20-F

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

20-F

☐

REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934

☒

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

For

the fiscal year ended December 31, 2020

☐

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

☐

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date

of event requiring this shell company report _________________

For

the transition period from to

Commission

file number 001-37829

NISUN

INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD

(Exact name of Registrant as specified in its charter)

British

Virgin Islands

(Jurisdiction of incorporation or organization)

99

Danba Rd, Bldg C9

Putuo

District, Shanghai

People’sRepublic of China

(Address of principal executive offices)

Changjuan

Liang, Chief Financial Officer

+86-577-8689-5678–

telephone

liangchangjuan@cnisun.com

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

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

Title of each class	Symbol	Name of each exchange on which registered

| Class A common shares, par value $0.001 per share | NISN | Nasdaq Capital Market |

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

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

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 20,555,129 Class A Common Shares and Nil Class B Common Shares.

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

☐ Yes ☒ No

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

☐ Yes ☒ No

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

☒ Yes ☐ No

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

☒ Yes ☐ No

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

Large accelerated filer ☐	Accelerated filer ☒

| Non-accelerated filer ☐ | 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 13(a) of the Exchange 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.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

U.S. GAAP ☒	International<br>Financial Reporting Standards as issued by<br><br>the International Accounting Standards Board ☐	Other ☐

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

☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐ Yes ☐ No

Table

of Contents

		Page
PART I
Item 1.	Identity of Directors, Senior Management and Advisers	1
Item 2.	Offer Statistics and Expected Timetable	1
Item 3.	Key Information	1
Item 4.	Information on the Company	26
Item 4A.	Unresolved Staff Comments	63
Item 5.	Operating and Financial Review and Prospects	63
Item 6.	Directors, Senior Management and Employees	72
Item 7.	Major Shareholders and Related Party Transactions	78
Item 8.	Financial Information	81
Item 9.	The Offer and Listing	82
Item 10.	Additional Information	82
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	90
Item 12.	Description of Securities Other than Equity Securities	90
PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies	91
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	91
Item 15.	Controls and Procedures	91
Item 15T.	Controls and Procedures	92
Item 16.	[Reserved]	92
Item 16A.	Audit Committee Financial Expert	92
Item 16B.	Code of Ethics	92
Item 16C.	Principal Accountant Fees and Services	92
Item 16D.	Exemptions from the Listing Standards for Audit Committees	93
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	93
Item 16F.	Change in Registrant’s Certifying Accountant	93
Item 16G.	Corporate Governance	93
Item 16H.	Mine Safety Disclosure	93
PART III
Item 17.	Financial Statements	94
Item 18.	Financial Statements	94
Item 19.	Exhibits	94

Conventions

Used in this Annual Report

Except where the context otherwise requires and for purposes of this annual report on Form 20-F only, “we,” “us,” “our company,” “Company,” “our” and “Nisun International” refer to:

●	NISUN INTERNATIONAL ENTERPRISE<br> DEVELOPMENT GROUP CO., LTD, formerly Hebron Technology Co., Ltd., a British Virgin Islands company limited by shares (“Nisun<br> International” when individually referenced);
●	NiSun International Enterprise<br> Management Group (British Virgin Islands) Co., Ltd. (“NiSun BVI”) (also referred to as 宁圣国际企业管理集团（维尔京群岛）有限公司), a limited company established under the laws of the British Virgin Islands and a wholly-owned subsidiary of Nisun International;
---	---
●	NiSun International Enterprise<br> Management Group (Hong Kong) Co., Limited (“NiSun HK”) (also referred to as 宁圣国际企业管理集团（香港）有限公司),<br> a limited company established under the laws of Hong Kong and a wholly-owned subsidiary of NiSun BVI;
---	---
●	NiSun (Shandong) Industrial<br> Development Co., Ltd. (“NiSun Shandong”) (also referred to as 宁圣（山东）产业发展有限公司), a limited company established under the laws of China (“PRC”) and a wholly-owned subsidiary of Nisun HK;
---	---
●	NingChen (Shanghai) Enterprise<br> Management Co., Ltd (“NingChen”) (also referred to as 宁臣（上海）企业管理有限公司),<br> a PRC company and a wholly-owned subsidiary of NiSun Shandong;
---	---
●	Fintech (Shanghai) Digital<br> Technology Co., Ltd (“Fintech”) (also referred to as 范太克（上海）数字科技有限公司),<br> a PRC company and a consolidated affiliate controlled by Ningchen through a series of agreements;
---	---
●	Khorgos Fintech Network<br> Technology Co., Ltd (“Khorgos”) (also referred to as 霍尔果斯泛太克网络科技有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	FintechSupply Chain Management<br> (Jiangsu) Co., Ltd. (“Fintech Jiangsu”) (also referred to as 范太克供应链管理（江苏）有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	Fintech Supply Chain Management<br> (Shandong) Co. Ltd. (“Fintech Shandong”) (also referred to as 范太克供应链管理（山东）有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	Fanlunke Supply Chain Management<br> (Shanghai) Co., Ltd. (“Fanlunke”) (also referred to as 范伦克供应链管理（上海）有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	Fintech Supply Chain Management<br> (Ningbo) Co. Ltd. (“Fintech Ningbo”) (also referred to as 范太克供应链管理（宁波）有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	Fintech (Henan) Supply<br> Chain Management Co. Ltd. (“Fintech Henan”) (also referred to as 范太克（河南）供应链管理有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	Shanxi Fintech Supply Chain<br> Management Co. Ltd. (“Fintech Shanxi”) (also referred to as 陕西范太克供应链管理有限公司),<br> a PRC company and an 80%-owned subsidiary of Fintech;
---	---
●	Inner Mongolia Fintech<br> Supply Chain Management Co. Ltd. (“Fintech Inner Mongolia”) (also referred to as 内蒙古范太克供应链管理有限公司),<br> a PRC company and a 70%-owned subsidiary of Fintech;
---	---
●	Jilin Lingang Supply Chain<br> Management Co., Ltd. (“Jilin”) (also referred to as 吉林省临港供应链管理有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---

●	Jilin<br>Province Lingang Hengda Supply Chain Management Co. Ltd. (“Hengda”) (also referred to as 吉林省临港恒达供应链管理有限公司),<br>a PRC company and a wholly-owned subsidiary of Jilin;
●	NiSun family office (“Guangzhou”)<br> Co., Ltd (“Guangzhou”) (also referred to as 宁圣家族办公室（广州）有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	Nanjing NiSun Gold Co.,<br> Ltd. (“NiSun Nanjing”) (also referred to as 南京宁圣黄金有限公司),<br> a PRC company and a wholly-owned subsidiary of Fintech;
---	---
●	Shandong Taiding International<br> Investment Co., Ltd (“Taiding”) (also referred to as 山东泰鼎国际投资有限公司),<br> a joint venture company established under the laws of PRC and 80% owned by NiSun BVI;
---	---
●	Beijing Hengtai Puhui Information<br> services Co., Ltd (“Hengpu”) (also referred to as 北京恒泰普惠信息服务有限公司),<br> a PRC company and a consolidated affiliate controlled by Ningchen through VIE agreements;
---	---
●	Hangzhou Fengtai Supply<br> Chain Management Co., Ltd. (also referred to as<br> 杭州丰钛供应链管理有限公司), a PRC company and a<br> wholly-owned subsidiary of Hengpu;
---	---
●	Nami Holding (Cayman) Co.,<br> Ltd. (“Nami Cayman”), a Cayman Islands exempted company established under the laws of the Cayman Islands and a wholly-owned<br> subsidiary of Nisun International;
---	---
●	Nami Holding (Hong Kong)<br> Co., Limited (“Nami HK), a Hong Kong company and a wholly-owned subsidiary of Nami Cayman;
---	---
●	Shanghai Naqing Enterprise<br> Management Co., Ltd. (“Naqing”) (also referred to as 上海纳卿企业管理有限公司), a PRC company and a wholly-owned subsidiary of NiSun Shandong;
---	---
●	Shanghai Nami<br> Financial Consulting Co., Ltd. (“Nami Shanghai”) (also referred to as<br> 上海纳觅财务咨询有限公司), a PRC company and a<br> consolidated affiliate controlled by Naqing through a series of agreements;
---	---
●	Hong Kong Xibolun<br> Technology Limited, a Hong Kong limited company (“Xibolun HK,” and together with its subsidiaries referred to<br> as “Xibolun Group”), which was wholly owned by Nisun International until its disposition on November 30,<br> 2020;
---	---
●	Zhejiang Xibolun Automation<br> Project Technology Co., Ltd. (“Xibolun Automation”) (also referred to as 浙江希伯伦自控工程科技有限公司or<br> Zhejiang Xibolun Automatically Control System Engineering Technology Co., Ltd. in China), a PRC company and a wholly-owned subsidiary<br> of Xibolun HK;
---	---
●	Wenzhou Xibolun Fluid Equipment<br> Co., Limited (“Xibolun Equipment”) (also referred to as 温州希伯伦流体设备有限公司<br> or Wenzhou Xibolun Fluid Equipment Co., Ltd. in China), a PRC company and a wholly-owned subsidiary of Xibolun HK, which holds 30%<br> of Xibolun Equipment directly and the remaining 70% through its direct subsidiary, Xibolun Automation.
---	---

In addition, Hebron is the English romanization of Xibolun in Chinese.

This annual report contains translations of certain RMB amounts into U.S. dollar amounts at a specified rate solely for the convenience of the reader. The exchange rates in effect as of December 31, 2020 and 2019 were US$1.00 for RMB 6.5250 and RMB 6.9618, respectively. The average exchange rates for the years ended December 31, 2020, 2019 and 2018 were US$1.00 for RMB 6.9042, RMB 6.9081, and RMB 6.6090, respectively. We use period-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Any discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.

For the sake of clarity, this annual report follows the English naming convention of first name followed by last name, regardless of whether an individual’s name is Chinese or English. For example, the name of the Chief Executive Officer will be presented as “Xiaoyun Huang,” even though, in Chinese, Mr. Huang’s name is presented as “Huang Xiaoyun.”

We obtained the industry and market data used in this annual report or any document incorporated by reference from industry publications, research, surveys and studies conducted by third parties and our own internal estimates based on our management’s knowledge and experience in the markets in which we operate. We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report. We have sought to provide current information in this annual report and believe that the statistics provided in this annual report remain up-to-date and reliable, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report.

iii

SPECIAL

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are intended to identify such forward-looking statements. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under “Item 3—Key Information—Risk Factors,” “Item 4—Information on the Company,” “Item 5—Operating and Financial Review and Prospects,” and elsewhere in this report, as well as factors which may be identified from time to time in our other filings with the Securities and Exchange Commission (the “SEC”) or in the documents where such forward-looking statements appear. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.

