022, our PRC subsidiaries had conducted more than 700 local life live broadcasts for more than 270 local life merchants across catering, tourism, beauty, fast-moving consumer goods, and other industries since May 2021. Our PRC subsidiaries typically receive performance-based service fees for their live streaming services.

To supplement their new media integrated content marketing business, our PRC subsidiaries have also developed software licensing and digital product distribution businesses, which currently account for a small percentage of their total revenue, but are expected to drive their future growth. First, our PRC subsidiaries have continually improved their research and development capabilities, and are committed to developing technological services enabled by low-code and user-experience-driven development. Currently, our PRC subsidiaries have independently developed business software products for live streaming sales, conference event services, and local life live broadcasting, and they have launched licensed Business to customers the self-developed software products and service, including Xuhang Live Streaming E-commerce Cloud and Xuhang Conference Cloud. As our PRC subsidiaries closely monitor industry developments to combine their advantages to expand their business, they have collaborated, since October 2021, with cultural institutions, including museums and tourist attractions, such as Daming Palace National Heritage Park and Huashan Scenic Area, to help them issue, promote, and sell IP-related digital products that are becoming increasingly popular among young people on platforms such as Ali Auction, NetEase Planet, and Xinhua Shucang. Those cultural institutions typically possess considerable IP resources but lack the means to monetize them beyond selling tickets. Our PRC subsidiaries' services include (i) designing digital collections by refining the proprietary IP elements provided by those cultural institutions and utilizing blockchain technology to create corresponding digital copyright works on the Ali Auction platform, (ii) assisting those cultural institutions in operating their e-commerce stores selling such IP-related digital collections, and (iii) leveraging our PRC subsidiaries' media advertising distribution channels to contribute to the promotion and sale of relevant digital collections. Such digital products are similar to NFT products, except they cannot be exchanged upon issuance in the PRC. Our PRC subsidiaries are entitled to receive a portion of the sales revenue as service fees for their services.

*S2P model* 

Leveraging their expertise in producing fun and entertaining content, our PRC subsidiaries provide services of directing viewer traffic to large Internet media platforms operated by their customers. Specifically, our PRC subsidiaries edit and produce captivating short videos from TV dramas, movies, and variety shows as authorized by the large Internet media platforms or other relevant copyright owners or licensors, and post these short videos via our PRC subsidiaries' self-operated and cooperative we-media accounts on high-profile short video platforms such as Douyin for generating and direction of a large amount of viewer traffic to customers' digital media platforms. Typically, our PRC subsidiaries receive performance-based online traffic service fees from media platforms based on the type of videos and the number of views, followers, and likes the videos receive, among other factors as determined by the large Internet media platforms. To a lesser extent, we may also receive the advertising fees received by the large Internet media platforms from such we-media accounts for which we help generate viewer traffic.

The sources of content, based on which our PRC subsidiaries produce short videos, are generally from (i) the media platforms that are the copyright owners or licensors of such content and thus have the legal right to authorize production of any derivative works thereof, (ii) copyright owners or licensors (other than the media platforms) that sublicense our PRC subsidiaries to edit such content for generating online traffic and with whom our PRC subsidiaries share a pre-determined portion of the online traffic service fees and advertising fees, if applicable, they receive from media platforms, and (iii) copyright owners or licensors from whom our PRC subsidiaries purchase the relevant content for use for a fixed period, in which case they are entitled to all the online traffic service fees and advertising fees, if applicable, from the media platforms during such a period.

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Below is an example that illustrates our S2P business model and the material terms of a typical agreement entered between our PRC subsidiaries and large Internet media platforms. "Xiguanuanxinshi" is a we-media account on Douyin, a large Internet media platform owned by Beijing ByteDance Network Technology Co., Ltd., the parent company of Douyin and Xigua Video. ByteDance has full right to use, operate, and profit from the account. In July 2020, ByteDance entered into an agreement with Jiangxi Ku'o, one of our PRC subsidiaries, pursuant to which agreement, Jiangxi Ku'o was required to operate the "Xiguanuanxinshi" account on behalf of ByteDance. Specifically, Jiangxi Ku'o was required to edit and produce short videos using the content provided by ByteDance, which has the legal right to authorize derivative works of such content, and to post the short videos on the "Xiguanuanxinshi" account and conduct relevant marketing activities. ByteDance was obligated to pay Jiangxi Ku'o based on (i) the number of followers of "Xiguanuanxinshi" acquired during the period operated by Jiangxi Ku'o, and (ii) the popularity of the short video (primarily measured by the number of views) produced by Jiangxi Ku'o. The agreement has an initial term of one year, beginning on July 1, 2020, subject to the initial trial period described below. In the event that neither party provides written notice to terminate the agreement prior to the expiration of the initial term or the then current term, the agreement will automatically renew for an additional one-year term, without any limitations on the number of such renewals (as of the date of this prospectus, the agreement has been renewed twice and is currently extended until July 1, 2023). Any party may terminate the agreement upon providing a written notice of termination to the other party. The agreement further provides for a trial period of 20 days for the services offered by Jiangxi Ku'o. If, during the trial period, the services provided by Jiangxi Ku'o do not meet the requirements provided in the agreement, ByteDance has the unilateral right to terminate the agreement without incurring any fees payable to Jiangxi Ku'o.

***Our Marketers***

Our PRC subsidiaries have built a diverse marketer base from a broad range of industries. Specifically, the customers of their new media integrated content marketing business consist of (i) marketers for our creative marketing under the S2B model, typically from a broad range of industry verticals, including e-commerce, commercial complex, retailing, catering, tourism, and leisure and entertainment; and (ii) media platforms for our PRC subsidiaries' online traffic services under the S2P model, typically including both the short-form and long-form video platforms.

During the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, our PRC subsidiaries served 607, 769, and 847 marketers for their new media integrated content marketing business, respectively.

In terms of the new media integrated content marketing services, for the year ended December 31, 2020, the top five customers of the PRC subsidiaries were Beijing ByteDance Network Technology Co., Ltd., Jiuyang Co., Ltd., Shanghai Flyco Electrical Appliance Co., Ltd., Tianjin Alibaba Culture and Entertainment Co., Ltd., and Hangzhou Jianren Network Technology Limited, which accounted for 3.45%, 2.97%, 1.75%, 1.69%, and 1.64% of our total revenue, respectively. For the year ended December 31, 2021, the top five customers of our PRC subsidiaries were Zhejiang Tmall Technology Co., Ltd., Taobao (China) Software Co., Ltd., Alibaba (China) Network Technology Co., Ltd., Wuhan Hezhong Yibao Technology Co., Ltd., and Beijing ByteDance Network Technology Co., Ltd., representing 6.50%, 6.30%, 4.29%, 2.22%, and 2.21% of our total revenue, respectively. For the nine months ended September 30, 2022, the top five customers of our PRC subsidiaries were Taobao (China) Software Co., Ltd., Alibaba (China) Network Technology Co., Ltd., Douyin Vision Co., Ltd., Zhejiang Tmall Technology Co., Ltd., and Nanjing Tianbao Network Technology Co., Ltd., representing 6.5%, 5.1%, 4.4%, 3.9%, and 2.9% of our total revenue, respectively.

***Ad Distribution Channels***

Our PRC subsidiaries provide new media integrated content marketing services through various distribution channels, including (i) we-media accounts, (ii) live streaming platforms, and (iii) to a lesser extent, offline ad inventories.

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*Distribution Through We-Media Publishers/Accounts* 

Our PRC subsidiaries' new media accounts can be generally classified into two categories: (i) self-operated accounts and (ii) cooperative accounts. Self-operated accounts are those owned by our PRC subsidiaries or by MCN institutions thereunder, over which accounts our PRC subsidiaries have operational or management authority. Specifically, self-operated accounts are comprised of (a) accounts owned by our PRC subsidiaries, which have full right to use, operate, and benefit from these accounts, or (b) accounts managed, operated, promoted, and developed by our PRC subsidiaries as MCN institutions, where our PRC subsidiaries have signed agreements with the actual owners of these accounts to the extent that our PRC subsidiaries have full authority to negotiate and enter into contracts on behalf of the account owners and enjoy the income or benefits derived therefrom—namely, the rights and authority exercised by our PRC subsidiaries are no different from those of the account owners, except that income received by our PRC subsidiaries is calculated according to the agreed proportion and distributed to the account owners as remuneration. On the other hand, cooperative accounts are not owned by our PRC subsidiaries, or managed, operated, promoted, and developed by our PRC subsidiaries as MCN institutions. Rather, our PRC subsidiaries first acquire commercial income interests through cooperation agreements with account owners or MCNs that manage the accounts, and then utilize the accounts for advertising or other commercial purposes. See "—Our Business Partners." As a result, our PRC subsidiaries have limited authority to manage the accounts granted by account owners or the MCNs that manage the accounts; our PRC subsidiaries are generally unable to manage the owners of those accounts. Self-operated accounts and cooperative accounts are both distribution channels our PRC subsidiaries utilize to deliver their marketing content, and there is no difference in terms of how our PRC subsidiaries record and recognize revenue derived from either type of accounts. However, our PRC subsidiaries treat and manage self-operated accounts the same way as fixed assets or intangible assets, whereas cooperative accounts are managed more like suppliers—in order to obtain the corresponding rights and interests in cooperative accounts, our PRC subsidiaries generally are required to pay a certain amount of fees in advance to establish cooperative partnerships.

Our PRC subsidiaries started operating a number of we-media accounts in 2017, which were mostly WeChat public accounts, such as Hangzhou Impressions and Favorite Hangzhou. Those we-media accounts have accumulated a large number of followers and have become efficient and effective platforms for the promotion of marketers' products and services. For example, as of October 31, 2022, Hangzhou Impressions and Favorite Hangzhou have acquired approximately 1.0 million and 0.9 million followers, respectively. ****Over the years, ****our PRC subsidiaries have grown a wide-ranging portfolio of text-based or video-based we-media accounts, currently encompassing multiple WeChat public accounts, short video accounts, and other new media accounts on high-profile media platforms in China, such as Douyin, Weibo, Kuaishou, and Xiaohongshu.

Furthermore, our PRC subsidiaries conduct integrated marketing campaigns through their cooperative we-media accounts, which constitute we-media accounts (i) that are not owned by our PRC subsidiaries or by MCN institutions thereunder, but (ii) over which we have the operational or management authority under cooperative agreements with the accounts' owners.

As of October 31, 2022, our PRC subsidiaries operated 1,015 we-media accounts at our disposal, including 524 self-operated accounts and 491 cooperative accounts, which collectively reached approximately 207 million Internet followers.

*Distribution Through Live Streaming Platforms* 

Our PRC subsidiaries operate their new media integrated content marketing services by planning, organizing, and implementing live streaming events, including live KOL/KOC sales and live video broadcasts, on behalf of marketers for promoting their products or services on live streaming platforms such as Douyin and Kuaishou.

*Distribution Through Offline Advertising Channels as Part of an Integrated Marketing Strategy* 

From time to time, our PRC subsidiaries cooperate with their offline media partners, such as advertising design, PR, and event organization firms and agencies, to organize offline marketing events, including purchasing offline

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advertisement inventories through outdoor electronic screens, elevators, and lightboxes at railway stations and bus stations. Such offline marketing events are usually conducted in conjunction with online marketing campaigns to meet customers' needs for an integrated "online-offline-linkage" marketing strategy. For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, offline ad inventories only accounted for a very small portion of distribution channels for our PRC subsidiaries' new media integrated content marketing services. Nonetheless, it remains an integral part of our PRC subsidiaries' creative marketing services, as they aim to provide multi-channel integrated marketing services as needed.

***Our Business Partners*** 

Our PRC subsidiaries' new media accounts consist of both self-operated accounts and cooperative accounts. Our PRC subsidiaries rely on third-party business partners, including both (i) account owners and (ii) MCN institutions that manage those cooperative accounts, for the provision of cooperative accounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Owners of Cooperative Accounts.* The example below illustrates the nature of the relationship between our
PRC subsidiaries and the actual owners of cooperative accounts. Specifically, "Impression Hangzhou" is a WeChat official account registered and certified by Hangzhou Find Fun Creative Cultural Co., Ltd. (the "Actual Owner"),
which is entitled to use, operate, and benefit from the "Impression Hangzhou" account. In December 2017, Horgos Weizan Network Technology Co., Ltd. ("Weizan"), one of our PRC subsidiaries, entered into a standard cooperation
agreement with the Actual Owner. According to the cooperation agreement, the Actual Owner is required to transfer the right to use, operate, and benefit from the "Impression Hangzhou" account for the next 10 years to Weizan, while Weizan
is obligated to pay the Actual Owner RMB300,000 per year as a consideration. After acquiring the rights related to the "Impression Hangzhou" account, Weizan developed and operated the "Impression Hangzhou" account to seek
commercial advertising opportunities on the account. As a result, "Impression Hangzhou" attracted many well-known brands and marketers, such as Starbucks and CoCo Milk Tea, to place ads and conduct marketing campaigns thereon. As shown
above, the cooperative accounts are not owned by our PRC subsidiaries but are simply utilized as part of our PRC subsidiaries' ad distribution channels for placing ads, advertorials, and/or promotional short videos in the new media integrated
content marketing services provided by our PRC subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *MCN Institutions that Manage Cooperative Accounts.* The example below illustrates the nature of the
relationship between our PRC subsidiaries and the MCN institutions that manage cooperative accounts. "Qingcheshulu" is a we-media account on the Douyin platform that was registered and certified by Xidan Lian, an Internet influencer (the
"Internet Influencer"). In October 2018, the Internet Influencer entered into an agreement with an MCN institution, Zhejiang Chengmi Film and Television Media Co., Ltd. ("Chengmi MCN"). Upon signing the MCN agreement, the
Internet Influencer designated Chengmi MCN as his exclusive broker of business activities, responsible for cultivating, developing, and operating all online social media accounts associated with the Internet Influencer. According to the MCN
agreement, Chengmi MCN has full authority to negotiate and enter into contracts on behalf of the Internet Influencer and to enjoy the income or benefits derived from those contracts, provided Chengmi MCN agrees to compensate the Internet Influencer
with an agreed proportion of income. In December 2018, Weizan entered into a standard cooperation agreement with Chengmie MCN, under which Weizan became the exclusive commercial agency rights for the "Qingcheshulu" account—namely,
Weizan recommends and negotiates with prospective marketers for the "Qingcheshulu" account to facilitate ad placement on the account. As a consideration, Chengmi MCN is required to share 30% of its revenue derived from the account with
Weizan as business agency fees.

***Our Content Production***

Our PRC subsidiaries' advertising idea creation and content production capability is one of their core competencies. Our PRC subsidiaries have an in-house new media content production team, which enables them to design and produce customized, high-quality, and eye-catching marketing ideas, content, and materials. Their

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content design and production team consisted of approximately 170 employees based in Hangzhou as of September 30, 2022, including (i) advertorial writers and proof-readers, (ii) staff for idea creation and content review, and (iii) scriptwriters, directors, editors, and post-production crew.

Below illustrates the general workflow of our PRC subsidiaries' production of promotional short videos and advertorials for new media integrated content marketing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Idea creation and scriptwriting*. Pursuant to a marketer's specific requirements, our PRC subsidiaries
develop creative ideas for the marketing campaign as agreed by the marketer, which are then translated to scripts by in-house scriptwriters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Pre-production and filming/writing*. Our PRC subsidiaries engage
KOL and/or KOC or sometimes invite their employees to shoot their short videos. Pre-production preparation involves make-up, costumes, props, and sets. Our PRC
subsidiaries' in-house director coordinates with other production crew, including filming and lighting, to deliver alternative shots and scenarios to be selected for inclusion in the final video. As to
the production of advertorials, our PRC subsidiaries engage their in-house experienced writers to draft articles pursuant to the marketer's requirements and the creative ideas they brainstormed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Post-production*. After completion of filming, the director works with our PRC subsidiaries' in-house editors and post-production crew to select the scenes for assembling and polishing the final video, including video and sound editing, creating and recording music, adding special effects, and color
grading. For advertorials, our PRC subsidiaries engage senior staff in their in-house content output teams, including professional writers and senior media practitioners and reporters to revise the draft for
quality control.

***Services and Operational Flow***

*Acquiring Marketers* 

Our PRC subsidiaries acquire marketers through various means, including (i) through referrals by local governments that cooperate with our PRC subsidiaries, (ii) approaching potential marketers based on market intelligence and their industry insights; (iii) leveraging their industry connections to identify potential marketers or through referrals by their marketers; and (iv) reaching out to their existing marketers to explore further business opportunities.

Our PRC subsidiaries provide potential marketers with an initial marketing plan. If the initial plan is approved, they will participate in the bidding, if any, for the potential marketer's project with other competitors by submitting their revised plan and quotation for their marketing services. If our PRC subsidiaries win the bidding, they will enter into a service agreement with the marketer. Alternatively, if no bidding is required for the project, our PRC subsidiaries will provide potential marketers with their quotation for new media integrated content marketing services, which lays out the types of marketing services they will provide, payment information, and other terms and conditions. If the marketer accepts our PRC subsidiaries' quotation, it becomes a legally binding contract with our PRC subsidiaries. In particular, the pricing model our PRC subsidiaries adopt for new media integrated content marketing services is subject to negotiation between our PRC subsidiaries and their marketers and is determined by taking into account various factors, including (i) our PRC subsidiaries' service scope for the relevant marketing campaigns, (ii) types and nature of the marketing content, (iii) types of media partners to be engaged and media resources to be utilized, (iv) data and other information available for evaluation of the marketing effect, and (v) specific requirements and preferences of, and any historical pricing models adopted with respect to, the relevant customers.

*Pre-Launch* 

Before launching an advertising campaign, our PRC subsidiaries usually discuss with marketer customers to understand their products or services to be marketed, marketing budget, and marketing objectives. For their new

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media integrated content marketing services, our PRC subsidiaries provide advice and services on advertising strategies and ad optimization, including choices of ad formats and content (such as short-video, image, and text descriptions), and appropriate social media accounts and suitable media channels for implementation and deployment of the advertising campaigns based on the themes and the desired effects of the campaigns. Our PRC subsidiaries provide such advice and services on advertising strategies and ad optimization to their customers to improve the effectiveness of the marketing campaigns to be launched, which we believe will serve to enhance their customers' satisfaction and encourage their customers to retain their services.

*Campaign Launch and Performance Review* 

For compliance purposes, our PRC subsidiaries' legal and compliance departments review ad content to be launched, to ensure that our PRC subsidiaries comply with applicable laws and regulations, ethical standards, and the relevant media platform's internal policies. If our PRC subsidiaries determine that the ad content may be in violation of applicable laws or regulations, they will provide suggested edits to the ad content and send it back to the content production teams for revision. After our PRC subsidiaries have determined that the ad content is in full compliance with applicable laws and regulations on information dissemination, they will confirm with the marketer customers on their opinion with respect to the compliance prior to the deployment of advertisements.

After our PRC subsidiaries and their customers agree upon the advertising strategies and materials, our PRC subsidiaries will be ready to launch the advertising campaigns. Upon receiving their customers' orders, they proceed to place the prepared ads with the relevant new media platforms, including WeChat, Weibo, Douyin, Kuaishou, and Xiaohongshu, and, to a lesser extent, with offline advertising spaces, such as outdoor LED billboards, elevators, and lightboxes at railway stations and bus stations, if applicable.

After their marketing campaign is launched, our PRC subsidiaries monitor audiences' feedback and behavioral data and assess the overall effectiveness of the marketing campaign in various dimensions, such as the exposure and visibility of advertisements as well as the degree of customer engagement of social media campaigns. Based on such assessment, our PRC subsidiaries may further advise their customers on advertising strategies and optimization to continually improve the effectiveness of the marketing campaigns. Review reports may be prepared to highlight our PRC subsidiaries' suggested optimization strategies, and closing reports may be issued to their customers to summarize the key ad deliverables (such as screenshots of the relevant social media accounts) and to analyze the campaign's effectiveness.

***Representative New Media Integrated Content Marketing Projects***

Our PRC subsidiaries offer a service package comprising a variety of integrated marketing solutions, including marketing strategy and creativity consulting, drafting advertorials, producing promotional short videos, managing and operating their customers' social media accounts, planning and implementing live e-commerce events, and organizing offline marketing events or public relations activities. Customers may select one or more types of services based on their respective marketing targets, demand, budgets, and other factors. As different customers tend to have different goals and focuses in their marketing campaigns, our PRC subsidiaries provide customized services to meet their specific needs. The following summarizes our PRC subsidiaries' representative marketing projects in the new media integrated content marketing business during the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Marketing Project for Nanhu Place (南湖天地).* See *"—Case Study for S2B Creative Marketing Services: Project for Nanhu Place*" below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *3M Products Marketing Project.* 3M is a world-renowned technology innovator and manufacturer that has
developed over 60,000 products across multiple industries, including household goods, medical products, transportation, and electronics. Since 2020, our PRC subsidiaries have provided customized integrated marketing services for certain 3M products
in China, such as Nexcare acne cover, waterproof bandages, and eye beauty tape, as well as ergo<sup>®</sup> office suppliers. Specifically, our PRC

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subsidiaries provided services including (i) formulating marketing strategies, (ii) developing media plans such as target consumer habits analysis and marketing budget proposals, (iii) shooting and editing creative marketing videos, (iv) drafting and publishing KOL advertorials on Weibo and WeChat, and (v) implementing other marketing campaigns across multiple platforms such as Xiaohongshu, Douyin, and Zhihu, to increase the exposure of the 3M brand and products. Our PRC subsidiaries' marketing campaigns boosted product sales and helped 3M enhance its brand influence in mainland China. For example, the Nexcare campaign achieved more than 50 million impressions and gained more than 110,000 user interactions during our PRC subsidiaries' marketing campaigns from January 2021 to December 2021. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Project for Operating Short Video Accounts for Construction Bank Hangzhou Branch.* China Construction Bank
Corporation ("CCB") is one of the "big four" commercial banks in China with approximately 14,000 domestic branches. In 2020, our PRC subsidiaries won the bidding for the short video operation project for CCB Hangzhou Branch.
Since then, our PRC subsidiaries have helped CCB Hangzhou Branch incubate and operate its official account on the Douyin platform by providing services including (i) original short video content production, (ii) quarterly online marketing
strategy formulation, (iii) data detection and analysis report preparation, and (iv) account operation and maintenance, including message and fan interactive topics management. In addition, our PRC subsidiaries helped CCB Hangzhou Branch
establish live video broadcasting rooms for its five operating centers and provided daily live video broadcasting services, including live video broadcasting training and content preparation, to grow CCB's brand and promote bank products and
services. As a result, from August 2020 to August 2021, our PRC subsidiaries helped CCB Hangzhou Branch obtained approximately 236,000 followers on Douyin through our marketing campaigns from 0 to 236,000, and our creative short videos and live
broadcasts also helped increase CCB's brand appeal among the younger generation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Shanghai Tower WeChat Public Account Operation Project.* Shanghai Tower is a landmark skyscraper in
Shanghai and is currently the tallest building in China. The Shanghai Tower is a "vertical city" that has a total floor area of approximately 6,243,068 square feet and can accommodate over 30,000 people. Since 2020, our PRC subsidiaries
have assisted Shanghai Tower in operating its WeChat public accounts and provided services including (i) article writing and graphic/creative design for banners, articles, and posters, (ii) providing weekly creative reports and monthly
data analysis reports, and (iii) data maintenance and technical support, as well as content and functions maintenance, such as message and keyword reply management. In addition, our PRC subsidiaries also assisted Shanghai Tower in operating and
maintaining its official accounts on other media platforms, such as Xiaohongshu, Weibo, and Toutiao. From June 2020 to June 2021, through our PRC subsidiaries' services, Shanghai Tower's WeChat public account gained approximately 30,000
followers and published approximately 160 articles with a total of at least 2.4 million views.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Project for Supporting Tmall Single's Day Offline Gala.* The Tmall Single's Day Offline Theme
Gala (the "Tmall Gala") is an annual cultural event hosted by Tmall, a subsidiary of Alibaba Group, for purposes of marketing its Singles' Day (November 11) e-commerce sale—a major shopping
event in China. Our PRC subsidiaries provided offline services in support of the 2021 Tmall Gala, including (i) security services and other on-site services (including COVID testing services), (ii)
travel, accommodation, transportation, and catering services for gala staff and performing artists, (iii) one-on-one medical service during the COVID-19 epidemic, (iv) logistics support, and (v) overall scheduling services for the project such as event planning and on-site coordination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Local Life Live Video Broadcast for Qiancaojun Catering.* Currently, with over 60 chain restaurants,
Qiancaojun Sushi Cuisine is a popular Japanese food chain brand in Jiangsu and Zhejiang provinces in China. From September to November 2021, our PRC subsidiaries performed a total of eight live video broadcasts on the Douyin platform for Qiancaojun,
generating a cumulative GMV of RMB2,033,645 (approximately US$319,123). Particularly, the eight-hour live video broadcast for the fifth-anniversary special event created a record GMV of over RMB800,000 (approximately US$125,537) in the

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Hangzhou area, representing an approximately 16 times return on investment with an investment of less than RMB50,000 (approximately US$7,846). <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Project for Promoting iQIYI's TV Programs.* See "— *Case Study for S2P Online Traffic Services: Project for Promoting iQIYI's TV Programs*" below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Project for Promoting Xigua Video.* Xigua Video is a Chinese online video-sharing platform owned by
ByteDance. As the video content operation partners of ByteDance, our PRC subsidiaries have provided services to direct online traffic to Xigua Video since May 2019. Specifically, our PRC subsidiaries edited and recreated short videos based on the
film and TV programs on Xigua Video and posted these short videos on the Toutiao platform, a news and information content platform in China also owned by ByteDance, to improve Xigua Video's brand appeal and user traffic. During the period from
May 2019 to July 2021, the promotional short video our PRC subsidiaries created for Xigua Video obtained 12 billion views on Toutiao, with over 600 videos that had at least one million views, among which, the most popular video reached
approximately 15 million views. The five accounts our PRC subsidiaries helped operate accumulated more than 13.67 million followers in total during the same period.

*Case Study for S2B Creative Marketing Services: Project for Nanhu Place* 

In April 2021, Jiaxing City Urban Infrastructure Investment Co., Ltd., a state-owned property developer, engaged our PRC subsidiaries to conduct marketing campaigns to promote the opening of Nanhu Place, a newly developed local commercial complex. Our PRC subsidiaries designed and provided an integrated marketing plan, consisting of comprehensive marketing campaigns across both online and offline channels to maximize the marketing effectiveness. After the customer agreed on the integrated marketing plan, our PRC subsidiaries consolidated their marketing resources and implemented marketing campaigns through various channels, including (i) their self-operated and cooperative we-media accounts on new media platforms such as WeChat, Douyin, Xiaohongshu, Meituan (美团), and Dianping (大众点评), (ii) traditional media such as TV and radio, and (iii) offline advertisements through outdoor LED billboards, elevators, and lightboxes at railway stations and bus stations. As a result, from November 2021 to December 2021, our integrated new media integrated content marketing for Nanhu Place achieved more than 500 million impressions, and the opening of the commercial complex achieved great success as measure by the number of visitors (approximately 420,000 visitors for the first two opening days) and GMV (approximately RMB1,800,000 GMV for the first two opening days). Attributable to the high-quality marketing performance, the customer decided to continually engage our PRC subsidiaries to operate their we-media account.

Below are screenshots of articles our PRC subsidiaries produced and posted on their self-operated WeChat public accounts for promoting the commercial complex:

![LOGO](g403554g99t01.jpg)

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Below are screenshots of an information flow ad, an app-launch screen ad, and a KOL review post on Dianping, Douyin, and Xiaohongshu, respectively, for promoting the commercial complex:

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| | | |
|:---|:---|:---|
| Dianping | Douyin | Xiaohongshu |
| ![LOGO](g403554g99t02.jpg) | ![LOGO](g403554g99t03.jpg) | ![LOGO](g403554g99t04.jpg) |

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Below are examples of our PRC subsidiaries' offline marketing campaigns at railway stations and bus stations, respectively:

![LOGO](g403554g10r02.jpg)

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![LOGO](g403554g10r01.jpg)

*Case Study for S2B Live Streaming Services: Project for* TW KIDS 

TW KIDS, a well-known children's apparel brand in China, engaged our PRC subsidiaries to promote its brand and sales from June 2021 to January 2022. Before the implementation of live streaming events, our PRC subsidiaries (i) communicated with the customer to understand its target market, features, and marketing demand; (ii) conducted market research to better understand the habits and interests of target audiences; and (iii) designed the marketing plans for the customer. To fulfill the customer's requirements for expanding sales channels via Douyin, our PRC subsidiaries organized and implemented 450 live streaming sales events to promote its apparel products and attract user traffic simultaneously. As of December 31, 2021, a team was responsible for this project and operated two Douyin accounts on behalf of and authorized by TW KIDS. Our PRC subsidiaries designed and produced live streaming content and materials before conducting the live sales. Our PRC subsidiaries constantly monitored the sales data, optimized strategies to reach target audiences, and attracted user traffic during the live sales events. In addition, they advised the customer on the price ladder of products for the live sales to meet the different needs of target consumers and optimized the profit performance of the sales events. Our PRC subsidiaries were able to implement two to three live sales per account per day. Their live sales events helped the customer achieve GMV of approximately RMB26.3 million from June 2021 to January 2022.

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Below are screenshots of our live sales events for TW KIDS:

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| | |
|:---|:---|
| ![LOGO](g403554g01b45.jpg) | ![LOGO](g403554g01b78.jpg) |

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*Case Study for S2P Online Traffic Services: Project for Promoting iQIYI's TV Programs* 

In January 2020, our PRC subsidiaries entered into a framework agreement with a term of two years with iQIYI, a popular online video platform in China, and became its business partner to promote its content and brand on the Douyin platform. iQIYI licensed our PRC subsidiaries the copyright to edit and broadcast specified content and our PRC subsidiaries are responsible for producing and posting appealing and entertaining edited short videos via Douyin to increase the exposure of iQIYI's content, generate user traffic, and increase the daily active users of its video platform. Our PRC subsidiaries' professional content production team edited short videos with their creative and attractive scripts and background music. During the first six-month trial period of their cooperation, our PRC subsidiaries accumulated more than 7 billion impressions for the content of iQIYI. Approximately 400 of their short videos achieved more than 100 thousand likes and 16 of their short videos achieved more than 1 million likes during the same period.

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Below are screenshots of our PRC subsidiaries' short video lists and the accounts used to promote a TV series for iQIYI:

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| | |
|:---|:---|
| ![LOGO](g403554g02c39.jpg) | ![LOGO](g403554g02d13.jpg) |

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Below are examples of our PRC subsidiaries' short videos tagged with popular social topics to attract user traffic:

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| | |
|:---|:---|
| ![LOGO](g403554g02e38.jpg) | ![LOGO](g403554g02g31.jpg) |

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**Digital Advertising Services** 

Our PRC subsidiaries commenced their digital advertising business in China in September 2014. Our PRC subsidiaries' digital advertising services enable advertisers—typically app developers and operators, and their advertising agents—to identify, engage, and activate target audiences across different digital advertising distribution channels for user acquisition. Specifically, our PRC subsidiaries first upload the advertisers' applications, which are contracted to be promoted, to their deployment backend system. Our PRC subsidiaries advertise these applications through their digital advertising channels, which primarily consist of Xuhang SDK-embedded Apps. The Xuhang SDK-embedded Apps can access advertisements for the applications to be promoted from our PRC subsidiaries' deployment backend system, and then display such advertisements when users run the Xuhang SDK-embedded Apps on mobile terminals. The advertisements will take turns being displayed at regular intervals. Upon clicking on an advertisement, the user is directed to download the promoted application. Subsequently, the user will be asked whether to install the promoted application after the download has been completed. In our PRC subsidiaries' backend system, each user action on a user's mobile terminal is assigned a representative number (such as 3 for display; 4 for click; 5 for download; 6 for install) in relation to any advertisement. Our PRC subsidiaries do not collect any personal information about users, including demographics, geographic location, gender, personal interest, or other online behavioral patterns, except for the International Mobile Equipment Identity ("IMEI") number of a mobile device. The IMEI number is a 15-digit number unique to each device and does not contain any personal information about users.

In addition, for digital advertising services targeting overseas users, our PRC subsidiaries also manually purchase ad inventories on behalf of advertisers from media platforms, primarily through media buy from the designated resellers of overseas top media platforms, such as Google and Meta, based on advertisers' specific ad campaign demand and their marketing budgets.

Our PRC subsidiaries receive digital advertising service fees from advertisers, which are typically charged on a CPA basis or CPM basis. For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, our revenue from digital advertising was RMB188.2 million, RMB106.3 million (US$14.9 million), and RMB42.5 million (US$6.0 million), respectively, accounting for 53.6%, 22.6%, and 12.5% of our total revenue for the respective years and period, respectively.

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***Formats of Digital Advertising***

We provide digital advertising services in various formats, such as banners, splash screens, pop-ups, search engine key words, information flow, and video advertisements. The following table sets forth our major types of digital advertising formats:

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| | |
|:---|:---|
| Banner ads | Pop-ups ads |
| ![LOGO](g403554g04r02.jpg) | ![LOGO](g403554g10b03.jpg) |

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***Customers***

The customers of our PRC subsidiaries' digital advertising business include direct advertisers (such as app developers and operators) and their advertising agents. The customers utilize our PRC subsidiaries' digital advertising services to promote their apps from a broad range of industry verticals, including games, tools and utilities, lifestyle, and e-commerce. ****For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, our PRC subsidiaries had contracted with a total of 26, 21, and six direct advertisers and 28, 20, and 15 advertising agents, respectively, for their digital advertising services.

In terms of the digital advertising business, for the year ended December 31, 2020, the top five customers of our PRC subsidiaries were Ten Thousand Hours Tech Limited, Lian Media Limited, Suzhou Lemi Information Technology Co., Ltd., Beijing Shenle Internet Technology Co., Ltd., and Jinhua Purun Culture Communication Co., Ltd., representing 16.02%, 9.86%, 2.85%, 2.84%, and 2.22% of our total revenue, respectively. For the year ended December 31, 2021, the top five customers of our PRC subsidiaries were Ten Thousand Hours Tech Limited, Suzhou Lemi Information Technology Co., Ltd., Lian Media Limited, Hangzhou Shengmai Communication Technology Co., Ltd., and Hangzhou Qubian Network Technology Co., Ltd., representing 3.92%, 2.87%, 2.84%, 2.77%, and 2.62% of our total revenue, respectively. For the nine months ended September 30, 2022, the top five customers of our PRC subsidiaries were Suzhou Lelin Wireless Information Technology Co., Ltd., Hangzhou Shengmai Communication Technology Co., Ltd., Hangzhou Aotian Technology Co., Ltd., Hangzhou Pengyu Technology Co., Ltd., and Hangzhou Qubian Network Technology Co., Ltd., representing 3.0%, 2.8%, 1.7%, 1.3%, and 1.3% of our total revenue, respectively.

***Suppliers***

The suppliers of our PRC subsidiaries' digital advertising services are digital advertising distribution channels, mainly comprising (i) long-tail media platforms, such as small- to medium-sized apps with available ad inventories, (ii) ad networks aggregating the ad inventories of these long-tail media platforms, and (iii) high-

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profile top overseas media platforms, such as Google and Meta. Our PRC subsidiaries generally purchase ad inventories from media platforms through SDK integration. The suppliers charge our PRC subsidiaries traffic acquisition fees, the price of which is determined by the media platforms themselves and is based on the pricing of their specific ad inventories available at the time, which varies by traffic characteristics such as time slot, targeted geographic location, and distribution duration.

***Pricing Model and Advertising Fees***

An advertisement generates an "impression" when the advertisement page is displayed. A portion of the users who have seen the display will click through the advertisement, and a portion of the users who have clicked through the advertisement will complete actions valuable to the advertiser, for example, purchasing goods or downloading apps from the advertiser's landing pages. Such actions are known as "conversions."

Our PRC subsidiaries charge their advertisers for digital advertising services based on several pricing models, primarily including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CPA (cost per action), based on the number of desired actions performed by the user, typically, a unit price is
charged for each action, such as download, installation, or registration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CPM (cost per mille), based on per one thousand impressions of the advertisement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CPC (cost per click), based on the number of clicks on the advertisement, typically, a unit price is charged for
each click;

Our PRC subsidiaries' advertisers are charged with services fees based on the total number of agreed upon actions depending on the types of pricing models they elected. Our PRC subsidiaries issue invoices typically on a monthly basis to an advertiser after verifying the relevant performance data with the advertiser based on the agreed upon pricing model and calculation basis. Some advertisers will set key performance indicators ("KPIs") for advertising campaigns, such as the app's user retention rate, to define how to count an action as an effective action for billing purposes, based on which our PRC subsidiaries will calculate the fees that they charge such advertisers. As KPIs only affect how to count the number of effective actions for purposes of fee calculation, they are not threshold requirements for the payment of our PRC subsidiaries' advertisers. The advertiser pays us service fees for digital advertising services within a time period after receipt of our PRC subsidiaries' invoice depending on the agreed credit term(s). We generally require our PRC subsidiaries' advertisers to settle payments within four to five months upon receipt of invoice/ revenue recognition.

The source of performance data for verifying the advertising fees typically comes from the media publishers through SDK or is otherwise provided by the media publishers or advertisers directly. Our PRC subsidiaries agree with the advertiser on which source of data to use in verifying performance data for purposes of billing once our PRC subsidiaries' engagement is confirmed. ****According to Frost & Sullivan, it is not uncommon that digital advertising service providers generally do not adopt anti-click fraud mechanisms but are entitled to engage independent third-party data tracking service providers to independently verify ad performance data when digital advertising service providers, such as our PRC subsidiaries, notice any unusual traffic. As of the date of this prospectus, there have been no material disputes regarding data verification among our PRC subsidiaries and their advertisers and media publishers, and therefore our PRC subsidiaries have not engaged any independent third-party data tracking service providers to verify the ad performance data reported by media publishers.

***Case Study for Digital Advertising Services—Project for Guanglian Interactive***

Beijing Guanglian Interactive Media Co., Ltd. ("Guanglian Interactive"), an advertising agency for promoting mobile application products, has been our PRC subsidiaries' long-term business partner since August 2017. Our PRC subsidiaries help Guanglian Interactive promote the products they work with—mostly apps on the Android system such as Qimao (七猫小说), Missfresh (每日优鲜), Xianyu (咸鱼), and Taobao (手机淘宝)—by purchasing

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ad inventories through their proprietary ad distribution SDK. Our PRC subsidiaries provide digital advertising solutions to help identify and engage target audiences through optimized ad distribution channels and generate revenue from services fees based on a CPA basis. Our PRC subsidiaries' service features (i) a targeted advertising strategy based on their insight and experience in digital advertising and their understanding of customer needs and the characteristics of ad distribution channels, (ii) high conversion rates attributable to the optimized ad distribution channels, and (iii) an advertising solution that meets the customer's needs for continuous and stable user traffic.

Below are screenshots of our PRC subsidiaries' digital ads for Guanglian Interactive:

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| | |
|:---|:---|
| ![LOGO](g403554g10k05.jpg) | ![LOGO](g403554g10s05.jpg) |

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**Technologies** 

The success of the PRC subsidiaries' business depends on their self-developed technologies based on low-code and user-experience-driven development, where we apply well-designed user interface components and data processing techniques to enhance development efficiency. We have developed the following software to support different lines of business for our PRC subsidiaries, including the live streaming broadcast, conference hosting, and local life live broadcast.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Xuhang Live Streaming E-commerce Cloud*. The software is developed
to facilitate the management of live streaming sales, and is currently being used by our PRC subsidiaries to support the business operations of multiple live streaming bases and centers, and to digitalize the management of their live streaming sales
business. It improves the operational efficiency of live broadcasting businesses by enhancing the collaboration between upstream and downstream partners.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Xuhang Conference Cloud*. The software includes Xuhang Conference Cloud back-end and an application called *Yihuitianxia*. As a conference and event management platform, Xuhang Conference Cloud is developed to support the conference/event departments of our PRC subsidiaries.
As a result, conferences and events are more efficiently organized, and guests and visitors have better participation experiences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Xuhang Local Life Applications (Tanshuo)*. Separate applications are available for merchants and
broadcasters, which help KOLs explore local stores and help merchants with marketing management, thereby improving both store management and KOLs' experiences.

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**Data Protection and Privacy** 

We collect data solely to analyze consumer behaviors and advertising performance. Through the provision of our new media integrated content marketing and digital advertising services, we collect certain user data, from our customers and third-party media platforms, derived from (i) user devices, such as device ID, IP address, type of device, operating system, and types of apps installed on devices, and (ii) user real-time actions, such as click-throughs, downloads, installations, and subsequent sign-ups. Such data are not user-specific and do not contain personal information, such as users' legal names or personal ID numbers. We treat all information we collect as confidential. We do not disclose any information we gather absent legal and appropriate approvals.

We have put in place appropriate physical, electronic, and managerial procedures to safeguard and secure our data assets, including to prevent unauthorized access, to preserve their integrity, and to ensure their appropriate use. On the software level, we encrypt important and sensitive data during their transmission from and to the user end, and only authorized personnel may access the backend of our systems based on their user assigned user groups and user levels. We have central controls to govern user roles and permissions. On the hardware level, only authorized information technology personnel have access to our servers through a virtual private network and data backup is kept inside our company safe box. In addition, we have established a hardware firewall where all traffic is inspected and filtered according to a comprehensive set of rules.

**Competition** 

The new media integrated content marketing industry and the digital advertising industry in China are highly competitive and rapidly evolving, with many new companies joining the competition in recent years and few leading companies. Other providers of marketing services compete directly with our PRC subsidiaries for marketers and marketing revenue. In addition, our PRC subsidiaries compete with traditional forms of media, such as newspapers, magazines, and radio and television broadcasts, and other providers of offline advertising services. We believe that our PRC subsidiaries' ability to compete effectively for marketers depends upon many factors, including brand recognition, quality of services, effectiveness of sales and marketing efforts, creativity in design and content of advertisements, pricing and discount policies, and hiring and retention of talented staff. We believe that our PRC subsidiaries are well-positioned to effectively compete in the new media integrated content marketing industry and the digital advertising industry based on the factors listed above.

Some of our PRC subsidiaries' current or future competitors, however, may have longer operating histories, greater brand recognition, or greater financial, technical, or marketing resources than we do. For a discussion of risks relating to competition, see "*Risk Factors—Risks Related to Our Business and Industry—Our PRC subsidiaries are in the highly competitive new media integrated content marketing industry and the digital advertising industry and may not be able to compete successfully against existing or new competitors, which could reduce their market share and adversely affect their competitive position and financial performance*."

**Branding and Marketing** 

Our PRC subsidiaries have implemented various marketing and promotional measures to promote their services. As of September 30, 2022, our PRC subsidiaries had a team of 102 sales and marketing employees. For the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, their sales and marketing expenses amounted to RMB4.6 million, RMB7.0 million (US$1.0 million), and RMB3.7 million (US$0.5 million), respectively, accounting for 1.3%, 1.5%, and 1.1% of their total revenue for the respective years and period, respectively. Their marketing and promotion efforts are focused on finding suitable new customers, deepening their relationships with existing ones, exploring and assessing business opportunities and associated risks, working towards collaboration with business partners, as well as enhancing their industry reputation. Our PRC subsidiaries engage with potential and existing customers through mobile and email communications as well as physical visits. Our PRC subsidiaries endeavor to provide effective services and diversify their service offerings to further enhance customers' retention rates or introduce existing customers to other types of services they have

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not experienced. Our PRC subsidiaries actively conduct market research to keep themselves abreast with industry development. For their new media integrated content marketing services, our PRC subsidiaries consider a combination of factors in selecting marketers for collaboration, such as their industry position and reputation, as well as their potential demand both online and offline for user engagement targeting industry verticals, such as retailing, e-commerce, catering, tourism, and leisure & entertainment. For the digital advertising services, our PRC subsidiaries mainly target mobile apps with a large existing user traffic and engage with app developers and operators to promote our solutions and services. To increase their brand awareness and promote their services, our PRC subsidiaries conduct a variety of sales and marketing activities, such as attending industry conferences and business development activities, increasing their social media presence, as well as collaborating with local governmental partners for business referrals and market expansion opportunities. The management team of our PRC subsidiaries also work together with their sales and marketing team to determine their business development strategies and action plans. In addition, our PRC subsidiaries' existing customers may also refer new customers to our PRC subsidiaries as a recognition for the high-quality services they provide.

**Intellectual Property** 

Our PRC subsidiaries regard their trademarks, service marks, domain names, trade secrets, and similar intellectual property as critical to their success. Our PRC subsidiaries rely on a combination of copyright and trademark law, and confidentiality and non-disclosure agreements to protect their intellectual property rights. Our PRC subsidiaries also regularly monitor any infringement or misappropriation of their intellectual property rights.

As of the date of this prospectus, our PRC subsidiaries have registered:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 32 trademarks in mainland China and two trademarks in Hong Kong;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 10 domain names for which the filing-for-record procedures have been completed in China;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 267 software copyrights in China, relating to our PRC subsidiaries' service and management platforms and
other self-developed products.

Our PRC subsidiaries implement comprehensive measures to protect their intellectual property in addition to making trademark and software copyright registration applications. Our PRC subsidiaries' key measures to protect their intellectual property include: (i) timely registration and filing with relevant authorities and application of intellectual property rights for their significant technologies and self-developed software; and (ii) reviews of virtual marketing materials, including text, graphics, and videos, to avoid copyright infringement.

**Employees** 

Our PRC subsidiaries had 389, 728, and 401 full-time employees as of December 31, 2020, 2021, and 2022, respectively. The following table sets forth the number of their full-time employees as of December 31, 2022:

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| | |
|:---|:---|
| **Function:** | **Number** |
|  Content Production and Operation | 159 |
|  Research and Development | 14 |
|  Sales and Marketing | 81 |
|  General and Administration | 147 |
|  **Total** | **401** |

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Our PRC subsidiaries enter into employment contracts with a confidentiality clause with their full-time employees.

We believe that our PRC subsidiaries maintain a good working relationship with their employees, and they have not experienced material labor disputes in the past. None of their employees are represented by labor unions.

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**Facilities** 

Our principal executive office is located at Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Rd, Gongshu District, Hangzhou, Zhejiang Province, China, where Xuhang Network leases this property for free from an independent third party, Shangtang Neighborhood Work Office of Gongshu District People's Government of Hangzhou Municipality, with an area of approximately 53,820 square feet, with a lease term from May 1, 2020 to December 31, 2024.

As of the date of this prospectus, our PRC subsidiaries do not own any property and they lease 18 offices or other premises in China with an aggregate gross floor area of approximately 191,035 square feet and with an average monthly rent of RMB0.49 million (approximately US$0.07 million). The terms of such leases range from one to five years.

The areas of leased premises are based on the figures specified in the certificates of land use or the corresponding lease agreements. The following table shows the information of the properties our PRC subsidiaries lease as of the date of this prospectus:

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| | | | |
|:---|:---|:---|:---|
| **Location** | **Area (Square Feet)** | **Current Use** | **Term of Use** |
| Gongshu District, Hangzhou, China | 53820 | Principal Executive Office | May 1, 2020 to December 31, 2024 |
| Binjiang District, Hangzhou, China | 30008 | Office | June 11, 2018 to September 10, 2023 |
| Gongshu District, Hangzhou, China | 1076 | Storage | August 1, 2021 to July 31, 2024 |
|  Horgos City, Xinjiang Province, China | 471 | Office | December 17, 2022 to December 16, 2023 |
|  Horgos City, Xinjiang Province, China | 380 | Office | December 17, 2022 to December 16, 2023 |
|  Horgos City, Xinjiang Province, China | 515 | Office | March 16, 2023 to March 15, 2024 |
|  Zhengzhou City, Henan Province, China | 3981 | Office | February 25, 2022 to February 24, 2025 |
|  Nanchang City, Jiangxi Province, China | 56749 | Office | October 25, 2019 to May 25, 2023 |
|  Nanjing City, Jiangsu Province, China | 2976 | Office | November 17, 2022 to October 1, 2023 |
| Jiading District, Shanghai, China | 14553 | Office | April 2, 2021 to April 1, 2026 |
|  Qingdao City, Shandong Province, China | 1184 | Office | June 1, 2020 to May 31, 2023 |
| Xiamen City, Fujian Province, China | 7742 | Office | March 23, 2021 to March 22, 2024 |
|  Horgos City, Xinjiang Province, China | 484 | Office | December 17, 2022 to December 16, 2023 |
| Chaoyang District, Beijing, China | Approximately 484 (12 Working Desks) | Office | November 1, 2022 to October 31, 2023 |
| Yangpu District, Shanghai, China | 1184 | Office | December 1, 2021 to November 30, 2023 |
|  Kunming City, Yunnan Province, China | 5823 | Office | January 1, 2022 to June 30, 2023 |
|  Qingdao City, Shandong Province, China | 6752 | Office | December 1, 2021 to November 31, 2024 |
| Wuhan City, Hubei Province, China | 2906 | Office | July 13, 2022 to July 12, 2023 |

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We believe that the facilities that our PRC subsidiaries currently lease are generally adequate to meet their needs for the foreseeable future.

**Insurance**

As required by regulations in China, our PRC subsidiaries participate in various employee social security plans that are organized by municipal and provincial governments for their full-time employees, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance, and housing insurance. Our PRC subsidiaries are required under PRC law to make contributions from time to time to employee benefit plans for their full-time employees at specified percentages of the salaries, bonuses, and certain allowances of such employees, up to a maximum amount specified by the local governments in China. Our PRC subsidiaries have not made adequate social security and housing fund contributions for all employees, and they may be required to make up for the shortfall in the social security contributions as well as to pay late fees at the

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rate of 0.05% per day of the outstanding amount from the due date. Our PRC subsidiaries do not maintain directors and officers liability insurance, group comprehensive life insurance for employees, property insurance, business interruption insurance, or general third-party liability insurance. We believe the insurance coverage our PRC subsidiaries maintain is in line with the industry. See "Risk Factors—Risks Related to Our Business and Industry—Our PRC subsidiaries' current insurance policies may not provide adequate levels of coverage against all claims and they may incur losses that are not covered by their insurance."

**Seasonality** 

Our PRC subsidiaries' revenue, cash flow, operating results, and other key operating and performance metrics may vary from quarter to quarter, due to the seasonal nature of their marketers' budgets and spending on advertising campaigns. For example, advertising spending tends to rise during holiday seasons with consumer holiday spending, or closer to the end-of-year in fulfillment of their annual advertising budgets, which may lead to an increase in our PRC subsidiaries' revenue and cash flow during such periods. Moreover, advertising inventory during holiday seasons may be more expensive, due to increased demand for advertising inventory.

**Legal Proceedings** 

Our PRC subsidiaries are not currently a party to any legal proceedings that in the opinion of their management would have a material adverse effect on their business. From time to time, our PRC subsidiaries may become a party to various legal or administrative proceedings arising in the ordinary course of their business, including actions with respect to intellectual property infringement, violation of third-party licenses or other rights, breach of contract, and labor and employment claims.

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**REGULATIONS** 

Our business and operations are subject to laws and regulations in the PRC. This section summarizes the major PRC laws, rules, and regulations applicable to our current business and the key aspects of the industry in which we operate.

**Regulations Relating to Company Establishment and Dividend Distribution** 

In accordance with the Company Law of the PRC (2018 Revision), which was released and came into force on October 26, 2018, where a company is to be established within the territory of the PRC, applications shall be submitted to the company registration authorities in accordance with the law for registration and establishment of companies.

Applications that satisfy the requirements for establishment shall be registered by the company registration authorities as limited liability companies or companies limited by shares respectively. Where laws and administrative regulations requires prior approval for company establishment, such approval shall be obtained in accordance with applicable law and regulations prior to the application for company registration.

Under the similar requirements of the Administrative Regulation of the PRC on the Registration of Market Entities, which took effect on March 1, 2022, upon review and approval of an application for enterprise legal person registration, an enterprise legal person business license shall be issued to the applicant who obtains legal person status, and the legitimate rights and interests of the enterprise shall be protected by State laws. ****

Our PRC subsidiaries have all completed the registration procedures under the requirements of the aforementioned laws in the SAMR or its local counterparts and now are legitimately operating under the supervision of authorities.

Regarding the dividend distribution, the Company Law of the PRC provides that a company shall contribute at least 10% of its after-tax profits of the current year into its statutory surplus reserve unless the aggregate sum of such reserve reaches 50% of its registered capital. Where the balance of the statutory surplus reserve of a company is insufficient to make good its losses in the previous year, the company shall make good such losses using its profits of the current year before making a contribution to the statutory surplus reserve in accordance with the aforementioned provisions.

Upon contribution to the statutory surplus reserve using its post-tax profits, a company may make a further contribution to the surplus reserve using its post-tax profits in accordance with a resolution of the shareholders' meeting or the shareholders' general meeting.

Shareholders of a limited liability company are entitled to dividends in accordance with the percentage of their respective paid-in capital contribution, unless all shareholders agree that they will not be distributed with the dividends based on the percentage of their capital contribution.

**Regulations Relating to Advertising Business** 

The Advertising Law, which took effect on February 1, 1995 and was last amended on April 29, 2021, regulates the content of advertisements, codes of conduct for advertisers, and the supervision and administration of the advertising industry. It also stipulates that advertisers, advertising operators, and advertisement publishers shall abide by the Advertising Law and related laws and regulations, be honest and trustworthy, and compete fairly in the advertising business. Pursuant to the Advertising Law, if advertising operators or advertisement publishers know or should have known the content of the advertisements is false or deceptive but still provide advertising design, production, agency, or publishing services in connection with the advertisement, they might be subject to penalties, including fines and confiscation of advertising revenue, and in the case of serious violations, the competent PRC authority may suspend or revoke their business licenses.

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According to the Advertising Law, quoted as follows, advertisements shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) use or covertly use the national flag, national anthem, national emblem, military flag, military anthem, and military emblem of the PRC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) use or covertly use the name or image of State agencies and their personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) use wordings such as "national level," "highest level," and "best";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) harm the dignity or interests of the State and divulge State secrets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) hinder social stability and harm public interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) endanger personal and property safety, and infringe upon personal privacy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) hinder public order or violate social morality;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) contain obscenity, pornography, gambling, superstition, terror, or violent content;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) contain ethnic, racial, religious, or sexual discrimination content;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) hinder the protection of the environment, natural resources, or cultural heritage; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) fall under any other circumstances stipulated by laws and administrative regulations.

The Interim Measures for the Administration of Internet Advertising (the "Interim Measures for Internet Advertising"), which entered into force on September 1, 2016, regulate advertising activities conducted via the Internet. As stipulated in the Interim Measures for Internet Advertising, advertisements published or distributed via the Internet shall not interfere with users' normal use of the Internet. For example, advertisements published on web page pop-up windows or in other forms shall be conspicuously marked with a "close" sign to ensure the closing of such advertisements by one click. Entities or individuals are prohibited from inducing users to click on the content of an advertisement by deception. An Internet advertisement publisher or advertising operator shall, in accordance with the relevant provisions of the state, establish and maintain a system for acceptance registration, examination, and file management; and examine, verify, and record the identity information of each advertiser. The Interim Measures for Internet Advertising also require Internet advertisement publishers and advertising operators to examine related supporting documents, verify the content of the advertisements, and shall not design, produce, act as agents, or publish those advertisements with content inconsistent with the supporting documents or the supporting documents thereof are incomplete.

One of our PRC subsidiaries, Hangzhou Dedao Culture Creative Co., Ltd. (a subsidiary of Horgos Weizan Network Technology Co., Ltd.), before being acquired by our Company, was fined RMB3,448.8 for publishing medical advertisements without proper inspection and examination on March 16, 2020. Other than the aforementioned penalty, none of our PRC subsidiaries received any administrative penalties for illegal or unlawful operations in the advertising business during the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022.

**Regulations Relating to Live streaming Commerce** 

On November 5, 2020, the SAMR implemented the Guiding Opinions on Strengthening the Supervision of Livestreaming Marketing Activities. According to these Guidance Opinions, governmental supervision of live streaming marketing activities will be focused on standardizing the scope of commodity or service marketing, standardizing the examination and release of advertisements, protecting consumers' right of information and right to choose, investigating and dealing with unlawful conduct in e-commerce, infringement of consumers' legitimate rights and interests, unfair competition, product quality, intellectual property, food safety, advertising, and pricing.

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The CAC promulgated the Administrative Provisions on the Information Services Provided Through Official Accounts of Internet Users (Revised in 2021) on January 22, 2021, or the Administrative Provisions, which came into force on February 22, 2021. In these Administrative Provisions, the CAC has specified that producers and operators of official accounts shall not commit illegalities and irregularities, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) failing to register with their real identity information or register the name, avatar, or brief introduction of any official account that is inconsistent with their real identity information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) maliciously counterfeiting, imitating, or misappropriating the public accounts of organizations or other persons to produce and publish information content;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) providing such services as collecting, editing, and releasing Internet news information without permission or beyond the scope of permission;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) manipulating and making use of multiple platform accounts to release similar and low-quality information content in batches, generating false flow data and creating false public opinions and hot spots;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) inciting extreme emotions by virtue of emergencies, or damaging the reputation of others and organizations by means of cyber-violence, disturbing the normal operation of organizations, and affecting social harmony and stability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) fabricating false information, falsifying the nature of originality, marking false information sources, distorting the truth, or misleading the public;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) conducting illegal network supervision, marketing fraud, extortion, and seeking illegal interests by means of paid release or deletion of information, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) registering, hoarding, or illegally trading official accounts in bulk in violation of regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) producing, reproducing, or releasing illegal information, or failing to take measures to prevent or boycott the production, reproduction, or release of harmful information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) committing any other acts prohibited by laws and administrative regulations.

Article 19 of the Administrative Provisions further promulgates that for any official account in violation of these Administrative Provisions and relevant laws and regulations, the information service platform for official accounts shall take disposal measures in accordance with applicable laws or as agreed, such as warning, restricting functions of such official account, suspending the updating of information, ceasing the release of advertisements, closing or deregistering such official account, blacklisting such official account, and prohibiting re-registration, and maintaining relevant records and timely report the case to the CAC and other competent authorities.

During the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, we did not receive any administrative penalties for illegal or unlawful operations in the field of live streaming commerce. In addition, we have established what we believe to be adequate and effective internal control policies over our advertising business to ensure that our live streaming accounts and content are regularly monitored and inspected.

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

The PRC government authorities have enacted laws and regulations with respect to internet information security and protection of personal information from any abuse or unauthorized disclosure, including (i) the Decision on Preserving Computer Network Security, enacted by the SCNPC on December 28, 2000 and amended on

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August 27, 2009, (ii) the Provisions on the Technical Measures for the Protection of the Security of the Internet, issued by the Ministry of Public Security (the "MPS") on December 13, 2005 and effective on March 1, 2006, (iii) the Decision on Strengthening Information Protection on Network, promulgated by the SCNPC on December 28, 2012, (iv) the Several Provisions on Regulating the Market Order of Internet Information Services, issued by the Ministry of Industry and Information Technology of the PRC (the "MIIT") on December 29, 2011 and effective on March 15, 2012, and (v) the Provisions on Protecting the Personal Information of Telecommunications and Internet Users, issued by MIIT on July 16, 2013 and implemented on September 1, 2013. The Provisions on Protection of Personal Information of Telecommunications and Internet Users regulate the use and collection of personal information in the process of the provision of telecommunications services and internet information services in the PRC. Telecommunications business operators and internet information service providers must specify the purposes, manners, scopes of collection and use of information, the channels for inquiry and correction of information, the consequences of refusal to provide information, and other relevant matters. Telecommunications business operators or internet information service providers (i) may not use and collect users' personal information without prior consent; (ii) shall strictly keep the collected personal information confidential and are prohibited from disclosing, tampering with, destroying, selling, or illegally providing others with such information; and (iii) are required to take technical and other measures to prevent the collected personal information from any unauthorized disclosure, destruction, alteration, or loss.

On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC (the "Cybersecurity Law"), which became effective on June 1, 2017. The Cybersecurity Law requires network operators to perform certain functions related to cybersecurity protection and strengthen network information management. For instance, no network operators may disclose, tamper with, or destroy personal information that it has collected, or disclose such information to others without the prior consent of the person whose personal information has been collected unless such information has been processed to prevent a specific person from being identified and such information from being restored.

The Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues concerning the Application of Law in the Handling of Criminal Cases of Infringing on Citizens' Personal Information (the "Interpretation"), which was issued on May 8, 2017 and took effect on June 1, 2017, clarifies several concepts regarding the crime of infringing upon a citizen' personal information, stipulated by Article 253A of the Criminal Law of the PRC, including (i) citizens' personal information, (ii) violation of relevant national provisions, (iii) provision of citizens' personal information, and (iv) illegally obtaining any citizen's personal information by other methods. Also, the Interpretations specify the standards for determining serious circumstances and particularly serious circumstances of this crime.

In addition, the Civil Code of the PRC, which was implemented on January 1, 2021, has further strengthened the protection of personal information by stipulating, among others, that the processing of personal information shall be subject to the principles of legitimacy, rightfulness, and necessity, with no excessive processing pursuant to Article 1035.

In the same field, Amendment (IX) to the Criminal Law of the PRC, which was issued on August 29, 2015 and came into effect on November 1, 2015, similarly stipulates that those who sell or provide any citizen's personal information or sells or provides to any other person any citizen's personal information obtained in the course of performing functions or providing services in violation of the relevant provisions of the state, shall, if the circumstances are serious, be sentenced to imprisonment or subject to a fine.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC (the "Personal Information Protection Law"), which took effect on November 1, 2021. The Personal Information Protection Law imposes special personal information protection obligations on large Internet platforms, including establishing and improving a personal information protection compliance system in accordance with state regulations and establishing an independent agency mainly composed of external members to supervise the protection of personal information. The platform is required to formulate its own operating rules under the

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principles of openness, fairness, and impartiality. In addition, the platform is required to regularly publish social responsibility reports on personal information protection and accept social supervision.

On December 28, 2021, 13 governmental departments of the PRC, including the CAC, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. According to the Cybersecurity Review Measures, the purchase of network products and services by a critical information infrastructure operator and the data processing activities of an online platform operator that affect or may affect national security shall be subject to the cybersecurity review. Particularly, an online platform operator that possesses personal information of at least one million users must apply for a cybersecurity review by the CAC if it seeks to be listed in foreign countries.

On November 14, 2021, the CAC published the Security Administration Draft, which provides that data processors shall apply for a cybersecurity review under certain circumstances, such as mergers, restructurings, and divisions of Internet platform operators that hold large amount of data relating to national security, economic development, or public interest which affects or may affect the national security, overseas listings of data processors that process personal data for more than one million individuals, Hong Kong listings of data processors that affect or may affect national security, and other data processing activities that affect or may affect the national security. With regard to personal information protection, data processors shall develop rules for processing personal information and strictly abide by these rules. Rules for processing personal information should be displayed in an accessible, centralized place with clear, concise, and clear content in a concise and plain style.

During the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, we took strict confidentiality measures to protect the personal information we obtained, and we did not receive any administrative penalties for illegal or unlawful operations in the field of information security. Furthermore, as confirmed by our PRC counsel, AllBright, we are not subject to cybersecurity review or network data security review by the CAC under the Cybersecurity Review Measures, or if the Security Administration Draft is enacted as proposed, since our PRC subsidiaries are not CIIOs or online platform operators with personal information of more than one million users. See "Risk Factors—Risks Relating to Doing Business in the PRC—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our PRC subsidiaries' business and our offering."

**Regulations Relating to Foreign Investment** 

According to the Provisions on Guiding the Direction of Foreign Investment, which took effect on April 1, 2002, industries in the PRC are classified into four categories: (i) permitted foreign investment industries, (ii) encouraged foreign investment industries, (iii) restricted foreign investment industries, and (iv) prohibited foreign investment industries. Encouraged foreign investment industries, restricted foreign investment industries, and prohibited foreign investment industries are specified in the aforementioned Provisions. Industries that do not fall in any of these three categories are regarded as permitted foreign investment industries. The categories ****were promulgated and amended from time to time by the NDRC and the MOFCOM. The Negative List, which was last amended on December 27, 2021 and subsequently enforced on January 1, 2022 by the NDRC and the MOFCOM, replaced the categories stipulated in the said Provisions, sets forth management measures for the market entry of foreign investors, such as equity requirements and senior management requirements. Pursuant to the Negative List, any internet cultural operations (except for music) and production and operation of radio and television programs (including the introduction of businesses) are prohibited from foreign investment industries, and foreign-invested shares of value-added telecommunications services must not exceed 50% (excluding e-commerce, domestic multi-party communications services, store, and forward services and call center services) of the business. According to the above-mentioned laws and regulations, our business does not fall within the prohibited list.

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On 15 March 2019, the NPC promulgated the Foreign Investment Law of the PRC, which became effective on January 1, 2020, and superseded the Law of the PRC on Chinese-Foreign Equity Joint Ventures, the Law of the PRC on Chinese-Foreign Contractual Joint Ventures, and the Law of the PRC on Wholly Foreign-Owned Enterprises. On December 26, 2019, the State Council issued the Regulations on Implementing the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, and replaced the Regulations on the Implementation of the Law of the PRC on Chinese-Foreign Equity Joint Ventures, Interim Provisions on the Contract Term of Chinese-foreign Equity Joint Ventures, the Detailed Rules for the Implementation of the Law of the PRC on Wholly Foreign-owned Enterprises, and the Detailed Rules for the Implementation of the Law of the PRC on Chinese-Foreign Contractual Joint Ventures.

The aforementioned laws can be generally concluded that the Chinese government encourages foreign investors to invest within the territory of China. It can be embodied that the government and its relevant departments are required to accord equal treatment to foreign investment enterprises and Chinese-funded enterprises in terms of, among others, government funding, land supply, tax reduction and exemption, qualification licensing, formulation of standards, project declaration, and human resource policies. Furthermore, foreign investors and foreign investment enterprises may, pursuant to laws, administrative regulations, or the provisions of the State Council, enjoy preferential financial, tax, land use, and other incentives. Foreign investors using investment gains derived in China to carry out further investments in China shall enjoy the corresponding preferential incentives pursuant to the applicable laws*.***

On December 30, 2019, the MOFCOM and the SAMR issued the Measures for the Reporting of Foreign Investment Information, which came into effect on January 1, 2020, and replaced the Interim Measures for the Recordation Administration of the Formation and Modification of Foreign-Funded Enterprises. Since January 1, 2020, for foreign investors carrying out investment activities directly or indirectly in China, the foreign investors or foreign-invested enterprises shall submit investment information to the market regulation authorities under these measures.

**Regulations Relating to Intellectual Property Rights** 

***Copyright***

The Copyright Law of the PRC (the "Copyright Law"), implemented on June 1, 1991 and amended on October 27, 2001, February 26, 2010, and November 11, 2020, the latest revision of which came into effect on June 1, 2021, provides that Chinese citizens, legal persons, or other organizations will, whether published or not, enjoy copyright in their copyrightable works, which include, among others, works of literature, art, natural science, social science, engineering technology, and computer software. Copyright owners enjoy certain legal rights, including but not limited to right of publication, right of authorship, and right of reproduction. The Copyright Law extends copyright protection to Internet activities, products disseminated over the Internet, and software products. In addition, the Copyright Law provides for a voluntary registration system administered by the China Copyright Protection Center, or the "CPCC."

Pursuant to the Regulation on Computers Software Protection, which became effective on October 1, 1991, was last amended on January 30, 2013, and was subsequently enforced on March 1, 2013, Chinese citizens, legal persons, and other organizations shall enjoy copyright on software they develop, regardless of whether the software is released publicly. The software copyright exists from the date on which the development of the software is completed, and software copyright owner may register with the software registration institution recognized by the State Council's copyright administration department. On February 20, 2002, the National Copyright Administration of the PRC issued the Measures for the Registration of Computer Software Copyright, which outline the operational procedures for registration of software copyright, as well as registration of the license contracts for the software copyright and software copyright transfer contracts. The CPCC is mandated as the software registration body under such measures.

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As of the date of this prospectus, our PRC subsidiaries have registered 267 copyrights in the PRC. No copyright infringement claim has been filed, or, to the best of our knowledge, threatened, against our PRC subsidiaries as of the date of this prospectus.

***Patent***

Under the Patent Law of the PRC, promulgated on March 12, 1984, effective on April 1, 1985, and amended on September 4, 1992, August 25, 2000, December 27, 2008, and October 17, 2020, the latest revision of which came into effect on June 1, 2021, and the Detailed Rules for the Implementation of the Patent Law of the PRC, promulgated on June 15, 2001, effective on July 1, 2001, and amended on December 28, 2002 and January 9, 2010, the patent administrative authorities shall be responsible for the administration of patent matters nationwide. Where two or more applicants have made their respective applications for a patent for the same invention, the patent rights shall be granted to the applicant who has made the first application. Inventions and utility models in which patent rights are granted shall possess novelty, creativity, and practicality. The validity period of patent rights is 20 years for an invention patent, 10 years for a utility model patent, and 15 years for a design patent, commencing from their respective date of application. Implementing a patent without obtaining consent or a proper license from the patentee constitutes an infringement of patent rights. As of the date of this prospectus, one of our PRC subsidiaries, Horgos Pinyue Network Technology Co., Ltd., has filed one patent application with the China Intellectual Property Administration, but has not been granted any patent rights in the PRC.

***Trademark***

Under the Trademark Law of the PRC, promulgated by the SCNPC on August 23, 1982, effective on March 1, 1983, and amended on February 22, 1993, October 27, 2001, August 30, 2013, and April 23, 2019, and the Implementation Regulations for the Trademark Law of the PRC, promulgated by the State Council on August 3, 2002, effective on September 15, 2002, and amended on April 29, 2014, the Trademark Office of National Intellectual Property Administration (the "Trademark Office"), under the SAIC shall be in charge of trademark registration and administration nationwide. A trademark to be registered shall possess distinctive characteristics to facilitate identification, and shall not conflict with prior legitimate rights obtained by others. The Trademark Law has adopted a first-to-file principle with respect to trademark registration. Where two or more trademark registration applicants apply for registration of identical or similar trademarks to be used on identical or similar commodities, the trademark with the earliest application, or with the earliest date of use (provided that the applications are filed on the same day), shall be preliminarily approved and published. A trademark to be registered that does not comply with the relevant provisions of the Trademark Law of the PRC or is identical or similar to a trademark registered by others for use on the same type of commodities or similar commodities or a trademark preliminarily approved shall be rejected by the Trademark Office. Any person applying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained a "sufficient degree of reputation" through such party's use. A registered trademark shall be valid for 10 years. A trademark registrant intending to continue to use the registered trademark upon expiry of the period of validity shall complete renewal procedures within 12 months before its expiration date. The validity period of each renewal shall be 10 years from the day after the expiration date of the last period of validity. A trademark registrant may license its registered trademark to another party by entering into trademark licensing contracts, which must be filed with the Trademark Office for its record.

As of the date of this prospectus, our PRC subsidiaries have registered 32 trademarks in mainland China. No trademark infringement claim has been filed, or, to the best of our knowledge, threatened, against our PRC subsidiaries as of the date of this prospectus.

***Domain Name***

Pursuant to the Measures for the Administration of Internet Domain Names, promulgated by the MIIT on August 24, 2017, and effective on November 1, 2017, the MIIT shall implement supervision and administration over domain name services nationwide. The registration of domain names adopts a first-to-file principle. The

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domain name registration service institutions, which provide domain name registration services, shall require applicants for domain name registration to provide true, accurate, and complete domain name registration information of the domain name such as the identity information of the holder of the domain name.

According to Administrative Measures on Internet-based Information Services, promulgated by the State Council on September 25, 2000, and revised on January 8, 2011, non-commercial internet-based domain names shall apply for filing-for-record to the administrative organ in charge of telecommunications.

As of the date of this prospectus, our PRC subsidiaries are the registered holder of 10 domain names for which the filing-for-record procedures have been completed in the PRC. No infringement claim has been filed, or, to the best of our knowledge, threatened, against the domain names of our PRC subsidiaries as of the date of this prospectus.

**Regulations Relating to Labor and Social Insurance** 

***Labor Law***

Pursuant to the Labor Law of the PRC, promulgated by the SCNPC on July 5, 1994, effective on January 1, 1995 and amended on August 27, 2009 and December 29, 2018, labor contracts shall be concluded if labor relationships are to be established between employers and employees. The conclusion and alternation of such labor contracts shall follow the principle of fairness, voluntariness, and mutual consensus, and shall not violate the laws and regulations. The employer must establish and perfect a system for labor safety and sanitary, strictly execute the national labor safety and sanitary rules and standards, provide labor safety and sanitary education to its workers or employees, prevent accidents arising from labor courses, and reduce occupational harms. In addition, the employer and its workers or employees must participate in social insurance schemes in accordance with the law and pay insurance premiums.

***Labor/Employment Contract***

Pursuant to the Labor Contract Law of the PRC, promulgated by the SCNPC on June 29, 2007, effective on January 1, 2008 and revised on December 29, 2012, the employment relationship is formed between the employer and its workers or employees when the employer puts the employee to work; and the employer shall sign written labor or employment contracts with its workers or employees. The employer shall not force a worker or employee to work overtime or do so in a disguised form. An employer that requires a worker or employee to work overtime shall pay overtime wages pursuant to the relevant provisions of the PRC. In addition, the wage of a worker or employee shall not be lower than the local minimum wage standards, and the employer shall promptly pay labor remuneration to workers in full amount.

***Social Security***

Pursuant to the Social Insurance Law of the PRC, promulgated on October 28, 2010 by the SCNPC, effective on July 1, 2011 and amended on December 29, 2018, the Provisional Regulations for the Collection and Payment of Social Insurance Premiums, promulgated by the State Council, effective on January 22, 1999 and amended on March 24, 2019, the Regulations on Work Injury Insurance, promulgated on April 27, 2003 by the State Council, effective on January 1, 2004 and amended on December 20, 2010, the Regulations on Unemployment Insurance, promulgated by the State Council on January 22, 1999 and effective on the same day, the Trial Measures for Enterprise Employee Maternity Insurance, promulgated on December 14, 1994 and effective on January 1, 1995, employers shall make contributions to basic endowment insurance, unemployment insurance, maternity insurance, work injury insurance, and basic medical insurance for employees in accordance with relevant laws. Employers should apply for registration of social insurance with the local social insurance agency and pay the social insurance fees for employees. If the employer fails to file the registration for social insurance, the social insurance administration authority shall order it to make rectification within a prescribed time limit. Otherwise, the employer will be imposed a fine. If the employer does not pay the social insurance in full amount as

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scheduled, the social insurance collection institution shall order it to pay within a prescribed time limit together with a late fee. If the payment including the late fee is not settled by the prescribed time limit, the employer will be imposed a fine.

Under the Regulations on the Management of Housing Fund, promulgated by the State Council and effective on April 3, 1994, and amended on March 24, 2002 and March 24, 2019, a newly formed entity in the PRC must register with the competent housing fund managing center. When employing new employees, the employer shall undertake housing fund payment and deposit registration at the housing provident fund management center. Where an employer is overdue in the payment and deposit of, or underpays, the housing fund, the housing fund management center shall order such employer to make the payment and deposit within a prescribed time limit; otherwise, an application may be made to a people's court by the housing provident fund management center for compulsory enforcement.

According to the Reform Scheme of Tax Collection and Management System of State Tax and Local Tax, which took effect on July 20, 2018, the social insurance collection and management authority was to be transferred to the tax authorities from January 1, 2019. On September 18, 2018, the general meeting of the State Council announced that the policies for social insurance shall remain unchanged until the transfer of the authority for social insurance has been completed. On September 21, 2018, according to the Urgent Notice of the General Office of the Ministry of Human Resources and Social Security on Enforcing the Spirit of the General Meeting of the State Council in Stabilizing the Levy of Social Insurance Contributions, policies for both the rate and basis of social insurance contributions shall remain unchanged until the reform on the transfer of the authority for social insurance has been completed. On November 16, 2018, the SAT released the Notice of the State Administration of Taxation on Certain Measures on Further Supporting and Serving the Development of Private Economy, which provided that the policy for social insurance shall remain stable and the SAT will pursue to lower the social insurance contribution rates with the relevant authorities, and ensure the overall burden of social insurance contributions on enterprises will be lowered. Furthermore, the Notice of the General Office of the State Administration of Taxation on Conducting the Relevant Work Concerning the Administration of Collection of Social Insurance Premiums in a Steady, Orderly and Effective Manner, which entered into force on September 13, 2018, holds the same attitude and endeavors to ensure the collection of social insurance premiums would be orderly.

Our PRC subsidiaries have not made adequate social insurance and housing fund contributions for all employees, and they may be required to make up for the shortfall in the social insurance contributions as well as to pay late fees at the rate of 0.05% per day of the outstanding amount from the due date. See "Risk Factors— Risks Relating to Doing Business in the PRC—Our PRC subsidiaries have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations, which may subject them to penalties."

During the years ended December 31, 2020 and 2021 and the nine months ended September 30, 2022, we did not receive any administrative penalties for illegal or unlawful operations in the field of social security.

**Regulations Relating to Tax** 

***Enterprise Income Tax***

In accordance with the EIT Law, which took effect on January 1, 2008, and was last amended on December 29, 2018, and the Regulations for the Implementation of the Enterprise Income Tax Law of the PRC, which took effect on January 1, 2008 and was last amended on April 23, 2019, enterprises are classified as resident enterprises and non-resident enterprises. Resident enterprises are defined as enterprises that are established in China, or that are established in accordance with the laws of foreign countries (regions) but whose actual or de facto control entity is within the PRC. Non-resident enterprises are defined as enterprises that are organized in accordance with the laws of foreign countries (regions) and whose actual management is conducted outside the PRC, but (i) have established entities or premises in China, or (ii) have no such entities or premises in China but have income generated from China. Under the EIT Law and relevant implementing regulations, foreign-invested enterprises in the PRC are subject to corporate income tax at a uniform rate of 25%. For a non-resident enterprise

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having no office or establishment inside China, or for a non-resident enterprise whose incomes have no actual connection to its institution or establishment inside China, a withholding tax of 10% will be levied for the income derived from China.

The Notice of the State Administration of Taxation on Issues about the Determination of Chinese-controlled Enterprises Registered Abroad as Resident Enterprises based on Their Body of Actual Management, promulgated by the SAT and last amended on December 29, 2017, sets out the standards and procedures for determining whether an enterprise registered outside of the PRC and controlled by PRC enterprises or PRC enterprise groups will be classified as a resident enterprise with its de facto control entity located within the PRC.

On December 10, 2009, the SAT issued the Notice on Strengthening the Administration of Enterprise Income Tax on Equity Transfers of Non-resident Enterprises (the "Circular 698"). By promulgating and implementing the Circular 698, the PRC tax authorities have enhanced their scrutiny over the indirect transfer of equity interests in a PRC resident enterprise by a non-resident enterprise. The SAT further issued the Public Announcement on Several Issues Concerning Enterprise Income Tax for Indirect Transfer of Assets by Non-Resident Enterprises (the "Circular 7") on February 3, 2015, which replaces certain provisions in the Circular 698. The Circular 7 introduces a new tax regime that is significantly different from that under the Circular 698. The Circular 7 extends its tax jurisdiction to capture not only indirect transfer as set forth under the Circular 698 but also transactions involving the transfer of immovable property in China and assets held under the establishment in China. The Circular 7 also provides clearer criteria than the Circular 698 on how to assess reasonable commercial purposes and introduces safe harbor scenarios applicable to internal group restructurings. Where a non-resident enterprise indirectly transfers equity interests or other assets of a PRC resident enterprise by implementing arrangements that are not for reasonable commercial purposes to avoid its obligation to pay enterprise income tax, such an indirect transfer shall, in accordance with the EIT Law, be recognized by the competent PRC tax authorities as a direct transfer of equity interests or other assets of the PRC resident enterprise.

On October 17, 2017, the SAT promulgated the Announcement on Matters Concerning Withholding and Payment of Income Tax of Non-resident Enterprises from Source (the "SAT Circular 37"), which came into force and replace the Circular 698 and certain provisions in the Circular 7 on December 1, 2017 and was partly amended on June 15, 2018. The SAT Circular 37, among other things, simplifies the procedures of withholding and payment of income tax levied on non-resident enterprises. Pursuant to SAT Circular 37, where the party responsible for withholding such income tax did not, or was unable to, withhold the taxes that should have been withheld to the relevant tax authority, the party may be subject to penalties. Where the non-resident enterprise receiving such income failed to declare and pay taxes that should have been withheld to the relevant tax authority, the party may be ordered to rectify within a specific time limit.

In accordance with the EIT Law and relevant implementing rules, a high-tech enterprise that has independent intellectual property rights and complies with the rules of corporate income tax and other relevant laws and regulations enjoys a reduced corporate income tax rate of 15%. The specific standards and procedures for the management of identification of high-tech enterprises are stipulated in the Measures for the Administration of the Accreditation of High-Tech Enterprises, which was jointly issued by the Ministry of Science and Technology, the Ministry of Finance of the PRC (the "MOF"), and the SAT on April 14, 2008 and amended on January 29, 2016, which took retroactive effect on January 1, 2016.

On April 25, 2018, the Revised Measures for the Handling of Matters concerning Preferential Enterprise Income Tax Policies (2018) was issued by the SAT, affixed with the Catalogue of Preferential Items of Enterprise Income Tax. Under the aforesaid Catalogue, enterprises that fall within a particular scope and meet the specified standards would enjoy a certain amount of tax reduction.

***Dividend Tax***

Pursuant to the EIT Law and relevant implementing rules, income from equity investment between qualified PRC resident enterprises such as dividends and bonuses, which refers to investment income derived by a resident enterprise from direct investment in another resident enterprise, is tax-exempt. Dividends paid by foreign-invested companies to their foreign investors that are non-resident enterprises as defined under the law are

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subject to withholding tax at a rate of 10%, unless otherwise provided in the relevant tax agreements entered into with the central government of the PRC.

Besides, pursuant to the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion Concerning Taxes on Income, which was signed on August 21, 2006, a PRC resident enterprise that distributes dividends to its Hong Kong shareholders shall pay income tax under the said laws and regulations. However, if the beneficiary of the dividends is a Hong Kong resident enterprise, which directly holds no less than 25% equity interests of the dividend distributor, the tax levied shall be 5% of the distributed dividends.

Pursuant to the Notice of the State Administration of Taxation on the Issues Concerning the Application of the Dividend Clauses of Tax Treaties, which took effect on February 20, 2009, a tax resident of the counterparty to the tax treaty shall meet all of the following requirements in order to enjoy the preferential tax rates provided under the tax treaty: (i) the tax resident that receives dividends should be limited to a company as provided in the tax agreement; (ii) the equity interests and voting shares of the PRC resident company directly owned by the tax resident reach the percentages specified in the tax agreement; and (iii) the equity interests of the Chinese resident company directly owned by such tax resident at any time during the twelve consecutive months prior to receiving the dividends reach a percentage specified in the tax agreement. On February 3, 2018, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning "Beneficial Owners" in Tax Treaties which took effect on April 1, 2018, provides clearer guidelines and adopts comprehensive assessment approaches when determining whether a company can be qualified as a beneficial owner, so as to enjoy the preferential tax rate on dividends.

On October 14, 2019, the SAT released the Administrative Measures for Non-Resident Taxpayers Enjoying Treaty Benefits, which came into effect on January 1, 2020. Under such measures, non-resident taxpayers claiming treaty benefits shall be handled in accordance with the principles of "self-assessment, claiming benefits, and retention of the relevant materials for future inspection." Where a non-resident taxpayer self-assesses and concludes that it satisfies the criteria for claiming treaty benefits, it may enjoy treaty benefits at the time of tax declaration or at the time of withholding through the withholding agent, simultaneously gather and retain the relevant materials for future inspection, and accept follow-up administration by the tax authorities.

***Value-added Tax***

Pursuant to the Provisional Regulations of the PRC on Value-added Tax, promulgated by the State Council on December 13, 1993, effective on January 1, 1994 and amended on November 10, 2008, February 6, 2016, and November 19, 2017, and the Implementation Rules for the Provisional Regulations the PRC on Value-added Tax, promulgated by the MOF on December 25, 1993 and amended on December 15, 2008 and October 28, 2011, organizations and individuals engaging in the sale of goods, the provision of processing, repair, and assembly services, sale of services, intangible assets, real property, and the importation of goods in the PRC shall be taxpayers of Value-added Tax (the "VAT"). The VAT rates generally applicable are simplified as 13%, 9%, 6%, and 0%, and the VAT rate applicable to the small-scale taxpayers is 3%.

***Regulations Relating to Foreign Exchange***

Pursuant to Regulation of the PRC on Foreign Exchange Administration, promulgated by the State Council on January 29, 1996, effective on April 1, 1996, and most recently amended on August 5, 2008, the foreign exchange income of domestic organizations and domestic individuals may be remitted into China or deposited overseas; and the specific conditions and term requirements for remittance into China or overseas deposits shall be stipulated by the foreign exchange control department of the State Council according to the status of international balance of payments and foreign exchange control requirements. Domestic organizations and domestic individuals making direct investments overseas or engaging in issuance and trading of negotiable securities or derivatives overseas shall process registration formalities pursuant to the provisions of the foreign

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exchange control department of the State Council. Where the State Council stipulates that prior approval by or filing with the relevant authorities in charge is required, the approval or filing formalities shall be processed prior to foreign exchange registration formalities.

Pursuant to the Provisions on the Foreign Exchange Administration of Domestic Direct Investment of Foreign Investors and the Supporting Documents, promulgated by the SAFE on May 10, 2013 and effective on May 13, 2013, direct investments in China by foreign investors shall be subject to registration. Organizations and individuals involved in direct investment activities in China shall be registered with the SAFE and its branches. Banks shall process the relevant transactions through the business systems designated by the foreign exchange bureau pursuant to the foreign exchange control provisions.

Pursuant to the SAFE Circular 37, promulgated by the SAFE and effective on July 4, 2014, the SAFE shall implement registration and administration of special-purpose vehicles established by Chinese residents. "Special purpose vehicles" refer to overseas enterprises established or controlled, directly or indirectly, by PRC residents or entities, using legitimate domestic or offshore assets or interests of, for the purpose of overseas investment and financing. "Round-trip investments" refer to direct investment activities in China by PRC residents or entities directly or indirectly through special purpose vehicles, namely, through the establishment of foreign-invested enterprises in China by way of a new establishment or merger and acquisition and obtaining ownership, control, business management rights. Prior to making a capital contribution in a special purpose vehicle by a Chinese resident using its legitimate assets or interests in China or overseas, a Chinese resident shall apply to the foreign exchange bureau for completion of foreign exchange registration formalities for overseas investments. For an overseas special purpose vehicle that has completed registration formalities, where there is any change in the basic information such as its Chinese resident individual shareholder, name, term of business, or occurrence of a significant change event such as increase or reduction of capital contribution, equity transfer or exchange by Chinese resident individual, merger or division, foreign exchange registration change formalities shall be promptly completed with the foreign exchange bureau.

On February, 2015, the SAFE further promulgated the SAFE Circular 13, effective on June 1, 2015, 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. The qualified banks, under the supervision of SAFE, directly examine the applications and conduct the registration.

On March 30, 2015, the SAFE released the Notice on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange Capital of Foreign-invested Enterprises, which came into effect on June 1, 2015 and adopted the system of willingness-based foreign exchange settlement for the foreign exchange capital of foreign-invested enterprises. Under this system, the foreign exchange capital, for which the monetary contribution has been confirmed by the foreign exchange authorities (or for which the monetary contribution has been registered for account entry) in the capital account of a foreign-invested enterprise, may be settled at a bank as required by the enterprise's actual management needs.

On January 26, 2017, the SAFE promulgated the Notice on Improving the Check of Authenticity and Compliance to further Promote Foreign Exchange Control, which expands the scope of settlement of exchange for domestic loans in foreign currencies and allows overseas loans under domestic guarantee to transfer inward. Furthermore, it also allows foreign institutions to make settlements of exchange through domestic foreign exchange accounts in pilot free trade zones.

Besides, the SAFE released the Notice on Further Promoting the Facilitation of Cross-border Trade and Investment on October 23, 2019, which came into force on the same day, which expands the regions to fulfill the support in carrying out such businesses as optimizing examination and verification of foreign exchange receipts and payments documents for trade in goods, canceling the special foreign exchange return registration, and simplifying verification of foreign exchange payments for imports.

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As of September 30, 2022, we had not received any administrative penalties for illegal or unlawful operations in the field of foreign exchange.

**Regulations Relating to Overseas Direct Investment** 

The Measures for the Administration of Overseas Investment were promulgated by the MOFCOM on September 6, 2014, and came into effect on October 6, 2014. As defined by the Measures for the Administration of Overseas Investment, overseas investment means the acts of enterprises legally established in the PRC to own the non-financial enterprises or obtain the ownership, control, or operation management rights of the existing non-financial enterprises in foreign countries through incorporation, merger and acquisition, or other means. If the overseas investments involve sensitive countries and regions or sensitive industries, they shall be subject to the approval of relevant competent authorities in the PRC. For other overseas investments, they shall be subject to record-filing administration. Local enterprises shall undergo record filings with the provincial commercial administration authorities where they are located. The qualified local enterprises will be put into the record and granted with an Overseas Investment Certificate for Enterprise by the relevant provincial commercial administration authorities.

On December 26, 2017, NDRC issued the Enterprise Overseas Investment Measures, which took effect on March 1, 2018. Under the Enterprise Overseas Investment Measures, sensitive overseas investment projects carried out by PRC enterprises either directly or through overseas enterprises under their control shall be approved by NDRC, and non-sensitive overseas investment projects directly carried out by PRC enterprises shall be filed with NDRC or its local branches at the provincial level. Furthermore, for a project that has been approved and filed, the investor must file an application for modifications with the relevant authority that issued the approval or filing notice for the project prior to the occurrence of any of the following circumstances: (i) an increase or decrease in the number of the investors; (ii) significant changes to the investment target; (iii) major changes to the primary activities or scale of the project; (iv) a change in the amount of investment by (a) 20% of the original amount approved or filed or (b) US$100 million, whichever is lower; and (v) any other circumstances that require a material adjustment to the approval or filing notice for the project. In the case of the large-amount non-sensitive overseas investment projects with the investment amount of US$300 million or above carried out by PRC enterprises through the overseas enterprises under their control, such PRC enterprises shall, before the implementation of the projects, submit a report describing the details about such projects to NDRC. Where PRC residents make overseas investments through overseas enterprises under their control, the Measures shall review applications mutatis mutandis. Subsequently, on January 31, 2018, NDRC issued the List of Sensitive Sectors for Outbound Investment (2018 Version), which became effective on March 1, 2018, under which enterprises shall be restricted from making overseas investments in certain industries, including but not limited to, (i) research, development, manufacturing, and repair of weaponry; (ii) cross-border exploitation and utilization of water resources; and (iii) news media.

**Regulations Relating to M&A** 

On August 8, 2006, six PRC governmental and regulatory agencies, including the CSRC and MOFCOM, promulgated the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules, which governs the mergers and acquisitions of domestic enterprises by foreign investors, require offshore special purpose vehicle, formed for overseas listing and controlled directly or indirectly by PRC companies or individuals through acquisitions of shares or equity interests in PRC domestic companies, to be approved by the CSRC prior to the listing and trading of such purpose vehicle's securities on an overseas stock exchange. According to the Manual of Guidance on Administration for Foreign Investment Access, promulgated by the MOFCOM on December 18, 2008, the M&A Rules are not applicable under the circumstance that PRC shareholders transfer their equity in foreign-invested enterprises to foreign parties. 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

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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. See "Risk Factors—Risks Relating to Doing Business in the PRC—The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China."

Our PRC legal counsel, AllBright, has advised us that, based on their understanding of the current PRC law, rules, and regulations, the CSRC's approval is not required for the listing and trading of our Ordinary Shares on Nasdaq in the context of this offering, because our PRC subsidiaries had been foreign-invested enterprises before they were acquired by Xuhang HK. As of September 30, 2022, we had not received any administrative penalties for illegal or unlawful operations in the field of foreign investment.

**Regulations Relating to Overseas Listings** 

On July 6, 2021, the General Office of Central Committee of the Communist Party of China and the General Office of the State Council issued the Opinions. 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. Measures, including promoting the construction of relevant regulatory systems, will be taken to control the risks and handle the incidents from China-concept overseas listed companies.

On February 17, 2023, the CSRC promulgated Announcement No. 43, which took effective on March 31, 2023 (Beijing Time).

According to Announcement No. 43, domestic enterprises shall not be listed abroad if any of the following circumstances occurs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the intended listing and financing are explicitly prohibited by laws, regulations, and relevant provisions
of the PRC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the intended overseas offering and listing may threaten or endanger national security as examined and
determined by relevant competent authorities under the State Council in accordance with applicable laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if applicants' domestic enterprises, controlling shareholders, or de facto controllers have committed
corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist market economy in the past three years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if applicants' domestic enterprises are currently under judicial investigation for suspected crimes or are
under investigation for suspected material violations of PRC laws and regulations; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) if there are material ownership disputes over equity held by the domestic enterprises' controlling
shareholders or by other shareholders that are controlled by the controlling shareholder and/or de facto controllers.

Announcement No. 43 comprehensively improves and reforms the existing regulatory system for overseas offering and listing of domestic enterprises, and brings all overseas listing activities, including both direct and indirect overseas offering and listing, under regulation by adopting a record-filing-based administration system.

Meanwhile, Announcement No. 43 aims to specify the record-filing procedures and regulatory requirements for overseas offering and listing activities by domestic enterprises and standardize their record-filing activities to ensure the smooth and effective implementation of the record-filing requirements. For direct overseas offering and listing, the issuer shall fulfill the record-filing and reporting obligations; for indirect overseas offering and listing, the issuer shall designate a major domestic operating entity to fulfill the record-filing and reporting

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obligations. Where an issuer makes an application for an initial public offering in an overseas market, the record-filing entity shall submit to the CSRC record-filing documents within three working days after such application is submitted. Considering the convenience of refinancing in overseas markets, record-filings shall be made within three working days after the securities offering is completed if an issuer makes refinancing after having been listed in an overseas market.

On February 17, 2023, the CSRC also issued the Circular of the Arrangements of Overseas Securities Offering and Listing by Domestic Companies (the "Circular of Announcement No. 43"), which mainly emphasizes the transitional period arrangement before the effective date of Announcement No. 43. If the overseas listing application has been submitted prior to March 31, 2023, but has not been approved by the overseas competent authority by the same date, the filing with CSRC must be completed before the overseas listing.

Arrangements are also made to accommodate certain practices commonly seen in overseas markets, such as offering in installments (or shelf offering) and confidential applications. Announcement No. 43 also requires a report to the CSRC on material events, which include the change of control, investigations or sanctions imposed by overseas securities regulatory authorities, changes in listing status or transfers of listing segments, voluntary or forced delisting, in order to strengthen ex-post regulation.

As of the date of this prospectus, Announcement No. 43 has just been released, and uncertainties remain as to its practice and future interpretations and implementations. See "Risk Factors—Risks Relating to Doing Business in the PRC—the Opinions recently adopted by the CSRC may cause additional compliance requirements in the future, and Announcement No. 43 subjects us to additional procedural and disclosure requirements for this listing."

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**MANAGEMENT** 

Set forth below is information concerning our directors, director appointees, and executive officers.

The following individuals are our executive management and members of the board of directors.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position(s)** |
|  Tianhang Xiao | 36 | Chief Executive Officer, Director, and Chairman of the Board of Directors |
|  Huazhen Xu | 28 | Finance Director |
|  Wenbing Wang | 51 | Independent Director Appointee\* |
|  Bo Lyu | 44 | Independent Director Appointee\* |
|  Xiaoyi Wang | 42 | Independent Director Appointee\* |

---

\* Wenbing Wang, Bo Lyu, and Xiaoyi Wang have accepted appointments to be our directors, effective immediately prior to the effectiveness of the registration statement of which this prospectus is a part.

The following is a brief biography of each of our executive officers and directors:

**Mr. Tianhang Xiao** has served as our Chairman of the Board of Directors since February 2023, Chief Executive Officer since September 2022, and director since June 2020. As the founder of Xuhang Network, Mr. Xiao has served as the chairman of the board of directors and general manager since September 2014, responsible for the management of day-to-day operations and high-level strategizing and business planning. Mr. Xiao has extensive experience in mobile Internet marketing, particularly in product development and technical analysis. From June 2010 to December 2011, Mr. Xiao served as a senior product manager at Sky-mobi Limited (formerly Nasdaq: MOBI), which is a mobile application store operator and was the first Chinese Internet marketing company listed on Nasdaq and was taken private in 2017 through a merger agreement with Amber Shining Investment Limited and Power Rich Limited. From January 2012 to August 2014, Mr. Xiao co-founded and served as the chief operating officer at Hangzhou Zhenqu Network Technology Co., Ltd., a company specializing in mobile advertisement placement and game services, which was subsequently acquired in 2015 by Meisheng Cultural and Creative Co., Ltd, a company listed on China's Shenzhen Stock Exchange (SZ: 002699). Mr. Xiao received his bachelor's degree in Weapon Systems and Engineering from Nanjing University of Science and Technology in 2010.

**Mr. Huazhen Xu** has served as our Finance Director since February 2023, and he is responsible for our overall financial management, including financial planning, accounting, and tax compliance. Mr. Xu has approximately eight years of experience in the financial and accounting fields. From April 2020 to May 2022, Mr. Xu served as a financial controller at Ebang International Holdings Inc. (Nasdaq: EBON), a company specializing in blockchain technology and cryptocurrency mining hardware. From October 2016 to August 2019, Mr. Xu served as a senior auditor at Ernst & Young LLP, where he oversaw and executed complex audit assessments while leading multiple audit engagements. Mr. Xu received his bachelor's degree in International Accounting from Shanghai University of Finance and Economics in 2016. Mr. Xu has been a member of the Association of Chartered Certified Accountants since February 2020.

**Mr. Wenbing Wang** will serve as our independent director starting immediately prior to the effectiveness of the registration statement of which this prospectus is a part. As an independent director of IT Tech Packaging Inc. (NYSE: ITP) since October 2009, Mr. Wang has extensive experience and knowledge of finance and corporate governance practices, which would be particularly valuable in his role as a board member of our Company. Since June 2021, Mr. Wang has served as the chief financial officer of Phoenix Motor, Inc. (Nasdaq: PEV), a U.S.-based electric vehicle manufacturer that designs and produces electric trucks and buses, where he is responsible for the company's overall financial management, including accounting, budgeting, and financial reporting. From November 2020 to June 2021, Mr. Wang served as the senior vice president of finance of SPI Energy Co., Ltd (Nasdaq: SPI) and the interim chief financial officer of Phoenix Motor, Inc. From February 2017 to November 2020, Mr. Wang served as the chief executive officer of Redwood Group International, a Hong Kong-based merchant bank focused on Greater-China growth and venture opportunities. Between December 2005 and October 2016, Mr. Wang served in various capacities at Fushi Copperweld, Inc. (formerly Nasdaq: FSIN),

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including the roles of president (from 2009 to 2016) and chief financial officer (from 2005 to 2010). Mr. Wang received his bachelor's degree in English from the University of Science and Technology, Beijing in 1994 and his MBA degree in Finance and Corporate Accounting from the University of Rochester in 2002.

**Mr. Bo Lyu** will serve as our independent director starting immediately prior to the effectiveness of the registration statement of which this prospectus is a part. With over a decade of experience in corporate finance and public company management, he was nominated as an independent director of U Power Limited in February 2022. Since November 2021, Mr. Lyu has served as the chief financial officer of Heyu Biological Technology Corporation, where he is responsible for the company's overall financial management and investment management. Between August 2020 and October 2021, Mr. Lyu held the position of financial controller at Building Dreamstar Technology Inc. From December 2017 to April 2019, he was the board secretary at Metalpha Technology Holding Limited (Nasdaq: MATH) (formerly known as Dragon Victory International Limited (Nasdaq: LYL)), and from 2014 to August 2017, he held the same position at Hailiang Education Group Inc. (Nasdaq: HLG). Between 2009 and 2013, Mr. Lyu served as an investment manager at Hailiang Group Co. Ltd., the former parent company of Hailiang Education Group Inc., Zhejiang Hailiang Co. Ltd. (SSE: 002203), and Hailiang International Holding Co. Ltd. (HKSE: 02336). Mr. Lyu received his bachelor's degree in International Investment from Wuhan University in 2001, and his master's degree in Finance from the National Economics Department of Albert-Ludwigs-Universität Freiburg in 2008. Additionally, he holds a Certificate of Board Secretary from the Shenzhen Stock Exchange.

**Prof. Xiaoyi Wang** will serve as our independent director starting immediately prior to the effectiveness of the registration statement of which this prospectus is a part. Prof. Wang has been an independent director of Guangyu Group Co., Ltd. (SSE: 6004), a company primarily engaged in the development, construction, and sale of residential and commercial properties, since November 2022. As an expert in digital and intelligent marketing, Prof. Wang has served as a Professor of Marketing and Digital Strategy, as well as a Ph.D. supervisor at the School of Management, Zhejiang University ("ZJU") since January 2018, mainly responsible for teaching and conducting scientific research in the cross-discipline of Neuroscience, Computing Science, and Marketing Science. Prof. Wang teaches courses on digital marketing, business models, marketing management, and other courses for Executive Master of Business Administration, Master of Business Administration, and undergraduate students. Prof. Wang also currently serves as (i) an assistant dean of the School of Management, ZJU, (ii) a deputy director of the Neuromanagement Laboratory, ZJU, (iii) a director of the Chinese Society of Technology Economics, and (iv) a member of the editorial board for the Journal of Behavioral Sciences. Prof. Wang's research focuses on consumer brain cognition, big data solutions, and their applications in digital marketing. He has presided over a number of research projects funded by the National Natural Science Foundation of China, and has published a series of research results in top-tier international and PRC academic journals, including Management Science, Marketing Science, Journal of Marketing Research, and Information Systems Research. Prof. Wang has won four Second Prizes of Science and Technology Progress Award of Zhejiang Province and one First Prize of National Commercial Science and Technology Progress Award in China. Prof. Wang received his Ph.D. in Management Science and Engineering from ZJU in 2008, and he is also a postdoctoral fellow at the University of Macau (from August 2011 to September 2011) and a visiting scholar of the Global Center for Mobile Big Data and Artificial Intelligence of Temple University in the U.S. (from January 2017 to December 2017).

**Family Relationships** 

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

**Board of Directors** 

Our board of directors will consist of five directors upon closing of this offering, three of whom will be "independent" within the meaning of the corporate governance standards of the Nasdaq listing rules and will meet the criteria for independence set forth in Rule 10A-3 of the Exchange Act.

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**Duties of Directors** 

Under Cayman Islands law, all of our directors owe three types of duties to us: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The Companies Act (As Revised) of the Cayman Islands imposes a number of statutory duties on a director. A Cayman Islands director's fiduciary duties are not codified, however, the courts of the Cayman Islands have held that a director owes the following fiduciary duties: (a) a duty to act in what the director *bona fide* considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our fourth amended and restated articles of association that will become effective immediately prior to the effectiveness of the registration statement of which this prospectus is a part. We have the right to seek damages if a duty owed by any of our directors is breached.

The functions and powers of our board of directors include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• appointing officers and determining the term of office of the officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exercising the borrowing powers of the company and mortgaging the property of the company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintaining or registering a register of mortgages, charges, or other encumbrances of the company.

**Terms of Directors and Executive Officers** 

Each of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director is eligible for re-election. All of our executive officers are appointed by and serve at the discretion of our board of directors.

**Qualification** 

There is currently no shareholding qualification for directors, although a shareholding qualification for directors may be fixed by our shareholders by ordinary resolution.

**Employment Agreements and Indemnification Agreements** 

We will enter into employment agreements with each of our executive officers. Pursuant to employment agreements, the form of which is filed as Exhibit 10.1 to the registration statement of which this prospectus forms a part, we agree to employ each of our executive officers for a specified time period, which may be renewed upon both parties' agreement 30 days before the end of the current employment term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a one-month prior written notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.

We will also enter into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.

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**Compensation of Directors and Executive Officers** 

For the year ended December 31, 2022, we paid an aggregate of RMB462,327.60 as compensation to our executive officers and directors. We have not set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors and executive officers. Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee's salary for his or her pension insurance, medical insurance, unemployment insurance, and other statutory benefits and a housing provident fund.

**Insider Participation Concerning Executive Compensation** 

Our Chairman of the Board of Directors and director, Mr. Tianhang Xiao has been making all determinations regarding executive officer compensation from the inception of our Company. After our Compensation Committee is established, it will be making all determination regarding executive officer compensation (please see below).

**Committees of the Board of Directors** 

We will establish three committees under the board of directors effective as of the effective date of the registration statement of which this prospectus forms a part: an audit committee, a compensation committee, and a nominating and corporate governance committee. The appointment to the committees will be effective immediately upon the effective date of the registration statement of which this prospectus forms a part. We will adopt a charter for each of the three committees. Each committee's members and functions are described below.

*Audit Committee*. Our audit committee will consist of Wenbing Wang, Bo Lyu, and Xiaoyi Wang. Wenbing Wang will be the chairperson of our audit committee. We have determined that Wenbing Wang, Bo Lyu, and Xiaoyi Wang will satisfy the "independence" requirements of the Nasdaq listing rules under and Rule 10A-3 under the Securities Exchange Act. Our board also has determined that Wenbing Wang qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq listing rules. 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:

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discussing the annual audited financial statements with management and the independent auditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving all proposed related party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• meeting separately and periodically with management and the independent auditors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 Wenbing Wang, Bo Lyu, and Xiaoyi Wang. Bo Lyu will be the chairperson of our compensation committee. We have determined that Wenbing Wang, Bo Lyu, and Xiaoyi Wang will satisfy the "independence" requirements of the Nasdaq listing rules and Rule 10C-1 under the Securities Exchange Act. The compensation committee will assist the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee will be responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving the total compensation package for our most senior executive officers;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• approving and overseeing the total compensation package for our executives other than the most senior executive
officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and recommending to the board with respect to the compensation of our directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing periodically and approving any long-term incentive compensation or equity plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors
relevant to that person's independence from management; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

*Nominating and Corporate Governance Committee.* Our nominating and corporate governance committee will consist of Wenbing Wang, Bo Lyu, and Xiaoyi Wang. Bo Lyu will be the chairperson of our nominating and corporate governance committee. We have determined that Wenbing Wang, Bo Lyu, and Xiaoyi Wang will satisfy the "independence" requirements of the Nasdaq listing rules. The nominating and corporate governance 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 and corporate governance committee will be responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifying and recommending nominees for election or re-election to our
board of directors or for appointment to fill any vacancy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing annually with our board of directors its current composition in light of the characteristics of
independence, age, skills, experience and availability of service to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifying and recommending to our board the directors to serve as members of committees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• advising the board periodically with respect 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 our board of directors on all matters of corporate governance and on any corrective action to be taken; and

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

**Code of Business Conduct and Ethics** 

Our board of directors will adopt a code of business conduct and ethics, which is to be filed as Exhibit 99.1 of the registration statement of which this prospectus forms a part and 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 the initial closing of this offering.

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**PRINCIPAL SHAREHOLDERS** 

The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Ordinary Shares as of the date of this prospectus, and as adjusted to reflect the sale of the Ordinary Shares offered in this offering for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of our directors and executive officers who beneficially own our Ordinary Shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each person known to us to own beneficially more than 5% of our Ordinary Shares.

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 Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership of each listed person prior to this offering is based on 58,804,977 Ordinary Shares outstanding (reflecting the effect of the Subdivision) as of the date of this prospectus immediately prior to the effectiveness of the registration statement of which this prospectus is a part. Percentage of beneficial ownership of each listed person after this offering is based on [●] Ordinary Shares outstanding immediately after the completion of this offering if the Representative does not exercise its over-allotment option and [●] Ordinary Shares outstanding immediately after the completion of this offering if the Representative exercises its over-allotment option in full.

Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities. In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, 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 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned by them. As of the date of the prospectus, we have 35 shareholders of record, none of whom are located in the United States. We will be required to have at least 450 unrestricted round lot shareholders at closing in order to satisfy the Nasdaq listing rules.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares<br>Beneficially Owned<br>Prior to this**<br>**Offering** | **Ordinary Shares<br>Beneficially Owned<br>Prior to this**<br>**Offering** | **Ordinary Shares<br>Beneficially Owned<br>After this Offering<br>(Over-allotment**<br>**option not**<br>**exercised)** | **Ordinary Shares<br>Beneficially Owned<br>After this Offering<br>(Over-allotment**<br>**option not**<br>**exercised)** | **Ordinary Shares<br>Beneficially Owned<br>After this Offering<br>(Over-allotment**<br>**option fully**<br>**exercised)** | **Ordinary Shares<br>Beneficially Owned<br>After this Offering<br>(Over-allotment**<br>**option fully**<br>**exercised)** |
|  | **Number** | **Percent** | **Number** | **Percent** | **Number** | **Percent** |
|  **Directors and Executive Officers<sup>(1)</sup>:** |  |  |  |  |  |  |
|  Tianhang Xiao<sup>(2)</sup> | 26365153 | 44.83% | 26365153 | [●]% | 26365153 | [●]% |
|  Huazhen Xu |  |  |  |  |  |  |
|  Wenbing Wang |  |  |  |  |  |  |
|  Bo Lyu |  |  |  |  |  |  |
|  Xiaoyi Wang |  |  |  |  |  |  |
|  **All directors and executive officers as a group (five individuals):** | 26365153 | 44.83% | 26365153 | [●]% | 26365153 | [●]% |
|  **5% Shareholders<sup>(3)</sup>:** |  |  |  |  |  |  |
|  TIAN HANG GROUP LIMITED<sup>(2)</sup> | 21012915 | 35.73% | 21012915 | [●]% | 21012915 | [●]% |
|  MIGHTY HUGE INVESTMENT LIMITED<sup>(4)</sup> | 3403616 | 5.79% | 3403616 | [●]% | 3403616 | [●]% |
|  WCC CAPITAL LIMITED<sup>(5)</sup> | 3078562 | 5.24% | 3078562 | [●]% | 3078562 | [●]% |
|  Hexagon Special Opportunities SPC<sup>(6)</sup> | 3843919 | 6.54% | 3843919 | [●]% | 3843919 | [●]% |
|  Venture Smart Holdings Limited<sup>(6)(7)</sup> | 4297735 | 7.31% | 4297735 | [●]% | 4297735 | [●]% |

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Notes:

(1) Unless otherwise indicated, the business address of each of the individuals is Building 2, Shangtanghe 198
Cultural and Creative Park, 198 Shenban Rd, Gongshu District, Hangzhou City, Zhejiang Province, China.

(2) Represents (i) 21,012,915 Ordinary Shares held by TIAN HANG GROUP LIMITED, a British Virgin Islands company,
which is 100% owned by XUHANG (BVI) LTD, which is in turn 100% owned by Mr. Tianhang Xiao, who has the sole voting and dispositive power over these Ordinary Shares, (ii) 3,403,616 Ordinary Shares held by MIGHTY HUGE INVESTMENT LIMITED, which is
100% owned by XH Fortune Success Trust, a trust established under the laws of the Island of Jersey by Mr. Tianhang Xiao, managed by Trident Trust Company (HK) Limited, as trustee, with Mr. Tianhang Xiao being the trust's beneficiary
and having the sole voting and dispositive power over these Ordinary Shares, and (iii) 1,948,622 Ordinary Shares held by Shanghai Qishu Enterprise Management Consulting L.P., a PRC limited partnership that is 99% owned by Hangzhou Xuli Network
Technology Co., Ltd., which is in turn 99% owned by Mr. Tianhang Xiao, who has the sole voting and dispositive power over these Ordinary Shares.

(3) Unless otherwise indicated, the business address of the following shareholders is OMC Chambers, Wickhams Cay 1,
Road Town, Tortola, British Virgin Islands.

(4) The number of Ordinary Shares beneficially owned prior to this offering represents 3,403,616 Ordinary Shares
held by MIGHTY HUGE INVESTMENT LIMITED, a British Virgin Islands company, which is 100% owned by XH Fortune Success Trust, a trust established under the laws of the Island of Jersey by Mr. Tianhang Xiao, managed by TRIDENT Trust Company (HK)
Limited, as trustee, with Mr. Tianhang Xiao being the trust's beneficiary as of the date of this prospectus and having the sole voting and dispositive power over these Ordinary Shares.

(5) The number of Ordinary Shares beneficially owned prior to this offering represents 3,078,562 Ordinary Shares
held by WCC CAPITAL LIMITED, a British Virgin Islands company, which is 100% owned by Mr. Congcong Wei, who has the sole voting and dispositive power over these Ordinary Shares.

(6) Represents (x) 1,262,531 Ordinary Shares directly held by Hexagon Special Opportunities SPC (acting for the
account of Segregated Portfolio I) ("SP1") and 816,527 Ordinary Shares directly held by Hexagon Special Opportunities SPC (acting for the account of Segregated Portfolio VII) ("SP7"), both SP1 and SP7 being segregated portfolios
under a Cayman Islands exempted company, Hexagon Special Opportunities SPC ("Hexagon") and (y) 1,765,861 shares directly owned by Top Smart Capital Investment Limited, which is 100% owned by SP7. Hexagon is (i) 34% owned by VSFG Asset
Management Limited, (ii) 33% owned by Gwon Yau Wong, and (iii) 33% owned by Valentin Wolf Schillo. Each of VSFG Asset Management Limited, Gwon Yau Wong, and Valentin Wolf Schillo shares the voting and dispositive power over the 3,843,919 Ordinary
Shares directly or indirectly held by Hexagon. The business address of Hexagon is 23/Floor, Lee Garden 5, 18 Hysan Avenue, Causeway Bay, Hong Kong. VSFG Asset Management Limited is 100% owned by Venture Smart Financial Holdings Limited, which is
majority owned by Able Bravo Limited, which is (i) 50% owned by BlackPine Private Equity Partners G.P. Limited, which is 100% owned by Chu Sheng Yu Lawrence and (ii) 50% owned by Venture Smart Holdings Limited, which is 100% owned by Leung Yuk Lun
Ulric.