The forward-looking statements contained in this report reflect our views and assumptions only as of the date this report is signed. Except as required by law, we assume no responsibility for updating any forward-looking statements.

PART

Item 1.	Identity of Directors, Senior Management and Advisers

Not applicable for annual reports on Form 20-F.

Item 2.	Offer Statistics and Expected Timetable

Not applicable for annual reports on Form 20-F.

Item 3.	Key Information
A.	Selected Financial Data
---	---

The following table presents the selected consolidated financial information for our company. The selected consolidated statements of operations data for the three years ended December 31, 2020, 2019 and 2018, and the selected consolidated balance sheets data as of December 31, 2020, 2019 and 2018 have been derived from our audited consolidated financial statements. Our historical results do not necessarily indicate results expected for any future periods. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below. Our audited consolidated financial statements are prepared and presented in accordance with US GAAP.

(All amounts in U.S. dollars, except Shares outstanding)

Statement

of operations data:

	For the Years Ended December 31,
	2020			2019			2018
Revenue	$	42,190,191		$	2,525,524		$	-
Cost of revenue		19,973,656			19,492			-
Gross profit		22,216,535			2,506,032			-
General and administrative expenses		8,188,736			1,082,631			1,170,900
Selling expenses		3,181,810			93,620			-
Bad debt expense		-			-			923,094
Research and development expenses		817,770			155,216			-
Income (loss) on operations		10,028,219			1,174,565			(2,093,994	)
Other income (expense), net		244,274			1,371			-
Interest and investment income		585,177			-			-
Income (loss) before income taxes		10,857,670			1,175,936			(2,093,994	)
Provision (benefit) for income taxes		941,064			(55,731	)		-
Net income (loss) from continuing operations		9,916,606			1,231,667			(2,093,994	)
(Loss) income from discontinued operations, net of tax		(22,971,016	)		1,508,323			(3,050,751	)
Net (loss) income		(13,054,410	)		2,739,990
Less: net income (loss) attributed to non-controlling interest		37,380			-			(5,144,745	)
Net (loss) income attributed to the shareholders		(13,091,790	)		2,739,990			(5,144,745	)
Foreign currency translation income (loss)		5,507,420			(561,091	)		(1,755,528	)
Comprehensive (loss) income	$	(7,584,370	)	$	2,178,899		$	(6,900,273	)

Balance

sheet data:

	As of December 31,
	2020		2019		2018
Current assets	$	60,399,271	$	52,916,672	$	38,421,753
Total assets	$	108,096,829	$	94,000,689	$	56,653,676
Current liabilities	$	26,803,286	$	37,434,697	$	19,683,973
Total liabilities	$	28,159,431	$	40,065,176	$	19,896,324
Total shareholders’ equity	$	79,937,398	$	53,935,513	$	36,767,352
Shares outstanding		20,555,129		17,710,471		16,269,577

B.	Capitalization and Indebtedness

Not applicable for annual reports on Form 20-F.

C.	Reasons for the Offer and Use of Proceeds

Not applicable for annual reports on Form 20-F.

D.	Risk Factors

SummaryRisk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are not limited to, risks related to:

RisksRelated to Our Business and Industry

●	We<br> have a limited operating history in the rapidly evolving supply chain and financial services<br> industries, and any unforeseeable changes and uncertainties could adversely affect our operating<br> results and future prospects.
●	If<br> we are unable to innovate or respond effectively to the ever-changing financial technologies<br> and industry practice, our business and results of operations would be materially adversely<br> affected.
---	---
●	We<br> rely on our cooperation with our customers and industry partners, and if our technology solutions<br> or services cannot meet the needs or expectations of customers and partners for any reason,<br> we could lose our established market share.
---	---
●	We<br> are subject to evolving regulatory requirements, and if we fail to adapt to regulatory changes,<br> our business and prospects may be materially and adversely affected.
---	---
●	Failure<br> to manage growth will cause disruption to our operations and impair our ability to generate<br> revenue.
---	---
●	We<br> have modified our business models and had substantial strategic changes to our business operations,<br> and may be subject to additional risks and uncertainties as a result.
---	---
●	We<br> cannot assure you that our growth strategies will be successful.
---	---
●	Cyber-attacks<br> or any failure to adequately maintain data security and prevent unauthorized access to confidential<br> information could materially adversely affect our reputation, financial condition and operating<br> results.
---	---

RisksRelated to Doing Business in China

●	Adverse<br> changes in political and economic policies of the PRC government could have a material adverse<br> effect on the overall economic growth of China and materially and adversely affect our competitive<br> position
●	Chinese<br> economic growth slowdown may have a negative effect on our business.
---	---
●	We<br> may be classified as a “Resident Enterprise” of China, which would result in<br> unfavorable tax consequences.
---	---
●	Uncertainties<br> with respect to the PRC legal system could adversely affect us.
---	---
●	Shareholders<br> may experience difficulties in effecting service of legal process, enforcing foreign judgments,<br> including those obtained in the U.S., or bringing actions in China against us or our management<br> based on foreign laws.
---	---

RisksRelated to Our Corporate Structure

●	If<br> the PRC government finds that the contractual arrangements that establish the structure for<br> operating our business do not comply with PRC laws and regulations, we could be subject to<br> severe consequences.
●	We<br> rely on our contractual arrangements with our consolidated affiliates and their shareholders<br> for business operations, which may not be as effective as direct ownership in providing operational<br> control.
---	---
●	Shareholders<br> of VIEs may have potential conflicts of interest with us, which may materially and adversely<br> affect our business and financial condition.
---	---
●	Our<br> VIE agreements may be subject to scrutiny by the PRC tax authorities which may determine<br> that we or our consolidated affiliates owe additional taxes.
---	---

RisksRelated to Ownership of Our Common Shares

●	We<br> are an “emerging growth company,” and the reduced reporting requirements applicable<br> to emerging growth companies may make our Class A common shares less attractive to investors.
●	British<br> Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby<br> depriving shareholders of the ability to protect their interests.
---	---
●	The<br> laws of the British Virgin Islands provide little protection for minority shareholders, and<br> minority shareholders will have little or no recourse if the shareholders are dissatisfied<br> with the conduct of our affairs.
---	---
●	The<br> market price of our Class A common shares may be volatile or may decline regardless of our<br> operating performance, and shareholders may not be able to resell their shares.
---	---
●	We<br> do not intend to pay dividends for the foreseeable future.
---	---

RisksRelated to Our Business and Industry

Wehave a limited operating history in the rapidly evolving supply chain and financial services industries, and any unforeseeable changesand uncertainties could adversely affect our operating results and growth prospects.

Financial technologies have brought dynamic and rapidly changes to the financial services and supply chain industries in China. The regulatory framework for those industries is also evolving and may remain uncertain for the foreseeable future. We provide technology-driven customized financing solutions to small- and mid-sized enterprises (SMEs) (hereinafter referred to as “SME financing solutions”) and direct banking solutions to small- and mid-sized commercial banks (referred to as “direct banking solutions” or “other financing solutions”) in China. We commenced our financial service operations in 2019 after we acquired NiSun BVI and its subsidiaries and contractually controlled affiliates, Fintech (Shanghai) Digital Technology Co., Ltd. (“Fintech”) and Beijing Hengtai Puhui Information Services Co., Ltd (“Hengpu”). We expanded our financial service operations following the acquisition of Nami Holding (Cayman) Co., Ltd.

In January 2020, we commenced our supply chain solutions service operations. Supply chain industry is at a relatively early stage of its development in China, and there are few established players with well-recognized business models that we can follow or build upon. In addition, we face uncertainties related to increased competition and a changing regulatory environment in China’s supply chain finance industry. As the financial services market dynamics, regulatory environment and our business continue to evolve, we may need to introduce new services from time to time or modify the existing business models. Any significant change to our existing business models may not achieve expected results and may have a material impact on our financial condition and results of operations. It is therefore difficult to effectively assess the future prospects of our operations. Investors should consider our business and prospects based on such uncertainties that we encounter or may encounter in this fast-growing industry, including, but not limited to:

●	our<br> ability to adapt to the changing macroeconomic environment in China and around the world,<br> which may be influenced by a number of factors, such as geopolitical factors, global<br> financial market volatility and pandemics such as COVID-19;
●	our<br> ability to compete successfully with our industry peers, some of whom may have more resources<br> in the business than we do;
---	---
●	our<br> response to changes in the regulatory environment;
---	---
●	our<br> solutions to meet the changing needs of our customers and partners, including those resulting<br> from changes in the regulatory environment in which they operate;
---	---
●	our<br> ability to maintain and strengthen our relationships with key stakeholders in the supply<br> chain finance industry, including, but not limited to, core enterprises and their suppliers,<br> as well as financial institutions;
---	---
●	our<br> strategy to reach more core enterprises and financial institutions and increase the volume<br> of transactions that process commodity flows through our technology solutions;
---	---
●	our<br> innovations and diversification of our solution products;
---	---
●	improvement<br> of our operational efficiency;
---	---
●	measures<br> to safeguard the security of our IT systems and confidentiality of the data we obtain<br> and use through our solutions and systems;
---	---
●	ability<br> to attract, retain, and motivate talented employees;
---	---
●	solutions<br> to potential litigation such as regulatory, intellectual property infringement, data<br> privacy, or other claims; and
---	---
●	other<br> potential risks and uncertainties inherently associated with our industry and our operations;
---	---

If we are unable to effectively address those identified and unknown risks and uncertainties, or fail to adapt to changes in the financial services industry, our business, financial condition and operating results could be materially adversely affected.

Ifwe are unable to innovate or respond effectively to ever-changing financial technologies and industry practice, our business and resultsof operations would be materially adversely affected.

The supply chain and SME financing markets in which we compete are subject to rapid and significant changes. Operating in the financial service industry requires cutting-edge technology to digitize supply chain finance processes and optimize payment cycles. We offer a wide range of solutions built upon our cutting-edge technologies such as AI, blockchain, big data, and cloud technology to digitize and optimize payment cycles throughout the supply chain procurement process. Innovation is key to improving our finance solution products and developing new technologies to meet ever-changing customer needs. If we fail to innovate or invest in technology innovation, our competitive position could be compromised, which in turn could have a material and adverse impact on our business, financial condition, operating results and prospects.

Our success will depend in part on our ability to adapt and respond to the technology changes in a timely and effective manner. It requires us to continue to invest significant resources to enhance our technology infrastructure and research and development efforts. Changes and developments in the supply chain finance industry may also require us to reevaluate our existing business models or financial solutions from time to time and make significant adjustments to our long-term strategy and business plans. We cannot assure you that we will succeed in implementing those initiatives. If we are unable to respond to technological developments or industry practices in a cost-effective manner, our business, financial position, and operating performance may be materially adversely affected.

Werely on our cooperation with our customers and industry partners, and if our technology solutions or services cannot meet the needs orexpectations of customers and partners for any reason, we could lose our established market share.

Our relationships with our customers and partners are critical to our success. We generate revenue primarily by providing financial services and technology solutions to our customers and partners for service fees. In our supply chain solutions business, much of our business depends on our relationships with core enterprises and financial institutions and their willingness to continue to work with us. Almost all of our customers apply a complex and rigorously screened bidding process in selecting their fintech solutions partners to address some of their most challenging yet frequently encountered problems. We have been successful in building trusted relationships with those core enterprises and financial institutions and believe we will continue to deliver satisfactory fintech solutions to those businesses. However our service agreements are usually non-exclusive in nature, and they may choose to use their in-house research and development capabilities or choose our competitors to develop their supply chain fintech platforms and solutions. We cannot guarantee our customers and industry partners will renew contracts with us on a long term basis or at all, nor can we be certain that the customer will not engage other third-party technology solution providers for their technical solution needs.

Our ability to maintain and expand our customer base and build long-term relationships with our partners also depends on a number of other factors, such as:

●	our<br> technologies and solutions to keep up with rapid technological change and the ability<br> to compete in the market;
●	our<br> adaptation to meet changing customer needs and expectations;
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●	satisfaction<br> level of our customers and partners with the performance, customization and effectiveness<br> of our solutions and customer service;
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●	our<br> ability to accurately predict market trends and deliver attractive products and services<br> at a prices sensitive to market demands;
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●	the<br> success and development of our customers and partners; and
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●	overall<br> economy conditions, market and regulatory developments.
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Our business, financial condition, operating results and prospects may be materially adversely affected if our technology solutions or services cannot meet the needs or expectations of customers and partners, or our customers and partners opt for their in-house team or our competitors to provide them technology solutions.

Weare subject to evolving regulatory requirements, and if we fail to adapt to regulatory changes, our business and prospects may be materiallyand adversely affected.

Many aspects of our business, including the provision of internet information, consulting services to customers and banks, online publication services relating to financial product information, and financing solutions services, among others, are subject to supervision and regulation by various governmental authorities in China. In addition, as we continue to expand the solutions on our platform, we may be subject to new and more complex regulatory requirements. We are also required to comply with applicable laws and regulations in relevant jurisdictions to protect the privacy and security of our customers’ information. Legal and regulatory restrictions may delay, or possibly prevent, some of our solutions or services from being offered, which may have a material adverse effect on our business, financial condition and results of operations. Violation of laws and regulations may also result in severe penalties, confiscation of illegal income, revocation of licenses and, under certain circumstances, criminal prosecution.

The PRC regulatory framework governing financial services and related technology services is evolving. New laws or regulations may be promulgated, which could impose new requirements or prohibitions that render our operations or our technologies non-compliant. In addition, due to uncertainties and complexities of the regulatory environment, we cannot assure you that regulators will interpret laws and regulations the same way we do, or that we will always be in full compliance with applicable laws and regulations. To remedy any violations, we may be required to modify our business models, solutions and technologies in ways that render our solutions less appealing. We may also become subject to fines or other penalties, or, if we determine that the requirements to operate in compliance are overly burdensome, we may elect to terminate potentially non-compliant operations. If those situations were to happen, our business, financial condition and results of operations may be materially and adversely affected.

Failureto manage our growth could cause disruption to our operations, impair our ability to generate revenue and strain our operational andother resources.

Since 2019, our business has experienced significant growths through acquisitions and service solution diversification. Our growth strategy includes increasing market penetration of our existing products and services, enhancing our financial technologies, developing new products, and increasing the number of industries and customers we serve. Pursuing these strategies has resulted in, and will continue to result in substantial demands on our capital and operating resources. In particular, the management of our growth will require, among other things:

●	successful<br>integration of our existing operations and acquired businesses;
●	continued technology innovations<br> and R&D capability enhancement;
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●	stringent cost controls<br> and adequate replenishable liquidity;
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●	strengthening of financial<br> and risk controls;
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●	increased marketing, sales<br> and support activities; and
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●	retaining, training and<br> hiring qualified employees and professionals.
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If we are not able to manage our growth successfully, our business, financial condition and operating results would be materially and adversely affected.

Wehave modified our business models and had substantial strategic operational adjustments to our business as a result of changes in theregulatory mandates as well as our corporate reorganizations, and we may be subject to risks, uncertainties or potential liabilitiesassociated with our legacy business, products or services.

Given the complexities, uncertainties and changes in the laws, rules, regulations, policies and administrative measures governing our industries and business operations, we have modified our business models and practices in response to changes in regulatory requirements and our strategies. In addition, among historical financial service products some of our affiliated entities offered, they had ceased to facilitate certain financial intermediary services before being acquired by our Company as a result of the legal and policy changes in the PRC financial industry. In addition, in the normal course of business, legacy Xibolun Group that has been divested by us in 2020 may still be subject to challenges from PRC taxing authorities regarding the amounts of taxes due. Although Xibolun Group management believed it had paid all accrued taxes owed, PRC taxing authorities may take the position that Xibolun Group owed more taxes than it had paid and could hold us liable for any overdue taxes that may be levied despite that Xibolun Group is no longer a part of our consolidated group.

We are not aware any PRC authorities have imposed such liability or administrative penalties on us as of the date of this prospectus. Nevertheless, we cannot assure you that we will not be subject to liabilities or regulatory penalties in connection with the historical products or services our affiliates previously offered. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of any violation of those policies and rules until notified by the relevant agencies, and we cannot assure you that our affiliates or disposed operations would not cause us to be subject to liabilities or administrative penalties even though the relevant products or operations had not been or no longer are associated with our Company. Any of such occurrence may materially and adversely affect our client relationship, reputation and business operations.

Wecannot assure you that our growth strategies will be successful or that we will not incur loss in the future.

We implement diversified and complimentary business strategies in pursuing our growth. However, many obstacles to our growth exist, including, but not limited to, increased competition from similar businesses, our ability to improve our products and product mix to realize the benefits of our solution services, unexpected costs and costs associated with marketing efforts. We cannot assure you that we will be able to successfully overcome such obstacles, increase market share or succeed in achieving our goals. Our inability to implement this internal growth strategy successfully may have a negative impact on our growth, future financial condition, results of operations or cash flows.

In addition, we have incurred losses in the past. We cannot assure you that we will be able to generate profits in the future. We may experience losses due to our continued investments in technology, talent, content, brand recognition, customer base expansion and other initiatives. Our profitability also depends on our ability to manage our costs and expenses. We intend to manage and control our costs and expenses as a proportion of our total revenues, but there can be no assurance that we will achieve this goal. Our ability to achieve and sustain profitability is affected by various other factors, some of which are beyond our control, such as changes in macroeconomic and regulatory environment or competitive dynamics in the industry. Accordingly, shareholders should not rely on our financial results of any prior period as an indication of our future performance.

Fromtime to time we may evaluate and pursue strategic investments or acquisitions, which could require significant management attention,disrupt our existing operations and adversely affect our financial results.

We may evaluate and consider strategic investments, combinations, acquisitions or alliances to expand our operations and further increase the value of our services to our customers. These transactions could be material to our financial condition and results of operations if consummated. If we are able to identify an appropriate business opportunity, we may not be able to successfully consummate the transaction or may be unable to obtain the benefits of such transaction.

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

●	difficulties<br> in integrating the operations, personnel, systems, data, technologies, rights, platforms, products and services of the acquired business;
●	inability<br> of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other<br> benefits;
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●	difficulties<br> in retaining, training, motivating and integrating key personnel;
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●	diversion<br> of management’s time and resources from our daily operations;
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●	difficulties<br> in maintaining uniform standards, controls, procedures and policies within the combined organizations;
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●	difficulties<br> in retaining relationships with customers, employees and suppliers of the acquired business;
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●	risks<br> of entering markets in which we have limited or no prior experience;
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●	assumption<br> of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property<br> rights or increase our risk for liability;
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●	failure<br> to successfully further develop the acquired technology;
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●	liability<br> for activities of the acquired business before the acquisition, such as violations of laws, commercial disputes, tax liabilities<br> and other known and unknown liabilities;
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●	potential<br> disruptions to our ongoing businesses; and
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●	unexpected<br> costs and unknown risks and liabilities associated with strategic investments or acquisitions.
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We have made certain investments and acquisitions during the past year, including, for example, working with local partners in Shandong to establish our Tai’an subsidiary as a key holding and operational platform and acquiring Nami Cayman and its subsidiaries and operating affiliates to support the growth of our SME financing solution services. However, our investments and acquisitions may not be successful, may not benefit our business strategy, may not generate sufficient revenues to offset the associated acquisition costs or may not otherwise result in the intended benefits. In addition, we cannot assure you that any future investment in or acquisition of new businesses or technology will prove to be profitable or bring value to our shareholders.

COVID-19 pandemichad an adverse effect on some operations of our business and may have material impact on our future business operations.

The COVID-19 pandemic has negatively impacted the global economy, disrupted business operations of various industries, and created significant volatility and disruption of financial markets. In the Spring of 2020, our operations were temporarily affected by travel restrictions, office closings, home quarantine, delays in project implementation, on-site work and business development, among others. For fiscal year 2020, the COVID-19 pandemic did not have a material negative impact on the Company’s financial services business. However, the COVID-19 pandemic resulted in material adverse effects on the Company’s discontinued equipment and engineering business. Employees had very limited access to Xibolun Group’s manufacturing facilities, and as a result, the Company experienced difficulty in providing manufacturing and installation services. In addition, some of the Company’s customers and suppliers experienced financial distress, delayed or defaulted on their payments, reduced the scale of their business, and suffered disruptions in their business, which in turn had caused further adverse impact on the equipment and engineering business.

After the Spring of 2020, the COVID outbreak in China has gradually been controlled and we also returned to normal operations. However, the pandemic could adversely affect our business and financial results in 2021 if any virus resurges cause significant disruptions to our operations or the business of our supply chain customers, logistics and service providers, and negative impact to the pricing of our products. We cannot predict the severity and duration of the impact from such resurgence, if any. If any new outbreak of COVID-19 is not effectively and timely controlled, or if government responses to outbreaks or potential outbreaks are severe or long-lasting, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, and could materially and adversely impact our business, financial condition and results of operations.

Ifwe cannot compete effectively, our results of operations could suffer.