(7) Represents an aggregate of 4,297,735 Ordinary Shares beneficially owned by Venture Smart Holdings Limited, a
British Virgin Islands company. Venture Smart Holdings Limited (i) directly owns 453,816 Ordinary Shares and (ii) shares the voting and dispositive power over 3,843,919 Ordinary Shares as described in footnote (6) above. Venture Smart Holdings
Limited is 100% owned by Leung Yuk Lun Ulric, who has the sole voting and dispositive power over these Ordinary Shares. The registered address of Venture Smart Holdings Limited is 23/Floor, Lee Garden 5, 18 Hysan Avenue, Causeway Bay, Hong Kong.

As of the date of this prospectus, none of our outstanding Ordinary Shares are held by record holders in the United States.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company.

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**RELATED PARTY TRANSACTIONS** 

**Material Transactions with Related Parties** 

a) Related parties

---

| | |
|:---|:---|
| **Name of related parties** | **Relationship with Our Company** |
| Tianhang Xiao | Our chairman and CEO |
| Lilian Liu | Our shareholder |
| Yu Jiang | Our shareholder |
| Shanghai Qishu Business Management Partnership LP. ("Shanghai Qishu") | Our shareholder |
| Genshui Bao | Our shareholder |
| Congcong Wei | Our shareholder |
| Shanghai Huiji Network Technology Co., LTD. ("Shanghai Huiji") | Non-controlling shareholder of our subsidiary |
| Zhejiang Lingshang Cultural Creative Co., LTD. ("Zhejiang Lingshang") | A company controlled by a director of our subsidiary |
| Shanghai Huihui Hanghang Management Consulting Co., LTD. ("Shanghai Huihui") | Non-controlling shareholder of our subsidiary |
| Shanghai Er'shang Culture Communication Co., LTD. ("Shanghai Er'shang") | Equity investee of our Company |
| Beijing Pinte Visual Culture Media Co. LTD. ("Beijing Pinte ") | Equity investee of our Company |
| Longtian Zhou | A director of our subsidiary |
| Shenzhen Zhuoya Network Media Co. LTD. ("Shenzhen Zhuoya") | Equity investee of our Company |
| Zhoushan Youtai Investment Partnership LP. ("Zhoushan Youtai") | Our original shareholder \* |
| Xi'an Saixinghang Enterprise Management Partnership LP. ("Xi'an Saixinghang") | A company controlled by our principal shareholder |
| Zhejiang Weilai Advertising Co. LTD. ("Zhejiang Weilai") | A company controlled by our principal shareholder |
| Zhejiang Weicheng Information Technology Co. LTD. ("Zhejiang Weicheng") | A company controlled by our principal shareholder |
| Sewing Time Trading (Shenzhen) Co. LTD. ("Sewing Time") | Non-controlling shareholder of our subsidiary |
| Hangzhou Find Fun Creative Culture Co. LTD. ("Hangzhou Find Fun") | A company controlled by our principal shareholder |
| Hangzhou Tianyi Electronic Commerce Co. LTD. ("Hangzhou Tianyi") | A company controlled by our principal shareholder |
| Hangzhou Netwide Network Technology Co. LTD. ("Hangzhou Netwide") | A company controlled by our principal shareholder |
| Tonghua Lvjian Agricultural Technology Development Co. LTD. ("Tonghua Lvjian") | A company controlled by a non-controlling shareholder of our subsidiary |
| Hangzhou Youxing Technology Co., LTD. ("Hangzhou Youxing") | A non-controlling shareholder of our subsidiary\*\* |

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| | |
|:---|:---|
| **Name of related parties** | **Relationship with Our Company** |
| Tailong Zheng | A non-controlling shareholder of our subsidiary |
| Qingdao Songshe Network Technology Co., LTD. ("Qingdao Songshe"） | A company controlled by a director of our subsidiary |
| Xinzu Gong | A director of our subsidiary |
| Lei Xu | A director of our subsidiary |
| Lei Xin | A director of our subsidiary |
| Hangzhou Meihangxiujue Technology Co., LTD. ("Hangzhou Meihangxiujue") | A company invested by our Company |
| Feng Luo | A director of our subsidiary |
| Xiaoyan Tong | A director of our subsidiary |
| Pingxiang Youxu Business Management Partnership (Limited Partnership) ("Pingxiang Youxu") | A company controlled by our principal shareholder |
| Wenying Cong | A director of our subsidiary |
| Tang Weiguo | A director of our subsidiary |
| Huangshan Huizhou Romantic Red Culture Tourism Group Co., LTD. ("Huangshan Huizhou") | A non-controlling shareholder of our subsidiary |
| Hangzhou Nerdy Bear Technology Co. LTD. ("Hangzhou Nerdy Bear") | A non-controlling shareholder of our subsidiary |
| Zhongguang International Advertising Creative Industry Base Development Co., LTD. ("Zhongguang Advertising") | A company controlled by a non-controlling shareholder of our subsidiary |
| Mengyong Song | A director of our subsidiary |
| Hangzhou Saixinghang Technology Co., LTD. ("Hangzhou Saixinghang") | Equity investee of our Company\*\*\* |
| Zhejiang Jupei Culture and Travel Technology Co., LTD. ("Zhejiang Jupei") | Equity investee of our Company |
| Xi'an Xuhang Digital Technology Co., LTD. ("Xi'an Xuhang") | Equity investee of our Company |
| Putian Shoe Brand Operation Service Co., LTD. ("Putian Shoe") | Equity investee of our Company |

---

\* Zhoushan Youtai ceased to be a related party, as it sold its shares in January 2021.

\*\* Hangzhou Youxing ceased to be a related party, as it sold its shares in November 2021.

\*\*\* Hangzhou Saixinghang ceased to be a related party, as we sold our shares in December 2022.

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##### [**Table of Contents**](#toc)
b) Amount due from related parties

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of the<br>date of this<br>prospectus** |
|  | **Nature** | **2020** | **2021** | **2021** | **2022** | **2022** | **As of the<br>date of this<br>prospectus** |
|  |  | **RMB** | **RMB** | **US$** | **RMB** | **US$** | **RMB** |
|  |  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  **Account receivables, net** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhejiang Lingshang  | Marketing planning and implementation services |  | 904 | 127 | 553 | 80 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shanghai Er'shang | New media integrated content marketing services | 3049 | 351 | 49 | 1843 | 267 | 1022 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhejiang Weicheng  | New media integrated content marketing services | 796 | 300 | 42 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tonghua Lvjian  | Providing supplies associated with the Internet e-commerce business |  | 270 | 38 | 270 | 39 | 270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sewing Time  | New media live broadcast operation services |  | 190 | 27 | 123 | 18 | 123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhejiang Weilai  | New media integrated content marketing services | 9251 | 119 | 17 | 620 | 90 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Nerdy Bear | Digital advertising and marketing |  |  |  | 45 | 7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Huangshan Huizhou | New media integrated content marketing services |  |  |  | 50 | 7 | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhongguang Advertising | New media integrated content marketing services |  |  |  | 35 | 5 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Putian Shoe | New media integrated content marketing services |  |  |  | 300 | 43 | 300 |
|  |  | 13096 | 2134 | 300 | 3839 | 556 | 1800 |
|  **Other receivables, net** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Yu Jiang<sup>(2)</sup> | Loan |  | 3390 | 477 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tianhang Xiao<sup>(3)</sup> | Loan | 34895 | 5403 | 760 | 1114 | 162 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Xi'an Saixinghang  | Loan |  | 750 | 105 | 750 | 109 | 750 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tailong Zheng | Staff petty cash |  | 629 | 88 | 617 | 89 | 617 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Congcong Wei<sup>(4)</sup> | Loan | 1200 | 550 | 77 | —  | —  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Genshui Bao | Staff petty cash |  | 420 | 59 | 420 | 61 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shenzhen Zhuoya  | Loan | 450 | 315 | 44 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shanghai Huiji  | Loan |  | 303 | 43 | 368 | 53 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shanghai Er'shang<sup>(1)</sup> | Loan |  | 300 | 42 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Qingdao Songshe  | Loan |  | 270 | 38 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhejiang Lingshang  | Loan |  | 250 | 35 | 250 | 36 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shanghai Qishu  | Loan |  | 139 | 20 | 139 | 20 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Xinzu Gong | Staff petty cash |  | 110 | 15 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lei Xu | Staff petty cash |  | 101 | 14 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Beijing Pinte | Loan | 100 | 100 | 14 | 100 | 14 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shanghai Huihui  | Loan |  | 27 | 4 | 27 | 4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lei Xin | Staff petty cash |  | 20 | 3 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Meihangxiujue  | Loan |  | 19 | 3 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Feng Luo | Staff petty cash |  | 4 | 1 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Xiaoyan Tong | Staff petty cash |  | 3 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhoushan Youtai<sup>(5)</sup> | Loan | 14162 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhejiang Jupei | Loan |  |  |  | 3670 | 532 | 4413 |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of the<br>date of this<br>prospectus** |
|  | **Nature** | **2020** | **2021** | **2021** | **2022** | **2022** | **As of the<br>date of this<br>prospectus** |
|  |  | **RMB** | **RMB** | **US$** | **RMB** | **US$** | **RMB** |
|  |  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pingxiang Youxu<sup>(6)</sup> | Loan | 2250 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Longtian Zhou<sup>(7)</sup> | Loan | 1000 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lilian Liu | Staff petty cash | 25 |  |  | 250 | 36 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhongguang Advertising | Rental deposits |  |  |  | 218 | 32 | 218 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Saixinghang | Loan |  |  |  | 1330 | 193 |  |
|  |  | 54082 | 13103 | 1842 | 9253 | 1341 | 6098 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amounts due from related parties |  | 67178 | 15237 | 2142 | 13092 | 1897 | 7898 |

---

(1) In 2021, we provided an interest-free loan to Shanghai Er'shang, an equity investee of our Company, with
an aggregate principal amount of approximately RMB0.3 million. The maturity date of the loan was January 14, 2022. As of December 31, 2021, the aggregate outstanding amount due from Shanghai Er'shang was RMB0.3 million (US$0.042 million). As of
the date of this prospectus, the aggregate outstanding amount due from Shanghai Er'shang is nil.

(2) In 2021, we provided an interest-free loan to Yu Jiang with an aggregate principal amount of approximately
RMB3.4 million (US$0.477 million). Yu Jiang is a shareholder of our Company. The maturity date of the loan was July 1, 2022. As of December 31, 2021, the aggregate outstanding amount due from Yu Jiang was RMB3.4 million (US$0.477 million). As of the
date of this prospectus, the aggregate outstanding amount due from Yu Jiang is nil.

(3) In 2020, we provided interest-free loans to Tianhang Xiao, with a total amount of RMB34.5 million. The maturity
date of these loans is December 31, 2022. As of December 31, 2020, the aggregate outstanding amount due from Tianhang Xiao was RMB34.9 million. In 2021, we obtained interest-free loans from Tianhang Xiao (and the companies controlled by him), with a
total amount of RMB96.6 million. The maturity date of these loans is December 31, 2022. In 2021, we provided interest-free loans to Tianhang Xiao with a total amount of RMB64.9 million. The maturity date of these loans is December 31, 2022.
Meanwhile, due to a debt transfer from Pingxiang Youxu to Tianhang Xiao, the amount due from Tianhang Xiao was RMB2.25 million. After offsetting the claims and debts, as of December 31, 2021, the aggregate outstanding amount due from Tianhang Xiao
was RMB5.4 million (US$0.76 million). In 2022, we obtained interest-free loans from Tianhang Xiao with a total amount of RMB10.3 million. In 2022, we provided interest-free loans to Tianhang Xiao with a total amount of RMB6.0 million. After
offsetting the claims and debts, as of December 31, 2022, the aggregate outstanding amount due from Tianhang Xiao was RMB1.1 million. As of the date of this prospectus, Tianhang Xiao has fully repaid his interest-free loans.

(4) In 2020, we provided an interest-free loan to Congcong Wei, one of our shareholders, with an aggregate
principal amount of approximately RMB1.2 million. The maturity date of the loan was April 26, 2022. As of December 31, 2020, the aggregate outstanding amount due from Congcong Wei was RMB1.2 million. In 2021, we provided an interest-free loan to
Congcong Wei with an aggregate principal amount of approximately RMB0.35 million. The maturity date of the loan was September 7, 2022. As of December 31, 2021, the aggregate outstanding amount due from Congcong Wei was RMB0.55 million (US$0.077
million). In 2022, we provided an interest-free loan to Congcong Wei with an aggregate principal amount of approximately RMB1 million. The maturity date of the loan is August 2024. As of September 30, 2022, the aggregate outstanding amount due from
Congcong Wei was RMB1 million (US$0.141 million). As of November 4, 2022, the aggregate outstanding amount due from Congcong Wei was nil.

(5) In 2018, we provided an interest-free loan to Zhoushan Youtai with an aggregate principal amount of
approximately RMB14.2 million. Zhoushan Youtai is a former shareholder of our Company that ceased to be a relate party as it sold its shares in January 2021. The maturity date of the loan was July 31, 2021. As of December 31, 2021, the aggregate
outstanding amount due from Zhoushan Youtai was nil.

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(6) In 2020, we made an interest-free loan of RMB2.25 million to Pingxiang Youxu, a company controlled by our
principal shareholder. As of December 31, 2021, the aggregate outstanding amount due from Pingxiang Youxu was nil.

(7) In 2019, we provided an interest-free loan to Longtian Zhou with an aggregate principal amount of approximately
RMB1 million. Longtian Zhou is a director of one of our subsidiaries. The maturity date of the loan was May 5, 2021. As of December 31, 2020, the balance of the loan was RMB1 million. As of December 31, 2021, the aggregate outstanding amount due
from Longtian Zhou was nil.

c) Amounts due to related parties

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of the<br>date of<br>this<br>prospectus** |
|  | <br>**Nature** | **2020** | **2021** | **2021** | **2022** | **2022** | **As of the<br>date of<br>this<br>prospectus** |
|  |  | **RMB** | **RMB** | **US$** | **RMB** | **US$** | **RMB** |
|  |  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  **Account payables** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Find Fun  | Payment due for provision of cooperative accounts |  | 300 | 42 | 600 | 87 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Netwide  | Payment due for provision of cooperative accounts | 450 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Tianyi  | Payment due for provision of cooperative accounts | 200 |  |  |  |  |  |
|  |  | 650 | 300 | 42 | 600 | 87 |  |
|  **Other payables** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Wenying Cong | Staff reimbursement payable |  | 297 | 42 | 464 | 67 | 465 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Genshui Bao<sup>(1)</sup> | Interest-free loan/Equity acquisition consideration | 26250 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Weiguo Tang | Staff reimbursement payable |  | 57 | 8 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lilian Liu<sup>(2)</sup> | Equity acquisition consideration | 7000 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Yu Jiang | Equity acquisition consideration | 868 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Xinzu Gong | Loan |  |  |  | 88 | 13 | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mengyong Song | Staff reimbursement payable |  |  |  | 22 | 3 | 22 |
|  |  | 34118 | 354 | 50 | 574 | 83 | 575 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amounts due to related parties |  | 34768 | 654 | 92 | 1174 | 170 | 575 |

---

(1) In 2020, we obtained an interest-free loan from Genshui Bao with an aggregate principal amount of approximately
RMB3.7 million. Genshui Bao is a shareholder of our Company. The maturity date of the loan was October 31, 2021. As of December 31, 2021, the aggregate outstanding amount due to Genshui Bao was nil. On November 13, 2020, we acquired 100% of the
equity interests in Hangzhou Xingkong for a total cash consideration of RMB23.4 million and equity consideration of RMB48.0 million. As of December 31, 2020, the cash consideration payable to Genshui Bao, which was the original shareholder of
Hangzhou Xingkong, was RMB22.5 million. As of December 31, 2021, the aggregate outstanding amount due to Genshui Bao was nil.

(2) On November 13, 2020, we also acquired 100% of the equity interests in Hangzhou Jinting for a total cash
consideration of RMB7.0 million and equity consideration of RMB14.0 million. As of December 31, 2020, the cash consideration payables to Lilian Liu, who is one of our shareholders and was the original shareholder of Hangzhou Jinting, was RMB7.0
million. As of December 31, 2021, the aggregate outstanding amount due to Lilian Liu was nil.

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d) Other related party transactions

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **Between<br>January 1,<br>2023 and<br>the date of<br>this<br>prospectus** |
|  | **Nature** | **2020** | **2021** | **2021** | **2022** | **2022** | **2023** |
|  |  | **RMB** | **RMB** | **US$** | **RMB** | **US$** | **RMB** |
|  |  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Service provided to |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shanghai Er'shang<sup>(1)</sup> | New media integrated content marketing services | 2751 | 6882 | 967 | 2821 | 409 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhejiang Weilai<sup>(2)</sup> | New media integrated content marketing services | 3964 | 1180 | 166 | 487 | 71 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhejiang Lingshang | Marketing planning and implementation services |  | 974 | 137 | 236 | 34 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sewing Time | New media live broadcast operation services |  | 453 | 64 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tonghua Lvjian | Providing supplies associated with Internet e-commerce business |  | 247 | 35 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shanghai Huiji | E-commerce operation services |  | 51 | 7 | 2 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Putian Shoe | New media integrated content marketing services |  |  |  | 1132 | 164 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Nerdy Bear | Digital advertising and marketing |  |  |  | 214 | 31 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Huangshan Huizhou | New media integrated content marketing services |  |  |  | 94 | 14 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Xi'an Xuhang | New media integrated content marketing services |  |  |  | 68 | 10 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Saixinghang | Technology research and development |  |  |  | 31 | 5 |  |
|  |  | 6715 | 9787 | 1376 | 5085 | 738 |  |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **Between<br>January 1,<br>2023 and<br>the date of<br>this<br>prospectus** |
|  | **Nature** | **2020** | **2021** | **2021** | **2022** | **2022** | **2023** |
|  |  | **RMB** | **RMB** | **US$** | **RMB** | **US$** | **RMB** |
|  Service provided by |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Youxing | Advertising traffic provision services |  | 766 | 108 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shenzhen Zhuoya | Advertising traffic provision services |  | 472 | 66 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Qingdao Songshe | Promotional video production services |  | 377 | 53 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Find Fun | Cooperative accounts provision services | 297 | 297 | 42 | 297 | 43 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Netwide | Cooperative accounts provision services | 149 | 149 | 21 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hangzhou Tianyi | Cooperative accounts provision services | 189 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zhongguang Advertising | Rent and utilities |  |  |  | 695 | 101 | 146 |
|  |  | 635 | 2061 | 290 | 992 | 144 | 146 |

---

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##### [**Table of Contents**](#toc)
(1) For the years ended December 31, 2020, 2021, and 2022, we provided new media integrated content marketing
services to Shanghai Er'shang, in the amount of RMB2.8 million, RMB6.9 million (US$1.0 million), and RMB2.8 million, respectively. We also had current receivables due from Shanghai Er'shang in the amount of RMB3.0 million, RMB0.4 million
(US$0.06 million), and RMB1.8 million as of December 31, 2020, 2021, and 2022, respectively.

(2) For the years ended December 31, 2020, 2021 and 2022, we provided new media integrated content marketing
services to Zhejiang Weilai Advertising Co., Ltd., a company controlled by our principal shareholder, in the amount of RMB4.0 million and RMB1.2 million (US$0.2 million), and RMB0.49 million, respectively. We also had current receivables due from
Zhejiang Weilai in the amount of RMB9.3 million, RMB0.1 million (US$0.017 million), and RMB0.62 million as of December 31, 2020, 2021, and 2022, respectively.

**Employment Agreements** 

See "Management—Employment Agreements and Indemnification Agreements."

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##### [**Table of Contents**](#toc)
**DESCRIPTION OF SHARE CAPITAL** 

We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association, as amended from time to time, and the Companies Act (As Revised) of the Cayman Islands (the "Companies Act"), and the common law of Cayman Islands.

As of the date of this prospectus, our authorized share capital is US$1,000,000 divided into 500,000,000 Ordinary Shares, par value US$0.002 per share.

As of the date of this prospectus, we have 58,804,977 Ordinary Shares issued and outstanding. All of our Ordinary Shares issued and outstanding prior to the completion of the offering are and will be fully paid, and all of our Ordinary Shares to be issued in the offering will be issued as fully paid.

**Our Post-Offering Memorandum and Articles of Association** 

We will adopt the fourth amended and restated memorandum and articles of association, which will become effective and replace our current third amended and restated memorandum and articles of association in its entirety immediately prior to the effectiveness of the registration statement of which this prospectus forms a part. The following are summaries of material provisions of our post-offering memorandum and articles of association and of the Companies Act, insofar as they relate to the material terms of our Ordinary Shares.

*Objects of Our Company.* Under our post-offering memorandum and articles of association, the objects of our Company are unrestricted, and we are capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided by section 27(2) of the Companies Act.

*Ordinary Shares.* Our Ordinary Shares are issued in registered form and are issued when registered in our register of members. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote for their shares.

*Dividends.* The holders of our Ordinary Shares are entitled to such dividends as may be declared by our board of directors. Our post-offering memorandum and articles of association provide that dividends may be declared and paid out of the funds of our Company lawfully available therefor. 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 out of the above premium 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.* Voting at any meeting of shareholders is by show of hands unless a poll is demanded. A poll may be demanded by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the chairperson of such meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• by at least three shareholders present in person or by proxy for the time being entitled to vote at the meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• by shareholder(s) present in person or by proxy representing not less than one-tenth of the total voting rights of all shareholders having the right to vote at the meeting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• by shareholder(s) present in person or by proxy and holding shares in us conferring a right to vote at the
meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the Ordinary Shares cast at a meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the issued and outstanding Ordinary

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Shares at a meeting. A special resolution will be required for important matters such as a change of name or making changes to our post-offering memorandum and articles of association, a reduction of our share capital, and the winding up of our Company. Our shareholders may, among other things, divide or combine their shares by ordinary resolution.

*General Meetings of Shareholders.* As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders' annual general meetings. Our post-offering memorandum and articles of association provide that we shall, if required by the Companies Act, in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors. General meetings, including annual general meetings, may be held at such times and in any location in the world as may be determined by the Board. A general meeting or any class meeting may also be held by means of such telephone, electronic, or other communication facilities as to permit all persons participating in the meeting to communicate with each other, and participation in such a meeting constitutes presence at such meeting.

Shareholders' general meetings may be convened by the chairperson of our board of directors or by a majority of our board of directors. Advance notice of at least ten clear days is required for the convening of our annual general shareholders' meeting (if any) and any other general meeting of our shareholders. A quorum required for any general meeting of shareholders consists of, at the time when the meeting proceeds to business, one or more shareholders holding shares which carry in aggregate (or representing by proxy) not less than one-third of all votes attaching to issued and outstanding shares in our Company entitled to vote at such general meeting.

The Companies Act does not provide shareholders with any right to requisition a general meeting or to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our post-offering memorandum and articles of association provide that upon the requisition of any one or more of our shareholders holding shares which carry in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our Company entitled to vote at general meetings, our board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, our post-offering memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

*Transfer of Ordinary Shares.* Subject to the restrictions set out below, any of our shareholders may transfer all or any of his or her Ordinary Shares by an instrument of transfer in the usual or common form or in a form prescribed by Nasdaq or any other form approved by our board of directors. Notwithstanding the foregoing, Ordinary Shares may also be transferred in accordance with the applicable rules and regulations of Nasdaq.

Our board of directors may, in its absolute discretion, decline to register any transfer of any Ordinary Share which is not fully paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any Ordinary Share unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the instrument of transfer is lodged with us, accompanied by the certificate for the Ordinary Shares to which it
relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the instrument of transfer is in respect of only one class of Ordinary Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the instrument of transfer is properly stamped, if required; in the case of a transfer to joint holders, the
number of joint holders to whom the Ordinary Share is to be transferred does not exceed four; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a fee of such maximum sum as Nasdaq may determine to be payable or such lesser sum as our directors may from time
to time require is paid to us in respect thereof.

If our directors refuse to register a transfer they shall, within two months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

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The registration of transfers may, after compliance with any notice required in accordance with the rules of Nasdaq, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine; provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our board may determine. The period of 30 days may be extended for a further period or periods not exceeding 30 days in respect of any year if approved by the shareholders by ordinary resolution.

*Liquidation.* On the winding up of our Company, if the assets available for distribution amongst our 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 our 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 our Company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, such the assets will be distributed so that, as nearly as may be, the losses are borne by our shareholders in proportion to the par value of the shares held by them.

*Calls on Shares and Forfeiture of Shares.* Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. 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, including out of capital, as may be determined by our board of directors. Our Company may also repurchase any of our shares on such terms and in such manner as have been approved by our board of directors. Under the Companies Act, the redemption or repurchase of any share may be paid out of our Company's profits, share premium, or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of capital 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 Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company has commenced liquidation. In addition, our Company may accept the surrender of any fully paid share for no consideration.

*Variations of Rights of Shares.* Whenever the capital of our Company is divided into different classes the rights attached to any such class may, subject to any rights or restrictions for the time being attached to any class, only be varied with the sanction of a resolution passed by a majority of two-thirds of the votes cast at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights 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, allotment, or issue of further shares ranking pari passu with such existing class of shares.

*Issuance of Additional Shares.* Our post-offering memorandum and articles of association authorize our board of directors to issue additional Ordinary Shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares.

Our post-offering memorandum and articles of association also authorize our board of directors to establish from time to time one or more series of preference shares and to determine, with respect to any series of preference shares, the terms and rights of that series, including, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the designation of the series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the number of shares of the series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the dividend rights, dividend rates, conversion rights, voting rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the rights and terms of redemption and liquidation preferences.

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Our board of directors may issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of Ordinary Shares.

*Inspection of Books and Records.* Holders of our Ordinary Shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, our post-offering memorandum and articles of association have provisions that give our shareholders the right to inspect our register of shareholders without charge, and to receive our annual audited financial statements. See "Where You Can Find Additional Information."

*Anti-Takeover Provisions.* Some provisions of our post-offering memorandum and articles of association may discourage, delay or prevent a change of control of our Company or management that shareholders may consider favorable, including provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• authorize our board of directors to issue preference shares in one or more series and to designate the price,
rights, preferences, privileges, and restrictions of such preference shares without any further vote or action by our shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limit the ability of shareholders to requisition and convene general meetings of shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our post-offering memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our Company.

*Exempted Company.* We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• does not have to file an annual return of its shareholders with the Registrar of Companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is not required to open its register of members for inspection;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• does not have to hold an annual general meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• may issue negotiable or bearer shares or shares with no par value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for
20 years in the first instance);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• may register as a limited duration company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• may register as a segregated portfolio company.

"Limited liability" means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder's shares of the company (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).

**Differences in Corporate Law** 

The Cayman Companies Act is derived, to a large extent, from the older Companies Acts of England and Wales but does not follow recent United Kingdom statutory enactments, and accordingly there are significant differences between the Cayman Companies Act and the current Companies Act of the UK. In addition, the Cayman Companies Act differs from laws applicable to United States corporations and their shareholders. Set

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forth below is a summary of certain significant differences between the provisions of the Cayman Companies Act applicable to us and the comparable laws applicable to companies incorporated in the State of Delaware in the United States.

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| | | |
|:---|:---|:---|
|  | **Delaware** | **Cayman Islands** |
| *Title of Organizational Documents* | Certificate of Incorporation and Bylaws | Certificate of Incorporation and Memorandum and Articles of Association |
| *Duties of Directors* | Under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its shareholders. The duty of care requires that directors act in an informed and deliberative manner and inform themselves, prior to making a business decision, of all material information reasonably available to them. The duty of care also requires that directors exercise care in overseeing and investigating the conduct of the corporation's employees. The duty of loyalty may be summarized as the duty to act in good faith, not out of self-interest, and in a manner which the director reasonably believes to be in the best interests of the shareholders. | As a matter of Cayman Islands law, a director owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The Cayman Companies Act imposes a number of statutory duties on a director. A Cayman Islands director's fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our amended articles of association, as amended and restated from time to time. We have the right to seek damages where certain duties owed by any of our directors are breached. |
| *Limitations on Personal Liability of Directors* | Subject to the limitations described below, a certificate of incorporation may provide for the elimination or limitation of the personal liability of a director to the corporation or its shareholders for monetary damages for a breach of fiduciary duty as a director. Such provision cannot limit liability for breach of loyalty, bad faith, intentional misconduct, unlawful payment of dividends or unlawful share purchase or redemption. In addition, | The 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. |

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|:---|:---|:---|
|  | **Delaware** | **Cayman Islands** |
|  | the certificate of incorporation cannot limit liability for any act or omission occurring prior to the date when such provision becomes effective. |  |
| *Indemnification of Directors, Officers, Agents, and Others* | A corporation has the power to indemnify any director, officer, employee, or agent of corporation who was, is, or is threatened to be made a party who acted in good faith and in a manner he believed to be in the best interests of the corporation, and if with respect to a criminal proceeding, had no reasonable cause to believe his conduct would be unlawful, against amounts actually and reasonably incurred. | Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of directors and officers, 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 the consequences of committing a crime, or against the indemnified person's own fraud or dishonesty.<br>Our post-offering memorandum and articles of association provide that that we shall indemnify our directors and officers, and their personal representatives, against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such persons, other than by reason of such person's dishonesty, willful default or fraud, in or about the conduct of our Company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses, or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our Company or its affairs in any court whether in the Cayman Islands or elsewhere.<br>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 director (including alternate director), secretary or any of our officers in respect of any matter identified in above on condition that the director (including alternate director), secretary or officer must repay the amount paid by us to the extent that it is ultimately found not liable to indemnify the director (including |

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| | | |
|:---|:---|:---|
|  | **Delaware** | **Cayman Islands** |
|  |  | alternate director), the secretary or that officer for those legal costs. |
| *Interested Directors* | Under Delaware law, a transaction in which a director who has an interest in such transaction would not be voidable if (i) the material facts as to such interested director's relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors are less than a quorum, (ii) such material facts are disclosed or are known to the shareholders entitled to vote on such transaction and the transaction is specifically approved in good faith by vote of the shareholders, or (iii) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified. Under Delaware law, a director could be held liable for any transaction in which such director derived an improper personal benefit. | Interested director transactions are governed by the terms of a company's memorandum and articles of association. |
| *Voting Requirements* | The certificate of incorporation may include a provision requiring supermajority approval by the directors or shareholders for any corporate action.<br>In addition, under Delaware law, certain business combinations involving interested shareholders require approval by a supermajority of the non-interested shareholders. | For the protection of shareholders, certain matters must be approved by special resolution of the shareholders as a matter of Cayman Islands law, including alteration of the memorandum or articles of association, appointment of inspectors to examine company affairs, reduction of share capital (subject, in relevant circumstances, to court approval), change of name, authorization of a plan of merger or transfer by way of continuation to another jurisdiction or consolidation or voluntary winding up of the company.<br>The Cayman Companies Act requires that a special resolution be passed by a majority of at least two-thirds or such higher percentage as set forth in the memorandum and articles of association, of shareholders being entitled to vote and do vote in person or by proxy at a general meeting, or by unanimous written consent of shareholders entitled to vote at a general meeting. |
| *Voting for Directors* | Under Delaware law, unless otherwise specified in the certificate of incorporation or bylaws of the corporation, directors shall | The Cayman Companies Act defines a "special resolution" only. A company's memorandum and articles of association can |

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| | | |
|:---|:---|:---|
|  | **Delaware** | **Cayman Islands** |
|  | be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. | therefore tailor the definition of an "ordinary resolution" as a whole, or with respect to specific provisions. |
| *Cumulative Voting* | No cumulative voting for the election of directors unless so provided in the certificate of incorporation. | There are no prohibitions in relation to cumulative voting under the Cayman Companies Act but our post-offering articles of association do not provide for cumulative voting. |
| *Directors' Powers Regarding Bylaws* | The certificate of incorporation may grant the directors the power to adopt, amend or repeal bylaws. | The memorandum and articles of association may only be amended by a special resolution of the shareholders. |
| *Nomination and Removal of Directors and Filling Vacancies on Board* | Shareholders may generally nominate directors if they comply with advance notice provisions and other procedural requirements in company bylaws. Holders of a majority of the shares may remove a director with or without cause, except in certain cases involving a classified board or if the company uses cumulative voting. Unless otherwise provided for in the certificate of incorporation, directorship vacancies are filled by a majority of the directors elected or then in office. | Nomination and removal of directors and filling of board vacancies are governed by the terms of the memorandum and articles of association. |

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**Anti-Money Laundering—Cayman Islands** 

In order to comply with legislation or regulations aimed at the prevention of money laundering, we are required to adopt and maintain anti-money laundering procedures and may require subscribers to provide evidence to verify their identity and source of funds. Where permitted, and subject to certain conditions, we may also delegate the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.

We reserve the right to request such information as is necessary to verify the identity of a subscriber. In some cases, the directors may be satisfied that no further information is required since an exemption applies under the Anti-Money Laundering Regulations (Revised) of the Cayman Islands, as amended and revised from time to time (the "Regulations"). Depending on the circumstances of each application, a detailed verification of identity might not be required where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the subscriber makes the payment for their investment from an account held in the subscriber's name at a
recognized financial institution; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the subscriber is regulated by a recognized regulatory authority and is based or incorporated in, or formed
under the law of, a recognized jurisdiction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the application is made through an intermediary which is regulated by a recognized regulatory authority and is
based in or incorporated in, or formed under the law of a recognized jurisdiction and an assurance is provided in relation to the procedures undertaken on the underlying investors.

For the purposes of these exceptions, recognition of a financial institution, regulatory authority, or jurisdiction will be determined in accordance with the Regulations by reference to those jurisdictions recognized by the Cayman Islands Monetary Authority as having equivalent anti-money laundering regulations.

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In the event of delay or failure on the part of the subscriber in producing any information required for 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 or other laws or regulations by any person in any relevant 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 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 (Revised) of the Cayman Islands) or the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (Revised), 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 (Revised) of the Cayman Islands) or the Financial Reporting Authority, pursuant to the Terrorism Act (Revised), 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.

**Data Protection in the Cayman Islands—Privacy Notice** 

This privacy notice explains the manner in which we collect, process, and maintain personal data about our investors pursuant to the Data Protection Act, 2017 of the Cayman Islands, as amended from time to time and any regulations, codes of practice, or orders promulgated pursuant thereto (the "DPA").

We are committed to processing personal data in accordance with the DPA. In our use of personal data, we will be characterized under the DPA as a "data controller," whilst certain of our service providers, affiliates, and delegates may act as "data processors" under the DPA. These service providers may process personal information for their own lawful purposes in connection with services provided to us.

By virtue of your investment in our Company, we and certain of our service providers may collect, record, store, transfer, and otherwise process personal data by which individuals may be directly or indirectly identified.

Your personal data will be processed fairly and for lawful purposes, including (a) where the processing is necessary for us to perform a contract to which you are a party or for taking pre-contractual steps at your request, (b) where the processing is necessary for compliance with any legal, tax, or regulatory obligation to which we are subject, or (c) where the processing is for the purposes of legitimate interests pursued by us or by a service provider to whom the data are disclosed. As a data controller, we will only use your personal data for the purposes for which we collected it. If we need to use your personal data for an unrelated purpose, we will contact you.

We anticipate that we will share your personal data with our service providers for the purposes set out in this privacy notice. We may also share relevant personal data where it is lawful to do so and necessary to comply with our contractual obligations or your instructions or where it is necessary or desirable to do so in connection with any regulatory reporting obligations. In exceptional circumstances, we will share your personal data with regulatory, prosecuting, and other governmental agencies or departments, and parties to litigation (whether pending or threatened), in any country or territory including to any other person where we have a public or legal duty to do so (e.g. to assist with detecting and preventing fraud, tax evasion, and financial crime or compliance with a court order).

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Your personal data shall not be held by our Company for longer than necessary with regard to the purposes of the data processing.

We will not sell your personal data. Any transfer of personal data outside of the Cayman Islands shall be in accordance with the requirements of the DPA. Where necessary, we will ensure that separate and appropriate legal agreements are put in place with the recipient of that data.

We will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction, or damage to the personal data.

If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation to your investment into our Company, this will be relevant for those individuals and you should inform such individuals of the content.

You have certain rights under the DPA, including (a) the right to be informed as to how we collect and use your personal data (and this privacy notice fulfils our obligation in this respect), (b) the right to obtain a copy of your personal data, (c) the right to require us to stop direct marketing, (d) the right to have inaccurate or incomplete personal data corrected, (e) the right to withdraw your consent and require us to stop processing or restrict the processing, or not begin the processing of your personal data, (f) the right to be notified of a data breach (unless the breach is unlikely to be prejudicial), (g) the right to obtain information as to any countries or territories outside the Cayman Islands to which we, whether directly or indirectly, transfer, intend to transfer, or wish to transfer your personal data, general measures we take to ensure the security of personal data, and any information available to us as to the source of your personal data, (h) the right to complain to the Office of the Ombudsman of the Cayman Islands, and (i) the right to require us to delete your personal data in some limited circumstances.

If you consider that your personal data has not been handled correctly, or you are not satisfied with our responses to any requests you have made regarding the use of your personal data, you have the right to complain to the Cayman Islands' Ombudsman. The Ombudsman can be contacted by calling +1 (345) 946-6283 or by email at info@ombudsman.ky.

**Legislation of the Cayman Islands** 

The Cayman Islands, together with several other non-European Union jurisdictions, have introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity. The International Tax Co-operation (Economic Substance) Act (Revised) (the "Substance Act") came into force in the Cayman Islands in January 2019 introducing certain economic substance requirements for in-scope Cayman Islands entities which are engaged in certain "relevant activities." An exempted company incorporated in the Cayman Islands as is the Company is an in-scope Cayman Islands entity; however, it does not include an entity that is tax resident outside the Cayman Islands. Our Company being a holding company with no material operations will likely be subject to limited substance requirements.

**History of Share Capital** 

The following is a summary of our share capital since incorporation. Unless otherwise indicated, the share amounts presented below do not give effect to the Subdivision.

On June 16, 2020, 50,000 ordinary shares, par value US$1.00 per share, were held by XUHANG (BVI) LTD.

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As part of the Reorganization, we undertook the following corporate actions:

***Increase of Authorized Share Capital, Share Issuances, and Share Transfers in April 2021***

On April 23, 2021, our authorized share capital increased from US$50,000 divided into 50,000 shares of US$1.00 each to US$91,972.2302 divided into 91,972.2302 shares of US$1.00 each. We issued the following ordinary shares of US$1.00 each:

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| | | | |
|:---|:---|:---|:---|
| **Purchaser** | **Number of**<br>**Ordinary<br>Shares of<br>US$1.00<br>each** | **Consideration** | **Consideration** |
|  SHENXUE CAPITAL LIMITED | 3844.7729 | US$ | 3844.7729 |
|  CWM CAPITAL LIMITED | 928.4962 | US$ | 928.4962 |
|  JDM CAPITAL LIMITED | 241.4090 | US$ | 241.4090 |
|  FAN CHAO CAPITAL LIMITED | 7161.7815 | US$ | 7161.7815 |
|  WCC CAPITAL LIMITED | 6445.6033 | US$ | 6445.6033 |
|  CZJ CAPITAL LIMITED | 716.1781 | US$ | 716.1781 |
|  YANGYANG CAPITAL LIMITED | 670.5785 | US$ | 670.5785 |
|  WUWEI CAPITAL LIMITED | 2011.7356 | US$ | 2011.7356 |
|  ZHUANNA CAPITAL LIMITED | 2321.2480 | US$ | 2321.2480 |
|  WZC CAPITAL LIMITED | 2218.0772 | US$ | 2218.0772 |
|  SUNYANLIN CAPITAL LIMITED | 405.8343 | US$ | 405.8343 |
|  LCB CAPITAL LIMITED | 698.1920 | US$ | 698.1920 |
|  SYG CAPITAL LIMITED | 696.7993 | US$ | 696.7993 |
|  YHH CAPITAL LIMITED | 2020.7049 | US$ | 2020.7049 |
|  BAOGENSHUI CAPITAL LIMITED | 1980.3580 | US$ | 1980.3580 |
|  JIANGYU CAPITAL LIMITED | 806.8131 | US$ | 806.8131 |
|  LLL CAPITAL LIMITED | 812.9244 | US$ | 812.9244 |
|  Oriental Financial Holding Corporation | 1081.1893 | US$ | 1081.1893 |
|  Cybernaut Global Education Group Corp. | 3543.8844 | US$ | 3543.8844 |
|  TOP SMART CAPITAL INVESTMENT LIMITED 領駿創富有限公司 | 3365.6502 | US$ | 3365.6502 |

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On April 26, 2021, our board of directors approved the following transfers of ordinary shares of US$1.00 each:

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| | | |
|:---|:---|:---|
| **Transferor** | **Transferee** | **Number of<br>Ordinary<br>Shares of<br>US$1.00 each** |
|  XUHANG (BVI) LTD. | TIAN HANG GROUP LIMITED 天航集團有限公司 | 44481.6662 |
|  XUHANG (BVI) LTD. | MIGHTY HUGE INVESTMENT LIMITED 浩瀚投資有限公司 | 5518.3338 |

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***Increase of Authorized Share Capital in June 2021***

On June 22, 2021, our authorized share capital increased from US$91,972.2302 divided into 91,972.2302 shares of US$1.00 each to US$113,453.8396 divided into 113,453.8396 shares of US$1.00 each.

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***Share Transfers in July 2021***

On July 6, 2021, our board of directors approved the following transfers of ordinary shares of US$1.00 each:

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| | | |
|:---|:---|:---|
| **Transferor** | **Transferee** | **Number of<br>Ordinary<br>Shares of<br>US$1.00<br>each** |
|  FAN CHAO CAPITAL LIMITED | WUWEI CAPITAL LIMITED | 99.2644 |
|  FAN CHAO CAPITAL LIMITED | ZHUANNA CAPITAL LIMITED | 28.4101 |
|  FAN CHAO CAPITAL LIMITED | TOP SMART CAPITAL INVESTMENT LIMITED 領駿創富有限公司 | 166.0701 |
|  FAN CHAO CAPITAL LIMITED | Cybernaut Global Education Group Corp. | 26.7899 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | CWM CAPITAL LIMITED | 45.8145 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | WZC CAPITAL LIMITED | 109.4458 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | YANGYANG CAPITAL LIMITED | 33.0882 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | ZHUANNA CAPITAL LIMITED | 86.1264 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | LCB CAPITAL LIMITED | 34.4507 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | JDM CAPITAL LIMITED | 11.9118 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | SYG CAPITAL LIMITED | 34.3819 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | YHH CAPITAL LIMITED | 99.7069 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | BAOGENSHUI CAPITAL LIMITED | 97.7161 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | JIANGYU CAPITAL LIMITED | 39.8103 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | LLL CAPITAL LIMITED | 40.1119 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Oriental Financial Holding Corporation | 53.3487 |
|  CZJ CAPITAL LIMITED | SHENXUE CAPITAL LIMITED | 32.0534 |
|  SUNYANLIN CAPITAL LIMITED | SHENXUE CAPITAL LIMITED | 17.2515 |
|  WCC CAPITAL LIMITED | SHENXUE CAPITAL LIMITED | 140.4063 |
|  WCC CAPITAL LIMITED | Cybernaut Global Education Group Corp. | 148.0747 |

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On July 8, 2021, our board of directors approved the following transfers of ordinary shares of US$1.00 each:

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| | | |
|:---|:---|:---|
| **Transferor** | **Transferee** | **Number of<br>Ordinary<br>Shares of<br>US$1.00<br>each** |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | VENTURE SMART HOLDINGS LIMITED | 907.6307 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | MIGHTY HUGE INVESTMENT LIMITED 浩瀚投資有限公司 | 1288.8966 |
|  FAN CHAO CAPITAL LIMITED | TIAN HANG GROUP LIMITED 天航集團有限公司 | 6841.2470 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | TAI, Sun Kwong | 1418.1730 |

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***Share Allotments in September 2021***

On September 26, 2021, our board of directors approved the following allotments of ordinary shares of US$1.00 each:

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| | | | |
|:---|:---|:---|:---|
| **Allottee** | **Number of<br>Ordinary<br>Shares of<br>US$1.00<br>each** | **Consideration** | **Consideration** |
|  Shanghai Qishu Enterprise Management Consulting L.P. 上海祁树企业管理咨询合伙企业（有限合伙） | 3897.2426 | US$ | 31746 |
|  Shanghai Zhuju Investment Center (Limited Partnership) 上海筑居投资中心（有限合伙） | 1299.7694 | US$ | 10588 |
|  Henan Saiqi High-tech Service Venture Capital Fund (Limited Partnership) 河南赛淇高技术服务创业投资基金（有限合伙） | 3889.2144 | US$ | 31681 |
|  Wenzhou Elite Equity Investment Partnership (Limited Partnership) 温州精英股权投资合伙企业（有限合伙） | 777.8507 | US$ | 6336 |
|  Qingdao Xida Kaiyue Investment Management Partnership (Limited Partnership) 青岛喜大开悦投 资管理合伙企业（有限合伙） | 476.8471 | US$ | 3884 |
|  Chengzhu Investment Management (Shanghai) Co., Ltd. 诚筑投资管理（上海）有限公司 | 458.4911 | US$ | 3735 |
|  Ningbo Xinrui Equity Investment Partnership (Limited Partnership) 宁波莘睿股权投资合伙企业（有限合伙） | 1164.6715 | US$ | 9487 |
|  Sai Pu No. 1 (Putian) Venture Capital Partnership (Limited Partnership) 赛莆一号（莆田）创业投资合伙企业（有限合伙） | 3088.4674 | US$ | 25158 |
|  Qingdao Lumin Investment Qinghe Equity Investment Partnership (Limited Partnership) 青岛鲁民投青合股权投资合伙企业（有限合伙） | 1890.9032 | US$ | 15403 |
|  Yancheng Guozhi Industry Fund Co., Ltd. 盐城国智产业基金有限公司 | 2269.0760 | US$ | 18483 |
|  Xingchan Saize (Huzhou) Venture Capital Partnership (Limited Partnership) 兴产赛泽（湖州）创业投资合伙企业（有限合伙） | 2269.0760 | US$ | 18483 |

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***Increase of Authorized Share Capital in November 2021***

In November 2021, our authorized share capital increased from US$113,453.8396 divided into 113,453.8396 shares of US$1.00 each to US$117,609.9539 divided into 117,609.9539 shares of US$1.00 each.

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***Share Allotments in December 2021***

On December 1, 2021, our board of directors approved the following allotments of ordinary shares of US$1.00 each:

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| | | | |
|:---|:---|:---|:---|
| **Allottee** | **Number of<br>Ordinary<br>Shares of<br>US$1.00<br>each** | **Consideration** | **Consideration** |
|  Hexagon Special Opportunities SPC (acting for the account of segregated portfolio I) | 2523.0616 | US$ | 2523.0616 |
|  Hexagon Special Opportunities SPC (acting for the account of segregated portfolio VII) | 1633.0527 | US$ | 1633.0527 |

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***Share Transfer in January 2022***

On January 17, 2022, our board of directors approved the following transfer of ordinary shares of US$1.00 each:

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| | | |
|:---|:---|:---|
| **Transferor** | **Transferee** | **Number of<br>Ordinary<br>Shares of<br>US$1.00<br>each** |
|  CZJ CAPITAL LIMITED | TIAN HANG GROUP LIMITED 天航集團有限公司 | 684.1247 |

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***Share Subdivision, Increase of Authorized Share Capital, Share Issuance, and Share Transfers in December 2022***

On December 2, 2022, our shareholders and board of directors approved the Subdivision, such that (i) our authorized share capital was changed from US$117,609.9539 divided into 117,609.9539 shares of par value of US$1.00 each to US$117,609.9539 dived into 58,804,976.95 shares of par value of US$0.002 each, and (ii) our issued share capital was changed from US$117,609.9539 divided into 117,609.9539 shares of par value of US$1.00 each to US$117,609.9539 divided into 58,804,976.95 shares of par value of US$0.002 each.

With the Subdivision, our shareholders and board of directors also approved (i) an increase in our authorized share capital from US$117,609.9539 divided into 58,804,976.95 shares of par value of US$0.002 each to US$1,000,000 divided into 500,000,000 Ordinary Shares of par value of US$0.002 each, and (ii) the following issuance of Ordinary Shares to adjust the total number of issued Ordinary Shares from 58,804,976.95 to 58,804,977:

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| | | | |
|:---|:---|:---|:---|
| **Purchaser** | **Number of<br>Ordinary<br>Shares** | **Consideration** | **Consideration** |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | 0.05 | US$ | 0.0001 |

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On December 2, 2022, our shareholders and board of directors approved the transfers of an aggregate of 17.25 Ordinary Shares by TIAN HANG GROUP LIMITED to the following 30 minority shareholders:

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| | | |
|:---|:---|:---|
| **Transferor** | **Transferee** | **Number of<br>Ordinary<br>Shares** |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | MIGHTY HUGE INVESTMENT LIMITED 浩瀚投資有限公司 | 0.80 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Shanghai Qishu Enterprise Management Consulting L.P. 上海祁树企业管理咨询合伙企业（有限合伙） | 0.70 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | WCC CAPITAL LIMITED | 0.85 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | SHENXUE CAPITAL LIMITED | 0.95 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | CWM CAPITAL LIMITED | 0.65 |

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| | | |
|:---|:---|:---|
| **Transferor** | **Transferee** | **Number of<br>Ordinary<br>Shares** |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | JDM CAPITAL LIMITED | 0.60 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | YANGYANG CAPITAL LIMITED | 0.65 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | ZHUANNA CAPITAL LIMITED | 0.75 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | WZC CAPITAL LIMITED | 0.50 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | SUNYANLIN CAPITAL LIMITED | 0.60 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | LCB CAPITAL LIMITED | 0.65 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | SYG CAPITAL LIMITED | 0.40 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | YHH CAPITAL LIMITED | 0.10 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | BAOGENSHUI CAPITAL LIMITED | 0.95 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | JIANGYU CAPITAL LIMITED | 0.30 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | LLL CAPITAL LIMITED | 0.85 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Cybernaut Global Education Group Corp. | 0.50 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | TOP SMART CAPITAL INVESTMENT LIMITED | 0.85 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | VENTURE SMART HOLDINGS LIMITED | 0.65 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | TAI, Sun Kwong | 0.50 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Shanghai Zhuju Investment Center (Limited Partnership) 上海筑居投资中心（有限合伙） | 0.30 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Henan Saiqi High-tech Service Venture Capital Fund (Limited Partnership) 河南赛淇高技术服务创业投资基金（有限合伙） | 0.80 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Wenzhou Elite Equity Investment Partnership (Limited Partnership) 温州精英股权投资合伙企业（有限合伙） | 0.65 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Qingdao Xida Kaiyue Investment Management Partnership (Limited Partnership) 青岛喜大开悦投 资管理合伙企业（有限合伙） | 0.45 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Chengzhu Investment Management (Shanghai) Co., Ltd. 诚筑投资管理（上海）有限公司 | 0.45 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Ningbo Xinrui Equity Investment Partnership (Limited Partnership) 宁波莘睿股权投资合伙企业（有限合伙） | 0.25 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Sai Pu No.1 (Putian) Venture Capital Partnership (Limited Partnership) 赛莆一号（莆田）创业投资合伙企业（有限合伙） | 0.30 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Qingdao Lumin Investment Qinghe Equity Investment Partnership (Limited Partnership) 青岛鲁民投青合股权投资合伙企业（有限合伙） | 0.40 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Hexagon Special Opportunities SPC (acting for the account of segregated portfolio I) | 0.20 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Hexagon Special Opportunities SPC (acting for the account of segregated portfolio VII) | 0.65 |

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***Share Transfers in December 2022***

On December 26, 2022, our shareholders and board of directors approved the following transfers of Ordinary Shares of US$0.002 each:

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| | | | |
|:---|:---|:---|:---|
| **Transferor**  | **Transferee** | **Number of**<br>**Ordinary**<br>**Shares** | **Number of**<br>**Ordinary**<br>**Shares** |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | HK SHENGXUN TRADING LIMITED 香港昇汛贸易有限公司 |  | 194056 |
|  TIAN HANG GROUP LIMITED 天航集團有限公司 | Preipo youjing Limited |  | 2646224 |

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**SHARES ELIGIBLE FOR FUTURE SALE** 

Before our initial public offering, there has not been a public market for our Ordinary Shares, and although we have applied to list our Ordinary Shares on Nasdaq, a regular trading market for our Ordinary Shares may not develop. Future sales of substantial amounts of shares of our Ordinary Shares in the public market after our initial public offering, or the possibility of these sales occurring, could cause the prevailing market price for our Ordinary Shares to fall or impair our ability to raise equity capital in the future. Upon completion of this offering, we will have outstanding Ordinary Shares held by public shareholders representing approximately [●]% of our Ordinary Shares in issue if the Representative does not exercise its over-allotment option, and approximately [●]% of our Ordinary Shares in issue if the Representative exercises its over-allotment option in full. All of the Ordinary Shares sold in this offering will be freely transferable by persons other than our "affiliates" without restriction or further registration under the Securities Act.

**Lock-Up Agreements** 

All of our officers and directors and substantially all of our pre-IPO shareholders have agreed not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of, or otherwise dispose of any Ordinary Shares or other securities convertible into or exercisable or exchangeable for Ordinary Shares for a period of six months from the date of this prospectus without the prior written consent of the Representative, which consent may be given or withheld in the Representative's sole discretion.

We are not aware of any plans by any significant shareholders to dispose of significant numbers of our Ordinary Shares. However, one or more existing shareholders or owners of securities convertible or exchangeable into or exercisable for our Ordinary Shares may dispose of significant numbers of our Ordinary Shares in the future. We cannot predict what effect, if any, future sales of our Ordinary Shares, or the availability of Ordinary Shares for future sale, will have on the trading price of our Ordinary Shares from time to time. Sales of substantial amounts of our Ordinary Shares in the public market, or the perception that these sales could occur, could adversely affect the trading price of our Ordinary Shares.

**Rule 144** 

All of our Ordinary Shares outstanding prior to the closing of 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 1% of the number of Ordinary Shares then outstanding, in the form of Ordinary Shares or otherwise, which will
equal approximately [●] shares immediately after this offering; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the average weekly trading volume of the Ordinary Shares on Nasdaq during the four calendar weeks preceding the
filing of a notice on Form 144 with respect to such sale.

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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 Ordinary Shares from us in connection with a compensatory stock plan or other written agreement executed prior to the completion of this offering is eligible to resell those Ordinary Shares in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144. However, the Rule 701 shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

**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.

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**MATERIAL INCOME TAX CONSIDERATION** 

**<u>Enterprise Taxation in Mainland China</u>**

The following brief description of Chinese enterprise income taxation is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends, if any, we are ultimately able to pay to our shareholders. See "Dividend Policy."

According to the EIT Law, which was promulgated by the SCNPC on March 16, 2007, became effective on January 1, 2008, and was then last amended on December 29, 2018, and the *Implementation Rules of the EIT Law*, which were promulgated by the State Council on December 6, 2007, and became effective on January 1, 2008, and last amended on April 23, 2018, enterprises are divided into resident enterprises and non-resident enterprises. Resident enterprises pay enterprise income tax on their incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC pay enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and non-resident enterprises with income having no substantial connection with their institutions in the PRC, pay enterprise income tax on their income obtained in the PRC at a reduced rate of 10%.

We are a holding company incorporated in the Cayman Islands and we gain substantial 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 Xuhang Cayman 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 Xuhang Cayman 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.

We believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of Xuhang Cayman, including the resolutions and

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meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC "resident enterprise" by the PRC tax authorities. Accordingly, we believe that Xuhang Cayman 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. 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 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%. AllBright, our PRC counsel, is unable to provide a "will" opinion because it believes that it is more likely than not that we and our offshore subsidiaries would be treated as non-resident enterprises for PRC tax purposes because we do not meet some of the conditions outlined in SAT Notice 82. In addition, AllBright is not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC "resident enterprise" by the PRC tax authorities as of the date of the prospectus. Therefore, AllBright believes that it is possible but highly unlikely that the income received by our overseas shareholders will be regarded as China-sourced income. An opinion on PRC tax matters by AllBright, our PRC counsel, is filed as Exhibit 8.1 to the registration statement of which this prospectus forms a part.

See "Risk Factors—Risks Relating to Doing Business in the PRC—Under the PRC Enterprise Income Tax Law, we may be classified as a PRC 'resident enterprise' for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment."

Currently, as resident enterprises in the PRC, Huzhou Yinzhiya, Wuhan Yinzhiya, as well as Xuhang Network and its subsidiaries in PRC are subject to the enterprise income tax at the rate of 25%. Under particular circumstances, such as an enterprise being identified as a small-scale minimal profit enterprise or as a new high-tech enterprise, or its domicile authority having a preferential tax policy, the EIT rate is reduced by various degrees. Pursuant to such regulations and policies, some of our PRC subsidiaries are eligible for the preferential tax rates. 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 Xuhang Cayman is 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 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 our non-PRC shareholders would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are 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.

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**<u>Hong Kong Taxation</u>**

Entities incorporated in Hong Kong are subject to profits tax in Hong Kong at the rate of 16.5%.

**<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 us 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 a party to a double tax treaty entered with the United Kingdom in 2010 but is otherwise not a party to any double tax treaties applicable to any payments made to or by our Company.

No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our 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 Ordinary Shares, as the case may be, nor will gains derived from the disposal of our Ordinary Shares be subject to Cayman Islands income or corporation tax.

**<u>United States Federal Income Taxation</u>**

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• banks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• insurance companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• regulated investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• real estate investment trusts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• broker-dealers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons that elect to mark their securities to market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. expatriates or former long-term residents of the U.S.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governments or agencies or instrumentalities thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax-exempt entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons liable for alternative minimum tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons holding our Ordinary Shares as part of a straddle, hedging, conversion, or integrated transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons that actually or constructively own 10% or more of our voting power or value (including by reason of
owning our Ordinary Shares);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as
compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons holding our Ordinary Shares through partnerships or other pass-through entities;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• beneficiaries of a Trust holding our Ordinary Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• persons holding our Ordinary Shares through a trust.

The discussion set forth below is addressed only to U.S. Holders that purchase 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 Ordinary Shares.

***Material Tax Consequences Applicable to U.S. Holders of Our Ordinary Shares***

The following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares. It is directed to U.S. Holders (as defined below) of our 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 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 who hold 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 Ordinary Shares and you are, for U.S. federal income tax purposes,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an individual who is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate whose income is subject to U.S. federal income taxation regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

If a partnership (or other entities treated as a partnership for United States federal income tax purposes) is a beneficial owner of our Ordinary Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our Ordinary Shares are urged to consult their tax advisors regarding an investment in our Ordinary Shares.

***Taxation of Dividends and Other Distributions on Our Ordinary Shares***

Subject to the PFIC rules discussed below, the gross amount of distributions made by us to you with respect to the 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 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 other 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 Ordinary Shares are readily

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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 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 Ordinary Shares are readily tradable on an established securities market in the United States. Under U.S. Internal Revenue Service authority, 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 NYSE and the Nasdaq Stock Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our 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 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 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 a distribution will be treated as a dividend even if that 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 Ordinary Shares***

Subject to the PFIC rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the 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 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.

***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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at least 75% of its gross income for such taxable year is passive income; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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

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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 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. We must make a separate determination each year as to whether we are a PFIC, however, 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 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 Ordinary Shares and the amount of cash we raise in this offering. Accordingly, fluctuations in the market price of the 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 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 Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely "mark-to-market" election as described below, however, you may avoid some of the adverse effects of the PFIC regime by making a "purging election" (as described below) with respect to the Ordinary Shares.

If we are a PFIC for your taxable year(s) during which you hold 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 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 Ordinary Shares will be treated as an excess distribution. Under these special tax rules:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the excess distribution or gain will be allocated ratably over your holding period for the Ordinary Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate 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 Ordinary Shares cannot be treated as capital, even if you hold the 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 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) Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an amount

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equal to the excess, if any, of the fair market value of the Ordinary Shares as of the close of such taxable year over your adjusted basis in such 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 Ordinary Shares over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any net mark-to-market gains on the 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 Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Ordinary Shares. Your basis in the 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 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 Nasdaq. If the Ordinary Shares are regularly traded on Nasdaq and if you are a holder of 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 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. The qualified electing fund election, however, 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. If you hold 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 Ordinary Shares, including regarding distributions received on the Ordinary Shares and any gain realized on the disposition of the Ordinary Shares.

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 Ordinary Shares, then such 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. A "purging election" creates a deemed sale of such 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 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 Ordinary Shares for tax purposes.

IRC Section 1014(a) provides for a step-up in basis to the fair market value for our Ordinary Shares when inherited from a decedent that was previously a holder of our Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Ordinary Shares, or a mark-to-market election and ownership of those Ordinary Shares are inherited, a special provision in IRC Section 1291(e) provides that the new U.S. Holder's basis should be reduced by an amount equal to the Section 1014 basis minus the decedent's adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent's passing, the PFIC rules will cause any new U.S. Holder that inherits our Ordinary Shares from a U.S. Holder to not get a step-up in basis under Section 1014 and instead will receive a carryover basis in those Ordinary Shares.

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You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Ordinary Shares and the elections discussed above.

***Information Reporting and Backup Withholding***

Dividend payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our 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. Transactions effected through certain brokers or other intermediaries, however, 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 Ordinary Shares, subject to certain exceptions (including an exception for 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 Ordinary Shares.

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**UNDERWRITING** 

We will enter into an underwriting agreement with Univest Securities, LLC, as the Representative, with respect to the Ordinary Shares in this offering. Subject to certain conditions, we will agree to sell to the underwriters, and the underwriters have severally agreed to purchase, the number of Ordinary Shares provided below opposite their respective names.

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| | |
|:---|:---|
| **Underwriters** | **Number of**<br>**Ordinary**<br>**Shares** |
|  Univest Securities, LLC | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[●] |
|  Total | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[●] |

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A copy of the form of underwriting agreement will be filed as an exhibit to the registration statement of which this prospectus is part. The underwriters are offering the Ordinary Shares subject to their acceptance of the Ordinary Shares from us and subject to prior sale. The underwriting agreement will provide that the obligations of the several underwriters to pay for and accept delivery of the Ordinary Shares offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the Ordinary Shares offered by this prospectus if any such Ordinary Shares are taken. However, the underwriters are not required to take or pay for the Ordinary Shares covered by the Representative's over-allotment option described below.

**Over-Allotment Option** 

We have granted the Representative an over-allotment option, which is exercisable for up to 30 days from the date of this prospectus, to purchase up to [●] additional Ordinary Shares (15% of the number of Ordinary Shares sold in this offering), solely to cover over-allotments, if any. If the Representative exercises all or part of this option, it will purchase Ordinary Shares covered by the option at the initial public offering price per Ordinary Share that appears on the cover page of this prospectus, less the underwriting discount. If this option is exercised in full, the total additional gross proceeds to us will be US$[●] and the total net proceeds received from this offering of Ordinary Shares to us will be US$[●], after deducting the underwriting discounts and estimated offering expenses payable by us.

**Underwriting Discounts and Expenses** 

The following table shows the initial public offering price, underwriting discount, and proceeds, before expenses, to us. The information assumes either no exercise or full exercise by the Representative of the over-allotment option.

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| | | | |
|:---|:---|:---|:---|
|  | **Per Share** | **Total**<br>**Without**<br>**Over-**<br>**Allotment**<br>**Option** | **Total With**<br>**Full Over-<br>Allotment<br>Option** |
|  Initial public offering price | US$ | US$ | US$ |
|  Underwriting discounts<sup>(1)</sup> | US$ | US$ | US$ |
|  Proceeds, before expenses, to us | US$ | US$ | US$ |

---

(1) Represents an underwriting discount equal to 4.82% per Ordinary Share. The fees do not include the
Representative's Warrants or expense reimbursement provisions described below.

The underwriters have advised us that they propose to offer the Ordinary Shares to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession

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not in excess of US$[●] per Ordinary Share. The underwriters may allow, and certain dealers may reallow, a discount from the concession not in excess of US$[●] per Ordinary Share to certain brokers and dealers. After this offering, the initial public offering price, concession, and reallowance to dealers may be changed by the Representative. No such change shall change the amount of proceeds to be received by us as set forth on the cover page of this prospectus. The Ordinary Shares are offered by the underwriters as stated herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. The underwriters have informed us that they do not intend to confirm sales to any accounts over which they exercise discretionary authority.

We have agreed to reimburse the Representative up to an aggregate of $180,000 for certain out-of-pocket accountable expenses, including but not limited to travel, due diligence, reasonable fees and expenses of its legal counsel, background check expenses, and reasonable cost for roadshows, provided that any expense over $5,000 requires prior written or email approval of our Company.

We have agreed to pay expenses relating to the offering, including: (i) all filing fees and communication expenses relating to the registration of the Ordinary Shares to be sold in this offering with the SEC and the filing of the offering materials with FINRA; (ii) all reasonable travel and lodging expenses incurred by the Representative or its counsel in connection with visits to, and examinations of, our Company; (iii) translation costs for due diligence purpose; (iv) all fees, expenses, and disbursements relating to the registration or qualification of such Ordinary Shares under the "blue sky" securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements of Representative's counsel); (v) the costs of all mailing and printing of the placement documents, registration statements, prospectuses, and all amendments, supplements, and exhibits thereto, and as many preliminary and final prospectuses as the Representative may reasonably deem necessary; (vi) the costs of preparing, printing, and delivering certificates representing the Ordinary Shares and the fees and expenses of the transfer agent for such Ordinary Shares; and (vii) the reasonable cost for road show meetings and preparation of a power point presentation.

We estimate that the total expenses of the offering payable by us, excluding the underwriting discounts, will be approximately US$[ ], including a maximum aggregate reimbursement of $180,000 of Representative's accountable expenses.

**Representative's Warrants** 

We have also agreed to issue to the Representative, or its designees, warrants to purchase up to [ ] Ordinary Shares, which equal to 5% of the total number of Ordinary Shares sold in this offering, including any shares issued upon exercise of Representative' over-allotment option.

The Representative's Warrants will have an exercise price per share equal to US$[ ] per Ordinary Share, 130% of the initial public offering price per Ordinary Shares in this offering and may be exercised on a cashless basis. The Representative's Warrants are exercisable commencing on the date of commencement of sales of the public offering, and will be exercisable until such warrants expire three years after the date of commencement of sales of the public offering. The Representative's Warrants and the Ordinary Shares underlying the warrants have been deemed compensation by FINRA and are being registered on the registration statement of which this prospectus forms a part. The Representative and its affiliates or employees will be entitled to one demand registration of the sale of the shares underlying the Representative's Warrants at our expense, one additional demand registration at the Representative's Warrants' holders' expense, and unlimited "piggyback" registration rights for a period of three years. The Representative's Warrants will provide for adjustment in the number and price of such warrants and the shares underlying such warrants in the event of recapitalization, merger, or other structural transaction to prevent mechanical dilution. The piggyback registration right provided will not be greater than seven years from the date of commencement of sales of the offering in compliance with FINRA Rule 5110(g)(8)(D).

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**Right of First Refusal** 

We have agreed that, until 18 months from the closing date of this offering, the Representative will have a right of first refusal to provide investment banking services to us on an exclusive basis in all matters for which investment banking services are sought by the Company, including, without limitation, (a) acting as lead or joint-lead manager for any underwritten public offering; (b) acting as lead or joint book-runner and/or lead or joint placement agent, initial purchaser in connection with any private offering of securities of our Company; and (c) acting as financial advisor in connection with any sale or other transfer by our Company, directly or indirectly, of a majority or controlling portion of our capital stock or assets to another entity, any purchase or other transfer by another entity, directly or indirectly, of a majority or controlling portion of the capital stock or assets of our Company, and any merger or consolidation of our Company with another entity, provided, however, that such right shall be subject to FINRA Rule 5110(g).

**Listing** 

We have applied to list our Ordinary Shares on Nasdaq under the symbol "SUNH." At this time, Nasdaq has not yet approved our application to list our Ordinary Shares. The closing of this offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our Ordinary Shares will be approved for listing on Nasdaq.

**Indemnification; Indemnification Escrow** 

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act and liabilities 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** 

All of our officers and directors and substantially all of our pre-IPO shareholders have agreed not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of, or otherwise dispose of any Ordinary Shares or other securities convertible into or exercisable or exchangeable for Ordinary Shares for a period of six months from the date of this prospectus without the prior written consent of the Representative, which consent may be given or withheld in the Representative's sole discretion.

**Determination of Initial Offering Price** 

Prior to this offering, there has been no public market for our Ordinary Shares. The initial public offering price of the Ordinary Shares will be negotiated between us and the Representative. Among the factors to be considered in determining the initial public offering price of the Ordinary Shares, in addition to the prevailing market conditions, are our historical performance, estimates of our business potential and earnings prospects, an assessment of our management, and the consideration of the above factors in relation to market valuation of companies in related businesses.

**Electronic Offer, Sale, and Distribution of Ordinary Shares** 

A prospectus in electronic format may be made available on the websites maintained by the underwriters or selling group members, if any, participating in this offering and the underwriters may distribute prospectuses electronically. The underwriters may agree to allocate a number of Ordinary Shares to selling group members for sale to their online brokerage account holders. The Ordinary Shares to be sold pursuant to internet distributions will be allocated on the same basis as other allocations. Other than the prospectus in electronic format, the

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information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or the underwriters, and should not be relied upon by investors.

**Price Stabilization, Short Positions, and Penalty Bids** 

In connection with this offering, the underwriters may engage in transactions that stabilize, maintain, or otherwise affect the price of our Ordinary Shares. Specifically, the underwriters may sell more Ordinary Shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of Ordinary Shares available for purchase by the underwriters under option to purchase additional Ordinary Shares. The underwriters can close out a covered short sale by exercising the option to purchase additional Ordinary Shares or purchasing Ordinary Shares in the open market. In determining the source of Ordinary Shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of Ordinary Shares compared to the price available under the option to purchase additional Ordinary Shares. The underwriters may also sell Ordinary Shares in excess of the option to purchase additional Ordinary Shares, creating a naked short position. The underwriters must close out any naked short position by purchasing Ordinary Shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Ordinary Shares in the open market after pricing that could adversely affect investors who purchase in the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing our Ordinary Shares in this offering because such underwriter repurchases those Ordinary Shares in stabilizing or short covering transactions.

Finally, the underwriters may bid for, and purchase, our Ordinary Shares in market making transactions, including "passive" market making transactions as described below.

These activities may stabilize or maintain the market price of our Ordinary Shares at a price that is higher than the price that might otherwise exist in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of these activities at any time without notice. These transactions may be effected on Nasdaq, in the over-the-counter market, or otherwise.

**Passive Market Making** 

In connection with this offering, the underwriters may engage in passive market making transactions in our Ordinary Shares on Nasdaq in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the Ordinary Shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker's bid, then that bid must then be lowered when specified purchase limits are exceeded.

**Potential Conflicts of Interest** 

The underwriters and their affiliates may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own accounts and for the accounts of their customers and such investment and securities activities may involve securities and/or instruments of our Company. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

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**Other Relationships** 

The underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing, and brokerage activities. Some of the underwriters and certain of their affiliates may in the future engage in investment banking and other commercial dealings in the ordinary course of business with us and our affiliates, for which they may in the future receive customary fees, commissions, and expenses.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long, and/or short positions in such securities and instruments.

**Stamp Taxes** 

If you purchase Ordinary Shares offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

**Selling Restrictions** 

No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of the Ordinary Shares, or the possession, circulation or distribution of this prospectus or any other material relating to us or the Ordinary Shares, where action for that purpose is required. Accordingly, the 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 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 Hong Kong** 

The Ordinary Shares may not be offered or sold in Hong Kong 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 Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the 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 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 made thereunder.

**Notice to Prospective Investors in Canada** 

The Ordinary Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration

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Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Ordinary Shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) 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 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.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

**Notice to Prospective Investors in the PRC** 

This prospectus has not been and will not be circulated or distributed in the PRC, and our Ordinary Shares may not be offered or sold, and will not be offered or sold to any person for re-offering or resale, directly or indirectly, to any residents of the PRC except pursuant to applicable laws and regulations of the PRC. For the purposes of this paragraph, the PRC does not include Taiwan, Hong Kong or Macau.

**Notice to Prospective Investors in Taiwan** 

The Ordinary Shares have not been and will not be registered or filed with, or approved by, the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be offered or sold in Taiwan through a public offering or in circumstances which constitute an offer within the meaning of the Securities and Exchange Act of Taiwan or relevant laws and regulations that require a registration, filing or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer or sell the Ordinary Shares in Taiwan.

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**EXPENSES RELATING TO THIS OFFERING** 

Set forth below is an itemization of the total expenses, excluding underwriting discounts, 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.

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| | | |
|:---|:---|:---|
|  Securities and Exchange Commission Registration Fee | US$ | 10797.0 |
|  Nasdaq Listing Fee | US$ | 270000.0 |
|  FINRA Filing Fee |  | \* |
|  Legal Fees and Other Expenses |  | \* |
|  Accounting Fees and Expenses |  | \* |
|  Printing and Engraving Expenses |  | \* |
|  Transfer Agent Expenses |  | \* |
|  Miscellaneous Expenses |  | \* |
|  **Total Expenses** |  | \* |

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\* To be completed by amendment.

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**LEGAL MATTERS** 

We are being represented by Hunter Taubman Fischer & Li LLC with respect to certain legal matters as to United States federal securities and New York State law. The validity of the Ordinary Shares offered in this offering and certain other legal matters as to Cayman Islands law will be passed upon for us by Conyers Dill & Pearman, our counsel as to Cayman Islands law. Legal matters as to PRC law will be passed upon for us by AllBright Law Offices Hangzhou Office to the Company and for Univest Securities, LLC by Dentons Law Offices. The underwriters are being represented by Sullivan & Worcester LLP with respect to certain legal matters as to United States federal securities and New York State law.

**EXPERTS** 

The consolidated financial statements for the years ended December 31, 2021 and 2020, and for each of the fiscal years in the period then ended, included in this prospectus have been so included in reliance on the report of WWC, P.C., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The office of WWC, P.C. is located at 2010 Pioneer Court, San Mateo, CA 94403.

**WHERE YOU CAN FIND ADDITIONAL INFORMATION** 

We have filed with the SEC a registration statement on Form F-1, including relevant exhibits and schedules under the Securities Act, covering the Ordinary Shares offered by this prospectus. You should refer to our registration statements and their exhibits and schedules if you would like to find out more about us and about the Ordinary Shares. This prospectus summarizes material provisions of contracts and other documents that we refer you to. Since the prospectus may not contain all the information that you may find important, you should review the full text of these documents.

Immediately upon the completion of this offering, we will be subject to periodic reporting and other informational requirements of the Exchange Act, as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders under the federal proxy rules contained in Sections 14(a), (b) and (c) of the Exchange Act, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

All information filed with the SEC can be obtained over the internet at the SEC's website at www.sec.gov. You can request copies of documents, upon payment of a duplicating fee, by writing to the SEC. We also maintain a website at www.sunhighgroup.com. Upon completion of the offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

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**XUHANG HOLDINGS LIMITED** 

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS** 

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| | |
|:---|:---|
|  | **Page** |
|  [Report of Independent Registered Public Accounting Firm](#fin403554_1) | F-2 |
|  [Consolidated Balance Sheets as of December 31, 2020 and 2021](#fin403554_3) | F-3 |
|  [Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2020 and 2021](#fin403554_4) | F-4 |
|  [Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2020 and 2021](#fin403554_5) | F-5 |
|  [Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2021](#fin403554_6) | F-6 |
|  [Notes to Consolidated Financial Statements](#fin403554_7) | F-7 |
|  [Report of Independent Registered Public Accounting Firm](#fin403554_50) | F-34 |
|  [Condensed Consolidated Balance Sheets as of December 31, 2021 and September 30, 2022 (unaudited)](#fin403554_8) | F-35 |
|  [Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Nine Months Ended September 30, 2021 and 2022](#fin403554_9) | F-36 |
|  [Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended September 30, 2021 and 2022](#fin403554_10) | F-37 |
|  [Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2022](#fin403554_11) | F-38 |
|  [Notes to the Unaudited Condensed Consolidated Financial Statements](#fin403554_12) | F-39 |

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![LOGO](g403554g03a03.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

To: The Board of Directors and Shareholders

Xuhang Holdings Limited

**Opinion on the Financial Statements** 

We have audited the accompanying consolidated balance sheets of Xuhang Holdings Limited and its subsidiaries (collectively the "Company") as of December 31, 2020 and 2021, and the related consolidated statements of income and comprehensive income, changes in shareholders' equity, and cash flows in each of the years for the two-year period ended December 31, 2021, 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 December 31, 2020 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, 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 audit 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 audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

![LOGO](g403554g24g26.jpg)

WWC, P.C.

Certified Public Accountants

PCAOB ID: 1171

We have served as the Company's auditor since 2021.

San Mateo, California

September 27, 2022 except for Note 2 for which the date is March 31, 2023.

![LOGO](g403554g03b04.jpg)

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##### [**Table of Contents**](#toc)
**XUHANG HOLDINGS LIMITED** 

**CONSOLIDATED BALANCE SHEETS** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  **ASSETS** |  |  |  |
|  **Current assets:** |  |  |  |
|  Cash and cash equivalents | 57087 | 113400 | 15942 |
|  Short term investment |  | 8010 | 1126 |
|  Accounts receivable, net | 124407 | 167965 | 23612 |
|  Amounts due from related parties | 67178 | 15237 | 2142 |
|  Advance to suppliers | 7411 | 13332 | 1874 |
|  Other receivable, net | 76799 | 90512 | 12724 |
|  Inventories, net |  | 1825 | 257 |
|  Prepaid expenses | 221 | 1470 | 206 |
|  **Total current assets** | **333103** | **411751** | **57883** |
|  **Non-current assets** |  |  |  |
|  Long-term investments | 2183 | 7296 | 1026 |
|  Property and equipment, net | 8348 | 26638 | 3745 |
|  Operating lease right-of-use assets | 8538 | 17705 | 2489 |
|  Goodwill | 286882 | 286965 | 40341 |
|  Other non-current assets | 23866 | 11538 | 1621 |
|  **Total non-current assets** | **329817** | **350142** | **49222** |
|  **Total assets** | **662920** | **761893** | **107105** |
|  **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
|  **Current liabilities:** |  |  |  |
|  Accounts payables | 67072 | 51971 | 7306 |
|  Advance from customers | 596 | 2655 | 373 |
|  Loans—current | 13500 | 17000 | 2390 |
|  Amounts due to related parties | 34768 | 654 | 92 |
|  Accrued expenses and other liabilities | 66580 | 60780 | 8544 |
|  Interest payables | 3431 |  |  |
|  Dividend payables | 267 | 267 | 38 |
|  Income tax payables | 7914 | 16307 | 2292 |
|  Operating lease liabilities—current | 3048 | 7872 | 1107 |
|  **Total Current Liabilities** | **197176** | **157506** | **22142** |
|  **Non-current liabilities:** |  |  |  |
|  Convertible promissory notes | 40707 |  |  |
|  Operating lease liabilities—non-current | 5491 | 9833 | 1382 |
|  Deferred revenue—non-current | 3284 | 2140 | 301 |
|  **Total non-current liabilities** | **49482** | **11973** | **1683** |
|  **Total liabilities** | **246658** | **169479** | **23825** |
|  **Shareholders' equity** |  |  |  |
|  Ordinary shares (US$0.002 par value; 500,000.000 shares authorized, 56,726,920 and 58,804,977 issued and outstanding as of December 31, 2020 and 2021, respectively\*) |  |  |  |
|  Additional paid-in-capital | 233651 | 283826 | 39899 |
|  Statutory reserve | 2286 | 5048 | 710 |
|  Retained earnings | 175663 | 250204 | 35173 |
|  Accumulated other comprehensive income | 1698 | 1544 | 217 |
|  **Total XUHANG HOLDINGS LIMITED shareholders' equity** | **413298** | **540622** | **75999** |
|  Non-controlling interest | 2964 | 51792 | 7281 |
|  **Total shareholders' equity** | **416262** | **592414** | **83280** |
|  **Total liabilities and shareholders' equity** | **662920** | **761893** | **107105** |

---

\* Retrospectively restated for the 500-for-1 forward split on December 2, 2022.

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

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**XUHANG HOLDINGS LIMITED** 

**CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  **Net revenue:** |  |  |  |
|  Digital advertising services | 188192 | 106316 | 14946 |
|  New media integrated content marketing services | 162712 | 365130 | 51329 |
|  **Total net revenue** | **350904** | **471446** | **66275** |
|  Cost of revenue | (243546) | (329888) | (46374) |
|  **Gross profit** | **107358** | **141558** | **19900** |
|  Sales and marketing expenses | (4649) | (6984) | (982) |
|  General and administrative expenses | (35071) | (59827) | (8410) |
|  Research and development expenses | (7448) | (2926) | (411) |
|  Allowance/(reversal) for doubtful debt and inventories | (318) | 5073 | 713 |
|  **Total operating expenses** | **(47486)** | **(64664)** | **(9090)** |
|  **Operating income** | **59872** | **76894** | **10810** |
|  Other income | 1657 | 4420 | 621 |
|  Other expenses | (280) | (993) | (140) |
|  Interest income | 274 | 264 | 37 |
|  Interest expense | (11707) | (7562) | (1063) |
|  Government subsidy | 962 | 4204 | 591 |
|  Investment income | (115) | 135 | 19 |
|  **Income before income taxes** | **50663** | **77362** | **10875** |
|  Income tax expense | (5944) | (8116) | (1141) |
|  **Net income** | **44719** | **69246** | **9734** |
|  Less: net loss attributable to non-controlling interest | 206 | 8057 | 1133 |
|  **Net income attributable to XUHANG HOLDINGS LIMITED's ordinary shareholders** | **44925** | **77303** | **10867** |
|  **Comprehensive income** |  |  |  |
|  Net income | 44719 | 69246 | 9734 |
|  **Other comprehensive income** |  |  |  |
|  Foreign currency translation adjustment | 365 | (154) | (22) |
|  **Total comprehensive income** | **45084** | **69092** | **9712** |
|  Less: comprehensive loss attributable to non-controlling interest |  |  |  |
|  **Comprehensive income attributable to XUHANG HOLDINGS LIMITED's ordinary shareholders** | **45084** | **69092** | **9712** |
|  **Income per share** |  |  |  |
|  Ordinary shares—basic and diluted | 0.844 | 1.20 | 0.17 |
|  **Weighted average shares outstanding used in calculating basic and diluted loss per share\*:** |  |  |  |
|  Ordinary shares—basic and diluted | 53192027 | 57765949 | 57765949 |

---

\* Retrospectively restated for the 500-for-1 forward split on December 2, 2022.

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

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**XUHANG HOLDINGS LIMITED** 

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | <br>**Ordinary shares\*** | <br>**Ordinary shares\*** | **Additional<br>paid-in<br>capital** | **Statutory<br>reserve** | **Retained<br>earnings** | **Accumulated<br>other** <br>**comprehensive<br>income (loss)** | **Total<br>XUHANG<br>HOLDINGS<br>LIMITED<br>shareholders'<br>equity** | **Non-<br>controlling<br>interests** | **Total**<br>**shareholders'<br>equity** |
|  | **Share\*** | **Amount** | **Additional<br>paid-in<br>capital** | **Statutory<br>reserve** | **Retained<br>earnings** | **Accumulated<br>other** <br>**comprehensive<br>income (loss)** | **Total<br>XUHANG<br>HOLDINGS<br>LIMITED<br>shareholders'<br>equity** | **Non-<br>controlling<br>interests** | **Total**<br>**shareholders'<br>equity** |
|  **Balance, December 31, 2019 (RMB)** | **49657134** |  | **28000** | **—** | **133024** | **1333** | **162357** | **24601** | **186958** |
|  Issuance of common shares for the acquisitions | 5677854 |  | 167000 |  |  |  | 167000 |  | 167000 |
|  Issuance of common shares for the acquisitions shares from non-controlling shareholders | 1391932 |  | 34000 |  |  |  | 34000 | (34000) |  |
|  Contribution by non-controlling shareholders |  |  |  |  |  |  |  | 12569 | 12569 |
|  Net income/(loss) |  |  |  |  | 44925 |  | 44925 | (206) | 44719 |
|  Equity portion of convertible promissory notes |  |  | 4651 |  |  |  | 4651 |  | 4651 |
|  Transfer to statutory reserve |  |  |  | 2286 | (2286) |  |  |  |  |
|  Foreign currency translation adjustment |  |  |  |  |  | 365 | 365 |  | 365 |
|  **Balance, December 31, 2020 (RMB)** | **56726920** |  | **233651** | **2286** | **175663** | **1698** | **413298** | **2964** | **416262** |
|  Contribution by non-controlling interest |  |  |  |  |  |  |  | 56885 | 56885 |
|  Net income/(loss) |  |  |  |  | 77303 |  | 77303 | (8057) | 69246 |
|  Conversion of convertible promissory notes | 2078057 |  | 50175 |  |  |  | 50175 |  | 50175 |
|  Transfer to statutory reserve |  |  |  | 2762 | (2762) |  |  |  |  |
|  Foreign currency translation adjustment |  |  |  |  |  | (154) | (154) |  | (154) |
|  **Balance, December 31, 2021 (RMB)** | **58804977** |  | **283826** | **5048** | **250204** | **1544** | **540622** | **51792** | **592414** |
|  **Balance, December 31, 2021 (US$)** | **58804977** |  | **39899** | **710** | **35173** | **217** | **75999** | **7281** | **83280** |

---

\* Retrospectively restated for the 500-for-1 forward split on December 2, 2022.

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

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**XUHANG HOLDINGS LIMITED** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(Amounts in thousand of RMB and US$, except for number of shares and per share date)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  **CASH FLOWS FROM OPERATING ACTIVITIES** |  |  |  |
|  Net income | 44719 | 69246 | 9734 |
|  Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |
|  Depreciation and amortization | 2993 | 2347 | 330 |
|  Allowance (reversal) of doubtful account and inventories | 318 | (5073) | (713) |
|  Non-cash interest expense for convertible promissory notes | 10841 | 6730 | 946 |
|  Changes in operating assets and liabilities: |  |  |  |
|  Accounts receivable | (28802) | (38305) | (5385) |
|  Amount due from related parties | (193) | 9700 | 1363 |
|  Advance to suppliers | 23845 | (5822) | (818) |
|  Other receivable | (48934) | (13709) | (1927) |
|  Inventories |  | (1825) | (257) |
|  Prepaid expenses | (221) | (1250) | (176) |
|  Other non-current assets | (23505) | 12087 | 1699 |
|  Accounts payables | 32357 | (15091) | (2121) |
|  Advance from customers | (334) | 2060 | 290 |
|  Amount due to related parties | 150 | 4 | 1 |
|  Accrued expenses and other payables | (28113) | 10309 | 1449 |
|  Dividend payables | 267 |  |  |
|  Income tax payables | 5899 | 8393 | 1180 |
|  Deferred revenue — non-current | 3285 | (1145) | (161) |
|  **Net cash provided by operating activities** | **(5042)** | **38656** | **5434** |
|  **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |  |
|  Purchase of property and equipment | (5544) | (21172) | (2976) |
|  Proceeds from/(payments for) short-term investments | 10049 | (8010) | (1126) |
|  Payments for long-term investments | (2183) | (6963) | (979) |
|  Payments for the acquisitions | (30000) | (46900) | (6593) |
|  Cash and cash equivalents from acquired companies | 6266 | 33 | 5 |
|  Proceeds from disposal of equity method investment |  | 950 | 133 |
|  **Net cash used in investing activities** | **(21412)** | **(82062)** | **(11536)** |
|  **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |  |
|  Proceeds from loans | 17226 | 3500 | 492 |
|  (Repayment)/proceeds to related parties | (34781) | 38522 | 5415 |
|  Cash contribution from minority shareholder | 12500 | 56885 | 7997 |
|  **Net cash (used in) provided by financing activities** | **(5055)** | **98907** | **13904** |
|  Effect of exchange rate changes | (230) | 812 | 114 |
|  Net (decrease)/increase in cash and cash equivalents | (31739) | 56313 | 7916 |
|  Cash and cash equivalents, at beginning of year | 88826 | 57087 | 8026 |
|  Cash and cash equivalents, at end of year | **57087** | **113400** | **15942** |
|  **Supplemental disclosure of cash flow information** |  |  |  |
|  **Cash paid for** |  |  |  |
|  Interest | 834 | 823 | 116 |
|  Income taxes | 2789 | 2666 | 375 |
|  **Non-cash investing and financing activities:** |  |  |  |
|  Liabilities assumed in connection with purchase of property and equipment |  | 567 | 80 |
|  Issuance of common shares for the acquisitions | 167000 |  |  |
|  Issuance of common shares for the acquisition shares from non-controlling shareholders | 34000 |  |  |

---

\* Retrospectively restated for the 500-for-1 forward split on December 2, 2022.

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

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**XUHANG HOLDINGS LIMITED** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

**Note 1 – Nature of business and organization** 

XUHANG HOLDINGS LIMITED ("Xuhang Holdings") was incorporated on June 16, 2020 as an exempted company with limited liability in the Cayman Islands. Xuhang Holdings principally engages in new media integrated content marketing services and digital advertising services through its subsidiaries in the People's Republic of China (the "PRC"). In September 2014, Mr. Tiahang Xiao ("Mr. Xiao"), chairman of board of directors, founded Hangzhou Xuhang Network Technology Co., Ltd. ("Xuhang Network"). Xuhang Holdings underwent a series of onshore and offshore reorganizations, which were completed on October 27, 2021 (the "Reorganization").

Immediately before and after the Reorganization, the controlling shareholder of Xuhang Network controlled Xuhang Network and Xuhang Holdings; therefore, for accounting purposes, the reorganization is accounted for as a transaction of entities under common control. Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods presented.

Xuhang Holdings and its consolidated subsidiaries are collectively referred to herein as the "Company," unless specific reference is made to an entity.

**Corporate Structure** 

Xuhang Holdings is a holding company incorporated in Cayman Islands that does not have substantive operations. Xuhang Holdings conducts its businesses through its subsidiaries. The principal subsidiaries of Xuhang Holdings consist of the following entities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Xuhang Network, a wholly-owned subsidiary and an onshore holding company established in the PRC on
September 16, 2014, principally for holding businesses in new media integrated content marketing services and digital advertising services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Horgos Xumi Network Technology Co., Ltd., or Horgos Xumi, a wholly-owned subsidiary and an operating entity
established in the PRC on February 8, 2017, principally for providing advertising design and production; technical services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Horgos Weizan Network Technology Co., Ltd., or Horgos Weizan, a wholly-owned subsidiary and an operating entity
established in the PRC on November 13, 2017, principally for providing marketing planning and advertising production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hongkong Lehui Network Technology Co., Limited, or HK Lehui, a wholly-owned subsidiary and an operating entity
established in Hong Kong on November 10, 2017, principally for providing digital advertising services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hangzhou Xingkong Internet Culture Communication Co., Ltd., or Hangzhou Xingkong, a wholly-owned PRC subsidiary
and an operating entity acquired on November 13, 2020, principally for providing advertising design and production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hangzhou Jinting Conference Co., Ltd., or Hangzhou Jinting, a wholly-owned PRC subsidiary and an operating entity
acquired on November 13, 2020, principally for providing conference services; cultural and artistic exchange activities planning;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jiangxi Ku'o Technology Co., Ltd., or Jiangxi Ku'o, a wholly-owned PRC subsidiary and an operating
entity acquired on March 16, 2020, principally for providing advertising production; graphic design and production;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hangzhou Xingxiu Network Technology Co., Ltd., a majority-owned subsidiary and an operating entity established in
the PRC on June 16, 2021, principally for providing advertising production and technical services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jiangsu Xuhang New Economy Technology Co., Ltd., a majority-owned subsidiary and an operating entity established
in the PRC on September 29, 2020, principally for providing advertising production and technical services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Qingdao Xuhang Digital New Economy Technology Co., Ltd., a majority-owned subsidiary and an operating entity
established in the PRC on October 29, 2020 principally for providing advertising production and technical services; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Qingdao Pinzhang Network Technology Co., Ltd., a majority-owned subsidiary and an operating entity established in
the PRC on April 15, 2021 principally for providing advertising production and technical services.

The accompanying consolidated financial statements reflect the activities of Xuhang Holdings and each of the following entities:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Place of** <br>**incorporation** | **Date of** <br>**incorporation**<br>**or acquisition** | **Percentage<br>of direct<br>or indirect** | **Principal** <br> **activities**  |
|  XUHANG LTD BVI | British Virgin<br>Islands<br>("BVI") | July 31, 2020 | 100% | Holding company |
|  XUHANG (HK) LIMITED | Hong Kong | November 2, 2020 | 100% | Holding company |
|  Horgos Pinyue Network Technology Co., Ltd. | PRC | November 10, 2017 | 100% | Advertising design and production; technical services; digital advertising services |
|  Shanghai Xumi Digital Technology Co., Ltd. | PRC | March 19, 2021 | 90% | Advertising production and technical services |
|  Xiamen Xuhang Digital Technology Co., Ltd. | PRC | April 1, 2021 | 75% | Marketing planning and advertising production |
|  Shanghai Pinzhang Network Technology Co., Ltd. | PRC | March 24, 2021 | 51% | Advertising production and technical services |
|  Hangzhou Pusheng Network Technology Co., Ltd. | PRC | August 25, 2020 | 51% | Advertising production and technical services |
|  Hangzhou Ruirong Network Technology Co., Ltd. | PRC | February 7, 2021 | 51% | Advertising production and technical services |
|  Henan New Circle Network Technology Co., Ltd. | PRC | January 17, 2020 | 100% | Advertising production and technical services |
|  Xuhang Shuzhiyun Technology (Hangzhou) Co., Ltd. | PRC | June 2, 2021 | 100% | Technical services and consultation; advertisement production |
|  Xuhang Digital (Henan) Technology Co., Ltd. | PRC | January 22, 2021 | 51% | Technical services and consultation |
|  Hangzhou Xiqi Cultural Tourism Technology Co., Ltd. | PRC | May 12, 2021 | 100% | Technical services and consultation |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Place of** <br>**incorporation** | **Date of** <br>**incorporation**<br>**or acquisition** | **Percentage<br>of direct<br>or indirect** | **Principal** <br> **activities**  |
|  Yunnan Xumi Digital Technology Co., Ltd. | PRC | July 2, 2021 | 51% | Marketing planning and advertising production |
|  Jiangxi Xuzhixing Technology Co., Ltd. | PRC | July 19, 2021 | 51% | Marketing planning and advertising production |
|  Shanghai Huihang Network Technology Co., Ltd. | PRC | May 25, 2021 | 51% | Marketing planning and advertising production |
|  Hangzhou Youyou Culture and Tourism Technology Co., Ltd. | PRC | July 14, 2021 | 51% | Marketing planning and advertising production |
|  Anhui Jiayuan Information Technology Co., Ltd. | PRC | April 14, 2016 | 100% | Advertising production and technical services |
|  Henan Xuhang Network Technology Co., Ltd. | PRC | November 29, 2019 | 99% | Internet advertising services |
|  Wenzhou Xumi Network Technology Co., Ltd. | PRC | March 4, 2020 | 100% | Marketing planning and advertising production |
|  Xumi (Fujian) Digital Technology Co., Ltd. ("Xumi Fujian") | PRC | February 8, 2021 | 85% | Advertising production and technical services |
|  Wuhan Xuhang Digital Technology Co., Ltd. | PRC | October 27, 2021 | 65% | Digital cultural creative content services; technical consultation |
|  Huangshan Xumi Digital Technology Co., Ltd. | PRC | September 16, 2021 | 90% | Advertising design and production |
|  Wuxi Xumi Creative Technology Co., Ltd. | PRC | September 10, 2021 | 75% | Marketing planning and advertising production |
|  Yangzhou Xumi Digital Technology Co., Ltd. | PRC | November 2, 2021 | 56.7% | Marketing planning and branding management |
|  Linyi Xumi Network Technology Co., Ltd. | PRC | August 26, 2021 | 60% | Marketing planning and advertising production |
|  Suzhou New Circle Network Technology Co., Ltd. | PRC | July 29, 2020 | 100% | Technical services and consultation |
|  Shanghai Xumi Digital Advertising Co., Ltd. | PRC | November 9, 2021 | 100% | Advertising design and production |
|  Shanghai Suhang Digital Technology Co., Ltd. | PRC | July 27, 2021 | 51% | Marketing planning and advertising production |
|  Hangzhou Xupai Technology Co., Ltd. | PRC | December 21, 2021 | 51% | Technical services and consultation |
|  Shanghai Hexian Lianhai Technology Group Co., Ltd. | PRC | January 18, 2022 | 51% | Marketing planning and advertising production |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Place of** <br>**incorporation** | **Date of** <br>**incorporation**<br>**or acquisition** | **Percentage<br>of direct<br>or indirect** | **Principal** <br> **activities**  |
|  Chengdu Xumi Digital Technology Co., Ltd. | PRC | February 28, 2022 | 80% | Technical services and consultation |
|  Hubei Xuhang Shuzhi Culture Co., Ltd. | PRC | February 28, 2022 | 90% | Marketing planning and advertising production |
|  Beijing Hexian Lianjing Technology Co., Ltd. | PRC | March 31, 2022 | 100% | Advertising design and production |
|  Beijing Xuhangyi Visual Technology Co., Ltd. | PRC | April 25, 2022 | 51% | Advertising design and production |

---

**Note 2 – Summary of significant accounting policies** 

<u>Basis of presentation</u> 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for information pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.

<u>Principles of consolidation</u> 

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

<u>Use of estimates and assumptions</u> 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenue and expenses during the reporting periods. Significant accounting estimates reflected in the Company's consolidated financial statements include estimates for useful lives and impairment of property and equipment, impairment of goodwill, valuation allowance for deferred tax assets, allowance for doubtful accounts and inventory valuation for excess and obsolete inventories, lower of cost and net realizable value of inventories. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements.

<u>Foreign currency translation and transaction</u> 

The accompanying consolidated financial statements are presented in the Renminbi ("RMB"), which is the reporting currency of the Company. The functional currency of Xuhang Holdings and Xuhang BVI is United State dollar, and the functional currency of HK Lehui, and Xuhang HK is Hong Kong dollar ("HKD"). The functional currency of the PRC subsidiaries is Renminbi ("RMB"). The functional currencies of the other subsidiaries are their respective local currencies. The determination of the respective functional currency is based on the criteria set out by ASC 830, Foreign Currency Matters ("ASC 830").

Transactions denominated in currencies other than in the functional currency are translated into the functional currency using the exchange rates prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into functional currency using the applicable exchange rates at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains or losses arising from foreign currency transactions are included in the consolidated statements of comprehensive income.

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The financial statements of the Company's entities of which the functional currency is not RMB are translated from their respective functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB at the exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Income and expense items are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive income or loss in the consolidated statements of comprehensive loss, and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive loss in the consolidated statements of shareholders' equity.

<u>Convenience translation</u> 

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2021 are solely for the convenience of the reader and were calculated at the rate of US$1.00 to RMB7.11350, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on September 30, 2022. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2021, or at any other rate.

<u>Business combinations and asset acquisitions</u> 

Business combinations are recorded using the acquisition method of accounting. The purchase price of the acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired, and non-controlling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses are expensed as incurred. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Transaction costs directly attributable to the acquisition are expensed as incurred.

If an investment involves the acquisition of an asset or group of assets that does not meet the definition of a business, the transaction is accounted for as an asset acquisition. An asset acquisition is recorded at cost, which includes capitalized transaction costs, and does not result in the recognition of goodwill. The cost of the acquisition is allocated to the assets acquired on the basis of their relative fair values.

Fair value is determined based upon the guidance of ASC Topic 820, Fair Value Measurements and Disclosures, and is generally determined using Level 2 inputs and Level 3 inputs. The determination of fair value involves the use of significant judgment and estimates. The Company utilizes the assistance of a third-party appraiser to determine the fair value as of the date of acquisition.

<u>Cash and cash equivalents</u> 

Cash and cash equivalents consist of cash on hand, demand deposits, and time deposits placed with banks or other financial institutions and have original maturities of less than three months.

<u>Short-term investment</u> 

Short-term investment consists of investment in a wealth management product issued by a bank that is redeemable by the Company at any time. The wealth management product is unsecured with variable interest rates. The Company measures the short-term investment at fair value and fair value is estimated based on the quoted price of similar products provided by banks at the end of each period.

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<u>Accounts receivable and allowance for doubtful accounts</u> 

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts.

The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability.

<u>Inventories, net</u> 

Inventories, net consist of finished goods. Inventories are stated at the lower of cost and net realizable value. Cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving and obsolete inventory, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks, and rewards of the products purchased.

<u>Property and equipment, net</u> 

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

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| | |
|:---|:---|
|  Office equipment | 3-5 years |
|  Furniture | 3-5 years |
|  Motor vehicles | 5 years |
|  Leasehold improvements | Over the shorter of the lease term or expected useful lives |

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The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals, and betterments, which are expected to extend the useful life of assets, are capitalized.

<u>Goodwill</u> 

Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. In accordance with ASC Topic 350, Goodwill and Other Intangible Assets ("ASC 350"), recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present.

In accordance with ASC 350, the Company assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. As of December 31, 2020 and 2021, the Company as a whole was one reporting unit.

Pursuant to ASC 350, in 2020 and 2021, the Company evaluated all relevant factors including macroeconomic conditions, industry and market conditions, and financial performance. The Company weighed all factors in their entirety and concluded that it was not more-likely-than-not the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary. No impairment loss of goodwill was recognized for the years ended December 31, 2020 and 2021.

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<u>Long-term investments</u> 

The Company's long-term investments include equity investments in entities and equity securities without readily determinable fair values. Investments in entities in which the Company can exercise significant influence and holds an investment in voting common stock or in-substance common stock (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323, Investments — Equity Method and Joint Ventures ("ASC 323"). Under the equity method, the Company initially records its investments at fair value. The Company subsequently adjusts the carrying amount of the investments to recognize the Company's proportionate share of each equity investee's net income or loss into earnings after the date of investment. The Company evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. Equity securities without readily determinable fair values and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.

<u>Related party transactions</u> 

A related party is generally defined as (i) any person and or their immediate family hold 10% or more of the Company's securities (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related parties may be individuals or corporate entities.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature.

<u>Fair value of financial instruments</u> 

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact, and it also considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Accounting guidance establishes three levels of inputs that may be used to measure fair value:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

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Financial assets and liabilities of the Company primarily consist of cash and cash equivalents, available-for-sale investments, accounts receivable, amounts due from related parties, deposits and other receivables, accounts payable, amounts due to related parties, other payables, short-term bank and other borrowings and loan payables. As of December 31, 2020 and 2021, the carrying values of these financial instruments are approximated to their fair values.

<u>Revenue recognition</u> 

The Company has adopted the new revenue standard, ASC 606, Revenue from Contracts with Customers (Topic 606) ("ASC 606") for all periods presented. Consistent with the criteria of Topic 606, the Company recognizes revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those services. Value-added tax that the Company collects concurrent with revenue-producing activities is excluded from revenue.

The Company recognizes revenue as it satisfies a performance obligation when its customer obtains control of promised services, in an amount that reflects the consideration that the entity expects to receive in exchange for those services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the services it transfers to the customer.

Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied.

The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the service, has discretion in establishing pricing and controls the promised service before transferring that service to customers. Otherwise, the Company records revenue at the net amounts as commissions.

The following is a description of the accounting policy for the principal revenue streams of the Company:

*Digital advertising services* 

Digital advertising services revenue primarily includes revenue from the provision of digital advertising services by the Company. The revenue is recognized when the related services are delivered based on the specific terms of the contract, which are commonly based on specified actions, such as cost per action ("CPA"), cost per mille ("CPM"), cost per click ("CPC") or other preferences agreed upon with advertisers. When entering into contracts with customers, the Company will stipulate the method of measure (such as CPA, CPM or CPC) by defining those units of measure and setting the unit price for type of unit of measure; these terms and conditions are found in the annex of the contract. The unit price of each type of actions is determined through negotiation between the Company and its customers. The Company typically determines the unit price of each type of actions based on the type of marketing product, which distribution channel to be deployed, and the length and timing of advertising campaign. The Company will also consider the prevailing market prices in the industry when providing quotations to its customers.

Revenue is earned at each point in time when the customers' end users execute the agreed upon actions as set forth in the sales contracts, such as a download or installation, or advertisements have reached a mille, or a banner or link has been clicked. The settlement of the fees earned from selling digital advertising services occurs one month following a monthly statement of the services provided has been furnished to and accepted by the

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clients, at which point the Company will enter revenue recognition journal entries into its accounting system to record the relevant revenue. The monthly statement is calculated based on the unit price of each type of actions, mille or click multiplied by the cumulative number of each type of actions, mille, or click completed in the month. The Company counts the cumulative completion quantity of each type of actions, mille, or click on a monthly basis, and states the cumulative completion quantity of each type of actions and the unit price for the applicable month in the statement. While none of the factors individually are considered presumptive or determinative, because the Company is the primary obligor and is responsible for (i) identifying and contracting with third-party advertisers that the Company views as customers; (ii) identifying media publishers to provide ad inventory (media space) where the Company views the media publishers as suppliers; (iii) establishing the selling prices of CPA, CPM, or CPC pricing model; (iv) performing all billing and collection activities, including retaining credit risk; and (v) bearing sole responsibility for fulfillment of the advertising, the Company acts as the principal of these arrangements and therefore recognizes revenue earned and costs incurred related to these transactions on a gross basis.

*New media integrated content marketing services* 

New media integrated content marketing services target social networks and applications to spread brand awareness or promote certain products. The Company offers a service package comprising of a variety of integrated marketing solutions, including marketing strategy and creativity consulting, writing advertorials, shooting and producing promotional videos/short videos, managing and operating customers' social media accounts or online stores, planning and implementing live e-commerce events, and organizing offline marketing events or public relations activities. Customers may select one or more types of integrated marketing services for the Company to implement based on their respective marketing targets, demand, budgets, and other factors.

The process of the new media integrated content marketing services refers to the following:

(i) The Company signs contracts with customers, which normally are framework contracts with terms typically within
one year; however, in certain circumstances, the terms may be longer, such as two years. According to the framework contracts, the Company is required to carry out marketing activities on a regular or irregular basis according to customers'
specific requirements. The framework contracts generally stipulate the scope of service, length of contract period, method of measurement including but not limited to fixed price project, and a revenue share from products sales generating through
the marketing campaign, or a combination of those all, method of settlement, and the rights and obligations of both parties.

(ii) After the signing of the contracts, the Company usually communicates with the customers on specific
requirements and provides the customers with a specific marketing campaign plan that is expected to be implemented within a certain period of time. The plan is a new media integrated marketing service product package, which includes a variety of
services. After the specific marketing activity plan for the period is confirmed by the customer, the two parties will decide the transaction price, including unit price, quantity (including, but not limited to, the number of articles, short videos
or activity frequency) and the calculation method of service fees for specific marketing activities during the period, through supplementary forms such as annexes to the agreement, purchase order slips or emails.

(iii) The Company provides related services to the customers, as agreed upon in the aforementioned subsection (ii),
including, but not limited to, training of the customers' employees who participate in the new media integrated content marketing campaign, marketing content production, setting up new media accounts, marketing channel procurement, release of
new media marketing content, and monitoring and evaluating the result and effectiveness of the marketing campaigns.

(iv) After the provision of all the related services in the period of time specified in the contracts, the Company
sends customers working reports or other acceptable references to confirm whether new media integrated content marketing campaign fulfilled the requirements of the signed contracts.

(v) Revenue derived from the provision of new media integrated content marketing services is recognized at the
point in time when the new media integrated content marketing campaigns are implemented and accepted by

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customers (all the new media marketing services included in a particular service package have been implemented), according to the terms of the contracts, and the satisfaction of the performance obligation is measured based on the implementation of new media integrated content marketing services.

The Company generally asks customers to pay for the services after all the services have been completed and accepted by the customers. Occasionally, the Company receives partial payment in advance from customers (typically no more than 30%). The advance payment is generally paid after a contract is signed. The remaining balance will be paid after all the services have been completed and accepted by the customers.

The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the new media integrated content marketing services. When the Company purchases ancillary services related to new media integrated content marketing campaigns on behalf of customers, such as purchasing air tickets and hotels for customers, the Company recognizes revenue at the net amount deducted from the purchasing amount as commissions.

The Company does not provide warranties, refunds, discounts, or rebates. The services provided by the Company are fully delivered when they have been completed and accepted by the customer (namely, the quality of the services has been approved by the customer). The Company does not have any after-sales guarantee obligations.

<u>Segment reporting</u> 

ASC 280, Segment Reporting, ("ASC 280"), establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by ASC 280, our chief operating decision maker ("CODM") has been identified as our Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the company. As a whole and hence, we have only one reportable segment. We do not distinguish between markets or segments for the purpose of internal reporting. As our long-lived assets are substantially located in the PRC, no geographical segments are presented.

<u>Cost of revenue</u> 

Cost of revenue consists primarily of (i) staff and welfare costs; (ii) costs of new media integrated content marketing services procured from suppliers; (iii) traffic intermediary costs procured from suppliers; (iv) amortization of official accounts; (v) lease expenses for office space; and (vi) taxes and surcharges. Cost of digital advertising services consists primarily of items (i), (iii), (iv), (v), and (vi). Cost of new media integrated content marketing services consists primarily of items (i), (ii), (iv), (v), and (vi). For the traffic intermediary costs procured from suppliers, we recognize such costs when we agree on the payment amount based on monthly specified actions or other preferences with suppliers. For other costs, we recognize the costs as incurred.

<u>Sales and marketing expenses</u> 

Sales and marketing expenses include (i) salaries and benefits of our sales and marketing staff; (ii) advertising fees; and (iii) other expenses, such as transportation expenses and entertainment expenses for our sales office.

<u>Advertising expenses</u> 

Advertising costs are expensed as incurred and included in sales and marketing expenses in the statements of income and comprehensive income. Advertising expenses amounted to RMB50 and RMB994 (US$156) for the years ended December 31, 2020 and 2021, respectively.

<u>Research and development expenses</u> 

Research and development costs are expensed as incurred. Research and development expenses include (i) salaries and benefits of our research and development staff; (ii) outsourced development expenses; and (iii) others expenses such as transportation expenses for our research and development office.

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<u>Operating leases</u> 

The Company adopted ASC Topic 842, *Lease* ("ASC 842") on January 1, 2020, using the modified retrospective method. The Company determines if an arrangement is a lease at inception. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company's leases do not contain any material residual value guarantees or material restrictive covenants.

The Company has elected the package of practical expedients, which allows the Company not to reassess (i) whether any expired or existing contracts as of the adoption date are or contain a lease, (ii) lease classification for any expired or existing leases as of the adoption date, and (iii) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Company elected the short-term lease exemption for all contracts with a lease term of 12 months or less.

At the commencement date of a lease, the Company determines the classification of the lease based on the relevant factors present and records a right-of-use ("ROU") asset and lease liability for any operating lease. ROU assets acquired through a lease represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. If the rate implicit in the Company's leases is not readily available, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancellable term of the lease.

Leases with an initial lease term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term.

<u>Government subsidy</u> 

Government grants represent cash subsidies received from the PRC government. Cash subsidies that have no defined rules and regulations to govern the criteria necessary for companies to enjoy the benefits are recognized when received. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business. Total government grants received amounted to RMB962 and RMB4,204 (US$660) for the years ended December 31, 2020 and 2021, respectively.

<u>Income taxes</u> 

Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Tax, ("ASC 740"). Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the financial statements and their respective tax basis, and operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized.

The Company records liabilities related to uncertain tax positions when, despite the Company's belief that the Company's tax return positions are supportable, the Company believes that it is more likely than not that those

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positions may not be fully sustained upon review by tax authorities. Accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense. The Company did not recognize uncertain tax positions as of December 31, 2020 and 2021.

<u>Comprehensive income (loss)</u> 

Comprehensive income (loss) 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 a foreign currency translation adjustment resulting from the Company not using the United States dollar as its functional currencies.

<u>Earnings per share</u> 

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 (loss) attributable to Xuhang Holdings divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (such as convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or at the issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (namely those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

<u>Statutory reserves</u> 

Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from their after-tax profit to the non-distributable "statutory surplus reserve fund." Subject to certain cumulative limits, the "statutory surplus reserve fund" requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the "reserve fund." For foreign invested enterprises, the annual appropriation for the "reserve fund" cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss.

<u>Commitments and Contingencies</u> 

In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical performance and the specific facts and circumstances of each matter.

<u>Concentration of credit risk</u> 

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with financial institutions with high credit ratings and quality.

The Company conducts credit evaluations of customers, and generally does not require collateral or other security from its customers. The Company establishes an allowance for doubtful accounts primarily based upon the factors surrounding the credit risk of specific customers.

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Concentration of clients

As of December 31, 2020, one client accounted for 17.1% of the Company's total accounts receivable. As of December 31, 2021, no clients accounted over 10% of the Company's total accounts receivable.

<u>Recently accounting pronouncements</u> 

The Company is an emerging growth company ("EGC") as defined by the Jumpstart Our Business Startups Act ("JOBS Act"). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the extended transition periods. However, this election will not apply should the Company cease to be classified as an EGC.