Competition in the SME financing industry has been intense, and increasingly more participants have also entered into the supply chain solutions market. Our competitors operate with different business models, have different cost structures or participate selectively in different markets. They may ultimately prove more successful or more adaptable to new regulatory, technological and other developments. Some of our current and potential competitors have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their financial service platforms and customers. Our competitors may also have longer operating histories, more extensive customer bases, greater brand recognition and brand loyalty and broader partner relationships than us. Additionally, a current or potential competitor may acquire one or more of its existing competitors or form a strategic alliance with one or more of its competitors. Our competitors may be better at developing new products or services, responding faster to new technologies, or undertaking more extensive and effective marketing campaigns. If we are unable to compete with such companies and meet the need for innovation in the financial services industry, the demand for our financial services could stagnate or substantially decline, our financial services business could experience reduced revenues or fail to achieve or maintain more widespread market acceptance, any of which could harm our business and results of operations.

IfSME financial products traded on provincial or regional financial assets exchanges become restricted or prohibited, or if such financialassets exchanges are prohibited from listing exchange administered products, our results of operations and financial condition wouldbe materially and adversely affected.

We provide small-and mid-size enterprises with financing solution services in connection with the listing of their securities on the provincial or regional financial assets exchanges in the PRC. The PRC government has not adopted a regulatory framework governing such local exchanges or the listing, trading and distribution of exchange administered products. The local financial assets exchanges are established upon approval of the local governments, and the exchange administered products listed and traded on these exchanges are filed with and approved by local financial asset exchanges under the supervision of the offices of finance at the municipal and provincial levels. As a result, the major product types selected for distribution on such exchanges are dependent upon the local regulatory environment and policies. If any significant product types are discouraged by the local government authorities, our product portfolio, distribution services and related revenues may be negatively impacted.

In addition, although the local financial exchanges are regulated by the local government subject to the two prohibitive provisions issued by the State Council, we cannot guarantee that they would not be covered by the tightened national financial supervision system. If they are subject to approval or guidance of any national regulatory bodies, such as the People’s Bank of China, China Banking and Insurance Regulatory and Administration Committee, or the CSRC, these financial exchanges may be prohibited from listing certain or all of the products currently traded on such exchanges, or be prohibited from engaging in such listing and trading services. Under that circumstance, we may have to change our business model and as a result, our operating results from SME financing solution services would be materially and adversely affected.

Wedepend on our industry partners to derive a substantial portion of our revenues.

We derive a substantial portion of our revenues from our cooperation with industry partners, including state-owned enterprises in our supply chain finance operations, financial institutions underwriting our customers’ securities on the financial asset exchanges and commercial banks distributing various financial products. If we lose any of the product providers, sponsors or acquirers, or any of our partners significantly reduces its volume of business with us, our revenues and profitability would be substantially reduced if we are unable seek alternative partners on a timely basis, or at all. In addition, the product volume we source and distribute from specific product providers may vary from period to period, particularly because we are not the exclusive distributor for any particular product provider. Our dependence on our financial product providers, sponsors or acquirers may also adversely affect our ability to negotiate fee rates with our customers, which may in turn materially and adversely affect our results of operations.

Whilewe are not aware of any data breach in the past, cyber-attacks, computer viruses or any future failure to adequately maintain securityand prevent unauthorized access to electronic and other confidential information could result in a data breach which could materiallyadversely affect our reputation, financial condition and operating results.

The protection of our customers’, business partners’, our Company’s and employees’ data is critically important to us. Our customers, business partners, and employees expect we will adequately safeguard and protect their sensitive personal and business information. We have become increasingly dependent upon automated information technology processes. Improper activities by third parties, exploitation of encryption technology, data-hacking tools and discoveries and other events or developments may result in a future compromise or breach of our networks, payment terminals or other settlement systems. In particular, the techniques used by criminals to obtain unauthorized access to sensitive data change frequently and often are not recognized until launched against a target; accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures. There can be no assurance that we will not suffer a criminal cyber-attack in the future, that unauthorized parties will not gain access to personal or business information or sensitive data, or that any such incident will be discovered in a timely manner.

We also face indirect technology, cybersecurity and operational risks relating to the third parties whom we work with to facilitate our business activities, including, among others, third-party online service providers who manage accounts for our customers and external cloud service provider. As a result of increasing consolidation and interdependence of technology systems, a technology failure, cyber-attack or other information or security breach that significantly compromises the systems of one entity could have a material impact on its counterparties. Any cyber-attack, computer viruses, physical or electronic break-ins or similar disruptions of such third-party service providers could adversely affect our operations and could result in misappropriation of funds of our customers.

Security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships with customers and cooperation partners could be severely damaged, we could incur significant liability and our business and operations could be adversely affected.

Anynegative publicity and allegations against us may adversely affect our brand and reputation, which may harm our ability to attract andretain customers and business partners and result in material adverse impact on our business, results of operations and prospects.

Negative publicity and allegations about us, our products and services or our financial results, including by short sellers or investment research firms, regardless of their veracity, may adversely damage our brand, public image and reputation, harm our ability to attract and retain customers and result in material adverse impact on our share price, business, results of operations and prospects. For example, on June 3, 2020, a short seller issued a report alleging that, among other things, the private placement we consummated in December 2019, Hengpu acquisition and Nami acquisition were undisclosed related party transactions which we failed to disclose. The trading price of our shares declined and a shareholder class action lawsuit was filed against us and some of our directors and senior executive officers with the United States District Court for the Southern District of New York which is currently pending. While the findings and conclusions of the independent investigation conducted by the special counsel have refuted the relevant allegations set out in the short report, nevertheless our share price fluctuated after such negative publicity.

Theloss of any of our key customers could reduce our revenues and our profitability.

For the year ended December 31, 2020, three customers accounted for approximately 31%, 21% and 12% of the Company’s total revenue from financial service business. As of December 31, 2020, three customers accounted for approximately 45%, 20% and 17% of the Company’s total accounts receivable balance. For the year ended December 31, 2019, one customer accounted for approximately 100% of our total financial services revenue and accounts receivable from the financial services.

We have not entered into long-term contracts with any of these major customers and instead rely on individual orders from such customers. Therefore, there can be no assurance that we will maintain or improve the relationships with these customers, or that we will be able to continue to serve these customers at current levels or at all. As the majority of our revenues are driven by individual orders for services, our major customers often change each period based on when a given order is placed. Although long-term contracts do not exist in our industry and our customers often make orders repeatedly, if we cannot develop and maintain long-term relationships with major customers or replace major customers from period to period with equivalent customers, the loss of such sales could have an adverse effect on our business, financial condition and results of operations.

Oursupply chain solutions services are capital driven operations, and if we cannot maintain the level of capital and funding sources neededto support our solutions services to our customers, our business would be harmed.

For our supply chain solutions services, we participate as an intermediary and a trading partner in the procurement and distribution transactions, automate the transaction payments and streamline the supply chain finance process. Such supply chain transactions are common for the commodity-based industry such as the agriculture, infrastructure and energy markets. As such, our supply chain solutions services may be considered capital intensive operations in the merchandise flows from the upstream procurement to the downstream distribution. Further, to remain competitive and enhance customer experience and the quality of our services, we need to make continued investment to develop new solution products and expand into new industries. Such endeavors carry risks, such as cost overruns, delays in delivery or lack of acceptance from our clients or partners. There can be no assurance that we will have sufficient funds available to maintain the levels of funding or future investment required to support our products or innovations, and any delay in the delivery of new services or the failure to accurately predict and address market demand could render our services less desirable to our customers and cooperation partners. While we have made continued efforts to diversify revenue and funding sources, we cannot assure you that such efforts would be successful or could remain or become increasingly diversified in the future. If we become dependent on a small number of customers or funding sources, and any such entities decide not to collaborate with us, change the commercial terms to the extent unacceptable to us or limit the funding available on our platform, such constraints may materially limit our ability to serve our customers. As a result, our business, financial condition, results of operations and cash flow may be materially and adversely affected.

OurPRC subsidiaries’ and consolidated affiliates’ books and records are prepared in accordance with China GAAP, not U.S. GAAP.

Substantially all of the business operations of the Company are located in Mainland China. Although Nisun International’s reports are prepared in accordance with U.S. GAAP, our PRC subsidiaries’ books and records are prepared in accordance with China GAAP. Despite our efforts to improve the Company’s controls and procedures, our accounting personnel do not have sufficient knowledge, experience and training in maintaining our books and records in accordance with U.S. GAAP standards. This has required us to obtain help to assist in the preparation of our financial statements for U.S. GAAP reporting until we are capable of doing internally. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm the value of our shares.

Weare substantially dependent upon our senior management and key information technology and development personnel.

We are highly dependent on our senior management to manage our business and operations and our key research and development personnel for the development of new products and the enhancement of our existing products and technologies. In particular, we rely substantially on members of our senior management, including Chief Executive Officer, Xiaoyun Huang, Chief Financial Officer, Changjuan Liang, and senior executives of Fintech, Hengpu and Nami to manage our operations.

While we provide the legally required personal insurance for the benefit of our employees, we do not maintain key man life insurance on any of our senior management or key personnel. The loss of any one of them would have a material adverse effect on our business and operations. Competition for senior management and our other key personnel is intense and the pool of suitable candidates is limited. We may be unable to locate a suitable replacement for any senior management or key personnel that we lose. In addition, if any member of our senior management or key personnel joins a competitor or forms a competing company, they may compete with us for customers, business partners and other key professionals and staff members of our Company. Although each of our senior management and key personnel has signed a confidentiality agreement in connection with their employment with us, we cannot assure you that we will be able to successfully enforce these provisions in the event of a dispute between us and any member of our senior management or key personnel.

We compete for qualified personnel with other technology companies and research institutions. Intense competition for these personnel could cause our compensation costs to increase, which could have a material adverse effect on our results of operations. Our future success and ability to grow our business will depend in part on the continued service of these individuals and our ability to identify, hire and retain additional qualified personnel. If we are unable to attract and retain qualified employees, we may be unable to meet our business and financial goals.

Weare heavily dependent upon the services of experienced personnel who possess skills that are valuable in our industry, and we may haveto actively compete for their services.

We are heavily dependent upon our ability to attract, retain and motivate skilled personnel to serve our customers. Many of our personnel possess skills that would be valuable to all companies engaged in our industry. Consequently, we expect that we will have to actively compete for these employees. Some of our competitors may be able to pay our employees more than we are able to pay to retain them. Our ability to profitably operate is substantially dependent upon our ability to locate, hire, train and retain our personnel. There can be no assurance that we will be able to retain our current personnel, or that we will be able to attract and assimilate other personnel in the future. If we are unable to effectively obtain and maintain skilled personnel, the development and quality of our services could be materially impaired. See “Our Employees.”

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

We rely on a combination of copyright, trademark and trade secret laws and non-disclosure agreements and other methods to protect our intellectual property rights. Our affiliated entities own a number of trademarks in China, all of which have been properly registered with regulatory agencies such as the State Intellectual Property Office and Trademark Office. This intellectual property has allowed our products to earn market share in the financial services and supply chain solutions industries.