On December 18, 2019, the Financial Accounting Standards Board ("FASB") issued ASU No. 2019-12, Income taxes (Topic 740), Simplifying the Accounting for Income Taxes. This guidance amends ASC Topic 740 and addresses several aspects including 1) evaluation of step-up tax basis of goodwill when there is not a business combination, 2) policy election to not allocate taxes on a separate entity basis to entities not subject to income tax, 3) accounting for tax law changes or rates during interim periods, 4) ownership changes from equity method investment to subsidiary or vice versa, 5) elimination of exception to intrapetrous allocation when there is gain in discontinued operations and a loss from continuing operations, and 6) treatment of franchise taxes that are partially based on income. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is evaluating the impact of this guidance on its financial statements and related disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's balance sheets, statements of income and statements of cash flows.

**Note 3 – Acquisition and disposal of subsidiaries** 

*Acquisitions in 2020* 

*Jiangxi Ku'o* 

On March 16, 2020, as part of its business strategy to expand the new media integrated content marketing service, the Company, through its subsidiary, Xuhang Network, acquired 100% of the equity interests in Jiangxi Ku'o for a total cash consideration of RMB90,000 and equity consideration of RMB105,000.

As Jiangxi Ku'o is in operation and possesses all the elements that are necessary to conduct normal operations as a business, such acquisition is accounted for as business combination.

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The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition:

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| | |
|:---|:---|
|  | **RMB** |
|  Property and equipment, net | 383 |
|  Customer contract | 3559 |
|  Other current assets | 2580 |
|  Total assets acquired | 6522 |
|  Other current liabilities | (6500) |
|  Total liabilities assumed | (6500) |
|  Net assets acquired | 22 |
|  Purchase consideration | 195000 |
|  Goodwill | 194978 |

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The revenue and net profit since the acquisition date included in the consolidated statements of operations for the period ended December 31, 2020 were RMB40,650 and RMB12,152, respectively. The goodwill, which is not tax deductible, is primarily attributable to synergies expected to be achieved from the acquisition.

Supplemental pro forma information:

The revenue and net profit for the year ended December 31, 2020 were RMB45,984 and RMB13,149, respectively.

*Hangzhou Xingkong* 

On November 13, 2020, as part of its business strategy to expand the new media integrated content marketing services, the Company, through its subsidiary, Xuhang Network, acquired 100% of the equity interests in Hangzhou Xingkong for a total cash consideration of RMB23,400 and equity consideration of RMB48,000.

As Hangzhou Xingkong is in operation and possesses all the elements that are necessary to conduct normal operations as a business, such acquisition is accounted for as business combination.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition:

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| | |
|:---|:---|
|  | **RMB** |
|  Property and equipment, net | 29 |
|  Customer contract | 3264 |
|  Other non-current assets | 37 |
|  Other current assets | 2390 |
|  Total assets acquired | 5720 |
|  Other current liabilities | (4307) |
|  Total liabilities assumed | (4307) |
|  Net assets acquired | 1413 |
|  Purchase consideration | 71400 |
|  Goodwill | 69987 |

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The revenue and net profit since the acquisition date included in the consolidated statement of operations for the period ended December 31, 2020 were RMB10,683 and RMB363. The goodwill, which is not tax deductible, is primarily attributable to synergies expected to be achieved from the acquisition.

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Supplemental pro forma information:

The revenue and net profit for the year ended December 31, 2020 were RMB91,076 and RMB1,078, respectively.

*Hangzhou Jinting* 

On November 13, 2020, as part of its business strategy to expand the new media integrated content marketing services, the Company, through its subsidiary, Xuhang Network, acquired 100% of the equity interests in Hangzhou Jinting for a total cash consideration of RMB7,000 and equity consideration of RMB14,000.

As Hangzhou Jinting is in operation and possesses all the elements that are necessary to conduct normal operations as a business, such acquisition is accounted for as business combination.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition:

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| | |
|:---|:---|
|  | **RMB** |
|  Property and equipment, net | 370 |
|  Customer contract | 5468 |
|  Other non-current assets | 177 |
|  Other current assets | 3346 |
|  Total assets acquired | 9361 |
|  Other current liabilities | (10278) |
|  Total liabilities assumed | (10278) |
|  Net liabilities assumed | (917) |
|  Purchase consideration | 21000 |
|  Goodwill | 21917 |

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The revenue since the acquisition date included in the consolidated statement of operations for the period ended December 31, 2020 were RMB514 and RMB74, respectively. The goodwill, which is not tax deductible, is primarily attributable to synergies expected to be achieved from the acquisition.

Changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2021 were as follows:

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| | | |
|:---|:---|:---|
|  | **RMB** | **RMB** |
|  Goodwill |  |  |
|  Balance, December 31, 2019 |  |  |
|  Additions |  | 286882 |
|  Impairment |  |  |
|  Balance, December 31, 2020 |  | 286882 |
|  Additions |  | 83 |
|  Impairment |  |  |
|  Balance, December 31, 2021 |  | 286965 |
|  | **USD** | **USD** |
|  Balance, December 31, 2021 |  | 40341 |

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**Note 4 – Cash and cash equivalents** 

Cash and cash equivalents consisted of the following:

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| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Cash on hand | 121 | 146 | 21 |
|  Cash at bank | 56678 | 112821 | 15860 |
|  Other cash and cash equivalents | 288 | 433 | 61 |
|  Cash and cash equivalents | 57087 | 113400 | 15942 |

---

**Note 5 – Accounts receivable, net** 

Accounts receivable, net consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Accounts receivable | 129540 | 167965 | 23612 |
|  Less: Allowance for doubtful accounts | (5133) |  |  |
|  Accounts receivable, net | 124407 | 167965 | 23612 |

---

Movements of allowance for doubtful accounts were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Allowance for doubtful accounts, beginning balance | (5133) | (5133) | (722) |
|  Add: Provision for doubtful accounts |  |  |  |
|  Reversal of doubtful accounts |  | 5133 | 722 |
|  Uncollectible receivables written-off |  |  |  |
|  Allowance for doubtful accounts, ending balance | (5133) |  |  |

---

**Note 6 – Inventories, net** 

Inventories, net consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Finished goods |  | 1884 | 264 |
|  Work in process |  |  |  |
|  Raw materials |  |  |  |
|  |  | 1884 | 265 |
|  Less: provision for impairment of inventories |  | (59) | (8) |
|  Inventories, net |  | 1825 | 257 |

---

During the years ended December 31, 2020 and 2021, the Company recorded provision for impairment of inventories of RMB59 (US$9) and nil for the obsolete inventories in cost of revenue, respectively.

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**Note 7 – Property and equipment, net** 

Property and equipment, net consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  At cost: |  |  |  |
|  Office equipment | 3502 | 5219 | 734 |
|  Furniture | 636 | 3062 | 430 |
|  Motor vehicles | 2466 | 2218 | 312 |
|  Leasehold improvement | 6299 | 22805 | 3206 |
|  | 12903 | 33304 | 4682 |
|  Accumulated depreciation | (4555) | (6666) | (937) |
|  Property and equipment, net | **8348** | **26638** | **3745** |

---

Depreciation expenses for the years ended December 31, 2020 and 2021 amounted to RMB2,993 and RMB2,347 (US$330), respectively.

**Note 8 – Long term investments** 

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  **Equity securities without readily determinable fair values investments** |  |  |  |
|  Shenzhen Zhuoya Network Media Co., LTD. ("Shenzhen Zhuoya") | 100 | 100 | 14 |
|  Hengyang Yixin Culture Media Co., LTD. ("Hengyang Yixin") | 50 | 100 | 14 |
|  Xi'an Xuhang Digital Technology Co., LTD. ("Xi'an Xuhang") |  | 2250 | 316 |
|  Beijing Pinte Visual Culture Media Co., LTD. ("Beijing Pinte") | 700 | 700 | 98 |
|  Shanghai Er'shang Culture Communication Co., LTD. ("Shanghai Er'shang") | 1333 | 1333 | 187 |
|  Putian Shoe Brand Operation Service Co., LTD. ("Putian Shoe") |  | 2813 | 397 |
|  Cost of equity investments without readily determinable fair value | 2183 | 7296 | 1026 |
|  Impairment on equity investments without readily determinable fair value |  |  |  |
|  **Carrying amount of Equity investments without readily determinable fair value** | **2183** | **7296** | **1026** |

---

In May 2020, the Company through its subsidiary, Xuhang Network, jointly set up Shenzhen Zhuoya with capital injection of RMB100 and held 20% of the investee as of December 31, 2020 and 2021. Based on the article of association, the Company cannot exercise significant influence over Shenzhen Zhuoya's operation and financial decisions.

In August 2020, the Company through its subsidiary, Xuhang Network, entered into an agreement to invest in Hengyang Yixin. The Company injected capital of RMB50 and RMB50 (US$7) in 2020 and 2021, respectively. The Company held 40% and 40% of equity interest as of December 31, 2020 and 2021, respectively. Based on the investment agreement, the Company cannot exercise significant influence over Hengyang Yixin's operation and financial decisions.

In December 2020, the Company through its subsidiary, Xuhang Network, jointly set up Xi'an Xuhang with capital injection of RMB2,250 and held 45% of the investee as of December 31, 2020 and 2021. Based on the article of association, the Company cannot exercise significant influence over Xi'an Xuhang's operation and financial decisions.

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In July 2020, the Company through its subsidiary, Horgos Weizan, entered into an agreement to invest in Beijing Pinte. The Company injected capital of RMB700 and held 28.75% of equity interest as of December 31, 2020 and 2021. Based on the investment agreement, the Company cannot exercise significant influence over Beijing Pinte's operation and financial decisions.

In September 2020, the Company through its subsidiary, Horgos Weizan, entered into an agreement to invest in Shanghai Er'shang. The Company injected capital of RMB1,333 and held 40% of equity interest as of December 31, 2020 and 2021. Based on the investment agreement, the Company cannot exercise significant influence over Shanghai Er'shang's operation and financial decisions.

In April 2021, the Company through its subsidiary, Xumi Fujian, jointly set up Putian Shoe with capital injection of RMB2,813 and held 37.5% of the investee as of December 31, 2020 and 2021. Based on the investment agreement, the Company cannot exercise significant influence over Putian Shoe's operation and financial decision.

**Note 9 – Accrued expenses and other payables** 

The components of accrued expenses and other payables were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Cash payables for the acquisition | 60750 | 43500 | 6115 |
|  Customers deposit | 2334 | 13115 | 1844 |
|  Other payables for daily operation | 626 | 1930 | 271 |
|  Others | 2870 | 2235 | 314 |
|  | **66580** | **60780** | **8544** |

---

Other payables mainly consisted of cash payables for the acquisition, customer deposit, and other payables for daily operation.

**Note 10 – Loans** 

Outstanding balances of loans consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of December 31, 2020** | **Balance** | **Maturity<br>date** | **Effective<br>interest<br>rate** | **Guarantee** |
|  China Merchants Bank Co., LTD. Hangzhou Fengqi Sub-branch ("CMB") | 7000 | 2021/3/9 | 5.10% | N/A |
|  Hangzhou United Rural Commercial Bank Co., LTD. Shangtang Sub-branch ("HURC") | 5000 | 2021/1/12 | 6.66% | N/A |
|  HURC | 1500 | 2021/8/17 | 4.80% | N/A |
|  Total loans | 13500 |  |  |  |
|  Less: loan – current | (13500) |  |  |  |
|  Loan – non-current |  |  |  |  |

---

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---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of December 31, 2021** | **Balance** | **Maturity<br>date** | **Effective<br>interest<br>rate** | **Guarantee** |
|  CMB | 7000 | 2022/8/22 | 5.10% | Credit guarantee:<br>Mr. Xiao |
|  HURC | 5000 | 2022/8/31 | 5.80% | Credit guarantee:<br>Mr. Xiao |
|  HURC | 5000 | 2022/8/31 | 5.80% | Credit guarantee:<br>Mr. Xiao |
|  Total loans | 17000 |  |  |  |
|  Less: loan – current | (17000) |  |  |  |
|  Loan – non-current (RMB) |  |  |  |  |
|  Loan – non-current (US$) |  |  |  |  |

---

Interest expenses for the years ended December 31, 2020 and 2021 amounted to RMB866 and RMB833 (US$117), respectively.

As of December 31, 2021, the Company's future loan obligations according to the terms of the loan agreement were as follows:

---

| | |
|:---|:---|
| 2022 | 17000 |
|  2023 and thereafter |  |
|  Total | 17000 |

---

**Note 11 – Convertible promissory notes** 

On December 13, 2019, HK Lehui entered into a loan agreement ("Loan 2019") with Hexagon Credit Limited ("HC"), stipulating that HC would provide HK Lehui a loan amounting to HKD20,000,000 with the interest of 15.0% per annum. HK Lehui received the loan from HC in full on December 17, 2019.

On March 20, 2020, Xuhang Network, HK Lehui and Mr. Xiao entered into a convertible promissory notes agreement with Hexagon Special Opportunities SPC ("HSO"), stipulating that SPC would grant HK Lehui a convertible promissory note with a facility from HKD50,000,000 to HKD150,000,000.

On April 8, 2020, HSO purchased and paid cash consideration of HKD30,000,000 for the convertible promissory notes (Notes I"), with the interest of 15.0% per annum and maturity date of December 31, 2021.

On September 30, 2020, HC, HSO and HK Lehui jointly signed a supplementary agreement for Loan 2019, stipulating that HC would transfer the rights under Loan 2019 to HSO. HSO converted such loan of HKD20,000,000 including the accrued interest of HKD2,367,123 into the convertible promissory notes ("Notes II") amounting to HKD22,367,123, with the interest rate of 15.0% per annum and maturity date of December 31, 2021.

Conversion

On August 10, 2021, HSO and the Company signed a conversion agreement, which HSO converted all outstanding amounts of Notes I and Notes II with the principal of HKD52,367,123 and interest of HKD9,061,643 into the Company's newly issued 4,156.1143 shares, with the conversion price of HKD14,780.34 per share. Such conversion was completed on December 1, 2021.

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##### [**Table of Contents**](#toc)
**Note 12 – Income taxes** 

*Cayman Islands* 

Under the current laws of the Cayman Islands, Xuhang Holdings is not subject to tax on income or capital gains. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. 

*British Virgin Islands* 

The Company's subsidiary, Xuhang BVI, is incorporated in the BVI and under the current laws of the BVI, Xuhang BVI is not subject to tax on income or capital gain. In addition, payments of dividends by such subsidiary to its shareholders are not subject to withholding tax in the BVI.

*Hong Kong* 

Xuhang HK and HK Lehui are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 8.25% on assessable profits arising in or derived from Hong Kong up to HKD2,000,000 and 16.5% on any part of assessable profits over HKD2,000,000.

*PRC* 

The Company's PRC subsidiaries are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the "EIT Laws"), 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 case-by-case basis. EIT grants preferential tax treatment to certain 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 the HNTE status every three years. Xuhang Network obtained the HNTE tax status in December 2021, which reduced its statutory income tax rate to 15% from 2021 to 2024. In addition, Anhui Jiayuan and Xuhang Network was qualified as a software enterprise in 2016, and thus was entitled to a five-year tax holiday (full exemption for the first two years and a 50% reduction in the statutory income tax rate for the following three years) until its software enterprise qualification expired in 2020. Horgos Xumi, Horgos Weizan, Horgos Pinyue, and Horgos Jinting were registered in Kashi Special Economic Zone, which allows them to utilize a five-year 100% exemption. Horgos Xumi's exemption period was from 2017 to 2021. Horgos Weizan's and Horgos Pinyue's exemption period were from 2018 to 2022. Khorgos Jinting's exemption period was from 2020 to 2024.

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*Reconciliation of the differences between statutory income tax rate and the effective tax rate*

The reconciliation of tax computed by applying the statutory income tax rate of 25% for the years ended December 31, 2020 and 2021 applicable to the PRC operations to income tax expenses is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** |
|  | **2020** | **2021** |
|  Statutory income tax rate | 25.0% | 25.0% |
|  Income tax exemptions and reliefs | (18.5)% | (21.3)% |
|  Non-deductible expenses | 1.0% | 0.4% |
|  Research and development expenses | (1.1)% | (0.4)% |
|  Prior year loss carry forward | (0.9)% | (1.0)% |
|  Valuation allowance | 6.2% | 7.8% |
|  | 11.7% | 10.5% |

---

Significant components of the provision for income taxes were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Current income tax expenses | 5944 | 8116 | 1141 |
|  Deferred tax expenses |  |  |  |
|  | **5944** | **8116** | **1141** |

---

For the purpose of presentation in the consolidated balance sheets, deferred income tax assets and liabilities have been offset and included in other assets on the accompanying consolidated balance sheets. Significant component of deferred tax assets were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Deferred tax assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tax losses | 3145 | 9140 | 1285 |
| &nbsp;&nbsp;&nbsp;&nbsp; Valuation allowance | (3145) | (9140) | (1285) |
|  Total deferred tax assets |  |  |  |

---

The Company operates through several subsidiaries. Valuation allowance is considered for each of the entities. Realization of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences and tax loss or credit carry forwards. The Company evaluates the potential realization of deferred tax assets on an entity-by-entity basis. As of December 31, 2020 and 2021, the Company and all of its subsidiaries were in cumulative loss position, valuation allowances were provided against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred tax assets will not be realized.

<u>Uncertain tax positions</u> 

The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. In general, the PRC tax authority has up to five years to conduct examinations of the tax filings of the Company's PRC entities. Accordingly, the

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PRC subsidiaries' tax years of 2014 through 2020 remain open to examination by the respective tax authorities. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company's PRC subsidiaries' tax filings, which may lead to additional tax liabilities.

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2020 and 2021, the Company did not have any significant unrecognized uncertain tax positions.

**Note 13 – Shareholders' equity** 

Xuhang Holdings was established under the laws of the Cayman Islands on June 16, 2020. The issued number of ordinary shares is 50,000.0000 shares with a par value of US$1.0 per ordinary share.

The Company completed new issuance of 41,972.2302, 21,481.6094 and 4,156.1143 shares with a par value of US$1.0 per ordinary share on April 23, 2021, September 26, 2021 and December 1, 2021, respectively.

**Note 14 – Operating leases** 

The Company entered into operating lease agreements for office spaces and employee dormitories. None of the amounts disclosed below for these leases contains variable payments, residual value guarantees or options that were recognized as part of the ROU assets and lease liabilities. As the Company's leases did not provide an implicit discount rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

As of December 31, 2021, the Company recognized operating lease liabilities, including current and noncurrent, in the amount of RMB17,705 (US$2,489) and the corresponding operating lease ROU assets of RMB17,705 (US$2,489).

Rental expenses for the years ended December 31, 2020 and 2021 were RMB4,226 and RMB7,492 (US$1,053), respectively.

<u>Lease commitments</u> 

The Company's maturity analysis of operating lease liabilities as of December 31, 2021 was as follows:

---

| | |
|:---|:---|
|  | **Operating<br>Leases** |
| 2022 | 8415 |
| 2023 | 7056 |
| 2024 | 2305 |
| 2025 | 740 |
|  Total lease payments | 18516 |
|  Less: imputed interest | (811) |
|  Present value of operating lease liabilities | 17705 |
|  Less: current obligation | (7872) |
|  Long-term obligation at December 31, 2021 | 9833 |

---

Supplemental disclosure related to operating leases were as follows:

---

| | |
|:---|:---|
|  Cash paid for amounts included in the measurement of lease liabilities | Cash paid for amounts included in the measurement of lease liabilities |
|  Operating cash flows for operating leases | 6469 |
|  Weighted average remaining lease term of operating leases | 2.53 |
|  Weighted average discount rate of operating leases | 4.45% |

---

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**Note 15 – Statutory reserves and restricted net assets** 

As a result of the PRC laws and regulations and the requirement that distributions by PRC entities can only be paid out of distributable profits computed in accordance with PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Company. Amounts restricted include paid-in capital, additional paid-in capital, and the statutory reserves of the Company's PRC subsidiaries.

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Additional paid-in-capital | 233651 | 283826 | 39899 |
|  Statutory reserve | 2286 | 5048 | 710 |
|  Total restricted net assets | **235937** | **288874** | **40609** |

---

As of December 31, 2020 and 2021, total restricted net assets were RMB235,937 and RMB288,874 (US$40,609), respectively.

**Note 16 – Related party transactions** 

a) Related parties

---

| | |
|:---|:---|
| **Name of related parties** | **Relationship with the Company** |
| Mr. Xiao | Chairman and CEO |
| Lilian Liu | Shareholder of the Company |
| Yu Jiang | Shareholder of the Company |
| Shanghai Qishu Business Management Partnership LP. ("Shanghai Qishu") | Shareholder of the Company |
| Genshui Bao | Shareholder of the Company |
| Congcong Wei | Shareholder of the Company |
| Shanghai Huiji Network Technology Co., LTD ("Shanghai Huiji") | Non-controlling shareholder of the Company's subsidiary |
| Zhejiang Lingshang Cultural Creative Co., LTD ("Zhejiang Lingshang") | A company controlled by a director of our subsidiary |
| Shanghai Huihui Hanghang Management Consulting Co., LTD ("Shanghai Huihui") | Non-controlling shareholder of the Company's subsidiary |
| Shanghai Er'shang | Equity investee of the Company |
| Beijing Pinte | Equity investee of the Company |
| Longtian Zhou | A director of the Company's subsidiary |
| Shenzhen Zhuoya | Equity investee of the Company |
| Zhoushan Youtai Investment Partnership LP. ("Zhoushan Youtai") | Original shareholder of the Company\* |
| Xi'an Saixinghang Enterprise Management Partnership LP. ("Xi'an Saixinghang") | A company controlled by principal shareholder of the Company |
| Zhejiang Weilai Advertising Co. LTD ("Zhejiang Weilai") | A company controlled by principal shareholder of the Company |
| Zhejiang Weicheng Information Technology Co. LTD ("Zhejiang Weicheng") | A company controlled by principal shareholder of the Company |
| Sewing Time Trading (Shenzhen) Co. LTD ("Sewing Time") | Non-controlling shareholder of the Company's subsidiary |

---

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---

| | |
|:---|:---|
| **Name of related parties** | **Relationship with the Company** |
| Hangzhou Find Fun Creative Culture Co. LTD ("Hangzhou Find Fun") | A company controlled by principal shareholder of the Company |
| Hangzhou Tianyi Electronic Commerce Co. LTD ("Hangzhou Tianyi") | A company controlled by principal shareholder of the Company |
| Hangzhou Netwide Network Technology Co. LTD ("Hangzhou Netwide") | A company controlled by principal shareholder of the Company |
| Tonghua Lvjian Agricultural Technology Development Co. LTD ("Tonghua Lvjian") | A company controlled by a non-controlling shareholder of the Company's subsidiary |
| Hangzhou Youxing Technology Co., LTD ("Hangzhou Youxing") | A non-controlling shareholder of the Company's subsidiary |
| Tailong Zheng | A non-controlling shareholder of the Company's subsidiary |
| Qingdao Songshe Network Technology Co., LTD. ("Qingdao Songshe") | A company controlled by a director of the Company's subsidiary |
| Xinzu Gong | A director of the Company's subsidiary |
| Lei Xu | A director of the Company's subsidiary |
| Lei Xin | A director of the Company's subsidiary |
| Hangzhou Meihangxiujue Technology Co., LTD. ("Hangzhou Meihangxiujue") | A company invested by the Company |
| Feng Luo | A director of the Company's subsidiary |
| Xiaoyan Tong | A director of the Company's subsidiary |
| Pingxiang Youxu Business Management Partnership (Limited Partnership) ("Pingxiang Youxu") | A company controlled by principal shareholder of the Company |
| Wenying Cong | A director of the Company's subsidiary |
| Weiguo Tang | A director of the Company's subsidiary |

---

\*Zhoushan Youtai ceased to be a related party, as it sold its shares in January 2021.

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b) Amounts due from related parties

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nature** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  |  | **2020** | **2021** | **2021** |
|  |  | **RMB** | **RMB** | **US$** |
|  **Accounts receivable, net** |  |  |  |  |
|  Zhejiang Lingshang | Business operation |  | 904 | 127 |
|  Shanghai Er'shang | Business operation | 3049 | 351 | 49 |
|  Zhejiang Weicheng | Business operation | 796 | 300 | 42 |
|  Tonghua Lvjian | Business operation |  | 270 | 38 |
|  Sewing Time | Business operation |  | 190 | 27 |
|  Zhejiang Weilai | Business operation | 9251 | 119 | 17 |
|  |  | 13096 | 2134 | 300 |
|  **Other receivable, net** |  |  |  |  |
|  Yu Jiang | Loan |  | 3390 | 477 |
|  Mr. Xiao | Loan | 34895 | 5403 | 760 |
|  Xi'an Saixinghang | Loan |  | 750 | 105 |
|  Tailong Zheng | Staff petty cash |  | 629 | 88 |
|  Congcong Wei | Loan | 1200 | 550 | 77 |
|  Genshui Bao | Staff petty cash |  | 420 | 59 |
|  Shenzhen Zhuoya | Loan | 450 | 315 | 44 |
|  Shanghai Huiji | Loan |  | 303 | 43 |
|  Shanghai Er'shang | Loan |  | 300 | 42 |
|  Qingdao Songshe | Loan |  | 270 | 38 |
|  Zhejiang Lingshang | Loan |  | 250 | 35 |
|  Shanghai Qishu | Loan |  | 139 | 20 |
|  Xinzu Gong | Staff petty cash |  | 110 | 15 |
|  Lei Xu | Staff petty cash |  | 101 | 14 |
|  Beijing Pinte | Loan | 100 | 100 | 14 |
|  Shanghai Huihui | Loan |  | 27 | 4 |
|  Lei Xin | Staff petty cash |  | 20 | 3 |
|  Hangzhou Meihangxiujue | Loan |  | 19 | 3 |
|  Feng Luo | Staff petty cash |  | 4 | 1 |
|  Xiaoyan Tong | Staff petty cash |  | 3 |  |
|  Zhoushan Youtai | Loan | 14162 |  |  |
|  Pingxiang Youxu | Loan | 2250 |  |  |
|  Longtian Zhou | Loan | 1000 |  |  |
|  Lilian Liu | Staff petty cash | 25 |  |  |
|  |  | 54082 | 13103 | 1842 |
|  Amounts due from related parties |  | 67178 | 15237 | 2142 |

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c) Amounts due to related parties

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nature** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | | **2020** | **2021** | **2021** |
|  | | **RMB** | **RMB** | **US$** |
|  **Accounts payables** |  |  |  |  |
|  Hangzhou Find Fun | Business operation |  | 300 | 42 |
|  Hangzhou Netwide | Business operation | 450 |  |  |
|  Hangzhou Tianyi | Business operation | 200 |  |  |
|  |  | 650 | 300 | 42 |
|  **Accrued expenses and other liabilities** |  |  |  |  |
|  Wenying Cong | Staff reimbursement payables |  | 297 | 42 |
|  Genshui Bao | Loan and cash payables for the acquisitions | 26250 |  |  |
|  Weiguo Tang | Staff reimbursement payables |  | 57 | 8 |
|  Lilian Liu | Cash payables for the acquisitions | 7000 |  |  |
|  Yu Jiang | Cash payables for the acquisitions | 868 |  |  |
|  |  | 34118 | 354 | 50 |
|  Amounts due to related parties |  | 34768 | 654 | 92 |

---

d) Other related party transactions

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Services provided to: |  |  |  |
|  Shanghai Er'shang | 2751 | 6882 | 967 |
|  Zhejiang Weilai | 3964 | 1180 | 166 |
|  Zhejiang Lingshang |  | 974 | 137 |
|  Sewing Time |  | 453 | 64 |
|  Tonghua Lvjian |  | 247 | 35 |
|  Shanghai Huiji |  | 51 | 7 |
|  | 6715 | 9787 | 1376 |
|  | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** | **For the year ended<br>December 31,** |
|  | **2020** | **2021** | **2021** |
|  | **RMB** | **RMB** | **US$** |
|  Services provided by: |  |  |  |
|  Hangzhou Youxing |  | 766 | 108 |
|  Shenzhen Zhuoya |  | 472 | 66 |
|  Qingdao Songshe |  | 377 | 53 |
|  Hangzhou Find Fun | 297 | 297 | 42 |
|  Hangzhou Netwide | 149 | 149 | 21 |
|  Hangzhou Tianyi | 189 |  |  |
|  | 635 | 2061 | 290 |

---

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##### [**Table of Contents**](#toc)
**Note 17 – Commitments and contingencies** 

**Contingencies** 

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 December 31, 2021, the Company has no outstanding litigation.

**Operating lease commitments** 

The Company signed several lease agreements to rent offices and facilities for its operations.

As of December 31, 2021, the Company was obligated under operating leases for minimum rentals as follows:

---

| | |
|:---|:---|
|  | **Minimum<br>lease<br>payment** |
|  | **RMB** |
| 2022 | 8415 |
| 2023 | 7056 |
| 2024 | 2305 |
| 2025 | 740 |
|  Thereafter |  |
|  Total | 18516 |

---

**Loan commitments** 

The Company signed several loan agreements for its operations.

As of December 31, 2021, the Company's future loan obligations according to the terms of the loan agreement were as follows:

---

| | |
|:---|:---|
|  | **Loan<br>payment** |
|  | **RMB** |
| 2022 | 17000 |
|  2023 and thereafter |  |
|  Total | 17000 |

---

**Note 18 – Subsequent events** 

On July 19, 2022, the Company entered into revolving lines of credit in the form of overdraft agreements with Huaxia Bank Beijing Shangdi branch to obtain aggregate maximum loans of RMB15,000,000 (US$2,108,667) The interest rate of loans is 4.785%. The maturity date of the loans is July 8, 2023. As of the date of the prospectus, the outstanding loan amount is RMB15,000,000 (US$2,108,667).

On September 5, 2022, the Company entered into revolving lines of credit in the form of overdraft agreements with HURC to obtain aggregate maximum loans of RMB10,000,000 (US$1,405,778). The interest rate ranges from 4.70% to 5.20% per annum. The maturity date of the loans is September 1, 2023. As of the date of the prospectus, the outstanding loan amount is RMB RMB10,000,000 (US$1,405,778).

The Company has assessed all events from December 31, 2021 up through September 27, 2022, which is the date that these consolidated financial statements are available to be issued, unless as disclosed below, there are not any material subsequent events that require disclosure in these consolidated financial statements.

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![LOGO](g403554g03m01.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

To: The Board of Directors and Shareholders of

Xuhang Holdings Limited

**Results of Review Interim Financial Information** 

We have reviewed the accompanying condensed consolidated balance sheets of Xuhang Holdings Limited and its subsidiaries (collectively the "Company") as of September 30, 2022, and the related condensed consolidated statements of income and comprehensive income, changes in shareholders' equity, and cash flows for the nine-month periods ended September 30, 2021 and 2022, and the related notes (collectively referred to as the interim financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, and the related statements of income and comprehensive income, changes in shareholders' equity and cash flows for the year then ended; and in our report dated September 27, 2022 except for Note 2 for which the date is March 31, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

**Basis for Review Results** 

These interim financial statements are the responsibility of the Company's management. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. 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.

![LOGO](g403554g24g26.jpg)

WWC, P.C.

Certified Public Accountants

PCAOB ID: 1171

We have served as the Company's auditor since 2022.

San Mateo, California

December 23, 2022 except for Note 2 for which the date is March 31, 2023.

![LOGO](g403554g03m02.jpg)

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##### [**Table of Contents**](#toc)
**XUHANG HOLDINGS LIMITED** 

**CONDENSED CONSOLIDATED BALANCE SHEETS** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **As of** | **As of** | **As of** |
|  | | **September 30,** | **September 30,** |
|  | **December 31,**<br>**2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  | | **(Unaudited)** | **(Unaudited)** |
|  **ASSETS** |  |  |  |
|  **Current assets:** |  |  |  |
|  Cash and cash equivalents | 113400 | 85769 | 12057 |
|  Short term investment | 8010 | 36324 | 5106 |
|  Accounts receivable, net | 167965 | 232624 | 32702 |
|  Amounts due from related parties | 15237 | 12457 | 1751 |
|  Advance to suppliers | 13332 | 36660 | 5154 |
|  Other receivable, net | 90512 | 98602 | 13861 |
|  Inventories, net | 1825 | 1627 | 229 |
|  Prepaid expenses | 1470 | 655 | 93 |
|  **Total current assets** | **411751** | **504718** | **70953** |
|  **Non-current assets** |  |  |  |
|  Long-term investments | 7296 | 6168 | 867 |
|  Property and equipment, net | 26638 | 20431 | 2872 |
|  Operating lease right-of-use assets | 17705 | 11933 | 1678 |
|  Goodwill | 286965 | 286965 | 40341 |
|  Other non-current assets | 11538 | 2506 | 352 |
|  **Total non-current assets** | **350142** | **328003** | **46110** |
|  Total assets | 761893 | 832721 | 117063 |
|  **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
|  **Current liabilities:** |  |  |  |
|  Accounts payables | 51971 | 63829 | 8973 |
|  Advance from customers | 2655 | 6889 | 968 |
|  Loans—current | 17000 | 25000 | 3514 |
|  Amounts due to related parties | 654 | 1314 | 185 |
|  Accrued expenses and other liabilities | 60780 | 40190 | 5650 |
|  Interest payables |  |  |  |
|  Dividend payables | 267 |  |  |
|  Income tax payables | 16307 | 25471 | **3,**581 |
|  Operating lease liabilities—current | 7872 | 7612 | 1070 |
|  **Total Current Liabilities** | **157506** | **170305** | **23941** |
|  **Non-current liabilities:** |  |  |  |
|  Operating lease liabilities—non-current | 9833 | 4321 | 607 |
|  Deferred revenue—non-current | 2140 | 1473 | 207 |
|  **Total non-current liabilities** | **11973** | **5794** | **814** |
|  Total liabilities | 169479 | 176099 | 24755 |
|  **Shareholders' equity** |  |  |  |
|  Ordinary shares (US$0.002 par value; 500,000.000 shares authorized, 58,804,977 and 58,804,977 issued and outstanding as of December 31, 2021 and September 30, 2022, respectively\*) |  |  |  |
|  Additional paid-in-capital | 283826 | 283826 | 39900 |
|  Statutory reserve | 5048 | 5048 | 710 |
|  Retained earnings | 250204 | 307820 | 43273 |
|  Accumulated other comprehensive income | 1544 | 6814 | 958 |
|  **Total XUHANG HOLDINGS LIMITED shareholders' equity** | **540622** | **603508** | **84841** |
|  Non-controlling interest | 51792 | 53114 | 7467 |
|  **Total shareholders' equity** | **592414** | **656622** | **92308** |
|  Total liabilities and shareholders' equity | 761893 | 832721 | 117063 |

---

\* Retrospectively restated for 500-for-1 forward split on December 2, 2022.

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

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##### [**Table of Contents**](#toc)
**XUHANG HOLDINGS LIMITED** 

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  **Net revenue:** |  |  |  |
|  Digital advertising services | 90191 | 42466 | 5970 |
|  New media integrated content marketing services | 222824 | 296864 | 41732 |
|  **Total net revenue** | **313015** | **339330** | **47702** |
|  Cost of revenue | (215919) | (221772) | (31176) |
|  **Gross profit** | **97096** | **117558** | **16526** |
|  Sales and marketing expenses | (4906) | (3721) | (523) |
|  General and administrative expenses | (42624) | (53674) | (7545) |
|  Research and development expenses | (2190) | (1938) | (272) |
|  Allowance for doubtful debt and inventory |  | (935) | (132) |
|  **Total operating expenses** | **(49720)** | **(60268)** | **(8472)** |
|  Operating income | 47376 | 57290 | 8054 |
|  Other Income | 4939 | 3781 | 532 |
|  Other Expenses | (974) | (1088) | (153) |
|  Interest Income | 241 | 160 | 22 |
|  Interest Expense | (7309) | (128) | (18) |
|  Government subsidy | 1083 | 1023 | 144 |
|  Impairment of long-term investment |  | (1628) | (229) |
|  Investment income | 64 | 1619 | 228 |
|  **Income before income taxes** | 45420 | 61029 | 8580 |
|  Income tax expense | (4003) | (8607) | (1210) |
|  **Net Income** | 41417 | 52422 | 7370 |
|  Less: net loss attributable to non-controlling interest | 4492 | 5194 | 731 |
|  **Net income attributable to XUHANG HOLDINGS LIMITED's ordinary shareholders** | **45909** | **57616** | **8101** |
|  **Comprehensive income** |  |  |  |
|  Net income | 41417 | 52422 | 7370 |
|  **Other comprehensive income** |  |  |  |
|  Foreign currency translation adjustment | (1822) | 5270 | 741 |
|  **Total comprehensive income** | **39595** | **57692** | **8111** |
|  Less: comprehensive loss attributable to non-controlling interest |  |  |  |
|  **Comprehensive income attributable to the Company's ordinary shareholders** | **39595** | **57692** | **8111** |
|  **Income per share** |  |  |  |
|  Ordinary shares—basic and diluted | 0.73 | 0.89 | 0.13 |
|  **Weighted average shares outstanding used in calculating basic and diluted loss per share\*:** |  |  |  |
|  Ordinary shares—basic and diluted | 56725920 | 58804977 | 58804977 |

---

\* Retrospectively restated for 500-for-1 forward split on December 2, 2022.

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

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##### [**Table of Contents**](#toc)
**XUHANG HOLDINGS LIMITED** 

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | <br>**Ordinary shares\*** | <br>**Ordinary shares\*** | **Additional<br>paid-in**<br>**capital** | **Statutory**<br>**reserve** | **Retained**<br>**earnings** | **Accumulated<br>other<br>comprehensive**<br>**Income (Loss)** | **Total<br>XUHANG<br>HOLDINGS<br>LIMITED.<br>Shareholder's<br>equity** | **Non-**<br>**controlling<br>interests** | **Total<br>shareholder's**<br>**Equity** |
|  | **Share\*** | **Amount** | **Additional<br>paid-in**<br>**capital** | **Statutory**<br>**reserve** | **Retained**<br>**earnings** | **Accumulated<br>other<br>comprehensive**<br>**Income (Loss)** | **Total<br>XUHANG<br>HOLDINGS<br>LIMITED.<br>Shareholder's<br>equity** | **Non-**<br>**controlling<br>interests** | **Total<br>shareholder's**<br>**Equity** |
|  **Balance, December 31, 2020 (RMB)** | **56726920** |  | **233651** | **2286** | **175663** | **1698** | **413298** | **2964** | **416262** |
|  Contribution by non- controlling shareholders |  |  |  |  |  |  |  | 54086 | 54086 |
|  Net income |  |  |  |  | 45909 |  | 45909 | (4492) | 41417 |
|  Transfer to statutory reserve |  |  |  |  |  |  |  |  |  |
|  Foreign currency translation adjustment |  |  |  |  |  | (1822) | (1822) |  | (1822) |
|  **Balance, September 30, 2021 (RMB)** | **56726920** |  | **233651** | **2286** | **221572** | **(124)** | **457385** | **52558** | **509943** |
|  **Balance, December 31, 2021 (RMB)** | **58804977** |  | **283826** | **5048** | **250204** | **1544** | **540622** | **51792** | **592414** |
|  Issuance of common shares for cash |  |  |  |  |  |  |  |  |  |
|  Contribution by noncontrolling interest |  |  |  |  |  |  |  | 6516 | 6516 |
|  Net income |  |  |  |  | 57616 |  | 57616 | (5194) | 52422 |
|  Conversion of long-term loan |  |  |  |  |  |  |  |  |  |
|  Transfer to statutory reserve |  |  |  |  |  |  |  |  |  |
|  Foreign currency translation adjustment |  |  |  |  |  | 5270 | 5270 |  | 5270 |
|  **Balance, September 30, 2022 (RMB)** | **58804977** |  | **283826** | **5048** | **307820** | **6814** | **603508** | **53114** | **656622** |
|  **Balance, September 30, 2022 (US$)** | **58804977** |  | **39900** | **710** | **43273** | **958** | **84841** | **7467** | **92308** |

---

\* Retrospectively restated for 500-for-1 forward split on December 2, 2022.

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

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##### [**Table of Contents**](#toc)
**XUHANG HOLDINGS LIMITED** 

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(Amounts in thousand of RMB and US$, except for number of shares and per share data)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the nine months ended September 30,** | **For the nine months ended September 30,** | **For the nine months ended September 30,** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  **CASH FLOWS FROM OPERATING ACTIVITIES** |  |  |  |
|  Net income | 41417 | 52422 | 7370 |
|  Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |
|  Depreciation and amortization | 692 | 6602 | 928 |
|  Allowance for doubtful debt and inventories |  | 935 | 131 |
|  Non-cash interest expense for convertible promissory notes | 6714 | (669) | (94) |
|  Impairment of long term investment |  | 1628 | 229 |
|  Changes in operating assets and liabilities: |  |  |  |
|  Accounts receivable | (32193) | (65381) | (9191) |
|  Amount due from related parties | 1081 | (476) | (67) |
|  Advance to suppliers | (8940) | (23328) | (3279) |
|  Other receivables | (39251) | (8090) | (1137) |
|  Inventories | (391) | 198 | 28 |
|  Prepaid expenses | (1127) | 817 | 115 |
|  Other non-current assets | 12626 | 9033 | 1270 |
|  Accounts payables | (13349) | 11859 | 1667 |
|  Advance from customers | 4715 | 4233 | 595 |
|  Amount due to related parties | 1367 | 356 | 50 |
|  Accrued expenses and other payables | 4595 | (591) | (83) |
|  Dividend payables |  | (267) | (38) |
|  Income tax payables | 3536 | 9164 | 1288 |
|  Deferred revenue — non-current | (639) | (667) | (94) |
|  **Net cash provided by (used in) operating activities** | **(19147)** | **(2222)** | **(312)** |
|  **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |  |
|  Purchase of property and equipment | (19552) | (1489) | (209) |
|  Payments for short-term investments | (14300) | (28300) | (3978) |
|  Payments for long-term investments | (7213) | (745) | (105) |
|  Payments for the acquisition | (46900) | (20000) | (2812) |
|  Cash and cash equivalents from acquired companies | 33 |  |  |
|  Proceeds from disposal of equity method investment |  | 119 | 17 |
|  **Net cash used in investing activities** | **(87932)** | **(50415)** | **(7087)** |
|  **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |  |
|  Proceeds from bank loans, net | 3500 | 8000 | 1125 |
|  Proceeds from related parties, net | 48006 | 3559 | 500 |
|  Cash contribution from minority shareholders | 54085 | 6159 | 866 |
|  **Net cash provided by financing activities** | **105591** | **17718** | **2491** |
|  Effect of exchange rate changes | (632) | 7288 | 1023 |
|  Net increase in cash and cash equivalents | (2120) | (27631) | (3885) |
|  Cash and cash equivalents, at beginning of year | 57087 | 113400 | 15942 |
|  Cash and cash equivalents, at end of year | **54967** | **85769** | **12057** |
|  **Supplemental disclosure of cash flow information:** |  |  |  |
|  **Cash paid for** |  |  |  |
|  Interest | 585 | 797 | 112 |
|  Income taxes | 2409 | 2454 | 345 |
|  **Non-cash investing and financing activities:** |  |  |  |
|  Liabilities assumed in connection with purchase of property, plant and equipment | 470 |  |  |

---

\* Retrospectively restated for 500-for-1 forward split on December 2, 2022.

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

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##### [**Table of Contents**](#toc)
**XUHANG HOLDINGS LIMITED** 

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** 

**(Amounts in thousands of RMB and US$, except for number of shares and per share data)** 

**Note 1 – Nature of business and organization** 

XUHANG HOLDINGS LIMITED ("Xuhang Holdings") was incorporated on June 16, 2020 as an exempted company with limited liability in the Cayman Islands. Xuhang Holdings principally engages in new media integrated content marketing services and digital advertising services through its subsidiaries in the People's Republic of China (the "PRC"). In September 2014, Mr. Tiahang Xiao ("Mr. Xiao"), chairman of board of directors, founded Hangzhou Xuhang Network Technology Co., Ltd. ("Xuhang Network"). Xuhang Holdings underwent a series of onshore and offshore reorganizations, which were completed on October 27, 2021 (the "Reorganization").

Immediately before and after the reorganization, the controlling shareholder of Xuhang Network controlled Xuhang Network and Xuhang Holdings; therefore, for accounting purposes, the reorganization is accounted for as a transaction of entities under common control. Accordingly, the accompanying unaudited condensed consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods presented.

Xuhang Holdings and its consolidated subsidiaries are collectively referred to herein as the "Company," unless specific reference is made to an entity.

**Corporate Structure** 

Xuhang Holdings is a holding company incorporated in Cayman Islands that does not have substantive operations. Xuhang Holdings conducts its businesses through its subsidiaries. The principal subsidiaries of Xuhang Holdings consist of the following entities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Xuhang Network, a wholly-owned subsidiary and an onshore holding company established in the PRC on
September 16, 2014, principally for holding businesses in new media integrated content marketing services and digital advertising services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Horgos Xumi Network Technology Co., Ltd., or Horgos Xumi, a wholly-owned subsidiary and an operating entity
established in the PRC on February 8, 2017, principally for providing advertising design and production; technical services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Horgos Weizan Network Technology Co., Ltd., or Horgos Weizan, a wholly-owned subsidiary and an operating entity
established in the PRC on November 13, 2017, principally for providing marketing planning and advertising production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hongkong Lehui Network Technology Co., Limited, or HK Lehui, a wholly-owned subsidiary and an operating entity
established in Hong Kong on November 10, 2017, principally for providing digital advertising services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hangzhou Xingkong Internet Culture Communication Co., Ltd., or Hangzhou Xingkong, a wholly- owned PRC subsidiary
and an operating entity acquired on November 13, 2020, principally for providing advertising design and production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hangzhou Jinting Conference Co., Ltd., or Hangzhou Jinting, a wholly-owned PRC subsidiary and an operating entity
acquired on November 13, 2020, principally for providing conference services; cultural and artistic exchange activities planning;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jiangxi Ku'o Technology Co., Ltd., or Jiangxi Ku'o, a wholly-owned PRC subsidiary and an operating
entity acquired on March 16, 2020, principally for providing advertising production; graphic design and production;

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##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hangzhou Xingxiu Network Technology Co., Ltd., a majority-owned subsidiary and an operating entity established in
the PRC on June 16, 2021, principally for providing advertising production and technical services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jiangsu Xuhang New Economy Technology Co., Ltd., a majority-owned subsidiary and an operating entity established
in the PRC on September 29, 2020, principally for providing advertising production and technical services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Qingdao Xuhang Digital New Economy Technology Co., Ltd., a majority-owned subsidiary and an operating entity
established in the PRC on October 29, 2020 principally for providing advertising production and technical services; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Qingdao Pinzhang Network Technology Co., Ltd., a majority-owned subsidiary and an operating entity established in
the PRC on April 15, 2021 principally for providing advertising production and technical services.

The accompanying unaudited condensed consolidated financial statements reflect the activities of Xuhang Holdings and each of the following entities:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Place of<br>incorporation** | **Date of**<br>**incorporation**<br>**or acquisition** | **Percentage<br>of direct<br>or indirect** | **Principal**<br> **activities** |
|  XUHANG LTD BVI | British Virgin<br>Islands<br>("BVI") | July 31, 2020 | 100% | Holding company |
|  XUHANG (HK) LIMITED | Hong Kong | November 2, 2020 | 100% | Holding company |
|  Horgos Pinyue Network Technology Co., Ltd. | PRC | November 10, 2017 | 100% | Advertising design and production; technical services; digital advertising services |
|  Shanghai Xumi Digital Technology Co., Ltd. | PRC | March 19, 2021 | 90% | Advertising production and technical services |
|  Xiamen Xuhang Digital Technology Co., Ltd. | PRC | April 1, 2021 | 75% | Marketing planning and advertising production |
|  Shanghai Pinzhang Network Technology Co., Ltd. | PRC | March 24, 2021 | 51% | Advertising production and technical services |
|  Hangzhou Pusheng Network Technology Co., Ltd. | PRC | August 25, 2020 | 51% | Advertising production and technical services |
|  Hangzhou Ruirong Network Technology Co., Ltd. | PRC | February 7, 2021 | 51% | Advertising production and technical services |
|  Henan New Circle Network Technology Co., Ltd. | PRC | January 17, 2020 | 100% | Advertising production and technical services |
|  Xuhang Shuzhiyun Technology (Hangzhou) Co., Ltd. | PRC | June 2, 2021 | 100% | Technical services and consultation; advertisement production |
|  Xuhang Digital (Henan) Technology Co., Ltd. | PRC | January 22, 2021 | 51% | Technical services and consultation |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Place of<br>incorporation** | **Date of**<br>**incorporation**<br>**or acquisition** | **Percentage<br>of direct<br>or indirect** | **Principal**<br> **activities** |
|  Hangzhou Xiqi Cultural Tourism Technology Co., Ltd. | PRC | May 12, 2021 | 100% | Technical services and consultation |
|  Yunnan Xumi Digital Technology Co., Ltd. | PRC | July 2, 2021 | 51% | Marketing planning and advertising production |
|  Jiangxi Xuzhixing Technology Co., Ltd. | PRC | July 19, 2021 | 51% | Marketing planning and advertising production |
|  Shanghai Huihang Network Technology Co., Ltd. | PRC | May 25, 2021 | 51% | Marketing planning and advertising production |
|  Hangzhou Youyou Culture and Tourism Technology Co., Ltd. | PRC | July 14, 2021 | 51% | Marketing planning and advertising production |
|  Anhui Jiayuan Information Technology Co., Ltd. | PRC | April 14, 2016 | 100% | Advertising production and technical services |
|  Henan Xuhang Network Technology Co., Ltd. | PRC | November 29, 2019 | 99% | Internet advertising services |
|  Wenzhou Xumi Network Technology Co., Ltd. | PRC | March 4, 2020 | 100% | Marketing planning and advertising production |
|  Xumi (Fujian) Digital Technology Co., Ltd. ("Xumi Fujian") | PRC | February 8, 2021 | 85% | Advertising production and technical services |
|  Wuhan Xuhang Digital Technology Co., Ltd. | PRC | October 27, 2021 | 65% | Digital cultural creative content services; technical consultation |
|  Huangshan Xumi Digital Technology Co., Ltd. | PRC | September 16, 2021 | 90% | Advertising design and production |
|  Wuxi Xumi Creative Technology Co., Ltd. | PRC | September 10, 2021 | 75% | Marketing planning and advertising production |
|  Yangzhou Xumi Digital Technology Co., Ltd. | PRC | November 2, 2021 | 56.7% | Marketing planning and branding management |
|  Linyi Xumi Network Technology Co., Ltd. | PRC | August 26, 2021 | 60% | Marketing planning and advertising production |
|  Suzhou New Circle Network Technology Co., Ltd. | PRC | July 29, 2020 | 100% | Technical services and consultation |
|  Shanghai Xumi Digital Advertising Co., Ltd. | PRC | November 9, 2021 | 100% | Advertising design and production |
|  Shanghai Suhang Digital Technology Co., Ltd. | PRC | July 27, 2021 | 51% | Marketing planning and advertising production |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Place of<br>incorporation** | **Date of**<br>**incorporation**<br>**or acquisition** | **Percentage<br>of direct<br>or indirect** | **Principal**<br> **activities** |
|  Hangzhou Xupai Technology Co., Ltd. | PRC | December 21, 2021 | 51% | Technical services and consultation |
|  Shanghai Hexian Lianhai Technology Group Co., Ltd. | PRC | January 18, 2022 | 51% | Marketing planning and advertising production |
|  Chengdu Xumi Digital Technology Co., Ltd. | PRC | February 28, 2022 | 80% | Technical services and consultation |
|  Hubei Xuhang Shuzhi Culture Co., Ltd. | PRC | February 28, 2022 | 90% | Marketing planning and advertising production |
|  Beijing Hexian Lianjing Technology Co., Ltd. | PRC | March 31, 2022 | 100% | Advertising design and production |
|  Beijing Xuhangyi Visual Technology Co., Ltd. | PRC | April 25, 2022 | 51% | Advertising design and production |

---

**Note 2 – Summary of significant accounting policies** 

<u>Basis of presentation</u> 

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and applicable rules and regulations of the Securities and Exchange Commission regarding financial reporting that are consistent with those used in the preparation of the Company's audited consolidated financial statements for the years ended December 31, 2020 and 2021. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements.

In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position, operating results and cash flows of the Company for each of the periods presented. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of results to be expected for any other interim period or for the year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021 was derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP for annual financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2020 and 2021.

<u>Principles of consolidation</u> 

The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

<u>Use of estimates and assumptions</u> 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenue and expenses during the reporting periods. Significant accounting estimates reflected in the Company's unaudited condensed consolidated financial statements include estimates for useful lives and impairment of property and equipment, impairment of goodwill, valuation allowance for deferred tax assets, allowance for

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doubtful accounts and inventory valuation for excess and obsolete inventories, lower of cost and net realizable value of inventories. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the unaudited condensed consolidated financial statements.

<u>Foreign currency translation and transaction</u> 

The accompanying unaudited condensed consolidated financial statements are presented in the Renminbi("RMB"), which is the reporting currency of the Company. The functional currency of Xuhang Holdings and Xuhang BVI is United State dollar, and the functional currency of HK Lehui, and Xuhang HK is Hong Kong dollar ("HKD"). The functional currency of the PRC subsidiaries is Renminbi ("RMB"). The functional currencies of the other subsidiaries are their respective local currencies. The determination of the respective functional currency is based on the criteria set out by ASC 830, Foreign Currency Matters, ("ASC 830").

Transactions denominated in currencies other than in the functional currency are translated into the functional currency using the exchange rates prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into functional currency using the applicable exchange rates at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains or losses arising from foreign currency transactions are included in the consolidated statements of comprehensive income.

The financial statements of the Company's entities of which the functional currency is not RMB are translated from their respective functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB at the exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Income and expense items are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive income or loss in the consolidated statements of comprehensive loss, and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive loss in the consolidated statements of shareholders' equity.

<u>Convenience translation</u> 

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the nine months ended September 30, 2022 are solely for the convenience of the reader and were calculated at the rate of US$1.00 to RMB7.1135, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on September 30, 2022. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 2022, or at any other rate.

<u>Business combinations and asset acquisitions</u> 

Business combinations are recorded using the acquisition method of accounting. The purchase price of the acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired, and non-controlling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses are expensed as incurred. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Transaction costs directly attributable to the acquisition are expensed as incurred.

If an investment involves the acquisition of an asset or group of assets that does not meet the definition of a business, the transaction is accounted for as an asset acquisition. An asset acquisition is recorded at cost, which includes capitalized transaction costs, and does not result in the recognition of goodwill. The cost of the acquisition is allocated to the assets acquired on the basis of their relative fair values.

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Fair value is determined based upon the guidance of ASC Topic 820, Fair Value Measurements and Disclosures, and is generally determined using Level 2 inputs and Level 3 inputs. The determination of fair value involves the use of significant judgment and estimates. The Company utilizes the assistance of a third-party appraiser to determine the fair value as of the date of acquisition.

<u>Accounts receivable and allowance for doubtful accounts</u> 

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts.

The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the debtors as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability.

<u>Goodwill</u> 

Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. In accordance with ASC Topic 350, Goodwill and Other Intangible Assets ("ASC 350"), recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present.

In accordance with ASC 350, the Company assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. As of December 31, 2021 and September 30, 2022, the Company as a whole was one reporting unit.

Pursuant to ASC 350, in 2021 and 2022, the Company evaluated all relevant factors including macroeconomic conditions, industry and market conditions, and financial performance. The Company weighed all factors in their entirety and concluded that it was not more-likely-than-not the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary. No impairment loss of goodwill was recognized for the year ended December 31, 2021 and the nine months ended September 30, 2022.

<u>Long-term investments</u> 

The Company's long-term investments include equity investments in entities and equity securities without readily determinable fair values. Investments in entities in which the Company can exercise significant influence and holds an investment in voting common stock or in-substance common stock (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323, Investments — Equity Method and Joint Ventures ("ASC 323"). Under the equity method, the Company initially records its investments at fair value. The Company subsequently adjusts the carrying amount of the investments to recognize the Company's proportionate share of each equity investee's net income or loss into earnings after the date of investment. The Company evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. Equity securities without readily determinable fair values and over which the Company has neither significant influence nor control through investments in common stock or in-substance common stock are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.

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<u>Revenue recognition</u> 

The Company has adopted the new revenue standard, ASC 606, Revenue from Contracts with Customers (Topic 606) ("ASC 606") for all periods presented. Consistent with the criteria of Topic 606, the Company recognizes revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those services. Value-added tax that the Company collects concurrent with revenue-producing activities is excluded from revenue.

The Company recognizes revenue as it satisfies a performance obligation when its customer obtains control of promised services, in an amount that reflects the consideration that the entity expects to receive in exchange for those services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the services it transfers to the customer.

Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied.

The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the service, has discretion in establishing pricing and controls the promised service before transferring that service to customers. Otherwise, the Company records revenue at the net amounts as commissions.

The following is a description of the accounting policy for the principal revenue streams of the Company:

*Digital advertising services* 

Digital advertising services revenue primarily includes revenue from the provision of digital advertising services by the Company. The revenue is recognized when the related services are delivered based on the specific terms of the contract, which are commonly based on specified actions, such as cost per action ("CPA"), cost per mille ("CPM"), cost per click ("CPC") or other preferences agreed upon with advertisers. When entering into contracts with customers, the Company will stipulate the method of measure (such as CPA, CPM or CPC) by defining those units of measure and setting the unit price for type of unit of measure; these terms and conditions are found in the annex of the contract The unit price of each type of actions is determined through negotiation between the Company and its customers. The Company typically determines the unit price of each type of actions based on the type of marketing product, which distribution channel to be deployed, and the length and timing of advertising campaign. The Company will also consider the prevailing market prices in the industry when providing quotations to its customers.

Revenue is earned at each point in time when the customers' end users execute the agreed upon actions as set forth in the sales contracts, such as a download or installation, or advertisements have reached a mille, or a banner or link has been clicked. The settlement of the fees earned from selling digital advertising services occurs one month following a monthly statement of the services provided has been furnished to and accepted by the clients, at which point the Company will enter revenue recognition journal entries into its accounting system to record the relevant revenue. The monthly statement is calculated based on the unit price of each type of actions, mille or click multiplied by the cumulative number of each type of actions, mille, or click completed in the month. The Company counts the cumulative completion quantity of each type of actions, mille, or click on a monthly basis, and states the cumulative completion quantity of each type of actions and the unit price for the

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applicable month in the statement. While none of the factors individually are considered presumptive or determinative, because the Company is the primary obligor and is responsible for (i) identifying and contracting with third-party advertisers that the Company views as customers; (ii) identifying media publishers to provide ad inventory (media space) where the Company views the media publishers as suppliers; (iii) establishing the selling prices of CPA, CPM, or CPC pricing model; (iv) performing all billing and collection activities, including retaining credit risk; and (v) bearing sole responsibility for fulfillment of the advertising, the Company acts as the principal of these arrangements and therefore recognize revenue earned and costs incurred related to these transactions on a gross basis.

*New media integrated content marketing services* 

New media integrated content marketing services target social networks and applications to spread brand awareness or promote certain products. The Company offers a service package comprising a variety of integrated marketing solutions, including marketing strategy and creativity consulting, writing advertorials, shooting and producing promotional videos/short videos, managing and operating customers' social media accounts or online stores, planning and implementing live e-commerce events, and organizing offline marketing events or public relations activities. Customers may select one or more types of integrated marketing services for the Company to implement based on their respective marketing targets, demand, budgets, and other factors.

The process of the new media integrated content marketing services refers to the following:

(i) The Company signs contracts with customers, which normally are framework contracts with terms typically within
one year; however, in certain circumstances, of the terms may be longer, such as two years. According to the framework contracts, the Company is required to carry out marketing activities on a regular or irregular basis according to customers'
specific requirements. The framework contracts generally stipulate the scope of service, length of contract period, method of measurement including but not limited to fixed price project, and a revenue share from products sales generating through
the marketing campaign, or a combination of those all, method of settlement, and the rights and obligations of both parties.

(ii) After the signing of the contracts, the Company usually communicates with the customers on specific
requirements and provides the customers with a specific marketing campaign plan that is expected to be implemented within a certain period of time. The plan is a new media integrated marketing service product package, which includes a variety of
services. After the specific marketing activity plan for the period is confirmed by the customer, the two parties will decide the transaction price, including unit price, quantity (including, but not limited to, the number of articles, short videos
or activity frequency) and the calculation method of service fees for specific marketing activities during the period, through supplementary forms such as annexes to the agreement, purchase order slips or emails.

(iii) The Company provides related services to the customers as agreed upon in the aforementioned subsection (ii),
including but not limited, training of the customers' employees who participate in the new media integrated content marketing campaign, marketing content production, setting up new media accounts, marketing channel procurement, release of new
media marketing content, and monitoring and evaluating the result and effectiveness of the marketing campaigns.

(iv) After the provision of all the related services in the period of time specified in the contracts, the Company
sends customers working reports or other acceptable references to confirm whether its new media integrated content marketing campaign fulfilled the requirements of the signed contracts.

(v) Revenue derived from the provision of new media integrated content marketing services is recognized at the
point in time when the new media integrated content marketing campaigns are implemented and accepted by customers (all the new media marketing services included in a particular service package have been implemented), according to the terms of the
contracts, and the satisfaction of the performance obligation is measured based on the implementation of new media integrated content marketing services.

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The Company generally asks customers to pay for the services after all the services have been completed and accepted by the customers. Occasionally, the Company receives partial payment in advance from customers (typically no more than 30%). The advance payment is generally paid after a contract is signed. The remaining balance will be paid after all the services have been completed and accepted by the customers.

The Company is a principal and records revenue on a gross basis when the Company is primarily responsible for fulfilling the new media integrated content marketing services. When the Company purchases ancillary services related to new media integrated content marketing campaigns on behalf of customers, such as purchasing air tickets and hotels for customers, the Company recognizes revenue at the net amount deducted from the purchasing amount as commissions.

The Company does not provide warranties, refunds, discounts, or rebates. The services provided by the Company are fully delivered when they have been completed and accepted by the customer (namely, the quality of the services has been approved by the customer). The Company does not have any after-sales guarantee obligations.

<u>Segment reporting</u> 

ASC 280, Segment Reporting, ("ASC 280"), establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by ASC 280, our chief operating decision maker ("CODM") has been identified as our Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the company. As a whole and hence, we have only one reportable segment. We do not distinguish between markets or segments for the purpose of internal reporting. As our long- lived assets are substantially located in the PRC, no geographical segments are presented.

<u>Operating leases</u> 

The Company adopted ASC Topic 842, *Lease* ("ASC 842") on January 1, 2020, using the modified retrospective method. The Company determines if an arrangement is a lease at inception. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company's leases do not contain any material residual value guarantees or material restrictive covenants.

The Company has elected the package of practical expedients, which allows the Company not to reassess (i) whether any expired or existing contracts as of the adoption date are or contain a lease, (ii) lease classification for any expired or existing leases as of the adoption date, and (iii) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Company elected the short-term lease exemption for all contracts with a lease term of 12 months or less.

At the commencement date of a lease, the Company determines the classification of the lease based on the relevant factors present and records a right-of-use ("ROU") asset and lease liability for any operating lease. ROU assets acquired through a lease represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. If the rate implicit in the Company's leases is not readily available, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancellable term of the lease.

Leases with an initial lease term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term.

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<u>Comprehensive income (loss)</u> 

Comprehensive income (loss) 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 a foreign currency translation adjustment resulting from the Company not using the United States dollar as its functional currencies.

<u>Earnings per share</u> 

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 (loss) attributable to Xuhang Holdings divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (such as convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or at the issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (namely those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

<u>Recently accounting pronouncements</u> 

The Company is an emerging growth company ("EGC") as defined by the Jumpstart Our Business Startups Act ("JOBS Act"). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the extended transition periods. However, this election will not apply should the Company cease to be classified as an EGC.

On December 18, 2019, the Financial Accounting Standards Board ("FASB") issued ASU No. 2019-12, Income taxes (Topic 740), Simplifying the Accounting for Income Taxes. This guidance amends ASC Topic 740 and addresses several aspects including 1) evaluation of step-up tax basis of goodwill when there is not a business combination, 2) policy election to not allocate taxes on a separate entity basis to entities not subject to income tax, 3) accounting for tax law changes or rates during interim periods, 4) ownership changes from equity method investment to subsidiary or vice versa, 5) elimination of exception to intrapetrous allocation when there is gain in discontinued operations and a loss from continuing operations, and 6) treatment of franchise taxes that are partially based on income. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is evaluating the impact of this guidance on its financial statements and related disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's balance sheets, statements of income and statements of cash flows.

**Note 3 – Accounts receivable, net** 

Accounts receivable, net consisted of the following:

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| | | | |
|:---|:---|:---|:---|
|  | **As of** | **As of** | **As of** |
|  | **December 31, 2021** | **September 30, 2022** | **September 30, 2022** |
|  | **RMB** | **RMB** | **US$** |
|  Accounts receivable | 167965 | 233345 | 32803 |
|  Less: Allowance for doubtful accounts |  | (721) | (101) |
|  Accounts receivable, net | 167965 | 232624 | 32702 |

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Movements of allowance for doubtful accounts were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of September 30** | **As of September 30** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  Allowance for doubtful accounts, beginning balance | (5133) |  |  |
|  Add: Provision for doubtful accounts |  | (721) | (101) |
|  Reversal of doubtful accounts | 5133 |  |  |
|  Uncollectible receivables written-off |  |  |  |
|  Allowance for doubtful accounts, ending balance |  | (721) | (101) |

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**Note 4 – Inventories, net** 

Inventories, net consisted of the following:

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| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of September 30** | **As of September 30** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  Finished goods | 1884 | 1683 | 237 |
|  Work in process |  |  |  |
|  Raw materials |  |  |  |
|  | 1884 | 1683 | 237 |
|  Less: provision for impairment of inventories | (59) | (56) | (8) |
|  | 1825 | 1627 | 229 |

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During the nine months ended September 30, 2021 and 2022, the Company recorded provision for impairment of inventories of nil and RMB56 (US$8) for the obsolete inventories in cost of revenue, respectively.

**Note 5 – Property and equipment, net** 

Property and equipment, net consisted of the following:

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| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of September 30** | **As of September 30** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  At cost: |  |  |  |
|  Office equipment | 5219 | 5527 | 777 |
|  Furniture | 3062 | 2580 | 363 |
|  Motor vehicles | 2218 | 2319 | 326 |
|  Leasehold improvement | 22805 | 23273 | 3271 |
|  | 33304 | 33699 | 4737 |
|  Accumulated depreciation | (6666) | (13268) | (1865) |
|  Property, plant and equipment, net | **26638** | **20431** | **2872** |

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Depreciation expenses for the nine months ended September 30, 2021 and 2022 amounted to RMB692 and RMB6,602 (US$928), respectively.

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**Note 6 – Long term investments** 

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| | | | |
|:---|:---|:---|:---|
|  | **As of<br>December 31,** | **As of<br>September 30** | **As of<br>September 30** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  **Equity securities without readily determinable fair values investments** |  |  |  |
|  Shenzhen Zhuoya Network Media Co., LTD. ("Shenzhen Zhuoya") | 100 | 100 | 14 |
|  Hengyang Yixin Culture Media Co., LTD. ("Hengyang Yixin") | 100 | 100 | 14 |
|  Xi'an Xuhang Digital Technology Co., LTD. ("Xi'an Xuhang") | 2250 | 2250 | 316 |
|  Beijing Pinte Visual Culture Media Co., LTD. ("Beijing Pinte") | 700 | 700 | 98 |
|  Shanghai Er'shang Culture Communication Co., LTD. ("Shanghai Er'shang") | 1333 | 1333 | 187 |
|  Putian Shoe Brand Operation Service Co., LTD. ("Putian Shoe") | 2813 | 2813 | 395 |
|  Zhejiang Jupei Culture and Travel Technology Co., LTD. ("Zhejiang Jupei") |  | 500 | 70 |
|  **Cost of equity investments without readily determinable fair value** | **7296** | **7796** | **1094** |
|  Impairment on equity investments without readily determinable fair value |  | (1628) | (227) |
|  **Carrying amount of Equity investments without readily determinable fair value** | **7296** | **6168** | **867** |

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In May 2020, the Company through its subsidiary, Xuhang Network, jointly set up Shenzhen Zhuoya with capital injection of RMB100 and held 20% of the investee as of December 31, 2020 and 2021. Based on the article of association, the Company cannot exercise significant influence over Shenzhen Zhuoya's operation and financial decisions.

In August 2020, the Company through its subsidiary, Xuhang Network, entered into an agreement to invest in Hengyang Yixin. The Company injected capital of RMB50 and RMB50 (US$8) in 2020 and 2021, respectively. The Company held 40% and 40% of equity interest as of December 31, 2020 and 2021, respectively. Based on the investment agreement, the Company cannot exercise significant influence over Hengyang Yixin's operation and financial decisions.

In December 2020, the Company through its subsidiary, Xuhang Network, jointly set up Xi'an Xuhang with capital injection of RMB2,250 and held 45% of the investee as of December 31, 2020 and 2021. Based on the article of association, the Company cannot exercise significant influence over Xi'an Xuhang's operation and financial decisions.

In July 2020, the Company through its subsidiary, Horgos Weizan, entered into an agreement to invest in Beijing Pinte. The Company injected capital of RMB700 and held 28.75% of equity interest as of December 31, 2020 and 2021. Based on the investment agreement, the Company cannot exercise significant influence over Beijing Pinte's operation and financial decisions.

In September 2020, the Company through its subsidiary, Horgos Weizan, entered into an agreement to invest in Shanghai Er'shang. The Company injected capital of RMB1,333 and held 40% of equity interest as of December 31, 2020 and 2021. Based on the investment agreement, the Company cannot exercise significant influence over Shanghai Er'shang's operation and financial decisions.

In April 2021, the Company through its subsidiary, Xumi Fujian, jointly set up Putian Shoe with capital injection of RMB2,813 and held 37.5% of the investee as of December 31, 2020 and 2021. Based on the investment agreement, the Company cannot exercise significant influence over Putian Shoe's operation and financial decision.

In July 2022, the Company through its subsidiary, Xuhang Network, disposed 16% shares of Zhejiang Jupei (originally held 51%) and held 35% of the investee as of September 30, 2022. Based on the investment

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agreement, the Company cannot exercise significant influence over Zhejiang Jupei's operation and financial decision.

**Note 7 – Accrued expenses and other payables** 

The components of accrued expenses and other payables were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of September 30** | **As of September 30** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  Cash payables for the acquisition | 43500 | 23500 | 3304 |
|  Customers deposit | 13115 | 13012 | 1829 |
|  Other payables for daily operation | 1930 | 1684 | 237 |
|  Others | 2235 | 1994 | 280 |
|  | **60780** | **40190** | **5650** |

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Other payables mainly consisted of cash payables for the acquisition, customer deposit, and other payables for daily operation.

**Note 8 – Loans** 

Outstanding balances of loans consisted of the following:

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|:---|:---|:---|:---|:---|
| **As of December 31, 2021** | **Balance** | **Maturity<br>date** | **Effective<br>interest<br>rate** | **Guarantee** |
|  China Merchants Bank Co., LTD. Hangzhou Fengqi Sub-branch ("CMB") | 7000 | 8/22/2022 | 5.10% | Credit guarantee: Xiao Tianhang, Chairman and CEO (Mr. Xiao) |
|  Hangzhou United Rural Commercial Bank Co., LTD. Shangtang Sub-branch ("HURC") | 5000 | 8/31/2022 | 5.80% | Credit guarantee: Mr. Xiao |
|  HURC | 5000 | 8/31/2022 | 5.80% | Credit guarantee: Mr. Xiao |
|  Total loans | 17000 |  |  |  |
|  Less: loan - current | (17000) |  |  |  |
|  Loan - non-current |  |  |  |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of September 30, 2022** | **Balance** | **Maturity<br>date** | **Effective<br>interest<br>rate** | **Guarantee** |
|  Huaxia Bank Beijing Shangdi branch ("HXB") | 10000 | 7/8/2023 | 4.79% | Secured by subsidiary's copyright |
|  HXB | 5000 | 7/8/2023 | 4.79% | Secured by subsidiary's copyright |
|  HURC | 2500 | 9/1/2023 | 5.20% | Secured by Mr. Xiao's property |
|  HURC | 2500 | 9/1/2023 | 5.20% | Secured by Mr. Xiao's property |
|  HURC | 5000 | 9/1/2023 | 4.70% | Secured by Mr. Xiao's property |
|  Total loans | 25000 |  |  |  |
|  Less: loan - current | (25000) |  |  |  |
|  Loan - non-current (RMB) |  |  |  |  |
|  Loan - non-current (US$) |  |  |  |  |

---

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Interest expenses for the nine months ended September 30, 2021 and 2022 amounted to RMB585 and RMB797 (US$112), respectively.

As of September 30, 2022, the Company's future loan obligations according to the terms of the loan agreement were as follows:

---

| | |
|:---|:---|
|  Remaining of 2022 | 25000 |
|  2023 and thereafter |  |
|  Total | 25000 |

---

**Note 9 – Convertible promissory notes** 

On December 13, 2019, HK Lehui entered into a loan agreement ("Loan 2019") with Hexagon Credit Limited ("HC"), stipulating that HC would provide HK Lehui a loan amounting to HKD20,000,000 with the interest of 15.0% per annum. HK Lehui received the loan from HC in full on December 17, 2019.

On March 20, 2020, Xuhang Network, HK Lehui and Mr. Xiao entered into a convertible promissory notes agreement with Hexagon Special Opportunities SPC ("HSO"), stipulating that SPC would grant HK Lehui a convertible promissory note with a facility from HKD50,000,000 to HKD150,000,000.

On April 8, 2020, HSO purchased and paid cash consideration of HKD30,000,000 for the convertible promissory notes (Notes I"), with the interest of 15.0% per annum and maturity date of December 31, 2021.

On September 30, 2020, HC, HSO and HK Lehui jointly signed a supplementary agreement for Loan 2019, stipulating that HC would transfer the rights under Loan 2019 to HSO. HSO converted such loan of HKD20,000,000 including the accrued interest of HKD2,367,123 into the convertible promissory notes ("Notes II") amounting to HKD22,367,123, with the interest rate of 15.0% per annum and maturity date of December 31, 2021.

Conversion

On August 10, 2021, HSO and the Company signed a conversion agreement, which HSO converted all outstanding amounts of Notes I and Notes II with the principal of HKD52,367,123 and interest of HKD9,061,643 into the Company's newly issued 4,156.1143 shares, with the conversion price of HKD14,780.34 per share. Such conversion was completed on December 1, 2021.

**Note 10 – Income taxes** 

*Cayman Islands* 

Under the current laws of the Cayman Islands, Xuhang Holdings is not subject to tax on income or capital gains. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.

*British Virgin Islands* 

The Company's subsidiary, Xuhang BVI, is incorporated in the BVI and under the current laws of the BVI, Xuhang BVI is not subject to tax on income or capital gain. In addition, payments of dividends by such subsidiary to its shareholders are not subject to withholding tax in the BVI.

*Hong Kong* 

Xuhang HK and HK Lehui are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong

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tax laws. The applicable tax rate is 8.25% on assessable profits arising in or derived from Hong Kong up to HKD2,000,000 and 16.5% on any part of assessable profits over HKD2,000,000.

*PRC* 

The Company's PRC subsidiaries are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the "EIT Laws"), 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 case-by-case basis. EIT grants preferential tax treatment to certain 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 the HNTE status every three years. Xuhang Network obtained the HNTE tax status in December 2021, which reduced its statutory income tax rate to 15% from 2021 to 2024. In addition, Anhui Jiayuan and Xuhang Network was qualified as a software enterprise in 2016, and thus was entitled to a five-year tax holiday (full exemption for the first two years and a 50% reduction in the statutory income tax rate for the following three years) until its software enterprise qualification expired in 2020. Horgos Xumi, Horgos Weizan, Horgos Pinyue, and Horgos Jinting were registered in Kashi Special Economic Zone, which allows them to utilize a five-year 100% exemption. Horgos Xumi's exemption period was from 2017 to 2021. Horgos Weizan's and Horgos Pinyue's exemption period were from 2018 to 2022. Khorgos Jinting's exemption period was from 2020 to 2024.

*Reconciliation of the differences between statutory income tax rate and the effective tax rate* 

The reconciliation of tax computed by applying the statutory income tax rate of 25% for the nine months ended September 30, 2021 and 2022 applicable to the PRC operations to income tax expenses was as follows:

---

| | | |
|:---|:---|:---|
|  | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** |
|  | **2021** | **2022** |
|  Statutory income tax rate | 25.0% | 25.0% |
|  Income tax exemptions and reliefs | (25.0)% | (30.9)% |
|  Non-deductible expenses |  | 14.4% |
|  Research and development expenses | (0.5)% | (0.5)% |
|  Prior year loss carry forward | (1.6)% | (0.5)% |
|  Valuation allowance | 10.9% | 6.6% |
|  | 8.8% | 14.1% |

---

Significant components of the provision for income taxes were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the nine months<br>ended September 30,** | **For the nine months<br>ended September 30,** | **For the nine months<br>ended September 30,** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  Current income tax expenses | 4003 | 8607 | 1210 |
|  Deferred tax expenses |  |  |  |
|  | **4003** | **8607** | **1210** |

---

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For the purpose of presentation in the consolidated balance sheets, deferred income tax assets and liabilities have been offset and included in other assets on the accompanying consolidated balance sheets. Significant component of deferred tax assets were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of** | **As of** | **As of** |
|  | **December 31,<br>2021** | **September 30,<br>2022** | **September 30,<br>2022** |
|  | **RMB** | **RMB** | **US$** |
|  Deferred tax assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tax losses | 9140 | 13174 | 1852 |
| &nbsp;&nbsp;&nbsp;&nbsp; Valuation allowance | (9140) | (13174) | (1852) |
|  Total deferred tax assets |  |  |  |

---

The Company operates through several subsidiaries. Valuation allowance is considered for each of the entities. Realization of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences and tax loss or credit carry forwards. The Company evaluates the potential realization of deferred tax assets on an entity-by-entity basis. As of December 31, 2021 and September 30, 2022, the Company and all of its subsidiaries were in cumulative loss position, valuation allowances were provided against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred tax assets will not be realized.

<u>Uncertain tax positions</u> 

The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. In general, the PRC tax authority has up to five years to conduct examinations of the tax filings of the Company's PRC entities. Accordingly, the PRC subsidiaries' tax years of 2014 through 2020 remain open to examination by the respective tax authorities. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company's PRC subsidiaries' tax filings, which may lead to additional tax liabilities.

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2021 and September 30, 2022, the Company did not have any significant unrecognized uncertain tax positions.

**Note 11 – Shareholders' equity** 

Xuhang Holdings was established under the laws of the Cayman Islands on June 16, 2020. The issued number of ordinary shares is 50,000.0000 shares with a par value of US$1.0 per ordinary share.

The Company completed new issuance of 41,972.2302, 21,481.6094 and 4,156.1143 shares with a par value of US$1.0 per ordinary share on April 23, 2021, September 26, 2021 and December 1, 2021, respectively.

On December 2, 2022, the shareholders of the Company approved an increase in the number of the Company's authorized ordinary shares from 117,609.9539 to 500,000,000 and the Company's board of directors approved a forward split of the Company's outstanding ordinary shares at a ratio of 500-for-1 share.

**Note 12 – Operating leases** 

The Company entered into operating lease agreements for office spaces and employee dormitories. None of the amounts disclosed below for these leases contains variable payments, residual value guarantees or options that

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were recognized as part of the ROU assets and lease liabilities. As the Company's leases did not provide an implicit discount rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

As of September 30, 2022, the Company recognized operating lease liabilities, including current and noncurrent, in the amount of RMB11,933 (US$1,678) and the corresponding operating lease ROU assets of RMB11,933 (US$1,678).

As of December 31, 2021, the Company recognized operating lease liabilities, including current and noncurrent, in the amount of RMB17,705 and the corresponding operating lease ROU assets of RMB17,705.

Rental expenses for the nine months ended September 30, 2021 and 2022 were RMB5,396 and RMB6,345 (US$892), respectively.

<u>Lease commitments</u> 

The Company's maturity analysis of operating lease liabilities as of September 30, 2022 was as follows:

---

| | |
|:---|:---|
|  | **Operating<br>Leases** |
| 2022 | 2242 |
| 2023 | 7056 |
| 2024 | 2305 |
| 2025 | 740 |
|  Total lease payments | 12343 |
|  Less: imputed interest | (410) |
|  Present value of operating lease liabilities | 11933 |
|  Less: current obligation | (7612) |
|  Long-term obligation at September 30, 2022 | 4321 |

---

Supplemental disclosure related to operating leases were as follows:

---

| | |
|:---|:---|
|  Cash paid for amounts included in the measurement of lease liabilities |  |
|  Operating cash flows for operating leases | 4943.0 |
|  Weighted average remaining lease term of operating leases | 1.87 |
|  Weighted average discount rate of operating leases | 4.45% |

---

**Note 13 – Related party transactions** 

a) Related parties

---

| | |
|:---|:---|
| **Name of related parties** | **Relationship with the Company** |
| Mr. Xiao | Chairman and CEO |
| Lilian Liu | Shareholder of the Company |
| Yu Jiang | Shareholder of the Company |
| Shanghai Qishu Business Management Partnership LP. ("Shanghai Qishu") | Shareholder of the Company |
| Genshui Bao | Shareholder of the Company |
| Congcong Wei | Shareholder of the Company |
| Shanghai Huiji Network Technology Co., LTD ("Shanghai Huiji") | Non-controlling shareholder of the Company's subsidiary |
| Zhejiang Lingshang Cultural Creative Co., LTD ("Zhejiang Lingshang") | A company controlled by a director of our subsidiary |

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| | |
|:---|:---|
| **Name of related parties** | **Relationship with the Company** |
| Shanghai Huihui Hanghang Management Consulting Co., LTD ("Shanghai Huihui") | Non-controlling shareholder of the Company's subsidiary |
| Shanghai Er'shang | Equity investee of the Company |
| Beijing Pinte | Equity investee of the Company |
| Longtian Zhou | A director of the Company's subsidiary |
| Shenzhen Zhuoya | Equity investee of the Company |
| Zhoushan Youtai Investment Partnership LP. ("Zhoushan Youtai") | Original shareholder of the Company\* |
| Xi'an Saixinghang Enterprise Management Partnership LP. ("Xi'an Saixinghang") | A company controlled by principal shareholder of the Company |
| Zhejiang Weilai Advertising Co. LTD ("Zhejiang Weilai") | A company controlled by principal shareholder of the Company |
| Zhejiang Weicheng Information Technology Co. LTD ("Zhejiang Weicheng") | A company controlled by principal shareholder of the Company |
| Sewing Time Trading (Shenzhen) Co. LTD ("Sewing Time") | Non-controlling shareholder of the Company's subsidiary |
| Hangzhou Find Fun Creative Culture Co. LTD ("Hangzhou Find Fun") | A company controlled by principal shareholder of the Company |
| Hangzhou Tianyi Electronic Commerce Co. LTD ("Hangzhou Tianyi") | A company controlled by principal shareholder of the Company |
| Hangzhou Netwide Network Technology Co. LTD ("Hangzhou Netwide") | A company controlled by principal shareholder of the Company |
| Tonghua Lvjian Agricultural Technology Development Co. LTD ("Tonghua Lvjian") | A company controlled by a non-controlling shareholder of the Company's subsidiary |
| Hangzhou Youxing Technology Co., LTD ("Hangzhou Youxing") | A non-controlling shareholder of the Company's subsidiary |
| Tailong Zheng | A non-controlling shareholder |
|  | of the Company's subsidiary |
| Qingdao Songshe Network Technology Co., LTD. ("Qingdao Songshe") | A company controlled by a director of the Company's subsidiary |
| Xinzu Gong | A director of the Company's subsidiary |
| Lei Xu | A director of the Company's subsidiary |
| Lei Xin | A director of the Company's subsidiary |
| Hangzhou Meihangxiujue Technology Co., LTD. ("Hangzhou Meihangxiujue") | A company invested by the Company |

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| | |
|:---|:---|
| **Name of related parties** | **Relationship with the Company** |
| Feng Luo | A director of the Company's subsidiary |
| Xiaoyan Tong | A director of the Company's subsidiary |
| Pingxiang Youxu Business Management Partnership (Limited Partnership) ("Pingxiang Youxu") | A company controlled by principal shareholder of the Company |
| Wenying Cong | A director of the Company's subsidiary |
| Weiguo Tang | A director of the Company's subsidiary |
| Huangshan Huizhou Romantic Red Culture Tourism Group Co., LTD. ("Huangshan Huizhou") | A non-controlling shareholder of the Company's subsidiary |
| Hangzhou Nerdy Bear Technology Co. LTD ("Hangzhou Nerdy Bear") | A non-controlling shareholder of the Company's subsidiary |
| Hangzhou SaixinghangTechnology Co., LTD ("Hangzhou Saixinghang") | Equity investee of the Company |
| Zhejiang Jupei | Equity investee of the Company |
| Zhongguang International Advertising Creative Industry Base Development Co., LTD ("Zhongguang Advertising") | A company controlled by a non-controlling shareholder of the Company's subsidiary |
| Shanghai Jiading Industrial Zone Industrial Housing Development Co., LTD ("Jiading Zone") | A company controlled by a non-controlling shareholder of the Company's subsidiary |
| Mengyong Song | A director of the Company's subsidiary |
| Putian shoe | Equity investee of the Company Subsidiary |
| Xi'an Xuhang | Equity investee of the Company |

---

\* Zhoushan Youtai ceased to be a related party, as it sold its shares in January 2021.

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b) Amounts due from related parties

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nature** | **As of December 31,** | **As of September 30,** | **As of September 30,** |
|  | | **2021** | **2022** | **2022** |
|  | | **RMB** | **RMB** | **US$** |
|  **Account receivables** |  |  |  |  |
|  Shanghai Er'shang | Business operation | 351 | 814 | 114 |
|  Zhejiang Weilai | Business operation | 119 | 598 | 84 |
|  Zhejiang Lingshang | Business operation | 904 | 513 | 72 |
|  Tonghua Lvjian | Business operation | 270 | 270 | 38 |
|  Sewing Time | Business operation | 190 | 123 | 17 |
|  Hangzhou Nerdy Bear | Business operation |  | 110 | 15 |
|  Huangshan Huizhou | Business operation |  | 50 | 7 |
|  Zhongguang Advertising | Business operation |  | 35 | 5 |
|  Zhejiang Weicheng | Business operation | 300 |  |  |
|  |  | 2134 | 2513 | 352 |
|  **Other receivables** |  |  |  |  |
|  Zhejiang Jupei | Loan |  | 2289 | 322 |
|  Mr. Xiao | Loan | 5403 | 2527 | 355 |
|  Hangzhou Saixinghang | Loan |  | 1110 | 156 |
|  Congcong Wei | Loan | 550 | 1000 | 141 |
|  Xi'an Saixinghang | Loan | 750 | 750 | 105 |
|  Tailong Zheng | Staff petty cash | 629 | 617 | 87 |
|  Genshui Bao | Staff petty cash | 420 | 420 | 59 |
|  Shanghai Huiji | Loan | 303 | 368 | 52 |
|  Zhejiang Lingshang | Loan | 250 | 250 | 35 |
|  Zhongguang Advertising | Deposit |  | 218 | 31 |
|  Shanghai Qishu | Loan | 139 | 139 | 20 |
|  Beijing Pinte | Loan | 100 | 100 | 14 |
|  Jiading Zone | Deposit |  | 81 | 11 |
|  Xiaoyan Tong | Staff petty cash | 3 | 48 | 7 |
|  Shanghai Huihui | Loan | 27 | 27 | 4 |
|  Yu Jiang | Loan | 3390 |  |  |
|  Shenzhen Zhuoya | Loan | 315 |  |  |
|  Shanghai Er'shang | Loan | 300 |  |  |
|  Qingdao Songshe | Loan | 270 |  |  |
|  Xinzu Gong | Staff petty cash | 110 |  |  |
|  Lei Xu | Staff petty cash | 101 |  |  |
|  Lei Xin | Staff petty cash | 20 |  |  |
|  Hangzhou Meihangxiujue | Loan | 19 |  |  |
|  Feng Luo | Staff petty cash | 4 |  |  |
|  |  | 13103 | 9944 | 1399 |
|  Amount due from related parties |  | 15237 | 12457 | 1751 |

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##### [**Table of Contents**](#toc)
c) Amounts due to related parties

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nature** | **As of December 31,** | **As of September 30,** | **As of September 30,** |
|  | | **2021** | **2022** | **2022** |
|  | | **RMB** | **RMB** | **US$** |
|  **Account payables** | **Account payables** |  |  |  |
|  Hangzhou Find Fun Creative Culture Co. LTD | Business operation | 300 | 525 | 74 |
|  |  | 300 | 525 | 74 |
|  **Other payables** | **Other payables** |  |  |  |
|  Cong Wenying | Staff reimbursement payables | 297 | 464 | 65 |
|  Xinzu Gong | Loan |  | 303 | 43 |
|  Mengyong Song | Staff reimbursement payables |  | 22 | 3 |
|  Tang Weiguo | Staff reimbursement payables | 57 |  |  |
|  |  | 354 | 789 | 111 |
|  Amount due to related parties |  | 654 | 1314 | 185 |

---

d) Other related party transactions

---

| | | | |
|:---|:---|:---|:---|
|  | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  Service provided to |  |  |  |
|  Shanghai Er'shang | 3602 | 1691 | 238 |
|  Putian Shoe |  | 566 | 80 |
|  Zhejiang Weilai | 750 | 467 | 66 |
|  Hangzhou Nerdy Bear |  | 213 | 30 |
|  Zhejiang Lingshang | 203 | 198 | 28 |
|  Huangshan Huizhou |  | 94 | 13 |
|  Xi'an Xuhang |  | 68 | 10 |
|  Hangzhou Saixinghang |  | 31 | 4 |
|  Shanghai Huiji | 27 | 2 |  |
|  Tonghua Lvjian | 247 |  |  |
|  Sewing Time | 390 |  |  |
|  | 5219 | 3330 | 469 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** | **For the nine months ended<br>September 30,** |
|  | **2021** | **2022** | **2022** |
|  | **RMB** | **RMB** | **US$** |
|  Service provided by |  |  |  |
|  Zhongguang Advertising |  | 525 | 74 |
|  Hangzhou Find Fun | 223 | 223 | 31 |
|  Hangzhou Youxing | 552 |  |  |
|  Hangzhou Netwide | 111 |  |  |
|  Qingdao Songshe | 377 |  |  |
|  | 1263 | 748 | 105 |

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##### [**Table of Contents**](#toc)
**Note 14 – Commitments and contingencies** 

**Operating lease commitments**

The Company signed several lease agreements to rent offices and facilities for its operations.

As of September 30, 2022, the Company was obligated under operating leases for minimum rentals as follows:

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| | |
|:---|:---|
|  | **Minimum<br>lease<br>payment** |
|  | **RMB** |
| 2022 | 2242 |
| 2023 | 7056 |
| 2024 | 2305 |
| 2025 | 740 |
|  Thereafter |  |
|  Total | 12343 |

---

**Loan commitments** 

The Company signed several loan agreements for its operations.

As of September 30, 2022, the Company's future loan obligations according to the terms of the loan agreement were as follows:

---

| | |
|:---|:---|
|  | **Loan<br>payment** |
|  | **RMB** |
| 2022 | 25000 |
|  2023 and thereafter |  |
|  Total | 25000 |

---

**Note 15 – Subsequent events** 

The Company has assessed all events from September 30, 2022 up through December 23, 2022, which is the date that these unaudited condensed consolidated financial statements are available to be issued, unless as disclosed below, there are not any material subsequent events that require disclosure in these unaudited condensed consolidated financial statements.

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***[***●***] Ordinary Shares***

![LOGO](g403554g00m01.jpg)

**XUHANG HOLDINGS LIMITED** 

**Prospectus dated [**●**], 2023**![LOGO](g403554g01a10.jpg)

Until [●], 2023 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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##### [**Table of Contents**](#toc)
**PART II** 

**INFORMATION NOT REQUIRED IN PROSPECTUS** 

**ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.** 

The 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 fourth amended and restated articles of association provide that we shall indemnify our directors and officers, and their personal representatives, against all actions, proceedings, costs, charges, expenses, losses, damages, or liabilities incurred or sustained by such persons, other than by reason of such person's dishonesty, willful default or fraud, in or about the conduct of our Company's business or affairs (including as a result of any mistake of judgment), or in the execution or discharge of his duties, powers, authorities, or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses, or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our Company or its affairs in any court whether in the Cayman Islands or elsewhere.

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 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.

Pursuant to indemnification agreements, the form of which is filed as Exhibit 10.2 to this registration statement, we will agree to indemnify our directors and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.

Insofar as indemnification for liabilities arising under the Securities Act 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.** 

During the past three years, we have issued the following securities which were not registered under the Securities Act. We believe that each of the following issuance was exempt from registration under the Securities Act in reliance on Regulation D under the Securities Act or pursuant to Section 4(2) of the Securities Act regarding transactions not involving a public offering or in reliance on Regulation S under the Securities Act regarding sales by an issuer in offshore transactions. No underwriters were involved in these issuances of securities.

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| | | | |
|:---|:---|:---|:---|
| **Securities/Purchaser** | **Date of Issuance** | **Number of**<br>**Securities\*** | **Consideration** |
|  **Ordinary Shares** |  |  |  |
|  XUHANG (BVI) LTD. | June 16, 2020 | 25000000<sup>(1)</sup> | US$50,000 |
|  SHENXUE CAPITAL LIMITED | April 23, 2021 | 1922386.45 | US$3,844.7729 |
|  CWM CAPITAL LIMITED | April 23, 2021 | 464248.31 | US$928.49662 |
|  JDM CAPITAL LIMITED | April 23, 2021 | 120704.5 | US$241.4090 |

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| | | | |
|:---|:---|:---|:---|
| **Securities/Purchaser** | **Date of Issuance** | **Number of**<br>**Securities\*** | **Consideration** |
|  FAN CHAO CAPITAL LIMITED | April 23, 2021 | 3580890.75<sup>(2)</sup> | US$7,161.7815 |
|  WCC CAPITAL LIMITED | April 23, 2021 | 3222801.65<sup>(3)</sup> | US$6,445.6033 |
|  CZJ CAPITAL LIMITED | April 23, 2021 | 358089.05<sup>(4)</sup> | US$716.1781 |
|  YANGYANG CAPITAL LIMITED | April 23, 2021 | 335289.25 | US$670.5785 |
|  WUWEI CAPITAL LIMITED | April 23, 2021 | 1005867.8 | US$2,011.7356 |
|  ZHUANNA CAPITAL LIMITED | April 23, 2021 | 1160624 | US$2,321.2480 |
|  WZC CAPITAL LIMITED | April 23, 2021 | 1109038.6 | US$2,218.0772 |
|  SUNYANLIN CAPITAL LIMITED | April 23, 2021 | 202917.15<sup>(5)</sup> | US$405.8343 |
|  LCB CAPITAL LIMITED | April 23, 2021 | 349096 | US$698.1920 |
|  SYG CAPITAL LIMITED | April 23, 2021 | 348399.65 | US$696.7993 |
|  YHH CAPITAL LIMITED | April 23, 2021 | 1010352.45 | US$2,020.7049 |
|  BAOGENSHUI CAPITAL LIMITED | April 23, 2021 | 990179 | US$1,980.3580 |
|  JIANGYU CAPITAL LIMITED | April 23, 2021 | 403406.55 | US$806.8131 |
|  LLL CAPITAL LIMITED | April 23, 2021 | 406462.2 | US$812.9244 |
|  Oriental Financial Holding Corporation | April 23, 2021 | 540594.65 | US$1,081.1893 |
|  Cybernaut Global Education Group Corp. | April 23, 2021 | 1771942.2 | US$3,543.8844 |
|  TOP SMART CAPITAL INVESTMENT LIMITED領駿創富有限公司 | April 23, 2021 | 1682825.1 | US$3,365.6502 |
|  Shanghai Qishu Enterprise Management Consulting L.P. 上海祁树企业管理咨询合伙企业（有限合伙） | September 26, 2021 | 1948621.3 | US$3,897.2426 |
|  Shanghai Zhuju Investment Center (Limited Partnership) 上海筑居投资中心（有限合伙） | September 26, 2021 | 649884.7 | US$1,299.7694 |
|  Henan Saiqi High-tech Service Venture Capital Fund (Limited Partnership) 河南赛淇高技术服务创业投资基金（有限合伙） | September 26, 2021 | 1944607.2 | US$3,889.2144 |
|  Wenzhou Elite Equity Investment Partnership (Limited Partnership) 温州精英股权投资合伙企业（有限合伙） | September 26, 2021 | 388925.35 | US$777.8507 |
|  Qingdao Xida Kaiyue Investment Management Partnership (Limited Partnership) 青岛喜大开悦投 资管理合伙企业（有限合伙） | September 26, 2021 | 238423.55 | US$476.8471 |
|  Chengzhu Investment Management (Shanghai) Co., Ltd. 诚筑投资管理（上海）有限公司 | September 26, 2021 | 229245.55 | US$458.4911 |
|  Ningbo Xinrui Equity Investment Partnership (Limited Partnership) 宁波莘睿股权投资合伙企业（有限合伙） | September 26, 2021 | 582335.75 | US$1,164.6715 |
|  Sai Pu No. 1 (Putian) Venture Capital Partnership (Limited Partnership) 赛莆一号（莆田）创业投资合伙企业（有限合伙） | September 26, 2021 | 1544233.7 | US$3,088.4674 |
|  Qingdao Lumin Investment Qinghe Equity Investment Partnership (Limited Partnership) 青岛鲁民投青合股权投资合伙企业（有限合伙） | September 26, 2021 | 945451.6 | US$1,890.9032 |
|  Yancheng Guozhi Industry Fund Co., Ltd. 盐城国智产业基金有限公司 | September 26, 2021 | 1134538 | US$2,269.0760 |
|  Xingchan Saize (Huzhou) Venture Capital Partnership (Limited Partnership) 兴产赛泽（湖州）创业投资合伙企业（有限合伙） | September 26, 2021 | 1134538 | US$2,269.0760 |
|  Hexagon Special Opportunities SPC (acting for the account of segregated portfolio I) | December 1, 2021 | 1261530.8 | US$2,523.0616 |
|  Hexagon Special Opportunities SPC (acting for the account for segregated portfolio VII) | December 1, 2021 | 816526.35 | US$1,633.0527 |
|  TIAN HANG GROUP LIMITED | December 2, 2022 | 0.05 | US$0.0001 |

---

------

##### [**Table of Contents**](#toc)
\* The number of securities reflects a 500-for-1 forward split of our Ordinary Shares approved by our shareholders and board of directors on December 2, 2022.

(1) On April 26, 2021, XUHANG (BVI) LTD. transferred all of the Ordinary Shares it was holding to two
investors (TIAN HANG GROUP LIMITED and MIGHTY HUGE INVESTMENT LIMITED) as part of the reorganization of our corporate structure.

(2) FAN CHAO CAPITAL LIMITED transferred 160,267.25 Ordinary Shares it was holding to four investors (WUWEI CAPITAL
LIMITED, ZHUANNA CAPITAL LIMITED, TOP SMART CAPITAL INVESTMENT LIMITED, and Cybernaut Global Education Group Corp.) on July 6, 2021, and transferred 3,420,623.5 Ordinary Shares it was holding to TIAN HANG GROUP LIMITED on July 8, 2021,
respectively, as part of the reorganization of our corporate structure.

(3) On July 6, 2021, WCC CAPITAL LIMITED transferred 144,240.5 Ordinary Shares it was holding to two investors
(SHENXUE CAPITAL LIMITED and Cybernaut Global Education Group Corp.) as part of the reorganization of our corporate structure.

(4) CZJ CAPITAL LIMITED transferred 16,026.7 Ordinary Shares it was holding to SHENXUE CAPITAL LIMITED on
July 6, 2021, and transferred 342,062.35 Ordinary Shares it was holding to TIAN HANG GROUP LIMITED on January 17, 2022, respectively, as part of the reorganization of our corporate structure.

(5) On July 6, 2021, SUNYANLIN CAPITAL LIMITED transferred 8,625.75 Ordinary Shares it was holding to SHENXUE
CAPITAL LIMITED as part of the reorganization of our corporate structure.

**ITEM 8. *EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.*** 

**(a) Exhibits** 

See Exhibit Index beginning on page II-5 of this registration statement.

**(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.*** 

The undersigned registrant hereby undertakes to provide to the Underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For purposes of determining any liability under the Securities Act, 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 under 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.

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##### [**Table of Contents**](#toc)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For the purpose of determining any liability under the Securities Act, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For the purpose of determining liability under the Securities Act to any purchaser, 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;(4) For the purpose of determining any liability of the registrant under the Securities Act 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;(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;(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;(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;(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

------

##### [**Table of Contents**](#toc)
**EXHIBIT INDEX** 

---

| | |
|:---|:---|
| **Description** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;1.1\*\* | Form of Underwriting Agreement |
| &nbsp;&nbsp;&nbsp;&nbsp;3.1\* | [Third Amended and Restated Memorandum and Articles of Association of the Registrant, as currently in effect](d403554dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.2\*\* | Form of Fourth Amended and Restated Memorandum and Articles of Association of the Registrant, effective immediately prior to the completion of this offering |
| &nbsp;&nbsp;&nbsp;&nbsp;4.1\* | [Specimen Certificate for Ordinary Shares](d403554dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.2\*\* | Form of the Representative's Warrants (included in Exhibit 1.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;5.1\*\* | Opinion of Conyers Dill & Pearman regarding the validity of the Ordinary Shares being registered |
| &nbsp;&nbsp;&nbsp;&nbsp;5.2\*\* | Opinion of Hunter Taubman Fischer & Li LLC regarding the enforceability of Representative's Warrants |
| &nbsp;&nbsp;&nbsp;&nbsp;8.1\*\* | Opinion of AllBright Law Offices Hangzhou Office with respect to certain PRC tax matters (included in Exhibit 99.3) |
| 10.1\* | [Form of Employment Agreement by and between executive officers and the Registrant](d403554dex101.htm) |
| 10.2\* | [Form of Indemnification Agreement with the Registrant's directors and officers](d403554dex102.htm) |
| 10.3\* | [Form of Director Offer Letter between the Registrant and its directors](d403554dex103.htm) |
| 10.4\* | [Form of Cooperation Agreement by and between local governments and the Registrant](d403554dex104.htm) |
| 10.5\* | [Form of Cooperation Agreement with respect to cooperative accounts by and between the Registrant and its business partners](d403554dex105.htm) |
| 15.1\* | [Letter of WWC, P.C., an independent registered public accounting firm](d403554dex151.htm) |
| 21.1\* | [Subsidiaries](d403554dex211.htm) |
| 23.1\* | [Consent of WWC, P.C.](d403554dex231.htm) |
| 23.2\*\* | Consent of Conyers Dill & Pearman (included in Exhibit 5.1) |
| 23.3\*\* | Consent of AllBright Law Offices Hangzhou Office (included in Exhibit 99.3) |
| 23.4\*\* | Consent of Hunter Taubman Fischer & Li LLC (included in Exhibit 5.2) |
| 23.5\*\* | Consent of Ince & Co |
| 24.1\* | [Powers of Attorney (included on signature page)](#sig) |
| 99.1\* | [Code of Business Conduct and Ethics of the Registrant](d403554dex991.htm) |
| 99.2\* | [Consent of Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.](d403554dex992.htm) |
| 99.3\*\* | Opinion of AllBright Law Offices Hangzhou Office regarding certain PRC law matters |
| 99.4\* | [Request for Waiver and Representation under Item 8.A.4 of Form 20-F](d403554dex994.htm) |
| 99.5\* | [Consent of Wenbing Wang](d403554dex995.htm) |
| 99.6\* | [Consent of Bo Lyu](d403554dex996.htm) |
| 99.7\* | [Consent of Xiaoyi Wang](d403554dex997.htm) |
| 107\* | [Filing Fee Table](d403554dexfilingfees.htm) |

---

\* Filed herewith

\*\* To be filed by amendment

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##### [**Table of Contents**](#toc)
**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 Hangzhou, People's Republic of China, on March 31, 2023.

---

| | |
|:---|:---|
|  **XUHANG HOLDINGS LIMITED** | **XUHANG HOLDINGS LIMITED** |
|  By: | /s/ *Tianhang Xiao* |
|  | Tianhang Xiao |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

**Power of Attorney** 

Each person whose signature appears below constitutes and appoints Tianhang Xiao as attorney-in-fact with full power of substitution, for him or her in any and all capacities, to do any and all acts and all things and to execute any and all instruments which said attorney and agent may deem necessary or desirable to enable the registrant to comply with the Securities Act, and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of ordinary shares of the registrant, including, without limitation, the power and authority to sign the name of each of the undersigned in the capacities indicated below to the Registration Statement on Form F-1 (the "Registration Statement") to be filed with the Securities and Exchange Commission with respect to such Shares, to any and all amendments or supplements to such Registration Statement, whether such amendments or supplements are filed before or after the effective date of such Registration Statement, to any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act, and to any and all instruments or documents filed as part of or in connection with such Registration Statement or any and all amendments thereto, whether such amendments are filed before or after the effective date of such Registration Statement; and each of the undersigned hereby ratifies and confirms all that such attorney and agent shall do or cause to be done by virtue hereof.

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/ *Tianhang Xiao*<br> Name: Tianhang Xiao | Chief Executive Officer, Director, and Chairman of the Board of Directors | March 31, 2023 |
|  | (Principal Executive Officer) |  |
| /s/ *Huazhen Xu* | Finance Director | March 31, 2023 |
|  Name: Huazhen Xu | (Principal Accounting and Financial Officer) |  |

---

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##### [**Table of Contents**](#toc)
**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 of XUHANG HOLDINGS LIMITED, has signed this registration statement or amendment thereto in New York, NY on March 31, 2023.

---

| | |
|:---|:---|
|  Cogency Global Inc. | Cogency Global Inc. |
|  Authorized U.S. Representative | Authorized U.S. Representative |
|  By: | /s/ Colleen A. De Vries |
|  | Name: Colleen A. De Vries |
|  | Title: Senior Vice President on behalf of Cogency Global Inc. |

---

## Exhibit 3.1

**Exhibit 3.1** 

**THE COMPANIES ACT (AS AMENDED)** 

------

**EXEMPTED COMPANY LIMITED BY SHARES** 

------

**THIRD AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION** 

**OF** 

**XUHANG HOLDINGS LIMITED** 

(Adopted by Special Resolution passed on 30th November 2021)

(Amended by Special Resolution passed on 2nd December 2022)

1. The name of the Company is **XUHANG HOLDINGS LIMITED**.

2. The Registered Office of the Company will be at the offices of Sanne Trustees (Cayman) Limited, 3rd Floor,
Citrus Grove, 106 Goring Avenue, PO Box 492, Grand Cayman KY1-1106, Cayman Islands with a registered branch office at such other places as the Directors may from time to time decide.

3. The objectives 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 laws of the Cayman Islands.

4. The liability of each member is limited to the amount from time to time unpaid on such member's shares.

5. The authorized share capital of the Company is US$1,000,000 divided into 500,000,000 shares with a par value of
US$0.002 each, with the power for the Company insofar as is permitted by law, to redeem or purchase any of its shares and to increase or reduce the said capital subject to the provisions of the Companies Act (as amended) and the Articles of
Association and to issue any part of its capital, whether original, redeemed or increased with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions and so that unless
the conditions of issue shall otherwise expressly declare every issue of shares whether declared to be preference or otherwise shall be subject to the powers hereinbefore contained.

------

**THE COMPANIES ACT (AS AMENDED)** 

------

**EXEMPTED COMPANY LIMITED BY SHARES** 

------

**THIRD AMENDED AND RESTATED ARTICLES OF ASSOCIATION** 

**OF** 

**XUHANG HOLDINGS LIMITED** 

(Adopted by Special Resolution passed on 30th November 2021)

**<u>PRELIMINARY & INTERPRETATION</u>**

1. In these Articles, Table 'A' of the Companies Act (as amended) does not apply and the following words
and expressions shall bear the meanings set out below, if not inconsistent with the subject or context:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "Articles" means the Articles of Association of the Company as originally hereby framed, or as from
time to time altered by special resolution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) "Board of Directors" means the Company's management body provided for in the Law and these
Articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) "Company" means XUHANG HOLDINGS LIMITED;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) "Debenture" means debenture stock, mortgages, bonds and any other such securities of the Company
whether constituting a charge on the assets of the Company or not;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) "Directors" means the persons for the time being occupying the position of Directors or any of them;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) "Dividend" includes bonus;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) "Holder" means, in relation to registered shares, the member whose name is entered in the register of
members as the holder of those shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) "Law" means the Companies Act of the Cayman Islands including any statutory modification or
re-enactment thereof for the time being in force;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) "Member" shall bear the meaning ascribed to it in Section 38 of the Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "Month" means calendar month;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) "Paid-up" means paid-up and/or credited as paid up;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) "Register" means the register of members required to be kept by Section 40 of the Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) "Registered office" means the registered office for the time being of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) "Seal" means the common seal of the Company or any facsimile thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) "Secretary" means the secretary of the Company or any person appointed to perform

the duties of the secretary of the Company, including an assistant secretary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) "Special Resolution" has the meaning assigned to it in Section 60 of the Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) "Written" and "In writing" includes all modes of representing or reproducing words in
visible form.

Words importing the singular only shall include the plural and vice versa, words importing the masculine gender shall include the feminine gender and words importing natural persons shall include also corporations. The headings in these Articles are for convenience only and shall be ignored in construing the language or meaning of the Articles.

**<u>COMMENCEMENT OF BUSINESS</u>**

2. The business of the Company may be commenced as soon after incorporation as the Board of Directors or the
subscribers to the Memorandum of Association shall see fit, notwithstanding that part only of the shares may have been allotted.

**<u>SHARES</u>**

3. The shares in the capital of the Company for the time being, and from time to time, unissued shall be under the
control of the Board of Directors, and may be allotted or disposed of in such manner, to such persons and on such terms as the Board of Directors in their absolute discretion may think fit.

4. Subject to the provisions, if any, in that behalf in the Memorandum of Association, or the Law, and without
prejudice to any rights previously conferred on the holders of existing shares, any share or fraction of a share in the Company's share capital may be issued with such preferred, deferred, other special rights, or restrictions, whether in
regard to dividend, voting, return of share capital or otherwise, as the Board of Directors may from time to time by resolution determine, and any share may be issued by the Directors on the terms that it is, or at the option of the Directors is
liable, to be redeemed or purchased by the Company whether out of capital in whole or in part or otherwise.

5. If at any time the share capital is divided into different classes of shares, unless otherwise provided by the
terms of issue of the shares, the rights attached to such class may be varied, including in any manner so as to adversely affect the holders of the shares of such class, with the consent in writing of all of the holders 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. The provisions of these Articles relating to general meetings shall, mutatis mutandis apply to every such separate
general meeting, but so that the necessary quorum shall be one or more persons together at least holding or representing by proxy two-thirds of the issued shares of that class and that any holder of shares of the class present in person or by proxy
may demand a poll.

------

6. Every person whose name is entered as a member in the register of members shall without payment, be entitled to
a certificate under the seal of the Company specifying the share or shares held by him and the amount paid up thereon, provided that in respect of a share or shares held jointly by several persons the Company shall not be bound to issue more that
one certificate, and delivery of a certificate for a share to one of several joint shareholders shall be sufficient delivery to all.

7. If a share certificate is defaced, lost or destroyed it may be renewed on payment of such fee, if any, and on
such terms if any, as to evidence and obligations to indemnify the Company as the Company's Board of Directors may determine.

**<u>REDEMPTION AND PURCHASE OF OWN SHARES</u>**

8. a) Subject to the provision of the Law, the Company may

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) issue shares which are to be redeemed or are liable to be redeemed at the option of the Company or the holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) purchase its own shares (including any redeemable shares); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) make a payment in respect of the redemption or purchase of its own shares otherwise than out of profits or the
proceeds of a fresh issue of shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) A share which is liable to be redeemed may be redeemed by either the Company or the Holder giving to the other
not less than Thirty days notice in writing of the intention to redeem such shares specifying the date of such redemption which must be a day on which banks in the Cayman Islands are open for business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) The amount payable on such redemption on each share so redeemed shall be the amount determined by the Board of
Directors as being the fair value thereof as between a willing buyer and a willing seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) Where the Company has agreed to purchase any share from a member, it shall give notice to all other members of
the Company specifying the number and class of shares proposed to be purchased, the name and address of the seller, the price to be paid therefor and the portion (if any) of that price which is being paid out of capital. Such notice shall also
specify a date (being not less than Thirty days after the date of the notice) on which the purchase is to be effected and shall invite members (other than the seller) to intimate any objections to the proposed purchase to the Company before that
date. If no objections have been received before the date specified in the notice the Company shall be entitled to proceed with the purchase upon the terms specified therein. If any objection is received prior to the specified date, the Board of
Directors may either decline to proceed with the purchase or convene a general meeting of the Company to consider and, if thought fit, approve the terms of the proposed purchase.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) The redemption or purchase of any share shall not be deemed to give rise to the redemption or purchase of any
other share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) At the date specified in the notice of redemption or purchase, the holder of the shares being redeemed or
purchased shall be bound to deliver up to the Company at its registered office the certificate thereof for cancellation and thereupon the Company shall pay to him the redemption or purchase monies in respect thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) The Board of Directors may when making payments in respect of redemption or purchase of shares in accordance
with the provisions of this Regulation, 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 payment either in cash or in specie.