We also rely on trade secret rights to protect our business through non-disclosure agreements with certain employees. If any of our employees breach their non-disclosure obligations, we may not have adequate remedies in China, and our trade secrets may become known to our competitors. In accordance with Chinese intellectual property laws and regulations, we will have to renew our trademarks once the terms expire.

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

Wemay be exposed to intellectual property infringement and other claims by third parties which, if successful, could disrupt our businessand have a material adverse effect on our financial condition and results of operations.

Our success depends, in large part, on our ability to use and develop our technology and know-how without infringing third party intellectual property rights. As litigation concerning intellectual property has become more common in China, we face a higher risk of being the subject of claims for intellectual property infringement, invalidity or indemnification relating to other parties’ proprietary rights. Our current or potential competitors, many of which have substantial resources and have made substantial investments in competing technologies, may have or may obtain intellectual property rights that will prevent, limit or interfere with our ability to use or sell our products in either China or other countries, including the United States. In addition, the defense of intellectual property suits, including patent infringement suits, and related legal and administrative proceedings can be both costly and time consuming and may significantly divert the efforts and resources of our technical and management personnel. Furthermore, an adverse determination in any such litigation or proceedings to which we may become a party could cause us to:

●	pay damage awards;
●	seek licenses from third<br> parties;
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●	pay ongoing royalties;
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●	redesign our products;<br> or
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●	be restricted by injunctions,
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each of which could effectively prevent us from pursuing some or all of our business and result in our customers or potential customers deferring or limiting their purchase or use of our branded products, which could have a material adverse effect on our financial condition and results of operations.

Ourbrands or reputation and the reputation of the financial service industry may materially and adversely be affected by factors outsideof its control.

Enhancing the recognition and reputation of the brands of our financial services is critical to its business and competitiveness. Factors that are important to this objective include but are not limited to its ability to:

●	maintain the quality and<br> reliability of our technology platform;
●	provide financial institutions,<br> corporate and individual customers and industry partners with a superior client service experience;
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●	maintain accurate financial<br> product matching and asset management tools and decision-making models;
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●	effectively manage and<br> resolve any customer questions or concerns; and
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●	effectively protect personal<br> information and privacy of customers and industry partners.
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Any negative publicity by the media or other parties about the foregoing or other aspects of our services, including but not limited to our management, business, compliance with laws, whether with merit or not, could severely hurt its reputation and harm its business and operating results.

Certain factors that may adversely affect our reputation are beyond our control. Negative publicity about our industry partners, service providers or other counterparties, such as negative publicity about their revenue generating practices and any failure by them to adequately protect the information of their investors, to comply with applicable laws and regulations or to otherwise meet required quality and service standards could harm the reputation of our financial services model working with those industry partners. Furthermore, any negative development in the financial services industry, such as bankruptcies or failures of other financial technology platforms, or negative perception of the industry as a whole, such as that arises from any failure of other financial advisory service providers or their technology platforms to detect or prevent money laundering or other illegal activities, even if factually incorrect or based on isolated incidents, could compromise our image, undermine the trust and credibility we have established and have a negative impact on our ability to attract new customers. Negative developments in the financial services industry, such as fraudulent behavior and/or the closure of other financial service platforms, may also lead to tightened regulatory scrutiny of the industry and limit the scope of permissible business activities that may be conducted by the industry participants. If any of the foregoing were to occur, our business and results of operations could be materially and adversely affected.

Ouroperations depend on the performance of the internet infrastructure and fixed telecommunications networks in China.

Almost all access to the internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT. We reoly on a limited number of telecommunication service providers to provide us with data communications capacity through local telecommunications lines and internet data centers to host our servers. We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China’s internet infrastructure or the fixed telecommunications networks provided by telecommunication service providers. With the expansion of our business, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our digital technology systems and platform. We cannot assure you that the internet infrastructure and the fixed telecommunications networks in China will be able to support the demands associated with the continued growth in internet usage.

In addition, we have no control over the costs of the services provided by telecommunication service providers. If the prices we pays for telecommunications and internet services rise significantly, our results of operations may be adversely affected. Furthermore, if internet access fees or other charges to internet users increase, our user traffic may decline and our business may be harmed.

Weface risks related to health pandemics or disease outbreaks.

In general, our business could be adversely affected by the effects of pandemic, including but not limited to, the COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A virus, Ebola virus, or other outbreaks. In response to an pandemic, government and other organizations may adopt regulations and policies that could lead to severe disruptions to our daily operations, including temporary closure of our offices and other facilities. These severe conditions may cause us and/or our suppliers and customers to make internal adjustments, including but not limited to, temporarily closing down our business, limiting business hours, and setting restrictions on travel and/or visits with clients and suppliers for a prolonged period of time. Various impacts arising from a severe condition may cause business disruption, resulting in a material, adverse impact to our financial condition and results of operations.

Substantially all of our revenues and our workforce are concentrated in the PRC. Consequently, our results of operations will likely be adversely, and may be materially, affected, to the extent that the COVID-19 or any other pandemic harms the Chinese and global economy in general. Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the health pandemics and the actions taken by government authorities and other entities to contain the health pandemics or alleviate its impact, almost all of which are beyond our control. Potential impacts include, but are not limited to, the following:

●	temporary<br>closure of offices, travel restrictions or suspension of services of our customers and suppliers have negatively affected, and<br>could continue to negatively affect, the demand for our services;

●	our<br>customers that are negatively impacted by the outbreak of health pandemics, may reduce their budgets on equipment and engineering<br>projects or delay the progress of the related projects or have less demands on our financial service which may materially adversely<br>impact our revenue;
●	our<br>customers may require additional time to pay us or fail to pay us at all, which could significantly increase the amount of accounts<br>receivable and require us to record additional allowances for doubtful accounts, which may in turn adversely affect our financial<br>condition and operating results; and
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●	any<br>disruption of our supply chains, logistics providers or customers could adversely impact our business and results of operations,<br>including causing our subcontractors to temporarily cease operation for a period of time, which may also lead to delayed project<br>progress and business harm to us;
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Because of the possible future uncertainty surrounding the COVID-19, the financial impact related to the pandemic of and response cannot be reasonably estimated at this time. There is no guarantee that our total revenues will grow or remain at the similar level year-over-year in the future. We may have to record downward adjustments, if conditions have not been significantly improved and global stock markets have not recovered from recent declines.

RisksRelated to Doing Business in China

Adversechanges in political climate and economic policies of the PRC government could have a material adverse effect on the overall economicgrowth of China and materially and adversely affect our competitive position.

Substantially all of our business operations are conducted in China. Our business, results of operations, financial condition and prospects are subject to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRC government continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB and foreign currencies, and regulate the growth of the general or specific market. This government involvements has been instrumental in China’s significant growth in the past 30 years. In response to the global and Chinese economic downturns, the PRC government has adopted policy measures aimed at stimulating the economic growth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRC government’s policies limits the growth of our industry or otherwise negatively affects our business, our growth rate or strategy and our results of operations could be adversely affected as a result.

Chineseeconomic growth slowdown may have a negative effect on our business.

Since 2014, Chinese economic growth has been slowing down from double-digit GDP speed. The annual rate of growth declined from 7.3% in 2014 to 6.9% in 2015, to 6.7% in 2016, to 6.9% in 2017, to 6.6% in 2018, and to 6.1% in 2019. Due to the impact of COVID-19, China’s economic growth rate in 2020 has slowed to 2.3%, its lowest level in years. While technology-based financial services companies have not been affected by the pandemic on the same level as companies in certain other industries, nevertheless a slow economic growth could adversely affected many of our customers and partners, which in turn may materially adversely affected our financial condition and results of operations.

Underthe Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likelyresult in unfavorable tax consequences to us and our non-PRC stockholders.

China passed an Enterprise Income Tax Law (the “EIT Law”) and implementing rules, both of which became effective on January 1, 2008. Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.

On April 22, 2009, the State Administration of Taxation of China issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, further interpreting the application of the EIT Law and its implementation to offshore entities controlled by a Chinese enterprise or group. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate stamps, board and stockholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management are often resident in China. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC stockholders.

Nisun International does not have a PRC enterprise or enterprise group as its primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of the Notice, so we believe the Notice is not applicable to us. However, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in the Notice to evaluate the tax residence status of Nisun International.

We do not believe that we meet some of the conditions outlined. As a holding company, the key assets and records of Nisun International including the resolutions and 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 have been deemed a PRC “resident enterprise” by the PRC tax authorities. Accordingly, we believe that Nisun International should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in the Notice 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.

If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Currently, we do not have any non-China source income, so this would have minimal effect on us; however, if we develop non-China source income in the future, we could be adversely affected. Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income.” Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC stockholders and with respect to gains derived by our non-PRC stockholders from transferring our shares.

If we were treated as a “resident enterprise” by the PRC tax authorities, we would be subject to taxation in both the U.S. and China, but our PRC source income will not be taxed in the U.S. again because the U.S.-China tax treaty will avoid double taxation between these two nations.

Uncertaintieswith respect to the PRC legal system could adversely affect us.

We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to wholly foreign-owned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.

Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

Shareholdersmay experience difficulties in effecting service of legal process, enforcing foreign judgments, including those obtained in the U.S.,or bringing actions in China against us or our management based on foreign laws.

We are a holding company incorporated under the laws of the British Virgin Islands. We conduct substantially all of our operations in China and substantially all of our assets are located in China. In addition, all our key employees and all, but one, directors are PRC residents and reside within China. As a result, it may be difficult for our shareholders to effect service of process upon us or those persons inside mainland China, including our management. In addition, China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the British Virgin Islands and many other countries and regions. Therefore, recognition and enforcement in China of judgments of a court in any of these non-PRC jurisdictions, including the U.S., in relation to any matter not subject to a binding arbitration provision may be difficult or impossible.

PRCregulation of loans and direct investment by offshore holding companies in PRC entities may delay or prevent us from using the proceedsof our securities offerings to make loans or additional capital contributions to our PRC operating subsidiaries, which could materiallyand adversely affect our liquidity and our ability to fund and expand our business.

In utilizing proceeds of our securities offerings, we may make loans to our PRC subsidiaries, or we may make additional capital contributions to our PRC subsidiaries.

Any loans to our PRC subsidiaries are subject to PRC regulations. For example, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the State Administration of Foreign Exchange, or SAFE. Currently, China is holding more open and tolerant attitude toward FIEs. More open rules and regulations are published in recent years to replace previous ones which are more restrictive. On March 30^th^, 2015, SAFE promulgated Circular 19 which is about Reformingthe Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises) and effective since June 1, 2015. Circular 19 has made some important changes in rules regarding the conversion of foreign exchanges to RMB, which are as follows in particular:

(1)	Instead of the payment-based<br> exchange settlement system under previous Circular 142 and Circular 88, new rules of discretional foreign exchange settlement have<br> been established, which means the foreign exchange capital in the capital account of foreign-invested enterprises for which the confirmation<br> of rights and interests of monetary contribution by the local foreign exchange bureau (or the book-entry registration of monetary<br> contribution by the banks in accordance with Circular 13 as we mentioned in the comment below) has been handled can be settled at<br> the banks based on the actual operational needs of the enterprises, and the proportion of foreign exchange which can be discretionally<br> converted by each FIE is temporarily determined as 100% (SAFE may adjust such scale as necessary). So regulation wise FIEs no longer<br> needs to report the use of its RMB before or after a conversion which are required by previous Circular 142 and Circular 88. However,<br> actually SAFE and the banks are experiencing a transitional period in this regard, so for the time being, most banks still need the<br> FIEs to report their proposed use of the RMB to be converted from foreign exchanges, as well as the actual use of the RMB obtained<br> in the last conversion. Certainly, the transitional period will not be too long and therefore optimistically from the year of 2016,<br> the report obligation will no longer be required.
(2)	Foreign currency-denominated<br> capital no longer needs to be verified by an accounting firm before converting into RMB.
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(3)	As stipulated in Circular<br> 19, the use of capital by FIEs shall follow the principles of authenticity and self-use within the business scope of enterprises,<br> shall not be used for the following purposes:
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a)	it shall not be directly<br> or indirectly used for the payment beyond the business scope of the enterprises or the payment prohibited by national laws and regulations;
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b)	it shall not be directly<br> or indirectly used for investment in securities unless otherwise provided by laws and regulations;
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c)	it shall not be directly<br> or indirectly used for granting the entrust loans in RMB (unless permitted by the scope of business), repaying the inter-enterprise<br> borrowings (including advances by the third party) or repaying the bank loans in Renminbi that have been sub-lent to the third party;<br> and
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d)	it shall not be used for<br> paying the expenses related to the purchase of real estate not for self-use, except for the foreign-invested real estate enterprises.

On May 10, 2013, SAFE released Circular 21, which came into effect on May 13, 2013; also, on February 13, 2015 SAFE published Circular 13 (Circularof the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange AdministrationPolicies) to update some measures stipulated in Circular 21. According to Circular 21, SAFE has significantly simplified the foreign exchange administration procedures with respect to the registration, account openings and conversions, settlements of FDI-related foreign exchange, as well as fund remittances. Meanwhile, Circular 13 has further simplified foreign exchange administration procedures, most important among which is that SAFE delegated foreign exchange registration to the banks, meanwhile the related registration approval by SAFE has been annulled.

Even with more and more open policy toward FDI and FIEs, the Circulars mentioned above may still have some limit our ability to convert, transfer and use the net proceeds from our securities offerings and any offering of additional equity securities in China, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions must be approved by the Ministry of Commerce of China, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capital contributions by us to our PRC subsidiaries. If we fail to receive such approvals, we will not be able to use the proceeds of our offerings and capitalize our PRC operations, which could adversely affect our liquidity and our ability to fund and expand our business.

Laborlaws in the PRC may adversely affect our results of operations.

On June 29, 2007, the PRC government promulgated a new labor law, namely, the Labor Contract Law of the PRC, which became effective on January 1, 2008, which was further amended on December 28, 2012 (effective July 1, 2013). The Labor Contract Law imposes greater liabilities on employers and significantly affects the cost of an employer’s decision to reduce its workforce. Further, it requires certain terminations be based upon seniority and not merit. In the event we decide to significantly change or decrease our workforce, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our business or in a timely and cost-effective manner, thus materially and adversely affecting our financial condition and results of operations. The Labor Contract Law also mandates that employers provide social welfare packages to all employees, increasing our labor costs. To the extent competitors from outside China are not affected by such requirements, we could be at a competitive disadvantage.

Governmentalcontrol of currency conversion may affect the value of your investment.

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income will currently only be derived from dividend payments from our PRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. 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 SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required where 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 currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our security-holders.

Fluctuationsin exchange rates could adversely affect our business and the value of our securities.

Changes in the value of the RMB against the U.S. dollar, Euro and other foreign currencies are affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of the RMB may have a material adverse effect on our revenues and financial condition, and the value of, and any dividends payable on our shares in U.S. dollar terms. For example, to the extent that we need to convert U.S. dollars we receive from our securities offerings into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on RMB amount we would receive from the conversion. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of paying dividends on our common shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us. In addition, fluctuations of the RMB against other currencies may increase or decrease the cost of imports and exports, and thus affect the price-competitiveness of our products against products of foreign manufacturers or products relying on foreign inputs.

Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

We reflect the impact of currency translation adjustments in our financial statements under the heading “accumulated other comprehensive income (loss).” For the years ended December 31, 2020, 2019 and 2018, we had foreign currency translation gain of $5.5 million, foreign currency loss of $1.8 million and foreign currency translation gain of $2.2 million, respectively. Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange gains and losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

PRCregulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholdersto penalties and limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distributeprofits to us, or otherwise adversely affect us.

The SAFE promulgated the Notice on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or Notice 37, in July 2014 that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to material change of capitalization or structure of the PRC resident itself (such as capital increase, capital reduction, share transfer or exchange, merger or spin off). On October 16, 2015, 9 of our shareholders who are Chinese residents completed the registration with SAFE under this Notice.

Failureto comply with the Individual Foreign Exchange Rules relating to the overseas direct investment or the engagement in the issuance ortrading of securities overseas by our PRC resident stockholders may subject such stockholders to fines or other liabilities.

Other than Notice 37, our ability to conduct foreign exchange activities in the PRC 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. PRC individuals who fail to make such registrations may be subject to warnings, fines or other liabilities.

We may not be fully informed of the identities of all our beneficial owners who are PRC residents. For example, because the investment in or trading of our shares will happen in an overseas public or secondary market where shares are often held with brokers in brokerage accounts, it is unlikely that we will know the identity of all of our beneficial owners who are PRC residents. Furthermore, we have no control over any of our future beneficial owners and we cannot assure you that such PRC residents will be able to complete the necessary approval and registration procedures required by the Individual Foreign Exchange Rules.

It is uncertain how the Individual Foreign Exchange Rules will be interpreted or enforced and whether such interpretation or enforcement will affect our ability to conduct foreign exchange transactions. Because of this uncertainty, we cannot be sure whether the failure by any of our PRC resident stockholders to make the required registration will subject our PRC subsidiaries to fines or legal sanctions on their operations, delay or restriction on repatriation of proceeds of our securities offerings into the PRC, restriction on remittance of dividends or other punitive actions that would have a material adverse effect on our business, results of operations and financial condition.

Thereare uncertainties under the PRC laws relating to the procedures for U.S. regulators to investigate and collect evidence from companieslocated in the PRC.

Shareholder claims that are common in the U.S., including securities law class actions and fraud claims, among other matters, generally are difficult to pursue as a matter of law or practicality in 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 local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the Unities States have not been efficient in the absence of mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities Law, which became effective in March 2020, or Article 177, the securities regulatory authority of the State Council may collaborate with securities regulatory authorities of other countries or regions in order to monitor and oversee cross border securities activities. Article 177 further provides that overseas securities regulatory authorities are not permitted to carry out investigation and evidence collection directly within the territory of the PRC, and that any Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to overseas agencies without prior consent of the securities regulatory authority of the State Council and the competent departments of the State Council.

Our principal business operations are conducted in the PRC. In the event that the U.S. regulators carry out investigations with respect to our business and need to conduct investigation or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority of the PRC. However, there can be no assurance that the U.S. regulators could succeed in establishing such cross-border cooperation in a specific case or could establish the cooperation in a timely manner. If U.S. regulators are unable to conduct such investigations, such U.S. regulators may determine to suspend and ultimately delist our common shares from the Nasdaq Capital Market or choose to suspend or de-register our SEC registration.

Newlyenacted Holding Foreign Companies Accountable Act, recent regulatory actions taken by the SEC and the Public Company Accounting OversightBoard, or the PCAOB, and proposed rule changes submitted by Nasdaq calling for additional and more stringent criteria to be applied toChina-based public companies could add uncertainties to our capital raising activities and compliance costs.

In April 2020, the SEC then-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.

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

In May 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act (“HFCAA” or the “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.

In August 2020, the President’s Working Group on Financial Markets (“PWG”) issued a Report on Protecting United States Investors from Significant Risks from Chinese Companies. The Report made five recommendations designed to address risks to investors in U.S. financial markets posed by the Chinese government’s failure to allow audit firms that are registered with the PCAOB to comply with U.S. securities laws and investor protection requirements. Among the recommendations was advice to enhance the listing standards of U.S. exchanges to require, as a condition of initial and continued exchange listing, PCAOB access to main auditor work papers either directly or through co-audits.

On December 2, 2020, the U.S. House of Representatives passed the HFCAA. On December 18, the HFCAA was signed into law. Among other things, the HFCAA amends the Sarbanes-Oxley Act of 2002 to require the SEC to prohibit the securities of foreign companies from being traded on U.S. securities markets, if the company retains a foreign accounting firm that cannot be inspected or investigated completely by the PCAOB for three consecutive years, beginning in 2021. The Act also requires foreign companies to make certain disclosures about their ownership by governmental entities. The HFCAA requires the SEC to issue new rules within 90 days of the enactment to implement the Act.

In a statement issued on December 18, 2020, the SEC then-Chairman Clayton observed that the SEC staff’s proposal in response to the PWG’s recommendations would substantially overlap with the Act. As a result, Clayton indicated that he had directed the SEC staff to consider providing a single consolidated proposal for the SEC’s consideration on issues related to the PCAOB’s access to audit work papers, exchange listing standards, and trading prohibitions.

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

The lack of access to the audit work paper or other inspections 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 those accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections.

Our independent registered public accounting firm that issued the audit reports incorporated by reference 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 our auditor’s compliance with the applicable professional standards. Our auditor is based on the U.S. and has been inspected by the PCAOB on a regular basis. However, the recent U.S. legislative and regulatory developments as related to PRC companies listing or seeking to list stock on U.S. exchanges would add uncertainties to the trading and price volatility of our common shares and this ATM offering. We cannot be certain whether SEC, Nasdaq or other U.S. regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, geographic reach, or sufficiency of resources as it relates to the audit of our financial statements.

Additionalfactors outside of our control related to doing business in China could negatively affect our business.