**<u>LIEN</u>**

9. The Company shall have a lien on every share (not being 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 the Company shall also have a lien on all shares (other than fully paid up shares) standing registered in the name of a single person for all moneys presently payable by
him or his estate to the Company; but the Board of Directors may at any time declare any share to be wholly or in part exempt from the provisions of this regulation. The Company's lien, if any, on a share shall extend to all dividends payable
thereon.

10. The Company may sell, in such manner as the Board of Directors think fit, any shares on which the Company has a
lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of fourteen days after a notice in writing demanding payment of such part of the amount in respect of which the lien
exists as is presently payable has been given to the registered holder for the time being of the share, or the persons entitled thereto by reason of the registered holder's death or bankruptcy.

11. To give effect to any such sale, the Board of Directors may authorize such person to transfer the shares sold
to the purchaser thereof. The purchaser shall be registered as the holder of the shares comprised in any such transfer 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 proceedings in reference to the sale.

12. The proceeds of the sale shall be received by the Company and applied in payment of such part of the amount in
respect of which the lien exists as is presently payable, and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares prior to the sale) be paid to the person entitled to the shares at the date of
the sale.

**<u>CALLS ON SHARES</u>**

13. The Board of Directors may from time to time make calls upon the members in respect of any moneys unpaid on
their shares and each member shall (subject to receiving at least fourteen 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.

------

14. The joint holders of a share shall be jointly and severally liable to pay calls in respect thereof.

15. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the
person from whom the sum is due shall pay interest upon the sum at the rate of 10% per annum from the day appointed for the payment thereof to the time of the actual payment, but the Board of Directors shall be at liberty to waive payment of the
interest wholly or in part.

16. The provisions of these Articles as to the liability of joint holders and as to the payment of interest shall
apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the amount of the share, or by way of premium, as if the same had become payable by virtue of a call duly
made and notified.

17. The Board of Directors may make arrangements on the issue of shares for a difference between the holders in the
amount of calls to be paid and in the times of payment.

18. The Board of Directors may, if they think fit, receive from any member willing to advance the same, all, or any
part of the moneys uncalled and unpaid upon any shares held by him; and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding, without the
sanction of the Company by resolution of its members, six percent per annum) as may be agreed upon between the member paying the sum in advance and the Board of Directors.

**<u>TRANSFER AND TRANSMISSION OF SHARES</u>**

19. The instrument of transfer of any share or fraction of a share shall be in writing and shall be executed by or
on behalf of the transferor and the transferor shall be deemed to remain the holder of a share until the name of the transferee is entered in the Register of Members in respect thereof. In the case of a share registered in the joint names of two or
more members, unless the joint holders have delivered to the Company an instrument in writing, executed by each of them, expressly referring to this article and stating that this article shall not apply to the share registered in their names, any
one joint holder shall have power to execute an instrument of transfer for and on behalf of himself and all joint holders, and each joint holder of a share shall be the attorney-in-fact for the other joint holder of a share with full power and
authority to do and perform all and every act and thing whatsoever with respect to the shares jointly held.

20. Shares shall be transferred in the following form, or in any other form approved by the Board of Directors:

I _______________________ of __________________________________ in consideration of the sum of ____________ paid to me by _______________ of ____________________ (hereinafter called "the transferee") do hereby transfer to the transferee the share (or shares) numbered _____________ in the undertaking called the _________________ to hold unto the said transferee, subject to the several conditions on which I hold the same; and I, the said transferee, do hereby agree to take the said share (or shares) subject to the conditions aforesaid.

As witness our hand the _______ day of ________________ 20____ Witness to the signatures

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21. The Board of Directors may decline to register any transfer of shares to a person of whom they do not approve,
and may also decline to register any transfer of shares on which the Company has a lien. The Board of Directors may also suspend the registration of transfers during the fourteen days immediately preceding a general meeting of the Company or of a
meeting of the holders of a class of shares. Notwithstanding anything to the contrary herein, the Board of Directors may decline to recognize any transfer, and such transfer will not be effective, unless the instrument of transfer is accompanied by
a certificate of the shares to which it relates, and such other evidence as the Board of Directors may reasonably require to show the right of the transferor to make the transfer. If the Board of Directors refuse to register a transfer of any shares
they shall, within two months after the date on which the transfer was lodged with the Company, send to the transferee notice of the refusal.

22. The legal personal representative of a deceased sole holder of a share shall be the only person recognized 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 survivor or survivors, or the legal personal representatives of the deceased survivor, shall be the only persons recognized by
the Company as having any title to the share.

23. A person entitled to a share in consequence of the death or bankruptcy of a member (or in any other way than by
transfer) shall upon such evidence being produced as may from time to time be properly required by the Board of 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 deceased or bankrupt person could have made; but the Board of 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 deceased or bankrupt person before the death or bankruptcy.

24. If the person so becoming entitled shall elect to be registered himself as holder he shall deliver or send to
the Company a notice in writing signed by him stating that he so elects.

25. A person becoming entitled to a share by reason of the death or bankruptcy of the member shall be entitled to
the same dividends and other advantages to which he would be entitled if he were the holder, 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. PROVIDED HOWEVER that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share and 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.

**<u>FORFEITURE OF SHARES</u>**

26. If a member fails to pay any call or instalment of a call on the day appointed for payment thereof, the Board
of Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as remains unpaid, together with any interest which may
have accrued and all expenses that have been incurred by the Company by reason of such non-payment.

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27. Such notice shall name a further day (not earlier than the expiration of fourteen days from the date of the
notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment, at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited.

28. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the
notice has been given may at any time thereafter, before the payment required by notice has been made, be forfeited by a resolution of the Directors to that effect.

29. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Board of
Directors think fit, and at any time before the sale or disposition the forfeiture may be cancelled on such terms as the Board of Directors think fit.

30. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but
shall 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, but his liability shall cease if and when the Company receives payment in full of the nominal amount of
the shares, and any premium due in respect of their issue.

31. A declaration in writing under the hand of a Director or the Secretary of the Company that a share in the
Company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration, if any, given for
the share on any sale or disposition thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share, and shall not be bound to see to
the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

32. The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by
the terms of issue of a share becomes payable at a fixed time, whether on account of the nominal amount of the share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

**<u>ALTERATION OF CAPITAL</u>**

33. The Company may from time to time by ordinary resolution of its members increase its authorized share capital
by such sum, to be divided into shares or fractions of a share of such amount, as the resolution shall prescribe.

34. The new shares shall be subject to the same provisions with reference to the payment of calls, lien, transfer,
transmission, forfeiture and otherwise as the shares in the same class in the original share capital.

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35. The Company may by ordinary resolution of its members:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 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;(b) sub-divide its existing shares, or any of them, into shares of smaller amount than is fixed by the Memorandum
of Association, subject nevertheless to the provisions of section 13 of the Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 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.

36. The Company may by special resolution reduce its share capital and any capital redemption reserve fund in any
manner and with, and subject to, any incident authorized and consent required by Law.

**<u>GENERAL MEETINGS</u>**

37. An annual general meeting shall be held once every year at such time (not being more than fifteen months after
the holding of the last preceding general meeting) and place as may be prescribed by a resolution of the members, or, in default thereof, by a resolution of the Board of Directors, except that if the Company be registered as an exempted company then
no such annual general meeting shall be required. The Board of Directors may, whenever they think fit convene a general meeting.

38. General meetings shall also be convened on the written requisition, duly signed, of any holder or holders of
not less than ten percent of the issued voting shares deposited at the registered office of the Company specifying the objects of the meeting. If the Board of Directors do not within twenty-one days from the date of the deposit of the requisition
proceed to convene the meeting, the requisitionist(s) may convene the general meeting in the same manner, as nearly as possible, as that in which meetings may be convened by the Board of Directors, and all reasonable expenses incurred shall be borne
by the Company, but any meeting so convened shall not be held after the expiration of three months after the expiration of the said twenty-one days.

39. If at any time there are no Directors of the Company any holder or holders of not less than ten percent of the
issued voting shares may convene a general meeting in the same manner, as nearly as possible, as that in which meetings may be convened by the Board of Directors, and all reasonable expenses incurred shall be borne by the Company.

**<u>NOTICE OF GENERAL MEETINGS</u>**

40. Notice of any general meeting shall be given at least seven days before such meeting is scheduled to take place
(exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which notice is given). Such notice shall specify the place, the day and the hour of the meeting and, in the case of special business, the
general nature of that business and shall be given in the manner hereinafter provided, or in such other manner (if any) as may be prescribed by the Company in general meetings, to such persons as are, under the Articles of the Company, entitled to
receive such notices from the Company. With the consent of all the members entitled to receive notice of any particular meeting, that meeting may be convened by such shorter notice and in such manner as those members may agree.

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41. Notwithstanding any other provision contained herein, the accidental omission to give notice of a meeting to,
or the non-receipt of a notice of a meeting by, any member shall not invalidate the proceedings at any meeting.

**<u>PROCEEDINGS AT GENERAL MEETINGS</u>**

42. Except as herein otherwise provided, no business shall be transacted at any general meeting unless a quorum of
members is present at the time that the meeting proceeds to do business. The presence in person or by proxy of the holders of a majority of the issued voting shares of the Company entitled to vote shall constitute a quorum for the transaction of
business. The shareholders present at a meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.

43. If, within half an hour from the time appointed for the meeting, a quorum is not present, such meeting shall
stand adjourned to the same day in the next week, at the same time and place, 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 deemed to constitute a
quorum.

44. All business carried out at a general meeting shall be deemed special with the exception of sanctioning a
dividend, the consideration of the accounts, the ordinary report of the Board of Directors and auditors, the appointment and removal of Directors, and the fixing of the remuneration of the Directors and auditors. No special business shall be
transacted at any general meeting without the consent of all members entitled to receive notice of that meeting unless notice of such special business has been given in the notice convening that meeting.

45. The chairman, if any, of the Board of Directors shall preside as chairman at every general meeting of the
Company.

46. If there is no such chairman, or if at any meeting he is not present within fifteen minutes after the time
appointed for holding the meeting or is unwilling to act as chairman, the members present shall choose one of their number to be chairman.

47. The chairman may, with the consent of any meeting at which a quorum is present, (and shall if so directed by an
ordinary resolution of the members) adjourn the 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. When a meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be
transacted at any adjourned meeting.

48. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a
poll is demanded (before or on the declaration of the result of the show of hands) by at least three members present in person or by proxy entitled to vote or by one member or two members so present and entitled, if that member or those two members
together hold not less than fifteen percent of the paid up capital of the Company. Unless a poll is demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried unanimously, or by a particular majority, or lost,
and an entry to that effect in the book of the proceedings of the Company shall be conclusive evidence of the fact, without proof of the number of that proportion of the votes recorded in favour of, or against, that resolution.

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49. If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll
shall be deemed to be the resolution of the meeting at which the poll was demanded.

50. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at
which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.

51. A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll
demanded on any other question shall be taken at such time as the chairman of the meeting directs.

**<u>VOTES OF MEMBERS</u>**

52. On a show of hands every member of the Company present in person or by proxy shall have one vote. On a poll
every member, present in person or by proxy, shall have one vote for each share of which he is the holder. Except as otherwise required by these Articles or by the Law, the affirmative vote of the holders of a majority of shares, present in person
or by proxy, is required to adopt any shareholder's resolution.

53. In the case of joint holders of shares, the vote of the senior who tenders a vote whether in person or by
proxy, shall be accepted to the exclusion of the votes of the other joint holder; and for this purpose seniority shall be determined by the order in which the names stand in the register of members.

54. A holder of shares of unsound mind, or in respect of whom an order has been made by any court having
jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee, or the person in the nature of a committee appointed by that court, and any such committee or other person, may on a poll, vote by proxy.

55. No holder of shares shall be entitled to vote at any general meeting unless all calls or other sums presently
payable by him in respect of shares in the Company have been paid.

56. On a poll or on a show of hands votes may be given either personally or by proxy.

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| | |
|:---|:---|
| 57. a) | The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorized in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorized. A proxy need not be a member of the Company.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The instrument appointing the proxy and the power of attorney or other authority (if any) under which it is
signed, or a notarially certified copy of the power of attorney or other authority, shall be deposited at the registered office of the Company not less than forty-eight hours before the time for holding the meeting or adjourned meeting at which the
person named in the instrument proposes to vote, and in default the instrument of proxy shall be treated as valid or invalid at the discretion of the chairman.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) An instrument appointing a proxy may be in the following form or any other common form:

I ________________, of ____________being a member of the above named Company hereby appoint _______________of ___________as my proxy, to vote for me and on my behalf at the (ordinary or extraordinary, as the case may be) general meeting of the Company to be held on the __________ day of _______________ 20___ and at any adjournment thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

58. Any corporation which is a member of the Company may by resolution of its Board of Directors or other governing
body authorize such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall be entitled to exercise the same powers on behalf of the corporation
which he represents as that corporation could exercise if it were an individual member of the Company.

59. Any share of its own capital belonging to the Company or held on its behalf shall not be voted directly or
indirectly at any meeting and shall not be counted in determining the total number of issued shares at any time.

**<u>WAIVER OF NOTICE AND CONSENTS</u>**

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| | |
|:---|:---|
| 60 (a) | The transactions of any meeting of members however called and whenever held, are as valid as though made at a meeting duly held after regular notice if each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting, or an approval of the minutes thereof. All such waivers, consents and approvals shall be filed with the Company's records.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any action of the members may be taken without a meeting, and without prior notice, if a resolution in writing
is signed by all the members for the time being entitled to receive notice of and to attend and vote at general meetings (or being corporations by their duly authorised representatives); such written resolution shall be as valid and effective as if
the same had been passed at a general meeting of the Company duly convened and held and may be in one or more instruments each signed by one or more of the members aforesaid, the effective date of the resolution so adopted being the date on which
the instrument or the last of such instruments (if more than one) is executed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any action of the Directors, or alternate Directors, may be taken without a meeting, and without prior notice,
if written consent, setting forth the action to be taken, is signed by all the Directors of the Company.

**<u>DIRECTORS</u>**

61. There shall be a Board of Directors of the Company consisting of one or more Directors. The initial Board of
Directors shall be determined in writing by the subscriber(s) to the Memorandum of Association.

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62. Subject to the provisions of these Articles, a Director shall hold office until such time as he is disqualified
or removed from office by an ordinary resolution of the Company in general meeting.

63. The Company in general meeting may from time to time fix the maximum and minimum number of Directors to be
appointed but unless such number is fixed as aforesaid the number of Directors shall be unlimited.

64. The Board of Directors shall have power at any time and from time to time to appoint a person as Director,
either as a result of a casual vacancy or as an additional Director, subject to the maximum number (if any) imposed by the Company in general meeting.

65. The Directors shall be entitled to such remuneration as the Board of Directors may by resolution determine and,
unless the resolution provides otherwise, the remuneration shall be deemed to accrue from day to day and such remuneration shall be divided between the Directors in such proportions and manner as the Board of Directors may unanimously determine or
in default of such determination equally, except that any Director holding office for less than a year or other period for which remuneration is paid shall rank in such division in proportion to the fraction of such year or other period during which
he has held office. Any Director who, at the request of the Directors, performs special services or goes or resides abroad for any purpose of the Company may receive such extra remuneration by way of salary, commission or participation in profits,
or partly in one way and partly in another, as the Board of Directors may determine. The Directors may 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 or separate meetings of the shareholders or otherwise in connection with the discharge of their duties.

66. A Director shall not be required to hold any share qualification but shall nevertheless be entitled to attend
and speak at any general meeting of the Company or at any separate meeting of the holders of any class of shares of the Company.

67. Any corporation which is a Director of the Company may by resolution of its Board of Directors or other
governing body authorize such person as it thinks fit to act as its representative at any meeting of the Board of Directors of the Company, and the person so authorized shall be entitled to exercise the same powers on behalf of the corporation which
he represents as that corporation could exercise if it were an individual Director of the Company.

**<u>POWERS AND DUTIES OF DIRECTORS</u>**

68. The business of the Company shall be managed by the Board of Directors, who may pay all expenses incurred in
organizing and registering the Company and may exercise all such powers of the Company as are not, by the Law or these Articles, required to be exercised by the Company by resolution of its members; but no regulation made by the Company by
resolution of its members shall invalidate any prior act of the Board of Directors which would have been valid if that regulation had not been made.

69. The Board of Directors may, from time to time, provide for the management of the affairs of the Company in such
manner as they think fit. The Board of Directors may from time to time:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) appoint one or more of their body to the office of managing Director for such term and at such remuneration
(whether by way of salary or commission or participation in profits, or partly in one way and partly in another) as they may think fit; his appointment shall be subject to termination ipso facto if he ceases for any cause to be a Director, or if the
Company in a general meeting resolves that his tenure of the office of managing Director be terminated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) appoint a manager for the Company for such term and for such remuneration (whether by way of fees, commissions
or participation in profits or gains, or partly in one way and partly in another and including reimbursement of all costs and charges paid or payable on behalf of the Company in connection with its formation and otherwise) and subject to such other
terms and conditions as they may think fit. The Board of Directors may, to the extent permitted by the Law and these Articles delegate (whether by contract or otherwise) such powers and duties to the said managing Director and or manager as they may
think fit. The Board of Directors may from time to time appoint such secretary, officers, agents, legal counsel, investment advisors and other professional advisors or administrators as they deems necessary, appropriate or advisable.

70. The Directors shall appoint the Company Secretary (and if need be an Assistant Secretary or Assistant
Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit, provided however that no person who is the sole Director of the Company shall be appointed or hold office as
Secretary. Any Secretary or Assistant Secretary so appointed by the Directors may be removed by the Directors.

71. The Directors may delegate any of their powers to committees consisting of such member or members of their body
as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may imposed on it by the Directors.

72. The Board of Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its
undertaking, property and uncalled capital or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party.

73. A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract
with the Company shall declare the nature of his interest at a meeting of the Board of Directors. A general notice given to the Board of Directors by any Director to the effect that he is a member of any specified company or firm and is to be
regarded as interested in a contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made. Subject thereto a Director may vote in respect of any contract or
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 the Board of Directors at which such contract or proposed contract
or arrangement shall come before the meeting for consideration.

74. A Director or alternate Director of the Company 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 in a 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.

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75. 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 Board of Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the
Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or contract arrangement entered into by or on behalf of the Company in which any Director is in
any way interested, be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office
or of the fiduciary relationship thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting whereat he or any other Director is appointed to hold
any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement.

76. Any 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; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company.

77. The Board of Directors shall cause minutes to be made in books provided for the purpose:

(a) of all appointments of officers made by the Board of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) of the names of the Directors present at each meeting of the Board of Directors and of any committee of the
Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) of all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of
Directors signed by the chairman of the meeting.

**<u>DISQUALIFICATION AND REMOVAL OF DIRECTORS</u>**

78. The office of Director shall be vacated, if the Director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) becomes bankrupt or makes any arrangement or composition with his creditors; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is found to be or becomes of unsound mind; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) resigns his office by notice in writing to the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) is removed from office by an ordinary resolution duly passed by the Company in general meeting.

**<u>PROCEEDINGS OF DIRECTORS</u>**

79. The Directors may meet together (either within or without the Cayman Islands) for the dispatch of business,
adjourn, and otherwise regulate their meetings and proceedings, as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the chairman shall have a second or casting vote. A Director
may, and the secretary on the requisition of a Director shall, at any time summon a meeting of the Directors.

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80. The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors, and
unless so fixed, if there be more than two Directors shall be two, and if there be two or less Directors shall be one. A Director represented by proxy or by an Alternate Director at any meeting shall be deemed to be present for the purposes of
determining whether or not a quorum is present.

81. A Director or Directors may participate in any meeting of the Board, or of any committee appointed by the Board
of which such Director or Directors are members, by means of telephone or similar communication equipment by way of which all persons participating in such meeting can hear each other and such participation shall be deemed to constitute presence in
person at the meeting.

82. When the Directors (being in number at least a quorum) sign the minutes of a meeting of the Directors the same
shall be deemed to have been duly held notwithstanding that the Directors have not actually come together or that there may have been a technical defect in the proceedings. A resolution signed by all such Directors shall be as valid and effectual as
if it had been passed at a meeting of the Board of Directors duly called and constituted. The minutes or resolution may be in one or more instruments each signed by one or more of the Directors.

83. The continuing Directors may act notwithstanding any vacancy in their body, but, if and so long as their number
is reduced below the number fixed by or pursuant to the Articles of the Company as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but
for no other purpose.

84. The Board of Directors may elect a chairman of their meeting 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.

85. A committee appointed by the Board of Directors may elect a chairman of its meetings; 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 members present may choose one of their number to be chairman of the meeting.

86. A committee appointed by the Board of Directors may meet and adjourn as it thinks proper. Questions arising at
any meeting shall be determined by a majority of votes of the members present and in case of an equality of votes the chairman shall have a second or casting vote.

87. All acts done by any meeting of the Directors or of a committee of Directors, or by any person acting as a
Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had
been duly appointed and was qualified to be a Director.

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**<u>PRESUMPTION OF ASSENT</u>**

88. A Director of the Company 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 Secretary of the
meeting before the adjournment thereof or shall forward such dissent by registered mail
to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action.

**<u>ALTERNATE DIRECTOR</u>**

89. Any Director may from time to time in writing appoint any person to be his alternate Director to act in his
place at any meeting of the Board of Directors at which he is unable to be present. The appointee, while he holds office as an alternate Director, shall be entitled to call and attend and vote at any meeting which the Director appointing him is not
personally present, and generally to perform all the functions of his appointor as a Director without limitation, but shall not be entitled to any remuneration from the Company otherwise than out of the remuneration of the Director appointing him,
as may be agreed between the said Director and the appointee. Any appointment so made may be revoked at any time by the appointor. Any appointment, or revocation by the appointor, made under this article shall be in writing,
and notice in writing shall be given to the registered office or to some other place as the Company may determine from time to time.

90. Any Director may appoint any person, whether or not a Director of the Company, to be the proxy of that Director
to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend
personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in the form set out below or any other common form and must be lodged with the chairman of the meeting of Board of Directors
at which such proxy is to be used, or first used, prior to the commencement of the meeting.

I<u> </u> , of<u> </u> being a Director of the above Company hereby appoint<u> </u> of<u> </u> as my proxy and on my behalf to attend vote at and to do all acts and things which I could personally have done at a meeting of the Board of Directors of the said Company to be held on the<u> </u> day of<u> </u><u> </u>20<u> </u> and at any adjournments thereof.

Date:<u> </u><u> </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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Signature of Director

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**<u>INDEMNITY</u>**

91. The Directors, Auditors and Officers for the time being of the Company and any trustee for the time being
acting in relation to any of the affairs of the Company and their heirs, executors, administrators and personal representatives respectively shall be indemnified out of the assets of the Company from and against all actions, proceedings, costs,
charges, losses, expenses and damages which they or any of them shall or may incur or sustain by reason of any act done or omitted in or about the execution of their duty in their respective offices or trusts, except such (if any) as they shall
incur or sustain by or through their own wilful misfeasance, bad faith, negligence or reckless disregard, or default of their duties respectively and no such Director, Auditor, Officer or trustee shall be answerable for the acts, receipts, neglects
or defaults of any other Director, Auditor, Officer or trustee or for joining in any receipt for the sake of conformity or for the solvency or honesty of any banker or other persons with whom any monies or effects belonging to the Company may be
lodged or deposited for safe custody or for any insufficiency of any security upon which any monies of the Company may be invested or for any other loss or damage due to any such cause as aforesaid or which may happen in or about the execution of
his office or trust unless the same shall happen through the wilful misfeasance, bad faith, negligence or reckless disregard or default of such Director, Auditor, Officer of trustee.

**<u>DIVIDENDS AND DISTRIBUTIONS</u>**

92. a) The Company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The Board of Directors may from time to time pay such interim dividends, or make such distributions out of the
Company's share premium account, as appear to the Board of Directors to be justified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Dividends may be paid out of profits or if the Board of Directors so determine dividends or distributions may
be made to members out of the share premium account in accordance with the provisions of the Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Subject to special rights if any, all dividends shall be declared and paid or distributions made in proportion
to the amount paid up on each share.

93. The Board of Directors, may, before recommending any dividend, set aside out of the profits of the Company such
sums as they think proper as a reserve or reserves which shall, at the discretion of the Board of Directors, be applicable for meeting contingencies, or for equalizing dividends, or for any other purpose to which the profits of the Company may be
properly applied, and pending such application may, at the like discretion, either be employed in the business of the Company or be invested in such investments as the Board of Directors may from time to time think fit.

94. If several persons are registered as joint holders of any share, any one of them may give effectual receipt for
any dividend or other moneys payable on or in respect of the share.

95. The Board of Directors may deduct from any dividend payable or distribution to be made to any member all sums
of money (if any) presently payable by him to the Company on account of calls in relation to the shares or otherwise of the Company. Any general meeting declaring a dividend may direct payment of such dividend wholly or partly
by distribution of specific assets and in particular of paid up shares, debentures or debenture stock of any other company or in any one or more of such ways, and the Board of Directors shall give effect to such resolution, and where any difficulty
arises in regard to such distribution, the Board of 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 parties, and may vest any such specific assets in trustees as may seem expedient to the Board of Directors.

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96. Any dividend or distribution may be paid by wire transfer of immediately available funds, or by cheque or
warrant sent through the post to the registered address of the member or person entitled thereto or in the case of joint holders, to any one of such joint holders at his registered address or to such person and such address as the member or person
entitled or such joint holders, as the case may be, may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to the order of such other persons as the member or such joint holders, as
the case may be, may direct.

97. The Directors when paying dividends to the members in accordance with the foregoing provisions may make such
payment either in cash or in specie.

98. a) The Company in general meeting may upon the recommendation of the Board of Directors resolve that it is desirable to capitalize any part of
the amount for the time being standing to the credit of any of the Company's share premium or reserve accounts or to the credit of the profit and loss account or otherwise available for distribution, and accordingly that such sum be set free
for distribution among the members who would have been entitled thereto if distributed by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied either in or towards paying up any amounts for the
time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of the Company to be allotted and distributed, credited as fully paid up, to and amongst such members in the proportion as
aforesaid, or partly in one way and partly in the other, and the Board of Directors shall give effect to such resolution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Whenever such a resolution as aforesaid shall have been passed the Board of Directors shall make all
appropriations and applications of the undivided profits resolved to be capitalized thereby, or the Company's share premium or reserve accounts and all allotments and issues of fully-paid shares or debentures, if any, and generally shall do all
acts and things required to give effect thereto, with full power to the Board of Directors to make such provisions by the issue of fractional shares or by payment in cash or otherwise as they think fit for the case of shares or debentures becoming
distributable in fractions, and also to authorize any person to enter on behalf of all the members entitled thereto into an agreement with the Company providing for the allotment to them respectively, credited as fully paid up, of any further shares
or debentures to which they may be entitled upon such capitalization, or (as the case may require) for the payment up by the Company on their behalf, by the application thereto of their respective proportions of the profits resolved to be
capitalized, or the Company's share premium or reserve accounts, of the amounts or any part of the amounts remaining unpaid on their existing shares, and any agreement made under such authority shall be effective and binding on all such
members.

99. No dividend shall bear interest against the Company.

**<u>ACCOUNTS</u>**

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100. The books of account relating to the Company's affairs shall be kept in such manner as may be determined
from time to time by the Board of Directors of the Company.

101. The books of account shall be kept at the registered office of the Company, or at such other place or places as
the Board of Directors think fit, and shall always be open to inspection by the Directors.

102. The Board of Directors shall from time to time determine whether and to what extent and at what time and places
and under what conditions or articles 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 inspection of any account or book
or document of the Company except as conferred by Law or authorized by the Board of Directors or by resolution of the members.

**<u>AUDIT</u>**

103. The accounts relating to the Company's affairs shall be audited in such manner as may be determined from
time to time by resolution of the members or failing any such determination, by the Board of Directors, or failing any determination as aforesaid shall not be audited. The Company's Financial Year End is 15 June.

**<u>THE SEAL</u>**

104. The seal of the Company shall not be affixed to any instrument except by the authority of a Resolution of the
Board of Directors, and in the presence of such person or persons as the Board of Directors may appoint for the purpose; and that person or persons as aforesaid shall sign every instrument to which the seal is so affixed in his or their
presence. Provided always that the said authority may be given prior to or after the affixing of the seal and if given after may be in general form confirming a number of affixings of the
seal. Notwithstanding the provisions hereof, the seal may be affixed to any returns filed under the Law without the authority of a Resolution of the Board of Directors in the presence of the Secretary or an Assistant
Secretary.

105. The Company shall maintain a facsimile of its seal in such countries or places as the Board of Directors shall
appoint and such facsimile seal shall not be affixed to any instrument except by the authority of the Board of Directors and in the presence of such person or persons as the Board of Directors shall for this purpose appoint and such person or
persons as aforesaid shall sign every instrument to which the facsimile seal is so affixed in their presence and such affixing of the facsimile seal and signing as aforesaid shall have the same meaning and effect as if the seal had been affixed in
the presence of and the instrument signed by such person or persons as the Board of Directors may appoint for the purpose.

106. Notwithstanding the foregoing, the secretary or any assistant secretary shall have the authority to affix the
seal or the facsimile seal, to any instrument for the purpose of attesting authenticity of the matter contained therein but which does not create any obligation binding the Company.

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**<u>POWER OF ATTORNEY</u>**

107. The Board of Directors may from time to time and at any time by revocable or irrevocable Power of Attorney
appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Board of Directors, to be the Attorney or Attorneys of the Company for such purposes and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Board of Directors under these articles) and for such period and subject to such conditions as they may think fit, and any such Power of Attorney may contain such provisions for the protection and
convenience of persons dealing with any such Attorney as the Board of Directors may think fit and may also authorize any such Attorney to delegate all or any of the powers, authorities and discretion vested in him.

**<u>NOTICES</u>**

108. Notices shall be in writing and may be given by the Company to any shareholder either personally or by sending
it by post, telex or telecopy to him or to his address as shown in the Register of Shareholders, such notice, if mailed, to be forwarded airmail if the address be outside the Cayman Islands.

109. a) 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 the notice, and to have been effected at the expiration of five Business Days after the letter containing the same is posted as aforesaid

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Where a notice is sent by telex or telecopy, service of the notice shall be deemed to be effected by properly
addressing and sending such notice through a transmitting organisation and to have been effected on the day the same is sent as aforesaid.

110. If a member has no registered address in the Cayman Islands and has not supplied to the Company an address for
the giving of notices to him, a notice addressed to him and advertised in a newspaper circulating in the Cayman Islands shall be deemed to be duly given to him at noon on the day following the day on which the newspaper is circulated and the
advertisement appeared therein.

111. A notice may be given by the Company to the joint holders of a share by giving the notice to the joint holder
named first in the register of members in respect of the share.

112. A notice may be given by the Company to the persons entitled to a share in consequence of the death or
bankruptcy of a member by sending it through the post in a prepaid envelope addressed to them by name, or by the title of the representative of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any, within the
Cayman Islands supplied for the purpose by the persons claiming to be so entitled, or (until such an address has been so supplied) by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not
occurred.

113. Notice of every general meeting shall be given in any manner hereinbefore authorized to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) every member entitled to receive notice of the meeting except those members who (having no registered address
in the Cayman Islands) have not supplied to the Company an address for the giving of notices to them; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) every person entitled to a share in consequence of a death or bankruptcy of a member, who, but for his death or
bankruptcy would be entitled to receive notice of the meeting;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) each Director of the Company.

No other persons shall be entitled to receive notices of general meetings.

**<u>NON RECOGNITION OF TRUST</u>**

114. No person shall be recognized by the Company as holding any share upon any trust and the Company shall not be
bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any of its shares or any other rights in respect thereof except an absolute right to the entirety thereof in
each member registered in the Company's register of members.

**<u>ALTERATION OF ARTICLES</u>**

115. The Company may from time to time alter or add to these articles by passing and registering a special
resolution in the manner prescribed by the Law.

**<u>WINDING UP</u>**

116. If the Company shall be wound up the liquidator may, with the sanction of an ordinary resolution of the
members, divide amongst the members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of the property of the same kind or not) and may, for such purpose set such value as the liquidator deems fair upon
any property to be divided as aforesaid and may determine how such 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 like sanction,
shall think fit, but so that no member shall be compelled to accept any shares or other securities whereon there is any liability.

**<u>JURISDICTION AND VENUE FOR LITIGATION</u>**

117. All rights and obligations as between the Company, its members, Directors, alternate Directors, officers,
agents, managers, employees or trustees or any of them shall be governed by and construed solely in accordance with the Laws of the Cayman Islands without giving effect to principles of choice or conflict of law and any cause of action between any
of the parties aforesaid shall be subject to the sole jurisdiction and venue of the Courts of the Cayman Islands.

**<u>REGISTRATION BY WAY OF CONTINUATION</u>**

118. The Company may by special resolution resolve to be registered by way of continuation in a jurisdiction outside
of the Cayman Islands or such jurisdiction in which it is for the time being registered; in furtherance of any such resolution the Board of Directors may cause an application to be made to such government authority as may be necessary to deregister
the Company in the jurisdiction in which it is, for the time being incorporated, registered, or existing, and may cause all such further steps as the Board of Directors consider appropriate to be taken to effect and transfer the Company by way of
continuation.

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**<u>DISCLOSURE</u>**

119. The Directors, or any authorised service providers (including the Officers, the Secretary and the registered
office agent of the Company) shall be entitled to disclose to any regulatory or judicial authority, or to any stock exchange on which the shares or any class or series may from time to time be listed, any information regarding the affairs of the
Company including, without limitation, information contained in the Register and books of the Company.

## Exhibit 4.1

**Exhibit 4.1** 

**Share Certificate** 

---

| | |
|:---|:---|
| Certificate Number | Number of Shares |

---

**Xuhang Holdings Limited** 

**Incorporated in the Cayman Islands under the Companies Act (as Revised)** 

This certifies that [Name] of [Address] is the registered holder of [Number] Ordinary Shares fully paid and non-assessable, subject to the Memorandum and Articles of Association of the Company.

[Transfer date]

Director Director/ Secretary

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## Exhibit 10.1

**Exhibit 10.1** 

**EMPLOYMENT AGREEMENT** 

This EMPLOYMENT AGREEMENT (the "<u>Agreement</u>"), is entered into as of [DATE], by and between Xuhang Holdings Limited, a company incorporated and existing under the laws of Cayman Islands (the "<u>Company</u>"), and [ ], an individual (the "<u>Executive</u>"). 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 direct or indirect parent companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent companies (collectively, the "<u>Group</u>").

**RECITALS** 

The Company desires to employ the Executive and to assure itself of the services of the Executive during the term of Employment (as defined below).

The Executive desires to be employed by the Company during the term of Employment and upon the terms and conditions of this Agreement.

**AGREEMENT** 

The parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **POSITION** 

The Executive hereby accepts a position of [ ] of the Company (the "<u>Employment</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **TERM** 

Subject to the terms and conditions of this Agreement, the initial term of the Employment shall be 3 years, commencing on [ ] (the "<u>Effective Date</u>"), unless terminated earlier pursuant to the terms of this Agreement. Upon expiration of the 3-year term, the Employment shall be automatically extended for successive 1-year terms unless either party gives the other party hereto a 1-month prior written notice to terminate the Employment prior to the expiration of the then current term or unless terminated earlier pursuant to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **PROBATION** 

There is no probationary period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **DUTIES AND RESPONSIBILITIES** 

The Executive's duties at the Company will include all jobs assigned by the Company's board of directors (the "<u>Board</u>").

The Executive shall devote all of his/her working time, attention and skills to the performance of his/her duties at the Company and shall faithfully and diligently serve the Company in accordance with this Agreement, the Memorandum and Articles of Association of the Company, as may be amended from time to time (the "<u>Articles of Association</u>"), and the guidelines, policies and procedures of the Company approved from time to time by the Board.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **NO BREACH OF CONTRACT** 

The Executive shall use his/her best efforts to perform his/her duties hereunder. The Executive shall not, without prior 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 directly or indirectly competes with the Group (any such business or entity, a "<u>Competitor</u>"), provided that nothing in this clause shall preclude the Executive from holding shares or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere, <u>provided</u> <u>however,</u> that the Executive shall notify the Company in writing prior to his/her obtaining a proposed interest in such shares or securities in a timely manner and with such details and particulars as the Company may reasonably require. The Company shall have the right to require the Executive to resign from any board or similar body which he/she may then serve if the Board reasonably determines, and notifies the Executive in writing, that the Executive's service on such board or body interferes with the effective discharge of the Executive's duties and responsibilities to the Company or that any business related to such service is then in competition with any business of the Company or any of its subsidiaries or affiliates.

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 that are required to be entered into by and between the Executive and any member of the Group pursuant to applicable law of the jurisdiction where the Executive is based, if any; (ii) 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/her duties hereunder; and (iii) 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **LOCATION** 

The Executive will be based in Hangzhou, the People's Republic of China, until both parties hereto agree to change otherwise. The Executive acknowledges that he/she may be required to travel from time to time in the course of performing his/her duties for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **COMPENSATION AND BENEFITS** 

(a) <u>Compensation</u>. The Executive's cash compensation (inclusive of any statutory social welfare
reserves that the Company may be required to set aside for the Executive under applicable law) shall be provided by the Company in a separate schedule attached hereto ("Schedule A") or as specified in a separate agreement between the
Executive and the Company's designated subsidiary or affiliated entity, subject to annual review and adjustment by the Company or the compensation committee of the Board. <u>The cash compensation</u> may be paid by the Company, a
subsidiary or affiliated entity or a combination thereof, as designated by the Company from time to time.

(b) <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.

(c) <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;**8.** **TERMINATION OF THE AGREEMENT** 

(a) <u>By the Company</u>. The Company may terminate the Employment for cause, at any time, without notice or
remuneration, if the Executive (1) commits any serious or persistent breach or non-observance of the terms and conditions of the Employment; (2) is convicted of a criminal offence other than one
which, in the opinion of the Board, does not affect the Executive's position as an employee of the Company, bearing in mind the nature of the Executive's duties and the capacity in which the Executive is employed; (3) willfully
disobeys a lawful and reasonable order; (4) misconducts himself/herself and such conduct is inconsistent with the due and faithful discharge of the Executive's material duties hereunder; (5) is guilty of fraud or dishonesty; or
(6) is habitually neglectful in his/her duties. The Company may terminate the Employment without cause at any time with a 1-month prior written notice to the Executive or by payment of 1 month's
salary in lieu of notice.

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(b) <u>By the Executive</u>. The Executive may terminate the Employment at any time with a 1-month prior written notice to the Company. In addition, the Executive may resign prior to the expiration of the Agreement if such resignation or an alternative arrangement with respect to the Employment is
approved by the Board.

(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 in accordance with the provisions of Section 20 below. The notice of termination shall indicate the specific provision(s) of this
Agreement relied upon in effecting the termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **CONFIDENTIALITY AND NONDISCLOSURE** 

(a) <u>Confidentiality and Non-disclosure.</u> The Executive hereby
agrees at all times during the term of his/her Employment and after termination of the Executive's Employment under this Agreement, to hold in the strictest confidence, and not to use, except for the benefit of the Group, or to disclose to any
person, corporation or other entity without written consent of the Company, any Confidential Information. The Executive understands that " <u>Confidential Information</u> " means any proprietary or confidential information of the Group, its
affiliates, their clients, customers or partners, and the Group's licensors, including, without limitation, technical data, trade secrets, research and development information, product plans, services, customer lists and customers (including,
but not limited to, customers of the Group on whom the Executive called or with whom the Executive became acquainted during the term of his/her Employment), supplier lists and suppliers, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information, personnel information, marketing, finances, information about the suppliers, joint ventures, licensors, licensees, distributors, and other persons with whom the Group
does business, information regarding the skills and compensation of other employees of the Group or other business information disclosed to the Executive by or obtained by the Executive from the Group, its affiliates, or their clients, customers, or
partners, either directly or indirectly, in writing, orally or by drawings or observation of parts or equipment, 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.

(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/her work or using the facilities of the Group are property of the Group and subject to inspection by the
Group, 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/her work with the Company and will provide prompt written certification of his compliance with this Agreement. Under no circumstances will the Executive have, following his/her termination, in his/her possession any property of the Group, or any
documents or materials or copies thereof containing any Confidential Information.

(c) <u>Former Employer Information</u>. The Executive agrees that he/she has not and will not, during the term
of his/her 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, or (ii) bring into
any premises of the Group 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
Group 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.

(d) <u>Third Party Information</u>. The Executive recognizes that the Group may have received, and in the
future may receive, from third parties confidential or proprietary information subject to a duty on the Group'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 Group 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 Group's agreement with such third party.

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This Section 9 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 9, the Company shall have right to seek remedies permissible under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **NOTIFICATION OF NEW EMPLOYER** 

In the event that the Executive leaves the employ of the Company, the Executive hereby grants consent to notification by the Company to his/her new employer about his/her rights and obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **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; <u>provided, however</u>, 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 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **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, other than any such agreement under any employment agreement entered into with a subsidiary of the Company at the request of the Company to the extent such agreement does not conflict with any of the provisions herein. The Executive acknowledges that he/she has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **REPRESENTATIONS** 

The Executive hereby agrees to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. The Executive hereby represents that the Executive's performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by the Executive in confidence or in trust prior to his/her Employment by the Company. The Executive has not entered into, and hereby agrees that he/she will not enter into, any oral or written agreement in conflict with this Section 15. The Executive represents that the Executive will consult his/her own consultants for tax advice and is not relying on the Company for any tax advice with respect to this Agreement or any provisions hereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **GOVERNING LAW** 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **ARBITRATION** 

Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in New York, New York, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. Each party to this agreement agrees that it will not challenge the jurisdiction or venue provisions as provided in this Section 17.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.** **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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.** **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) sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party), (ii) delivered by hand, (iii) otherwise delivered against receipt therefor, or (iv) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**21.** **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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**22.** **NO INTERPRETATION AGAINST DRAFTER** 

Each party recognizes that this Agreement is a legally binding contract and acknowledges that such party 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. The Executive agrees and acknowledges that he/she has read and understands this Agreement, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering into this Agreement and has had ample opportunity to do so.

*[Remainder of this page has been intentionally left blank.]* 

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

---

| | |
|:---|:---|
| **Xuhang Holdings Limited** | **Xuhang Holdings Limited** |
| By: |  |
| Name: | Tianhang Xiao |
| Title: | Chief Executive Officer |

---

**Executive** 

Signature: <br> Name:

*[Signature Page to Employment Agreement]* 

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**Schedule A** 

Annual compensation is RMB[ ], payable in U.S. dollars.

## Exhibit 10.2

**Exhibit 10.2** 

**INDEMNIFICATION** 

**AGREEMENT** 

This Indemnification Agreement (this "<u>Agreement</u>") is entered into as of [DATE] by and between Xuhang Holdings Limited, a Cayman Islands company (the "<u>Company</u>"), and the undersigned, a director and/or an officer of the Company ("<u>Indemnitee</u>"), as applicable.

**RECITALS** 

The Board of Directors of the Company (the "<u>Board of Directors</u>") has determined that the inability to attract and retain highly competent persons to serve the Company is detrimental to the best interests of the Company and its shareholders and that it is reasonable and necessary for the Company to provide adequate protection to such persons against risks of claims and actions against them arising out of their services to the corporation.

**AGREEMENT** 

In consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

A. DEFINITIONS

The following terms shall have the meanings defined below:

***Expenses*** shall include, without limitation, damages, judgments, fines, penalties, settlements and costs, attorneys' fees and disbursements and costs of attachment or similar bond, investigations, and any other expenses paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding.

***Indemnifiable Event*** means any event or occurrence that takes place either before or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or an officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, partnership, joint venture or other entity, or related to anything done or not done by Indemnitee in any such capacity, including, but not limited to neglect, breach of duty, error, misstatement, misleading statement or omission.

***Participant*** means a person who is a party to, or witness or participant (including on appeal) in, a Proceeding.

***Proceeding*** means any threatened, pending, or completed action, suit, arbitration or proceeding, or any inquiry, hearing or investigation, whether civil, criminal, administrative, investigative or other, including appeal, in which Indemnitee may be or may have been involved as a party or otherwise by reason of an Indemnifiable Event.

B. AGREEMENT TO INDEMNIFY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>General Agreement</u>. In the event Indemnitee was, is, or becomes a Participant in, or is threatened to be made a Participant in, a Proceeding, the Company shall indemnify the Indemnitee from and against any and all Expenses which Indemnitee incurs or becomes obligated to incur in connection with such Proceeding, to the fullest extent permitted by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Indemnification of Expenses of Successful Party</u>. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding or in defense of any claim, issue or matter in such Proceeding, the Company shall indemnify Indemnitee against all Expenses incurred in connection with such Proceeding or such claim, issue or matter, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Partial Indemnification</u>. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expenses, but not for the total amount of Expenses, the Company shall indemnify the Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>No Employment Rights</u>. Nothing in this Agreement is intended to create in Indemnitee any right to continued employment with the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Contribution</u>. If the indemnification provided in this Agreement is unavailable and may not be paid to Indemnitee for any reason other than those set forth in Section B.4, then the Company shall contribute to the amount of Expenses paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and by the Indemnitee on the other hand from the transaction or events from which such Proceeding arose, and (ii) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events which resulted in such Expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section B.5 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

C. INDEMNIFICATION PROCESS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Notice and Cooperation by Indemnitee</u>. Indemnitee shall, as a condition precedent to his/her right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement, provided that the delay of Indemnitee to give notice hereunder shall not prejudice any of Indemnitee's rights hereunder, unless such delay results in the Company's forfeiture of substantive rights or defenses. Notice to the Company shall be given in accordance with Section F.7 below. If, at the time of receipt of such notice, the Company has directors' and officers' liability insurance policies in effect, the Company shall give prompt notice to its insurers of the Proceeding relating to the notice. The Company shall thereafter take all necessary and desirable actions to cause such insurers to pay, on behalf of Indemnitee, all Expenses payable as a result of such Proceeding. In addition, Indemnitee shall give the Company such information and cooperation as the Company may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Indemnification Payment.</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;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Advancement of Expenses*. Indemnitee may submit a written request with reasonable particulars to the Company requesting that the Company advance to Indemnitee all Expenses that may be reasonably incurred in advance by Indemnitee in connection with a Proceeding. The Company shall, within 10 business days of receiving such a written request by Indemnitee, advance all requested Expenses to Indemnitee. Any excess of the advanced Expenses over the actual Expenses will be repaid to 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;(b) *Reimbursement of Expenses*. To the extent Indemnitee has not requested any advanced payment of Expenses from the Company, Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company immediately after Indemnitee makes a written request to the Company for reimbursement unless the Company refers the indemnification request to the Reviewing Party in compliance with Section C.2(c) below.

&nbsp;&nbsp;&nbsp;&nbsp;&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) *Determination by the Reviewing Party*. If the Company reasonably believes that it is not obligated under this Agreement to indemnify the Indemnitee, the Company shall, within 10 days after the Indemnitee's written request for an advancement or reimbursement of Expenses, notify the Indemnitee that the request for advancement of Expenses or reimbursement of Expenses will be submitted to the Reviewing Party (as hereinafter defined). The Reviewing Party shall make a determination on the request within 30 days after the Indemnitee's written request for an advancement or reimbursement of Expenses. Notwithstanding anything foregoing to the contrary, in the event the Reviewing Party informs the Company that Indemnitee is not entitled to indemnification in connection with a Proceeding under this Agreement or applicable law, the Company shall be entitled to be reimbursed by Indemnitee for all the Expenses previously advanced or otherwise paid to Indemnitee in connection with such Proceeding; p<u>rovided</u>, <u>however</u>, that Indemnitee may bring a suit to enforce his/her indemnification right in accordance with Section C.3 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Suit to Enforce Rights</u>. Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification within 30 days after making a written demand in accordance with Section C.2 above or 50 days if the Company submits a request for advancement or reimbursement to the Reviewing Party under Section C.2(c) above, Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing litigation in any court of competent jurisdiction seeking a determination by the court or challenging any determination by the Reviewing Party or any aspect of this Agreement. Any determination by the Reviewing Party not challenged by Indemnitee and any judgment entered by the court shall be binding on the Company and Indemnitee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Assumption of Defense</u>. In the event the Company is obligated under this Agreement to advance or bear any Expenses for any Proceeding against Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, upon delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, unless (i) the employment of counsel by Indemnitee has been previously authorized by the Company, (ii) Indemnitee shall have reasonably concluded, based on written advice of counsel, that there may be a conflict of interest of such counsel retained by the Company between the Company and Indemnitee in the conduct of any such defense, or (iii) the Company ceases or terminates the employment of such counsel with respect to the defense of such Proceeding, in any of which events the fees and expenses of Indemnitee's counsel shall be at the expense of the Company. At all times, Indemnitee shall have the right to employ counsel in any Proceeding at Indemnitee's expense.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Defense to Indemnification, Burden of Proof and Presumptions</u>. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement that it is not permissible under this Agreement or applicable law for the Company to indemnify the Indemnitee for the amount claimed. In connection with any such action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified under this Agreement, the burden of proving such a defense or determination shall be on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>No Settlement without Consent</u>. Neither party to this Agreement shall settle any Proceeding in any manner that would impose any damage, loss, penalty or limitation on Indemnitee without the other party's written consent. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Company Participation</u>. Subject to Section B.5, the Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial action if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense, conduct and/or settlement of such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Reviewing Party.</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;&nbsp;&nbsp;&nbsp;&nbsp;(a) For purposes of this Agreement, the Reviewing Party with respect to each indemnification request of Indemnitee that is referred by the Company pursuant to Section C.2(c) above shall be (A) the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee. If the Reviewing Party determines that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within 10 days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel or member of the Board of Directors shall act reasonably and in good faith in making a determination under this Agreement of the Indemnitee's entitlement to indemnification. Any reasonable costs or expenses (including reasonable attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. "<u>Disinterested</u> Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

&nbsp;&nbsp;&nbsp;&nbsp;&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 the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section C.8(b). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the proceeding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; *provided*, *however*, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of "<u>Independent Counsel</u>" as defined in Section C.8(d) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting under this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section C.8(b), regardless of the manner in which such Independent Counsel was selected or appointed.

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&nbsp;&nbsp;&nbsp;&nbsp;&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) In making a determination with respect to entitlement to indemnification hereunder, the Reviewing Party shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or without court approval), conviction, or upon a plea of *nolocontendere* or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he/she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his/her conduct was unlawful. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Company and any other corporation, partnership, joint venture or other entity of which Indemnitee is or was serving at the written request of the Company as a director, officer, employee, agent or fiduciary, including financial statements, or on information supplied to Indemnitee by the officers and directors of the Company or such other corporation, partnership, joint venture or other entity in the course of their duties, or on the advice of legal counsel for the Company or such other corporation, partnership, joint venture or other entity or on information or records given or reports made to the Company or such other corporation, partnership, joint venture or other entity by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or such other corporation, partnership, joint venture or other entity. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or such other corporation, partnership, joint venture or other entity shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. The provisions of this Section C.8(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&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>Independent Counsel</u>" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

D. DIRECTOR AND OFFICER LIABILITY INSURANCE

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Good Faith Determination</u>. The Company shall from time to time make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses incurred in connection with their services to the Company or to ensure the Company's performance of its indemnification obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Coverage of Indemnitee</u>. To the extent the Company maintains an insurance policy or policies providing directors' and officers' liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any of the Company's directors or officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>No Obligation</u>. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain any director and officer insurance policy if the Company determines in good faith that such insurance is not reasonably available in the case that (i) premium costs for such insurance are disproportionate to the amount of coverage provided, or (ii) the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit.

E. NON-EXCLUSIVITY; U.S. FEDERAL PREEMPTION; TERM

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Non-Exclusivity</u>. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company's current memorandum and articles of association, as may be amended from time to time, applicable law or any written agreement between Indemnitee and the Company (including its subsidiaries and affiliates). The indemnification provided under this Agreement shall continue to be available to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he/she may have ceased to serve in any such capacity at the time of any Proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>U.S. Federal Preemption</u>. Notwithstanding the foregoing, both the Company and Indemnitee acknowledge that in certain instances, U.S. federal law or public policy may override applicable law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Such instances include, but are not limited to, the prohibition by the U.S. Securities and Exchange Commission (the "<u>SEC</u>") on indemnification for liabilities arising under certain U.S. federal securities laws. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC an obligation to submit the question of indemnification to a court in certain circumstances for a determination of the Company's right under public policy to indemnify Indemnitee.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Duration of Agreement</u>. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer and/or a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his/her former or current capacity at the Company, whether or not he/she is acting or serving in any such capacity at the time any Expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer and/or a director of the Company or any other enterprise at the Company's request.

F. MISCELLANEOUS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Amendment of this Agreement</u>. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided in this Agreement, no failure to exercise or any delay in exercising any right or remedy shall constitute a waiver.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Subrogation</u>. In the event of payment to Indemnitee by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company to bring suit to enforce such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Assignment; Binding Effect</u>. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either party hereto without the prior written consent of the other party; except that the Company may, without such consent, assign all such rights and obligations to a successor in interest to the Company which assumes all obligations of the Company under this Agreement. Notwithstanding the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and the Company's successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, as well as Indemnitee's spouses, heirs, and personal and legal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Severability and Construction</u>. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company's inability, pursuant to a court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. In addition, if any portion of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by applicable law. The parties hereto acknowledge that they each have opportunities to have their respective counsels review this Agreement. Accordingly, this Agreement shall be deemed to be the product of both of the parties hereto, and no ambiguity shall be construed in favor of or against either of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Counterparts</u>. This Agreement may be executed in two counterparts, both of which taken together shall constitute one instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Governing Law</u>. This agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to conflicts of law provisions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Notices</u>. All notices, demands, and other communications required or permitted under this Agreement shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed via postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at:

Xuhang Holdings Limited

Attention: Chief Executive Officer

and to Indemnitee at his/her address last known to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Entire Agreement</u>. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

------

(Signature page follows)

IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first written above.

**Xuhang Holdings Limited** 

By:

Name:

Title:

**Indemnitee** 

Signature:

Name:

[Signature Page to Indemnification Agreement]

## Exhibit 10.3

**Exhibit 10.3** 

**Xuhang Holdings Limited** 

Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road

Gongshu District, Hangzhou City, Zhejiang Province

The People's Republic of China, 310000

+86-0571-88583100

[DATE]

Mr./Ms. [NAME]

[ADDRESS OF DIRECTOR]

Re: <u>Director Offer Letter</u>

Dear Mr./Ms. [NAME],

Xuhang Holdings Limited, a Cayman Islands exempted company with limited liability (the "**Company**"), is pleased to offer you a position as a member of its board of directors (the "**Board**"). We believe your background and experience will be a significant asset to the Company and we look forward to your participation on the Board. Should you choose to accept this position as a member of the Board, this letter agreement (this "**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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Term</u>**. This Agreement is effective upon your acceptance and signature below. Your term as a director shall commence upon you being elected to the Board. Subject to the Company's memorandum and articles of association, as amended, and the provisions in Section 8 below, your term shall continue until your successor is duly elected and qualified. The position shall be up for re-election each year at the annual shareholder's meeting, and upon re-election, the terms and provisions of this Agreement shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>Services</u>**. You shall render services as a member of the Board and the Board committees set forth on ***<u>Schedule A</u>*** attached hereto (hereinafter your "**Duties**"). During the term of this Agreement, you shall attend and participate in such number of meetings of the Board and of the Board committee(s) of which you are a member as regularly or specially called. You may attend and participate at each such meeting via teleconference, video conference, or in person. You shall consult with the other members of the Board and Board committee(s) as necessary via telephone, electronic mail, or other forms of correspondence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Compensation</u>**. As compensation for serving on the Board, you will receive the compensation set forth on ***<u>Schedule B</u>*** attached hereto (hereinafter, the "**Compensation**") during your term as a director. You shall be reimbursed for reasonable and approved expenses incurred by you in connection with the performance of your Duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>D&O Insurance</u>.** During the term of this Agreement, the Company shall include you as an insured under its directors' and officers' liability insurance policy ("**D&O insurance**") with coverage determined annually by the Company and the Board. The Company shall pay the premiums for the D&O insurance policy and provide you with copies of the policy and any subsequent updates or changes thereto. The Company agrees to maintain such insurance during the term that you serve as a director and for two years after you cease to be a director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<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;6. **<u>Confidential Information; Non-Disclosure</u>**. In consideration of your access to certain Confidential Information (as defined below) of the Company, and in connection with your business relationship with the Company, you hereby represent and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **<u>Definition</u>**. For purposes of this Agreement the term "Confidential Information" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Any information which is related to the business of the Company and is generally not known by non-Company personnel.

------

**Xuhang Holdings Limited**

Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road

Gongshu District, Hangzhou City, Zhejiang Province

The People's Republic of China, 310000

+86-0571-88583100

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Confidential Information includes, without limitation, trade secrets and any information concerning services provided by the Company, concepts, ideas, improvements, techniques, methods, research, data, know-how, software, formats, marketing plans, general analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Exclusions</u>**. Notwithstanding the foregoing, the term "Confidential Information" shall not include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Any information which becomes generally 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Information received from a third party in rightful possession of such information who is not restricted from disclosing such information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Information known by you prior to receipt of such information from the Company, which prior knowledge can be documented.