Additional factors that could negatively affect our business include a potential significant revaluation of the Renminbi, which may result in an increase in the cost of commodity or products in the PRC supply chain industry, labor shortages and increases in labor costs in China as well as difficulties in moving products manufactured in China out of the country, whether due to infrastructure inadequacy, labor disputes, slowdowns, PRC regulations and/or other factors. Prolonged disputes or slowdowns can negatively impact both the time and cost of goods. Natural disasters or health pandemics impacting China can also have a significant negative impact on our business. Further, the imposition of trade sanctions or other regulations against products supplied or sold in the supply chain industry transactions for which we provide solutions or the loss of “normal trade relations” status with China could significantly affect our operating results and harm our business.

RisksRelated to Our Corporate Structure

Ifthe PRC government finds that the contractual arrangements that establish the structure for operating our business do not comply withPRC laws and regulations, or if these regulations or their interpretations change in the future, we could be subject to severe penaltiesor be forced to relinquish our interests in those operations.

Foreign ownership of internet-based businesses, such as distribution of online information, is subject to restrictions under current PRC laws and regulations. For example, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except e-commerce) and any such foreign investor must have experience in providing value-added telecommunications services overseas and maintain a good track record in accordance with the Special Administrative Measures (Negative List) for Foreign Investment Access (2020 Edition) issued on June 23, 2020 and effective on July 23, 2020, by the National Development and Reform Commission, or the NDRC, and the PRC Ministry of Commerce, and other applicable laws and regulations.

We are a British Virgin Islands company. To comply with PRC laws and regulations, we conduct our financing solutions and supply chain service operations in China through a series of contractual arrangements entered into between our subsidiaries and VIEs and shareholders of the VIEs. As a result of these contractual arrangements, we exert control over VIEs and their subsidiaries and consolidate the VIEs’ operating results in our financial statements under U.S. GAAP. We believe our current ownership structure and the contractual arrangements among our subsidiaries, VIEs and the shareholders of the VIEs are not in violation of existing PRC laws, rules and regulations; and those contractual arrangements are valid, binding and enforceable in accordance with their terms and applicable PRC laws and regulations currently in effect. However, there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations and there can be no assurance that the PRC government will ultimately take a view that is consistent with our opinion.

It is uncertain whether any new PRC laws, rules or regulations relating to variable interest entities structures will be adopted or if adopted, what they would provide. In particular, in January 2015, the Ministry of Commerce, or MOFCOM, published a discussion draft of the proposed Foreign Investment Law for public review and comments. Among other things, the draft Foreign Investment Law expands the definition of foreign investment and introduces the principle of “actual control” in determining whether a company is considered a foreign-invested enterprise, or an FIE. Under the draft Foreign Investment Law, variable interest entities would also be deemed as FIEs, if they are ultimately “controlled” by foreign investors, and be subject to restrictions on foreign investments. In December 2018, the Standing Committee of the National People’s Congress published a discussion draft of a new proposed Foreign Investment Law, aiming to replace the major existing laws governing foreign direct investment in China. On January 29, 2019, the discussion draft with slight revisions, or the New Draft Foreign Investment Law, was submitted for review. Pursuant to the New Draft Foreign Investment Law, foreign investments shall be subject to the negative list management system. However, the New Draft Foreign Investment Law does not mention “actual control” as regulated in the previous draft and the position to be taken with respect to the existing or future companies with the “variable interest entities” structure. On March 15, 2019, the Foreign Investment Law of the People’s Republic of China, or the Final Foreign Investment Law, with slight revision, was finally issued and became effective on January 1, 2020.

Although variable interest entities structures are not included in the Final Foreign Investment Law, it is uncertain whether any interpretation and implementation of the Final Foreign Investment Law or new PRC laws, rules or regulations relating to variable interest entities structures will be adopted or if adopted, what they would provide. If the ownership structure, contractual arrangements and business of our PRC subsidiary or its consolidated VIEs are found to be in violation of any existing or future PRC laws or regulations, or our PRC subsidiary fails to obtain or maintain any of the required permits or approvals, the relevant governmental authorities would have broad discretion in dealing with such violation, including levying fines, confiscating its income or the income of its PRC subsidiary or consolidated variable interest entities, revoking the business licenses or operating licenses of its PRC subsidiary or consolidated variable interest entities, discontinuing or placing restrictions or onerous conditions on its operations, requiring our PRC operations to undergo a costly and disruptive restructuring and taking other regulatory or enforcement actions that could be harmful to our business. Any of these actions could cause significant disruption to our financial service business operations and severely damage its reputation, which would in turn materially and adversely affect its business, financial condition and results of operations. If any of these occurrences results in its inability to direct the activities of its consolidated variable interest entities, and/or its failure to receive economic benefits from its consolidated variable interest entities, we may not be able to consolidate our VIEs’ results into our consolidated financial statements in accordance with U.S. GAAP.

Werely on our contractual arrangements with VIEs and the shareholder of VIEs for our business operations, which may not be as effectiveas direct ownership in providing operational control.

We have relied and expect to continue to rely on contractual arrangements with Fintech, Hengpu and Nami to operate our SME financing solutions, supply chain and other financing solutions business in the future. These contractual arrangements may not be as effective as direct ownership in providing us with control over our consolidated affiliates. For example, VIEs and their shareholders could breach their contractual arrangements by, among other things, failing to conduct their operations, in an acceptable manner or taking other actions that are detrimental to our interests.

If we had direct ownership of the VIEs, we would be able to exercise our rights as a shareholder to effect changes in the VIEs. However, under the current contractual arrangements, we rely on the performance by the VIEs and their shareholders of their obligations under the contracts to exercise control over our consolidated entities. The shareholders of VIEs may not act in the best interests of ours or may not perform their obligations under these contracts. Such risks exist throughout the period in which we operate our business through the contractual arrangements with the VIEs. Although we have the right to replace any shareholder of the consolidated variable interest entities under the contractual arrangement, if any shareholder of such entity is uncooperative or any dispute relating to these contracts remains unresolved, we will have to enforce the rights under the contracts through the operations of PRC laws and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. Therefore, the contractual arrangements with VIEs may not be as effective in ensuring our control over the relevant portion of its business operations as direct ownership would be.

Shareholdersof VIEs may have potential conflicts of interest with ours, which may materially and adversely affect our business and financial condition.

The equity interests of the VIEs are beneficially owned by several individual shareholders through holding companies. Such VIE shareholders’ interests in VIE may differ from the interests of our Company as a whole. VIE shareholders may breach, or cause VIEs to breach, the existing contractual arrangements between us and VIEs, which would have a material adverse effect on our ability to effectively control the consolidated variable interest entities and receive economic benefits from them. For example, shareholders of VIEs may be able to cause the VIE agreements with the VIE to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to our subsidiaries on a timely basis. We cannot assure you that when conflicts of interest arise, any or all of VIE shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor.

Currently, we do not have any arrangements to address potential conflicts of interest between VIE shareholders and ours, except that we could exercise the purchase option under the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in the VIE to a PRC entity or individual designated by us, to the extent permitted by PRC laws. If we cannot resolve any conflict of interest or dispute with the shareholders of the VIE, we would have to rely on legal proceedings, which could result in the disruption of its business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

Contractualarrangements in relation to our consolidated variable interest entities may be subject to scrutiny by the PRC tax authorities and theymay determine that we or our PRC consolidated variable interest entities owe additional taxes, which could negatively affect our financialcondition and the value of your investment.

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. The PRC enterprise income tax law requires every enterprise in China to submit its annual enterprise income tax return together with a report on transactions with its related parties to the relevant tax authorities. The tax authorities may impose reasonable adjustments on taxation if they have identified any related party transactions that are inconsistent with arm’s length principles. We may face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements between NingChen and Naqing, our wholly-owned subsidiaries in China, consolidated VIEs in China, and the shareholders of the VIEs were not entered into on an arm’s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the VIEs’ income in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by VIEs for PRC tax purposes, which could in turn increase its tax liabilities without reducing tax expenses of NingChen and Naqing. In addition, if NingChen or Naqing requests the shareholders of VIEs to transfer their equity interests in the VIEs at nominal or no value pursuant to these contractual arrangements, such transfer could be viewed as a gift and subject the VIEs to PRC income tax. Furthermore, the PRC tax authorities may impose late payment fees and other penalties on the VIEs for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if our consolidated variable interest entities’ tax liabilities increase or if they are required to pay late payment fees and other penalties.

Wemay lose the ability to use and enjoy assets held by our consolidated VIEs that are material to the operation of our business if theVIE goes bankrupt or becomes subject to a dissolution or liquidation proceedings.

The VIE holds certain assets that are material to the operation of our financial services business, including domain names and equipment for our financial technology platform. Under the contractual arrangements, VIEs may not and VIE shareholders may not cause it to, in any manner, sell, transfer, mortgage or dispose of their assets or their legal or beneficial interests in the business without its prior consent. However, in the event a VIE shareholder breaches these contractual arrangements and voluntarily liquidates the VIE or the VIE declares bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without NingChen’s or Naqing’s consent, it may be unable to continue some or all of its business activities, which could materially and adversely affect its business, financial condition and results of operations. If the VIE undergoes a voluntary or involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of their assets, thereby hindering our ability to operate its business, which could materially and adversely affect its business, financial condition and results of operations.

Weare a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies, whichmay make it more difficult for you to evaluate our performance and prospects.

We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime.

As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

RisksRelated to Ownership of Our Common Shares

Weare an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growthcompanies will make our Class A common shares less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, although we could lose that status sooner if our revenues exceed $1.07 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our Class A common shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict if investors will find our Class A common shares less attractive because we may rely on these exemptions. If some investors find our Class A common shares less attractive as a result, there may be a less active trading market for our Class A common shares and our stock price may be more volatile. Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.

BritishVirgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability toprotect their interests.

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

Thelaws of the British Virgin Islands provide little protection for minority shareholders, and minority shareholders will have little orno recourse if the shareholders are dissatisfied with the conduct of our affairs.

Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Business Companies Act dealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents of the corporation, our amended and restated memorandum and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordance with the general law and the articles and memorandum.

There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law of the British Virgin Islands for business companies is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents of the corporation. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are the following: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts that constitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right to vote; and (4) where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded minority shareholders under the laws of many states in the United States.

Themarket price of our Class A common shares may be volatile or may decline regardless of our operating performance, and you may not beable to resell your shares.

The trading price for our Class A common shares has fluctuated since we first listed our common shares. After our common shares became listed on the Nasdaq on December 27, 2016, the trading price of our Class A common shares has ranged from $0.72 to $18.21 per share for the year ended December 31, 2020, and the last reported trading price on April __, 2021 was $__ per Class A common share. The market price of our common shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

●	actual or anticipated fluctuations<br> in our revenue and other operating results;
●	the financial projections<br> we may provide to the public, any changes in these projections or our failure to meet these projections;
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●	actions of securities analysts<br> who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our<br> failure to meet these estimates or the expectations of investors;
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●	announcements by us or<br> our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures,<br> or capital commitments;
●	price and volume fluctuations<br> in the overall stock market, including as a result of trends in the economy as a whole;
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●	lawsuits threatened or<br> filed against us; and
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●	other events or factors,<br> including those resulting from war or incidents of terrorism, or responses to these events.
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In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. 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.