&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 earliest of Company's demand, termination of this Agreement, or your termination or Resignation, as defined in Section 8 herein.

&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 maybe 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Ownership</u>**. You agree that 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 or conveyances as may be necessary in respect hereof, and to perfect, obtain, maintain, enforce, and defend any rights assigned or otherwise conveyed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **<u>Non-Competition</u>**. You agree and undertake that you will not, so long as you are a member of the Board and for a period of 12 months following termination of this Agreement for whatever reason, directly or indirectly as owner, partner, joint venture, shareholder, employee, broker, agent principal, corporate officer, director, licensor, or in any other capacity whatsoever, engage in, become financially interested in, be employed by, or have any connection with any business or venture that is engaged in any activities involving services or products which compete, directly or indirectly, with the services or products provided or proposed to be provided by the Company or its subsidiaries or affiliates in the People's Republic of China; *<u>provided</u>*, *<u>however</u>*, that you may own securities of any public corporation which is engaged in such business but in an amount not to exceed at any one time, one percent of any class of stock or securities of such company, so long as you has no active role in the publicly owned company as director, employee, consultant, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **<u>Non-Solicitation</u>**. So long as you are a member of the Board and for a period of 12 months thereafter, you shall not directly or indirectly solicit for employment any individual who was an employee of the Company during your tenure.

------

**Xuhang Holdings Limited**

Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road

Gongshu District, Hangzhou City, Zhejiang Province

The People's Republic of China, 310000

+86-0571-88583100

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **<u>Termination and Resignation</u>**. Your membership on the Board may be terminated for any or no reason by an Ordinary Resolution, as defined in the Company's memorandum and articles of association, as amended. Your membership on the Board or on any Board committee shall be terminated if you become of unsound mind, are prohibited by law from acting as a director, or are subject to any other conditions as specified in the Company's memorandum and articles of association, as amended. Your membership on any Board committee will be terminated on the same effective date when your membership on the Board is terminated. You may also terminate your membership on the Board or on any Board committee 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 be subject to the Company's obligations to pay you any compensation (including the vested portion of the securities of the Company) 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. Any securities of the Company that have not vested as of the effective date of such termination or Resignation shall be forfeited and cancelled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **<u>Governing Law</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 internal laws of the State of New York without regard to conflict of laws provisions therein.

&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;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 negligence, fraud, bad faith, 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;13. **<u>Not an Employment Agreement</u>**. This Agreement is not an employment agreement, and shall not be construed or interpreted to create any right for you as an employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **<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 the Company of any questions arising under this Agreement.

[*Signature Page Follows*]

------

**Xuhang Holdings Limited**

Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road

Gongshu District, Hangzhou City, Zhejiang Province

The People's Republic of China, 310000

+86-0571-88583100

This Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.

---

| |
|:---|
| Sincerely, |
| Xuhang Holdings Limited |
| By: Tianhang Xiao |
| Title: Chief Executive Officer |

---

AGREED AND ACCEPTED:

<br> By: [NAME]

------

**Xuhang Holdings Limited**

Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road

Gongshu District, Hangzhou City, Zhejiang Province

The People's Republic of China, 310000

+86-0571-88583100

**Schedule A** 

The Director is offered to serve on the following Board committee(s):

---

| | |
|:---|:---|
| **Committee** | **Title** |
| Audit Committee |  |
| Nominating and Corporate Governance Committee |  |
| Compensation Committee |  |

---

------

**Xuhang Holdings Limited**

Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road

Gongshu District, Hangzhou City, Zhejiang Province

The People's Republic of China, 310000

+86-0571-88583100

**Schedule B** 

Compensation

During your term as a member of the Board, you will receive cash compensation in the amount of RMB[•] per year, which shall be paid evenly to you at the end of each month in U.S. dollars.

## Exhibit 10.4

**Exhibit 10.4** 

**COOPERATION AGREEMENT** 

**Party A**: ______________________________________

Person in Charge: _______________________________

Address: ______________________________________

**Party B**: Hangzhou Xuhang Network Technology Co., Ltd

Legal representative: Xiao Tianhang

Address: [\*]

Hangzhou Xuhang Network Technology Co., Ltd. (hereinafter referred to as "**Xuhang**" or the "**Company**"), a company incorporated in September 2014, is a new media integrated service provider. Combining the digital new economy and big data operation, the Company uses the new media platform to help local governments create and promote city identities and drive consumption upgrading. In the meanwhile, the Company helps local industries expand market share and improve industry competitiveness through precision marketing and brand promotion. In 2019, the Company was rated as Zhejiang Pre Unicorn Enterprise. Xuhang has served 35 of the world's top 500 enterprises and more than 1500 service brands; has operated new media accounts with more than 300 million followers; and has contracted with over 1000 Internet celebrities. The Company has an operating income of approximately RMB600 million since 2019.

In order to leverage Party A's advantages in terms of location and system and mechanism innovation, as well as Party B's scale and expertise in content production, new media operation, big data support, and monetization of the Internet traffic, to promote the rapid development of regional digital new economy industry, Party A and Party B (collectively, the "**Parties**") sign this cooperation agreement through friendly negotiation in accordance with the strategic development needs of both Parties, aiming to achieve win-win cooperation.

**Chapter I Project Overview** 

**Article 1.** Development Objectives

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. A joint venture companies shall be established by Xuhang and the government funded platform, which is committed to developing into a local digital economy integrated service platform and a unicorn enterprise by utilizing the strong resource integration and business service capabilities of both Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The joint venture company will be committed to empowering the [Name of Government] in various aspects including event planning, content creation, new media operation, data support, and targeted poverty alleviation, to develop the "attention" economy, create a city identify, revitalize local brands, stimulate local consumption, and drive social and economic benefits.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The joint venture shall make every effort to enable the industrial development of [District of Government], improve its industrial Internet brand marketing capabilities, and realize the digital marketing upgrade of "quality efficiency integration" for the enterprise through the agency operation of new media serving the local industry.

Key areas of cooperation between the two Parties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party B shall establish the joint venture company in [District of Government], and work hard to develop it into a digital new economy "infrastructure" service provider in [District of Government]. Together with local new media platform companies and service agencies, Party B shall carry out integrated services and industrial upgrading of new media brand marketing for local enterprises, institutions and industries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party B is committed to helping Party A create its city identify and stimulate local consumption by undertaking and serving the publicity and implementation of cultural, tourism, sports, and other activities in Party A's region.

**Article 2.** Project Cooperation Mode

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A and Party B shall jointly invest to establish a limited liability company operating in the digital economy industry in the place where Party A is located, with a registered capital of RMB____________ million. Party A shall contributes RMB____________ million, accounting for ____________% of the shares, and Party B shall contribute RMB____________ million, accounting for ____________% of the shares. Party B shall be responsible for the daily operation of the joint venture company and for developing the local market. The registered capital of the newly established company will be received from the Parties in the same proportion in two phases. ____________% of the registered capital will be received within one month of the company's establishment; When the accumulated revenue of the joint venture company reaches RMB____________ million yuan, the remaining ____________% of the capital contribution will be paid in by both Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A shall appoint one person as the supervisor of the joint venture company, who does not directly participate in the daily operation of the company but exercises all the rights of Party A as a shareholder, has the right to access all the information related to the operation of the company, and has the right to view the annual business financial statements of the company.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party A and Party B are entitled to the distribution of profits of the joint venture company base on their respective equity interests. Three years after the establishment of the joint venture company, Party A shall have the right to sell its shares at any time in one of the following two ways, whichever has a higher selling price. One is to sell the company's shares held by Party A through public market listing, and Party B has the right of first refusal for the purchase of such shares at the same price. Alternatively, Upon a written notice. Party A may require Party B to repurchase all the equity interests in the company held by Party A. The transfer price shall constitute the principal plus the interest, calculated based on the loan interest rate of one-year loan prime rate (LPR) published by the National Interbank Funding Center in the month of written notification. If Party A's income from the joint venture company three years after its establishment can cover its rent, Party A shall withdraw from the company five years after its establishment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The joint venture company shall actively cooperate with Party A and other departments to carry out audit in accordance with laws and regulations. If any violation is found in the audit, Party A has the right to require Party B to repurchase all the equity interests Party A holds in the company with Party A's initial capital contribution plus interest calculated based on the loan interest rate of one-year LPR published by the National Interbank Funding Center in the month of a written notification

**Chapter II Rights and Obligations** 

**Article 3.** Rights and Obligations of Party A

Party A shall support the Joint venture in the following aspects:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Investment support from state-owned platform companies: [Name of the State-owned Company Designated by Party A] is designated to participate in the establishment of joint ventures, with the amount of investment no more than RMB____________ million and the equity ratio no more than ____________%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Business support: Party A agrees to coordinate with its related publicity department, the bureau of commerce, the bureau of culture and tourism, the sports bureau, and other relevant departments in the region, to provide order support to Party B in creating city IPs and promoting a city's identity, new media advertising and operation, activity planning and implementation, and digital marketing and other related businesses. Specifically, Party A shall prioritize the procurement of the joint venture company's services when comparable services are available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Rental subsidy for business premises: Party A shall provide, in the first phase, no less than 1000 square meters of office space to meet the needs of 100-150 employers, which could be subsequently expanded to 2000 square meters based on actual business needs. Party A shall provide 100% rent subsidies for the first three years and 50% rent subsidies for the following two years. When Party A withdraws from the joint venture company and receives less principal and income than the repurchase price agreed upon in Article 2(3) of this agreement or the total rent of the business premises calculated at the market value, Party B is required to compensate for the shortfall.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Construction of live broadcast e-commerce industry base: Party A shall discuss with Party B in connection with the construction of Internet celebrity live broadcast e-commerce bases, the operation of the digital new media business, the recruitment and cultivation of Internet celebrity talents, and other aspects of in-depth cooperation based on the joint venture company's actual business scope; and provide additional subsidies for sites and operations as needed.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Tax exemptions: Party B is entitled to a 100% tax exemption (for its VAT and corporate income tax) in the first three years beginning from the first full year of operation of the joint venture company, followed by a 50% tax exemption for fourth and fifth; A reward of 100% tax exemption (for personal income tax) for the first three years and 50% tax exemption for the second two years shall be granted to up to five senior executive officers and/or core members of the joint venture company who have an annual taxable income exceeding RMB500,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Talent policy support: Party A shall coordinate with relevant governmental departments to actively introduce talent rating and compensation subsidy policies for Internet celebrity economic industry, and to evaluate and subsidize the talents introduced by the joint venture company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Others: Party A shall set up a special working group to mobilize the publicity department, the bureau of culture and tourism, the bureau of commerce, the investment promotion bureau and other relevant governmental departments to jointly provide support for upgrading local new medial digital economy industry and to jointly promote the development of the digital new economy industry of [Name of City].

**Article 4** Rights and Obligations of Party B

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party B shall contribute to the registered capital of the joint venture company as required and cooperate in the registration and implementation of the joint venture company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party B is entitled to the distribution of profits and income of the joint venture company according to the proportion of capital contribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party B shall leverage the advantages of its new media operations and its media resources with approximately 300 million followers to provide comprehensive urban consumption upgrading, industrial digital upgrading, talent skills upgrading, and poverty alleviation services in [Name of City].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Party B shall lead the day-to-day operations of the joint venture company. The joint venture company shall generate, in three years, a total revenue of no less than RMB200 million and a profit of no less than RMB60 million; In three years, the joint venture company shall create about 500 indirect jobs, train about 200 regional industrial talents, contract with about 1000 Internet celebrities, create about 500 digital new media professionals, and increase the value of upstream and downstream industries by about RMB5-10 billion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The aggregate tax contribution (excluding tax benefits/emptions) made by the joint venture shall not be less than RMB25 million within 5 years and shall be subject to Party's annual assessment of tax revenue. Specifically, the tax contribution shall not be less than RMB3 million in the first year, not less than RMB4 million in the second year, not less than RMB5 million in the third year, not be less than RMB6 million in the fourth year, not be less than RMB7 million in the fifth year.

------

**Chapter III Liabilities for Breach of Contract** 

**Article 5.** The commitment of Party A and Party B in this agreement is predicated upon the successful registration and operation of a joint venture company in [District of Government].

**Article 6.** If Party B violates any terms of this agreement, Party B and the joint venture company shall bear joint and several liabilities. If this agreement cannot be performed in part or in whole due to force majeure, neither Party shall bear legal liability, provided that both Parties shall take all necessary remedial measures to reduce the losses caused by force majeure if conditions permit. In case of force majeure due to one Party's delay in performing this agreement, such Party shall not be exempted from liability; during the term of this agreement, in case of major adjustment of national, provincial, and municipal land, fiscal, and tax policies (subject to the official documents officially issued), which affects the implementation of relevant provisions of this agreement, the latest national, provincial, and municipal adjustment policies shall prevail and the time specified in the above adjustment policies shall be followed.

**Article 7.** If the tax paid by Party B in the current year fails to meet the requirements specified in Article 4 of Chapter II during the assessment period, Party B shall not be entitled to the local tax benefits or exemption during the assessment period.

**Chapter IV Others** 

**Article 8.** After the agreement comes into force, no party shall fail to perform its obligations under this agreement due to the change of its name or of the project leader or the undertaker. In case of the above changes or changes in contact information or contact person, the other party shall be notified in writing in a timely manner.

**Article 9.** The rights and obligations of Party A's investment agreed upon in this agreement shall be implemented by the state-owned platform company designated by Party A.

**Article 10.** Both Party A and Party B shall have strict confidentiality obligations for the content of this agreement and the other party's data, trade secrets, and other information that they know or obtain from each other in the course of cooperation. Without the written permission of the other party, neither party shall disclose such confidential information to any third party (except the joint venture company and its shareholders and relevant personnel).

**Article 11.** In case of any dispute arising from the execution of this agreement, Party A and Party B shall settle it through active negotiation. If the negotiation fails, both Parties agree to submit the case for litigation to the people's court with jurisdiction where Party A is located.

------

**Article 12.** For matters not covered in this agreement or special matters in the performance of this agreement, both Parties can sign a supplementary agreement after further negotiation. The supplementary agreement is an integral part of this agreement and has the same legal effect as this agreement.

**Article 13.** The conclusion, validity, interpretation, performance, and dispute settlement of this agreement shall be governed by the laws of the People's Republic of China. At the time of signing this agreement, if both Parties agree that this agreement is inconsistent with the prohibitive or mandatory provisions of the state or the superior people's government, the provisions of the state or the superior people's government shall prevail.

**Article 14.** This cooperation agreement shall come into force after being signed and sealed by the representatives of Party A and Party B, and shall be valid for 5 years. This agreement is made in quadruplicate, with each party holding two copies.

------

(This is the signature page of this cooperation agreement)

---

| |
|:---|
| **Party A:**<u> </u> |
| Legal representative or authorized representative (signature) |
| Date: |
| **Party B:** Hangzhou Xuhang Network Technology Co., Ltd |
| Legal representative or authorized representative (signature): |
| Date: |

---

## Exhibit 10.5

**Exhibit 10.5** 

**WECHAT OFFICIAL ACCOUNT COOPERATION AGREEMENT** 

**Party A: ___________________________** 

Legal representative: ___________________________

Address: ___________________________

**Party B: [Name of Operating Entities of Xuhang Holdings Limited]** 

Legal representative: Xiao Tianhang

Address: ___________________________

Following a full and friendly negotiation, in accordance with the laws, regulations, and rules of the People's Republic of China, Party A and Party B (collectively, the "**Parties**"), on the principle of equality and mutual benefit, have reached the following terms on the cooperation with respect to Party A's WeChat official account identified hereinafter.

**Article 1.** Party A is responsible for providing its legally owned WeChat official account: _________ (ID: __________) Number of followers: ____________

(hereinafter referred to as the "**WeChat Official Account**"), Party B shall be entitled to Party A's right of use, right of operation, right of income, and other related rights and interests of the WeChat Official Account for a term of ____________ years, with a total contract price of RMB____________.

**Article 2.** Party A guarantees that it has the legal and complete ownership, use right, operation right, and income right of the above-mentioned WeChat Official Account, which does not infringe the rights of any third party, or is involved in any ownership disputes or other legal disputes.

**Article 3.** Party A guarantees that the ownership of the WeChat Public Account and all relevant intellectual property rights, before the execution of this cooperation agreement, belong to Party A, and that the income right, operation right, use right, and all relevant intellectual property rights of the WeChat Public Account belong to Party B upon the effective date of this cooperation agreement. Party A shall bear all liabilities and responsibilities for any disputes arising from the intellectual property related to the WeChat Public Account.

**Article 4.** Party B shall pay Party A an annual fee of RMB____________ from the effective date of this Agreement. Such annual traffic fee shall be paid at the end of the first quarter of each year.

------

**Article 5.** Party A is obliged to help Party B deal with relevant problems encountered in the operation of the WeChat Official Account. All the income of the WeChat Official Account shall be owned by Party B from the effective date of this agreement, and Party A shall not utilize or occupy the WeChat Official Account in any form without Party B's consent.

**Article 6.** Party A guarantees that it shall not take any means (including legal proceedings) to retrieve the WeChat Official Account upon the execution of this agreement. If Party B is unable to operate the WeChat Official Acount due to any means of Party A, Party A shall bear all economic losses of Party B and pay Party B a liquidated damage of RMB10 million.

**Article 7.** If either Party A or Party B violates the agreement under this agreement, the breaching party shall bear 30% of the total amount of the liquidated damages under this agreement to the non-breaching party. The breaching party shall continue to perform other obligations stipulated in this agreement.

**Article 8.** Upon expiration of the agreement term agreed herein, Party B shall have the priority right to renew the agreement. If Party B decides not to renew the contract, the income derived from the followers of the WeChat Official Account, upon the termination of this agreement, shall be divided as follows: any income derived from the original followers belong to Party A, and the income derived from the followers acquired during the term of this cooperation agreement belong to Party B.

**Article 9.** Any dispute arising from or in connection with this agreement shall be settled by both Parties through friendly negotiation; If the negotiation fails, both Parties agree to file a lawsuit to the people's court with jurisdiction in the place where the agreement is signed, and the litigation costs shall be borne by the losing party.

**Article 10.** For matters not covered in this agreement, both Parties shall sign a written supplementary agreement after reaching consensus. The supplementary agreement is an important part of this contract. If the supplementary agreement is inconsistent with this agreement, the supplementary agreement shall prevail.

**Article 11.** This agreement shall come into force after being signed by both Parties. This contract is made in duplicate, with each party holding one copy, and each copy has the same legal effect.

---

| | |
|:---|:---|
| Party A<u> </u> (Seal): | Party B:<u> </u> (Seal) |
| Legal representative (signature): | Legal representative (signature): |

---

------

---

| | |
|:---|:---|
| Signing date: | Signing date: |
| Place of signature: [Name of City] |  |

---

## Exhibit 15.1

**EXHIBIT 15.1**![LOGO](g402781g0331185233572.jpg)

To the Board of Directors and Shareholders of

Xuhang Holdings Limited

**LETTER IN LIEU OF CONSENT FOR REVIEW REPORT** 

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of Xuhang Holdings Limited and its subsidiaries for the periods ended September 30, 2021 and 2020, as indicated in our report dated December 23, 2022, except for Note 2 for which the date is March 31, 2023; because we did not perform an audit, we expressed no opinion on that information.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

---

| | |
|:---|:---|
|  | ![LOGO](g402781g0331185233760.jpg) |
| San Mateo, California<br> March 31, 2023 | WWC, P.C.<br> Certified Public Accountants<br> PCAOB ID: 1171 |

---

## Exhibit 21.1

**Exhibit 21.1** 

**XUHANG HOLDINGS LIMITED** 

**Subsidiaries of the Registrant** 

---

| | |
|:---|:---|
| **Subsidiaries** | **Place of Incorporation** |
| XUHANG LTD | British Virgin Islands |
| XUHANG (HK) LIMITED | Hong Kong |
| Huzhou Yinzhiya Network Technology Co., Ltd. | PRC |
| Wuhan Yinzhiya Network Technology Co., Ltd. | PRC |
| Hangzhou Xuhang Network Technology Co., Ltd. | PRC |
| Horgos Xumi Network Technology Co., Ltd. | PRC |
| Horgos Pinyue Network Technology Co., Ltd. | PRC |
| Hong Kong Lehui Network Technology Co., Ltd. | Hong Kong |
| Horgos Weizan Network Technology Co., Ltd. | PRC |
| Hangzhou Xingkong Internet Culture Communication Co., Ltd. | PRC |
| Hangzhou Jinting Conference Co., Ltd. | PRC |
| Jiangxi Ku'o Technology Co., Ltd. | PRC |
| Hangzhou Xingxiu Network Technology Co., Ltd. | PRC |
| Jiangsu Xuhang New Economy Technology Co., Ltd. | PRC |
| Qingdao Xuhang Digital New Economy Technology Co., Ltd. | PRC |
| Shanghai Xumi Digital Technology Co., Ltd. | PRC |
| Xiamen Xuhang Digital Technology Co., Ltd. | PRC |
| Shanghai Pinzhang Network Technology Co., Ltd. | PRC |
| Qingdao Pinzhang Network Technology Co., Ltd. | PRC |
| Hangzhou Pusheng Network Technology Co., Ltd. | PRC |
| Hangzhou Ruirong Network Technology Co., Ltd. | PRC |
| Henan New Circle Network Technology Co., Ltd. | PRC |
| Xuhang Shuzhiyun Technology (Hangzhou) Co., Ltd. | PRC |
| Xuhang Digital (Henan) Technology Co., Ltd. | PRC |

---

------

---

| | |
|:---|:---|
| Hangzhou Xiqi Cultural Tourism Technology Co., Ltd. | PRC |
| Yunnan Xumi Digital Technology Co., Ltd. | PRC |
| Jiangxi Xuzhixing Technology Co., Ltd. | PRC |
| Shanghai Huihang Network Technology Co., Ltd. | PRC |
| Hangzhou Youyou Culture and Tourism Technology Co., Ltd | PRC |
| Anhui Jiayuan Information Technology Co., Ltd. | PRC |
| Henan Xuhang Network Technology Co., Ltd. | PRC |
| Wenzhou Xumi Network Technology Co., Ltd. | PRC |
| Xumi (Fujian) Digital Technology Co., Ltd. | PRC |
| Wuhan Xuhang Digital Technology Co., Ltd. | PRC |
| Huangshan Xumi Digital Technology Co., Ltd. | PRC |
| Wuxi Xumi Creative Technology Co., Ltd. | PRC |
| Yangzhou Xumi Digital Technology Co., Ltd. | PRC |
| Linyi Xumi Network Technology Co., Ltd. | PRC |
| Suzhou New Circle Network Technology Co., Ltd. | PRC |
| Shanghai Xumi Digital Advertising Co., Ltd. | PRC |
| Shanghai Suhang Digital Technology Co., Ltd. | PRC |
| Hangzhou Xupai Technology Co., Ltd. | PRC |
| Shanghai Hexian Lianhai Technology Group Co., Ltd. | PRC |
| Chengdu Xumi Digital Technology Co., Ltd. | PRC |
| Hubei Xuhang Shuzhi Culture Co., Ltd. | PRC |
| Beijing Hexian Lianjing Technology Co., Ltd. | PRC |
| Beijing Xuhangyi Visual Technology Co., Ltd. | PRC |
| Beijing Yunjia Lianjing Network Technology Co., Ltd. | PRC |

---

## Exhibit 23.1

**Exhibit 23.1**![LOGO](g402781g0331185402981.jpg)

<u>Consent of Independent Registered Public Accounting Firm</u> 

We hereby consent to the incorporation of our report dated September 27, 2022 except for Note 2 for which the date is March 31, 2023 in the Registration Statement on Form F-1, under the Securities Act of 1933 (File No. 333-) with respect to the consolidated balance sheets of Xuhang Holdings Limited and its subsidiaries (collectively the "Company") as of December 31, 2020 and 2021, and the related consolidated statements of income and comprehensive income, changes in shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes included herein.

We also consent to the reference of WWC, P.C., as an independent registered public accounting firm, as experts in matters of accounting and auditing.

---

| | |
|:---|:---|
|  | ![LOGO](g402781g0331185403153.jpg) |
| San Mateo, California<br> March 31, 2023 | WWC, P.C.<br> Certified Public Accountants<br> PCAOB ID: 1171 |

---

![LOGO](g402781g0331185403340.jpg)

## Exhibit 99.1

**Exhibit 99.1** 

**CODE OF BUSINESS CONDUCT AND ETHICS OF** 

**XUHANG HOLDINGS LIMITED** 

**INTRODUCTION** 

**Purpose** 

This Code of Business Conduct and Ethics (this "Code") contains general guidelines for the conduct of business of Xuhang Holdings Limited, a Cayman Islands company (the "<u>Company</u>"), consistent with the highest standards of business ethics. To the extent where this Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, we shall adhere to these higher standards.

This Code applies to all the directors, officers, and employees of the Company and its subsidiaries (which, unless the context otherwise requires, are collectively referred to as the "Company" in this Code). We refer to all persons covered by this Code as "<u>Company employees</u>" or simply "<u>employees</u>." We also refer our chief executive officer and our chief financial officer as our "<u>principal financial officers</u>."

**Seeking Help and Information** 

This Code is not intended to be a comprehensive rulebook and cannot address every situation that you may face. If you feel uncomfortable about a situation or if you have any doubts whether it is consistent with the Company's ethical standards, do seek help. We encourage you to first contact your supervisor for help. If your supervisor cannot answer your question or resolve your problem, or if you do not feel comfortable contacting your supervisor, you may contact the Compliance Officer of the Company, who shall be a person appointed by the Board of Directors of the Company. Tianhang Xiao has been appointed by the Board of Directors of the Company as the Compliance Officer of the Company. The Company will notify you if there is a change in the appointment of the Compliance Officer. You may remain anonymous and will not be required to reveal your identity in your communication to the Company.

**Reporting Violations of the Code** 

All employees have a duty to report any known or suspected violation of this Code, including any violation of the laws, rules, regulations or policies that apply to the Company. If you know of or suspect a violation of this Code, immediately report the conduct to your supervisor. Your supervisor will contact the Compliance Officer, who will work with you and your supervisor to investigate the matter. If you do not feel comfortable reporting the matter to your supervisor or you do not get a satisfactory response, you may contact the Compliance Officer directly. Employees making a report need not leave their name or other personal information and reasonable efforts will be used to conduct the investigation that follows from the report in a manner that protects the confidentiality and anonymity of the employee submitting the report. All reports of known or suspected violations of the law or this Code will be handled sensitively and with discretion. Your supervisor, the Compliance Officer and the Company will protect your confidentiality to the extent possible, consistent with law and the Company's need to investigate your report.

It is the Company's policy that any employee who violates this Code will be subject to appropriate discipline, which may include termination of employment. This determination will be based upon the facts and circumstances of each situation. An employee accused of violating this Code will be given an opportunity to present his or her version of the events at issue prior to any determination of appropriate discipline. Employees who violate the law or this Code may expose themselves to substantial civil damages, criminal fines and prison terms. The Company may also face substantial fines and penalties, and many incur damage to its reputation and standing in the community. Your conduct as a representative of the Company, if it does not comply with the law or with this Code, can result in serious consequences for both you and the Company.

**Policy Against Retaliation** 

The Company prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations. Any reprisal or retaliation against an employee because such employee, in good faith, sought help or filed a report will be subject to disciplinary action, including potential termination of employment.

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**Waivers of the Code** 

Waivers of this Code for employees may be granted only by an executive officer of the Company. Any waiver of this Code for our directors, executive officers or other principal financial officers may be granted only by our Board of Directors or the appropriate committee of our Board of Directors and will be disclosed to the public as required by law or the rules of Nasdaq.

**CONFLICTS OF INTEREST** 

**Identifying Potential Conflicts of Interest** 

A conflict of interest may occur when an employee's private interest interferes, or appears to interfere, with the interests of the Company as a whole. You should avoid any private interest that influences your ability to act in the interests of the Company or that makes it difficult to perform your work objectively and effectively.

Identifying potential conflicts of interest may not always be clear-cut. The following situations are examples of conflicts of interest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Outside Employment</u>. No employee should be employed by, serve as a director of, or provide any services
not in his or her capacity as a Company's employee to a company that is a material customer, supplier, or competitor of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Improper Personal Benefits</u>. No employee should obtain any material (as to him or her) personal benefits
or favors because of his or her position in the Company. Please see "Gifts and Entertainment" below for additional guidelines in this area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Financial Interests</u>. No employee should have a significant financial interest (ownership or otherwise)
in any company that is a material customer, supplier or competitor of the Company. A "significant financial interest" means (i) ownership of greater than 1% of the equity of a material customer, supplier or competitor or (ii) an
investment in a material customer, supplier or competitor that represents more than 5% of the total assets of the employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Loans or Other Financial Transactions</u>. No employee should obtain loans or guarantees of personal
obligations from, or enter into any other personal financial transaction with, any company that is a material customer, supplier or competitor of the Company. This guideline does not prohibit arms-length transactions with banks, brokerage firms or
other financial institutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Service on Boards and Committees</u>. No employee should serve on a board of directors or trustees or on a
committee of any entity (whether profit or not-for-profit) whose interests would reasonably be expected to be in conflict with those of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Actions of Family Members</u>. The actions of family members outside the workplace may also give rise to the
conflicts of interest described above because they may influence an employee's objectivity in the making of decisions on behalf of the Company. For the purposes of this Code, " <u>family members</u> " include your spouse or
life-partner, brothers, sisters and parents, in-laws and children, whether such relationships are by blood or adoption.

For the purposes of this Code, a company is considered to be a "material" customer if that company has made payments to the Company in the past year in excess of US$100,000 or 10% of the customer's gross revenues, whichever is greater. A company is considered as a "material" supplier if that company has received payments from the Company in the past year in excess of US$100,000 or 10% of the supplier's gross revenues, whichever is greater. A company is considered as a "material" competitor if that company competes in the Company's line of business and has annual gross revenues from such line of business in excess of US$500,000. If you are uncertain whether a particular company is a material customer, supplier or competitor, please contact the Compliance Officer for assistance.

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**Disclosure of Conflicts of Interest** 

The Company requires employees to disclose any situations that would reasonably be expected to give rise to a conflict of interest. If you suspect that you have a conflict of interest, or something that others could reasonably perceive as a conflict of interest, you must report it to your supervisor or the Compliance Officer. Your supervisor and the Compliance Officer will work with you to determine whether you have a conflict of interest and, if so, how best to address it. Although conflicts of interest are not automatically prohibited, they are not desirable and may only be waived as described in "Waivers of the Code" above.

**CORPORATE OPPORTUNITIES** 

As an employee of the Company, you have an obligation to advance the Company's interests when the opportunity to do so arises. If you discover or are presented with a business opportunity through the use of corporate property, information, or because of your position in the Company, you should first present the business opportunity to the Company before pursuing the opportunity in your individual capacity. No employee may use corporate property, information, or his or her position in the Company for personal gain or in a manner that may compete with the Company.

You should disclose to your supervisor the terms and conditions of each business opportunity covered under this Code that you wish to pursue. Your supervisor will contact the Compliance Officer and the appropriate management personnel to determine whether the Company wishes to pursue the business opportunity. If the Company waives its right to pursue the business opportunity, you may pursue the business opportunity on the same terms and conditions as originally proposed and consistent with the other ethical guidelines set forth in this Code.

**Confidential Information and Company's Property** 

Employees have access to a variety of confidential information while being employed at the Company. Confidential information includes all non-public information that might be of use to competitors, or, if disclosed, harmful to the Company or its customers. Each employee has a duty to respect and safeguard the confidentiality of the Company's information and the information of our suppliers and customers, except when disclosure is authorized or legally mandated. In addition, you must refrain from using any confidential information from any previous employment if, in doing so, you could reasonably be expected to breach your duty of confidentiality to your former employers. An employee's obligation to protect confidential information continues after he or she leaves the Company. Unauthorized disclosure of confidential information could cause competitive harm to the Company and/or its customers and could result in legal liability to you and the Company.

Employees also have a duty to protect the Company's intellectual property and other business assets. The intellectual property, business systems and the security of the Company are critical to the Company's business.

Any questions or concerns on whether the disclosure of Company information is legally mandated should be promptly referred to the Compliance Officer.

**Safeguarding Confidential Information and Company's Property** 

Care must be taken to safeguard and protect confidential information and the Company's property. Accordingly, the following measures should be adhered to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's employees should conduct their business and social activities so as not to risk inadvertent
disclosure of confidential information. For example, when not in use, confidential information should be securely stored. Besides, review of confidential documents or discussion of confidential subjects in public places (e.g., airplanes, trains,
taxis, buses, etc.) should not be conducted so as to prevent being overheard or accessed by unauthorized persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• When in the Company's offices, confidential matters should not be discussed within hearing range of
visitors or others not working on such matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Confidential matters should not be discussed with other employees not working on such matters or with friends
or relatives, including those living in the same household as a Company's employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's employees are only to access, use, and disclose confidential information that is necessary
for them to perform their duties. They are not to disclose confidential information to other employees or contractors at the Company unless it is necessary for those employees or contractors to have such confidential information in the course of
their duties.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's files, personal computers, networks, software, internet access, internet browser programs,
emails, voice mails, and other business equipment (e.g., desks and cabinets) and resources are provided for business use, and they are the exclusive property of the Company. Misuse of such Company's property is not tolerable.

**COMPETITION AND FAIR DEALING** 

All employees are obligated to deal fairly with fellow employees and with the Company's customers, suppliers and competitors. Employees should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

**Relationships with Customers** 

Our business success depends upon our ability to foster lasting customer relationships. The Company is committed to dealing with customers fairly, honestly, and with integrity. Specifically, you should keep the following guidelines in mind when dealing with customers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Information we supply to customers should be accurate and complete to the best of our knowledge. Employees
should not deliberately misrepresent information to customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Employees should not refuse to sell, service, or maintain products the Company has produced simply because a
customer is buying products from another supplier.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Customer entertainment should not exceed the reasonable and customary business practice of the Company.
Employees should not provide entertainment or other benefits that could be viewed as an inducement to or a reward for customer's purchase decisions. Please see "Gifts and Entertainment" below for additional guidelines in this area.

**Relationships with Suppliers** 

The Company deals fairly and honestly with its suppliers. This means that our relationships with suppliers are based on price, quality, service, and reputation, among other factors. Employees dealing with suppliers should carefully guard their objectivity. Specifically, no employee should accept or solicit any personal benefit from a supplier or potential supplier that might compromise, or appear to compromise, their objective assessment of the supplier's products and prices. Employees can give or accept promotional items of nominal value or moderately scaled entertainment within the limits of reasonable and customary business practice of the Company. Please see "Gifts and Entertainment" below for additional guidelines in this area.

**Relationships with Competitors** 

The Company is committed to free and open competition in the marketplace. Employees should avoid actions that would be contrary to laws governing competitive practices in the marketplace, including antitrust laws. Such actions include misappropriation and/or misuse of a competitor's confidential information or making false statements about the competitor's business and business practices.

**PROTECTION AND USE OF COMPANY'S ASSETS** 

Employees should protect the Company's assets and ensure their efficient use for legitimate business purposes only. Theft, carelessness and waste have a direct impact on the Company's profitability. The use of Company funds or assets, whether or not for personal gain, for any unlawful or improper purpose is prohibited.

To ensure the protection and proper use of the Company's assets, each employee should:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exercise reasonable care to prevent theft, damage or misuse of Company's property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• report the actual or suspected theft, damage or misuse of Company's property to a supervisor;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• use the Company's telephone system, other electronic communication services, written materials and other
property primarily for business-related purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• safeguard all electronic programs, data, communications and written materials from inadvertent access by
others; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• use Company's property only for legitimate business purposes, as authorized in connection with your job
responsibilities.

Employees should be aware that Company's property includes all data and communications transmitted or received to or by, or contained in, the Company's electronic or telephonic systems, as well as all written communications. Employees and other users of Company's property should have no expectation of privacy with respect to these communications and data. To the extent permitted by law, the Company has the ability, and reserves the right, to monitor all electronic and telephonic communication. These communications may also be subject to disclosure to law enforcement or government officials.

**GIFTS AND ENTERTAINMENT** 

The act of giving and receiving of gifts is a common business practice. Appropriate business gifts and entertainment are welcome courtesies designed to build relationships and understanding among business partners. However, gifts and entertainment should not compromise, or appear to compromise, your ability to make objective and fair business decisions.

It is your responsibility to use good judgment in this area. As a general rule, you may give or receive gifts or entertainment to or from customers or suppliers only if the gift or entertainment would not be viewed as an inducement to or reward for any particular business decision. All gifts and entertainment expenses should be properly accounted for on expense reports. The following specific examples may be helpful:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Meals and Entertainment</u>. You may occasionally accept or give meals, refreshments or other entertainment
if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The items are of reasonable value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The purpose of the meeting or attendance at the event is business related; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The expenses would be paid by the Company as a reasonable business expense if not paid for by another party.

Entertainment of reasonable value may include food and tickets for sporting and cultural events if they are generally offered to other customers, suppliers or vendors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Advertising and Promotional Materials</u>. You may occasionally accept or give advertising or promotional
materials of nominal value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Personal Gifts</u>. You may accept or give personal gifts of reasonable value that are related to recognized
special occasions, such as a graduation, promotion, new job, wedding, retirement or a holiday. A gift is also acceptable if it is based on a family or personal relationship and unrelated to the business involved between the individuals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Gifts Rewarding Service or Accomplishment</u>. You may accept a gift from a civic, charitable or religious
organization specifically related to your service or accomplishment.

You must be particularly careful that gifts and entertainment are not construed as bribes, kickbacks, or other improper payments. See "The Foreign Corrupt Practices Act" below for a more detailed discussion of our policies on giving or receiving gifts related to business transactions.

You should make every effort to refuse or return a gift that is beyond these permissible guidelines. If it would be inappropriate to refuse a gift or you are unable to return a gift, you should promptly report the gift to your supervisor. Your supervisor will bring the gift to the attention of the Compliance Officer, who may require you to donate the gift to an appropriate community organization. If you have any questions on whether it is permissible to accept a gift or something else of value, contact your supervisor or the Compliance Officer for additional guidance.

------

**COMPANY RECORDS** 

Accurate and reliable records are crucial to our business. Our records are the basis of our earnings statements, financial reports and other disclosures to the public and guide our business decision-making and strategic planning. Company records include booking information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of our business.

All Company records must be complete, accurate and reliable in all material respects. Undisclosed or unrecorded funds, payments or receipts are inconsistent with our business practices and are prohibited. You are responsible for understanding and complying with our record-keeping policy. Ask your supervisor if you have any questions.

**ACCURACY OF FINANCIAL REPORTS AND OTHER PUBLIC COMMUNICATIONS** 

As a public company we are subject to various securities laws, regulations and reporting obligations. These laws, regulations and obligations and our policies require the disclosure of accurate and complete information regarding the Company's business, financial condition and results of operations. Inaccurate, incomplete or untimely reporting will not be tolerated and can severely damage the Company's reputation and integrity, and result in legal liability.

It is essential that the Company's financial records, including all filings with the Securities and Exchange Commission ("SEC") be accurate and timely. Accordingly, in addition to adhering to the conflict of interest policy and other policies and guidelines under this Code, the principal financial officers and other senior financial officers must take special care to exhibit integrity at all times and to instill this value within their organizations. In particular, these senior officers must ensure their conduct is honest and ethical that they abide by all public disclosure requirements by providing full, fair, accurate, timely and understandable disclosures, and that they comply with all other applicable laws and regulations. These financial officers must also understand and strictly comply with generally accepted accounting principles in the U.S. and all standards, laws and regulations for accounting and financial reporting of transactions, estimates and forecasts.

In addition, U.S. federal securities law requires the Company to maintain proper internal books and records and to devise and maintain an adequate system of internal accounting controls. The SEC has supplemented the statutory requirements by adopting rules that prohibit (1) any person from falsifying records or accounts subject to the above requirements and (2) officers or directors from making any materially false, misleading, or incomplete statement to an accountant in connection with an audit or any filing with the SEC. These provisions reflect the SEC's intent to discourage officers, directors, and other persons with access to the Company's books and records from taking action that might result in the communication of materially misleading financial information to the investing public.

**COMPLIANCE WITH LAWS AND REGULATIONS** 

Each employee has an obligation to comply with all laws, rules and regulations applicable to the Company's operations. These include, without limitation, laws covering bribery and kickbacks, copyrights, trademarks and trade secrets, information privacy, insider trading, illegal political contributions, antitrust prohibitions, foreign corrupt practices, offering or receiving gratuities, environmental hazards, employment discrimination or harassment, occupational health and safety, false or misleading financial information or misuse of corporate assets. You are expected to understand and comply with all laws, rules and regulations that apply to your job position. If any doubt exists about whether a course of action is lawful, you should seek advice from your supervisor or the Compliance Officer.

**COMPLIANCE WITH INSIDER TRADING LAWS** 

The Company has an insider trading policy, which may be obtained from the Compliance Officer. The following is a summary of some of the general principles relevant to insider trading, and should be read in conjunction with the aforementioned specific policy.

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Company employees are prohibited from trading in shares or other securities of the Company while in possession of material, non-public information about the Company. In addition, Company employees are prohibited from recommending, "tipping" or suggesting that anyone else buy or sell shares or other securities of the Company on the basis of material, non-public information. Company employees who obtain material non-public information about another company in the course of their employment are prohibited from trading in shares or securities of the other company while in possession of such information or "tipping" others to trade on the basis of such information. Violation of insider trading laws can result in severe fines and criminal penalties, as well as disciplinary action by the Company, up to and including termination of employment.

Information is "non-public" if it has not been made generally available to the public by means of a press release or other means of widespread distribution. Information is "material" if a reasonable investor would consider it important in a decision to buy, hold or sell stock or other securities. As a rule of thumb, any information that would affect the value of stock or other securities should be considered material. Examples of information that is generally considered "material" include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Financial results or forecasts, or any information that indicates the Company's financial results may
exceed or fall short of forecasts or expectations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Important new products or services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pending or contemplated acquisitions or dispositions, including mergers, tender offers or joint venture
proposals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Possible management changes or changes of control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pending or contemplated public or private sales of debt or equity securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Acquisition or loss of a significant customer or contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Significant write-offs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Initiation or settlement of significant litigation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in the Company's auditors or a notification from its auditors that the Company may no longer rely
on the auditor's report.

The laws against insider trading are specific and complex. Any questions about information you may possess or about any dealings you have had in the Company's securities should be promptly brought to the attention of the Compliance Officer.

**PUBLIC COMMUNICATIONS AND PREVENTION OF SELECTIVE DISCLOSURE** 

**Public Communications Generally** 

The Company places a high value on its credibility and reputation in the community. What is written or said about the Company in the news media and investment community directly impacts our reputation, positively or negatively. Our policy is to provide timely, accurate and complete information in response to public requests (media, analysts, etc.), consistent with our obligations to maintain the confidentiality of competitive and proprietary information and to prevent selective disclosure of market-sensitive financial data. To ensure compliance with this policy, all news media or other public requests for information regarding the Company should be directed to the Company's Investor Relations Department. The Investor Relations Department will work with you and the appropriate personnel to evaluate and coordinate a response to the request.

**Prevention of Selective Disclosure** 

Preventing selective disclosure is necessary to comply with United States securities laws and to preserve the reputation and integrity of the Company as well as that of all persons affiliated with it. "Selective disclosure" occurs when any person provides potentially market-moving information to selected persons before the news is available to the investing public generally. Selective disclosure is a crime under United States law and the penalties for violating the law are severe.

------

The following guidelines have been established to avoid improper selective disclosure. Every employee is required to follow these procedures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All contact by the Company with investment analysts, the press and/or members of the media shall be made
through the chief executive officer, chief financial officer or persons designated by them (collectively, the "Media Contacts").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other than the Media Contacts, no officer, director or employee shall provide any information regarding the
Company or its business to any investment analyst or member of the press or media.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All inquiries from third parties, such as industry analysts or members of the media, about the Company or its
business should be directed to a Media Contact. All presentations to the investment community regarding the Company will be made by us under the direction of a Media Contact.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other than the Media Contacts, any employee who is asked a question regarding the Company or its business by a
member of the press or media shall respond with "No comment" and forward the inquiry to a Media Contact.

These procedures do not apply to the routine process of making previously released information regarding the Company available upon inquiries made by investors, investment analysts and members of the media.

Please contact the Compliance Officer if you have any questions about the scope or application of the Company's policies regarding selective disclosure.

**THE FOREIGN CORRUPT PRACTICES ACT** 

**Foreign Corrupt Practices Act** 

The Foreign Corrupt Practices Act of 1977 (the "FCPA") prohibits the Company and its employees and agents from offering or giving money or any other item of value to win or retain business or to influence any act or decision of any governmental official, political party, candidate for political office or official of a public international organization. Stated more concisely, the FCPA prohibits the payment of bribes, kickbacks or other inducements to foreign officials. This prohibition also extends to payments to a sales representative or agent if there is a reason to believe that the payment will be used indirectly for a prohibited payment to foreign officials. Violation of the FCPA is a crime that can result in severe fines and criminal penalties, as well as disciplinary action by the Company, up to and including termination of employment.

Certain small facilitation payments to foreign officials may be permissible under the FCPA if customary in the country or locality and intended to secure routine governmental action. Governmental action is "routine" if it is ordinarily and commonly performed by a foreign official and does not involve the exercise of discretion. For instance, "routine" functions would include setting up a telephone line or expediting a shipment through customs. To ensure legal compliance, all facilitation payments must receive prior written approval from the Compliance Officer and must be clearly and accurately reported as a business expense.

**ENVIRONMENT, HEALTH AND SAFETY** 

The Company is committed to providing a safe and healthy working environment for its employees and avoiding adverse impact and injury to the environment and the communities in which we do business. Company's employees must comply with all applicable environmental, health and safety laws, regulations and Company's standards. It is your responsibility to understand and comply with the laws, regulations and policies that are relevant to your job. Failure to comply with environmental, health and safety laws and regulations can result in civil and criminal liability against you and the Company, as well as disciplinary action by the Company, up to and including termination of employment. You should contact the Compliance Officer if you have any questions about the laws, regulations and policies that apply to you.

------

**Environment** 

All Company's employees should strive to conserve resources and reduce waste and emissions through recycling and other energy conservation measures. You have a responsibility to promptly report any known or suspected violations of environmental laws or any events that may result in a discharge or emission of hazardous materials. Employees whose jobs involve manufacturing have a special responsibility to safeguard the environment. Such employees should be particularly alert to the storage, disposal and transportation of waste, and handling of toxic materials and emissions into the land, water or air.

**Health and Safety** 

The Company is committed not only to complying with all relevant health and safety laws, but also to conducting business in a manner that protects the safety of its employees. All employees are required to comply with all applicable health and safety laws, regulations and policies relevant to their jobs. If you have a concern about unsafe conditions or tasks that present a risk of injury to you, please report these concerns immediately to your supervisor or the Human Resources Department.

**EMPLOYMENT PRACTICES** 

The Company pursues fair employment practices in every aspect of its business. The following is intended to be a summary of our employment policies and procedures. Copies of our detailed policies are available from the Human Resources Department. Company employees must comply with all applicable labor and employment laws, including anti-discrimination laws and laws related to freedom of association, privacy and collective bargaining. It is your responsibility to understand and comply with the laws, regulations and policies that are relevant to your job. Failure to comply with labor and employment laws can result in civil and criminal liability against you and the Company, as well as disciplinary action by the Company, up to and including termination of employment. You should contact the Compliance Officer or the Human Resources Department if you have any questions about the laws, regulations and policies that apply to you.

**Harassment and Discrimination** 

The Company is committed to providing equal opportunity and fair treatment to all individuals on the basis of merit, without discrimination because of race, color, religion, national origin, gender (including pregnancy), sexual orientation, age, disability, veteran status or other characteristic protected by law. The Company prohibits harassment in any form, whether physical or verbal and whether committed by supervisors, non-supervisory personnel or non-employees. Harassment may include, but is not limited to, offensive sexual flirtations, unwanted sexual advances or propositions, verbal abuse, sexually or racially degrading words, or the display in the workplace of sexually suggestive objects or pictures.

If you have any complaints about discrimination or harassment, report such conduct to your supervisor or the Human Resources Department. All complaints will be treated with sensitivity and discretion. Your supervisor, the Human Resources Department and the Company will protect your confidentiality to the extent possible, consistent with law and the Company's need to investigate your concern. Where our investigation uncovers harassment or discrimination, we will take prompt corrective action, which may include disciplinary action by the Company, up to and including, termination of employment. The Company strictly prohibits retaliation against an employee who, in good faith, files a complaint.

Any member of management who has reason to believe that an employee has been the victim of harassment or discrimination or who receives a report of alleged harassment or discrimination is required to report it to the Human Resources Department immediately.

------

**CONCLUSION** 

This Code of Business Conduct and Ethics contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. If you have any questions about these guidelines, please contact your supervisor or the Compliance Officer. We expect all Company employees to adhere to these standards.

*This Code of Business Conduct and Ethics, as applied to the Company's principal financial officers, shall be the Company's "code of ethics" within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.* 

*This Code and the matters contained herein are neither a contract of employment nor a guarantee of continuing Company policy. We reserve the right to amend, supplement or discontinue this Code and the matters addressed herein, without prior notice, at any time.*

## Exhibit 99.2

**Exhibit 99.2** 

March 3, 2023

**Xuhang Group Holdings Ltd.** 

Building 2, Shangtanghe 198 Cultural and Creative Park, 198 Shenban Road

Gongshu District, Hangzhou City, Zhejiang Province

The People's Republic of China, 310000

**Re: Consent of Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.** 

Ladies and Gentlemen,

We understand that Xuhang Holdings Limited. (the **"Company"**) intends to file a registration statement on Form F-1 (the **"Registration Statement"**) with the United States Securities and Exchange Commission (the **"SEC"**) under the Securities Act of 1933, as amended, 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 "China Digital Marketing Market Study, Independent Market Research 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

**Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.** 

<u>/s/ Charles Lau</u> 

Name: Charles Lau

Title: Consulting Director

## Exhibit 99.4

**Exhibit 99.4**![LOGO](g402781g0228144822888.jpg)

**Xuhang Holdings Limited** 

March 31, 2023

Via EDGAR

Division of Corporation Finance

Office of Trade & Services

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C., 20549

---

| | |
|:---|:---|
| Attention: | James Guigliano |
|  | Doug Jones |
|  | Taylor Beech |
|  | Lilyanna Peyser<br>|

---

---

| | |
|:---|:---|
| **Re:** | **Xuhang Holdings Limited** |
|  | **Amended Draft Registration Statement on Form F-1**<br> **CIK No. 0001946025** |
|  | **Request for Waiver and Representation under Item 8.A.4 of Form 20-F** |

---

Ladies and Gentlemen:

The undersigned, Xuhang Holdings Limited, a foreign private issuer organized under the laws of the Cayman Islands (the "Company"), is submitting this letter to the U.S. Securities and Exchange Commission (the "Commission") in connection with the Company's draft registration statement on Form F-1, as amended, initially submitted to the Commission on September 28, 2022 (the "Registration Statement") relating to a proposed initial public offering and listing of the Company's ordinary shares in the United States.

The Company has included in the Registration Statement its audited consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States, as of December 31, 2021 and 2020, and for each of the two fiscal years ended December 31, 2021 and 2020, and unaudited interim consolidated financial statements as of September 30, 2022, and for each of the nine-month periods ended September 30, 2022 and 2021.

The Company respectfully requests that the Commission waive the requirement of Item 8.A.4 of Form 20-F, which states that in the case of a company's initial public offering, the registration statement on Form F-1 must contain audited financial statements of a date not older than 12 months from the date of the offering (the "12-Month Requirement"). *See also* Division of Corporation Finance, *Financial Reporting Manual*, Section 6220.3.

The Company is submitting this waiver request pursuant to Instruction 2 to Item 8.A.4 of Form 20-F, which provides that the Commission will waive the 12-Month Requirement "in cases where the company is able to represent adequately to us that it is not required to comply with this requirement in any other jurisdiction outside the United States and that complying with this requirement is impracticable or involves undue hardship." *See also* the 2004 release entitled *International Reporting and Disclosure Issues in the Division of Corporation Finance* (available on the Commission's website at http://www.sec.gov/divisions/corpfin/internatl/cfirdissues1104.htm) by the staff of the Division of Corporation Finance of the Commission at Section III.B.c, in which the staff notes that:

"the instruction indicates that the staff will waive the 12-month requirement where it is not applicable in the registrant's other filing jurisdictions and is impracticable or involves undue hardship. As a result, we expect that the vast majority of IPOs will be subject only to the 15-month rule. The only times that we anticipate audited financial statements will be filed under the 12-month rule are when the registrant must comply with the rule in another jurisdiction, or when those audited financial statements are otherwise readily available."

------

In connection with this waiver request, the Company represents to the Commission that:

1. The Company is not required by any jurisdiction outside the United States to prepare consolidated financial statements audited under any generally accepted auditing standards for any interim period.

2. Full compliance with Item 8.A.4 of Form 20-F at present is impracticable and involves undue hardship for the Company.

3. The Company does not anticipate that its audited financial statements for the fiscal year ended December 31, 2022 will be available until April 2023.

4. In no event will the Company seek effectiveness of the Registration Statement if its audited financial statements are older than 15 months at the time of the Company's initial public offering.

The Company will file this letter as an exhibit to the Registration Statement pursuant to Instruction 2 to Item 8.A.4 of Form 20-F.

---

| |
|:---|
| Sincerely, |
| /s/ Tianhang Xiao |
| Tianhang Xiao, Chief Executive Officer |

---

## Exhibit 99.5

**Exhibit 99.5** 

**CONSENT OF WENBING WANG** 

XUHANG HOLDINGS LIMITED (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 Appointee.

Dated: March 1, 2023

---

| |
|:---|
| /s/ Wenbing Wang |
| **Wenbing Wang** |

---

## Exhibit 99.6

**Exhibit 99.6** 

**CONSENT OF BO LYU** 

XUHANG HOLDINGS LIMITED (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 Appointee.

Dated: March 1, 2023

---

| |
|:---|
| /s/ Bo Lyu |
| **Bo Lyu** |

---

## Exhibit 99.7

**Exhibit 99.7** 

**CONSENT OF XIAOYI WANG** 

XUHANG HOLDINGS LIMITED (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 Appointee.

Dated: March 1, 2023

---

| |
|:---|
| /s/ Xiaoyi Wang |
| **Xiaoyi Wang** |

---

## Ex-Filing

**Exhibit 107** 

**Calculation of Filing Fee Tables** 

<u>F-1</u> 

(Form Type)

<u>XUHANG HOLDINGS LIMITED</u> 

(Exact Name of Registrant as Specified in its Charter)

<u>Table 1: Newly Registered 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 | Proposed<br>Maximum<br>Aggregate<br>Offering<br> Price<sup>(1)</sup> | Fee<br> Rate | Amount of<br>Registration<br>Fee |
| &nbsp;&nbsp;&nbsp;Fees to Be Paid | Equity | Ordinary shares, par value $0.002 per share<sup>(2)</sup> | Rule 457(o) | – | – | $92000000 | 0.00011020 | $10138.40 |
|  | Equity | Representative's warrants<sup>(3)</sup> | Rule 457(g) | – | – | – | – | – |
|  | Equity | Ordinary shares underlying the representative's warrants | Rule 457(o) | – | – | $5980000 | 0.00011020 | $659.00 |
|  | Total Offering Amounts | Total Offering Amounts | Total Offering Amounts | Total Offering Amounts |  | $97980000 |  | $10797.40 |
|  | Total Fees Previously Paid | Total Fees Previously Paid | Total Fees Previously Paid | Total Fees Previously Paid |  |  |  | $0 |
|  | Total Fee Offset | Total Fee Offset | Total Fee Offset | Total Fee Offset |  |  |  | $0 |
|  | Net Fee Due | Net Fee Due | Net Fee Due | Net Fee Due |  |  |  | $10797.40 |

---

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(1) In accordance with Rule 416, the Registrant is also registering an indeterminate number of additional ordinary
shares that shall be issuable after the date hereof as a result of share splits, share dividends, or similar transactions.

(2) Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o)
under the Securities Act of 1933, as amended (the "Securities Act"). Includes ordinary shares that may be purchased by the representative of the several underwriters pursuant to its option to purchase additional ordinary shares to cover
over-allotment, if any.

(3) The Registrant will issue to the representative warrants to purchase a number of ordinary shares equal to an
aggregate of 5% of the ordinary shares sold in the offering, including any ordinary shares issued upon exercise of the underwriters' over-allotment option. The exercise price of the representative's warrants is equal to 130% of the
offering price of the ordinary shares offered hereby. The representative's warrants are exercisable at any time, and from time to time, in whole or in part, commencing on the date of issuance and expiring on the third-year anniversary of the
commencement of sales of ordinary shares in this offering.

In accordance with Rule 457(g) under the Securities Act, because the Registrant's ordinary shares underlying the representative's warrants are registered hereby, no separate registration fee is required with respect to the warrants registered hereby.