Wedo not intend to pay dividends for the foreseeable future.

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

Ifwe continue to be unable to implement and maintain effective internal control over financial reporting in the future, investors may loseconfidence in the accuracy and completeness of our financial reports and the market price of our Class A common shares may decline.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. In addition, beginning with the first annual report on Form 20-F, we have been required to furnish a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. If we continue to identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common shares could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the Securities and Exchange Commission, or the SEC, or other regulatory authorities, which could require additional financial and management resources.

Ourstaggered board structure may prevent a change in control of our company.

Our board of directors is divided into three classes of directors. The current terms of the directors expire in 2021, 2022 and 2023. Directors of each class are chosen for three-year terms upon the expiration of their current terms, and each year the shareholders elect one class of directors. The staggered terms of our directors may reduce the possibility of a tender offer or an attempt at a change in control, even though a tender offer or change in control might be in the best interest of our shareholders.

Therequirements of being a public company may strain our resources and divert management’s attention.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our management, legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, semiannual, and current reports with respect to our business and operating results.

As a result of disclosure of information in this annual report on Form 20-F and in filings required of a public company, our business and financial condition are more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, brand and reputation and results of operations.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

Weincur increased costs as a result of being a public company.

As a public company, we incur legal, accounting and other expenses that we did not incur as a private company. For example, we must now engage U.S. securities law counsel and U.S. GAAP auditors that we did not require as a private company, and we will have annual payments for listing on a stock exchange if we are so listed. In addition, the Sarbanes-Oxley Act, as well as new rules subsequently implemented by the SEC and NASDAQ, has required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal, accounting and financial compliance costs and to make certain corporate activities more time-consuming and costly. In addition, we incur additional costs associated with our public company reporting requirements. While it is impossible to determine the amounts of such expenses in advance, we expect that we will incur additional expenses of between $500,000 and $1 million per year that we did not experience as a private company.

Item 4.	Information on the Company
A.	History and Development of the Company
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NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD, formerly Hebron Technology Co., Ltd. (“Nisun International” or the “Company”) was established under the laws of the British Virgin Islands (“BVI”) on May 29, 2012 as a company limited by shares. The Company is a holding company and conducts its business through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of VIEs in the People’s Republic of China (‘‘PRC’’).

We have had three major reorganizations since our inception. In connection with our initial public offering, we consummated the first reorganization to acquire our equipment and engineering business (the “IPO Reorganization”) in 2016. We became the ultimate parent company of Hong Kong Xibolun Technology Limited (“Xibolun HK”) and its PRC subsidiaries, Wenzhou Xibolun Fluid Equipment Co., Limited (“Xibolun Equipment”) and Zhejiang Xibolun Automation Project Technology Co., Ltd. (“Xibolun Automation”) (collectively referred to as the “Xibolun Group”), which before the IPO Reorganization, were all controlled by Mr. Anyuan Sun, our former Chairman of the Board and CEO. The Xibolun Group conducts equipment and engineering services operations focusing on the research, development and manufacture of valves, pipe fittings fluid equipment, with an emphasis on the manufacture and installation of intelligent valves used in the pharmaceutical, biological, food and beverage, and other clean industries in the PRC.

We commenced the second corporate restructure in July 2019 for the acquisition of our financial services business. We expanded our operations into the financial services industry through the acquisition of NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd. (“NiSun BVI”), its subsidiaries and consolidated affiliate, Fintech (Shanghai) Digital Technology Co., Ltd. (“Fintech”), and subsidiaries of Fintech (collectively, “Fintech” or “Fintech Subsidiary Group”). In 2019, Fintech provided comprehensive financing solution services to SMEs primarily in connection with SME financings sponsored or underwritten by financial institutions and also provided distribution and management services for direct banking products issued by small- and medium-sized commercial banks in China.

Since July 2019, our financial services industry operations have experienced significant growth through several subsequent acquisitions and organizational changes. In December 2019, we acquired a controlling interest in Beijing Hengtai Puhui Information Service Co. Ltd., a PRC company, and its subsidiaries (collectively, “Hengpu” or “Hengpu Subsidiary Group”) through certain contractual arrangements. Hengpu provides a full set of financing solution services in SME financings. In May 2020, we acquired Nami Holding (Cayman) Co., Ltd., a Cayman Islands exempted company (“Nami Cayman”), and its subsidiaries and consolidated affiliated entity (collectively, “Nami” or “Nami Subsidiary Group”) pursuant to a share purchase agreement. Nami provides financial advisory and intermediary financing solutions services matching small- and mid-sized enterprises and high quality investors in China.

On September 22, 2020, we changed our corporate name from “Hebron Technology Co., Ltd.” to “Nisun International Enterprise Development Group Co., Ltd” and in connection with the name change, the trading symbol of our Class A common shares on the Nasdaq Capital Market was changed to “NISN” from “HEBT,” effective on November 16, 2020. The new corporate name reflects our Company’s current core financial services business and enables different service business to integrate various brands under one corporate identity.

In December 2020, based on a preliminary agreement with the local government, we established a wholly owned subsidiary, Nisun (Shandong) Industry Development Co., Ltd (“Nisun Shandong”), in Tai’an, Shandong province. Nisun Shandong is a holding company for our existing PRC operating subsidiaries and is expected to be a key operations platform. In 2020, we also formed several operating subsidiaries in different regions of China in response to the operational demands in our supply chain solutions and SME financing solutions services.

On November 30, 2020, to streamline our businesses, we completed the third corporate restructure whereby we sold all of our equity interest in Xibolun HK to Wise Metro Development Co., Ltd., an entity controlled by our former Chairman and CEO, Mr. Anyuan Sun (“Wise Metro”). The disposition of Xibolun HK (the “Disposition”) was consummated pursuant to a Call Option Agreement we entered on April 16, 2019 with Wise Metro under which Wise Metro was granted an option to purchase all of the equity of the Xibolun Group for a period beginning six months after the effective date of the Call Option Agreement and expiring two years and six months after the agreement effective date. Upon exercise, the purchase price to exercise the Call Option Agreement would be equal to the fair market value of the Xibolun Group at the time of exercise of the Call Option as determined by a qualified and experienced business appraisal firm appointed by us and Wise Metro. On June 14, 2019, our shareholders approved our entry into the Call Option Agreement. On May 11, 2020, Wise Metro exercised the Call Option to acquire the Xibolun Group. We completed the Disposition on November 30, 2020.

Through the transfer of Xibolun HK and the resulting divestiture of our interests in Xibolun HK’s operating subsidiaries, Xibolun Automation and Xibolun Equipment, we discontinued our legacy equipment and engineering business and disposed of our minority interest in Xuzhou Weijia Biotechnology Co., Ltd. We sold the legacy businesses for a gain of approximately $0.14 million.

On March 24, 2021, we completed the latest subsidiary reorganization whereby Nami Cayman and its Hong Kong subsidiary transferred all of the equity they held in Naqing and the economic interests in Nami Shanghai to Nisun Shandong. Following the transaction, Naqing became a wholly-owned subsidiary of Nisun Shandong, which holds a controlling interest in Nami Shanghai.

CorporateInformation

Our principal executive offices are located at 99 Danba Road, Bldg C9, Putuo District, Shanghai, People’s Republic of China. Our telephone number is +86-21-2357-0055.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. We maintain our websites at https://www.fintaike.comfor Fintech, at https://www.ihengpu.com for Hengpu, and at www.namizx.com.cn for Nami*.*

PrincipalCorporate Activities

Below is a brief summary of principal activities of our Company since its formation.

●	January 25, 2005, Xibolun<br> Equipment was incorporated.
●	June 14, 2011, Xibolun<br> HK was formed in accordance with laws and regulations of Hong Kong.
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●	July 21, 2011, Xibolun<br> HK acquired 30% ownership interest of Xibolun Equipment.
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●	May 29, 2012, Hebron Technology<br> was established under the laws of the British Virgin Islands as a holding company.
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●	September 24, 2012, Xibolun<br> Automation was incorporated.
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●	December 5, 2012, Xibolun<br> HK acquired 100% ownership interest of Xibolun Automation from Hebron Technology, Xibolun Equipment, and Zhejiang Xibolun.
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●	October 22, 2012, Hebron<br> Technology acquired 100% ownership interest of Xibolun HK. As a result, Xibolun HK became a wholly owned subsidiary of Hebron Technology.
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●	July 29, 2013, Mr. Anyuan<br> Sun transferred his 70% ownership interest in Xibolun Equipment to Xibolun Automation.
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●	December 27, 2016, Hebron<br> Technology completed an initial public offering of 2,695,347 common shares. The offering was completed at an issuance price of $4.00<br> per share. Prior to the offering, the Company had 12,000,000 issued and outstanding shares, and after the offering, the Company had<br> 14,695,347 issued and outstanding shares. The Company issued to the placement agent in the initial public offering, warrants to purchase<br> 134,768 common shares for an exercise price of $4.80 per share. The placement agent’s warrants have a term of three years.
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●	March 7, 2018, Hebron Technology<br> re-classified and re-designated our common shares into Class A common shares and Class B common shares by filing the Third Amended<br> and Restated Memorandum of Association with the BVI Registrar of Corporate Affairs. Pursuant to the Third Amended and Restated Memorandum<br> of Association, our authorized shares are re-classified and re-designated into 50,000,000 common shares of par value of US$0.001<br> each, of which 40,000,000 share are designated as Class A common shares of par value of US$0.001 each and 10,000,000 shares are designated<br> as Class B common shares of par value of US$0.001 each. Each Class A common share is entitled to one vote and each Class B common<br> share is entitled to five votes on all matters subject to vote at our shareholders’ meetings. After the reclassification and<br> re-designation, 6,916,947 Class A common shares and 7,778,400 Class B common shares were issued and outstanding. Our former Chief<br> Executive Officer, Mr. Anyuan Sun, beneficially owns all of the 7,778,400 Class B common shares. The Nasdaq marketplace effective<br> date is March 12, 2018.
●	March 10, 2018, Hebron<br> Technology entered into a share acquisition agreement with the sole shareholder of Xuzhou Weijia Bio-Tech Co., Ltd. (“Weijia<br> Bio-Tech”) and Weijia Bio-Tech to acquire 49% of the equity in Weijia Bio-Tech. As consideration, we were obligated to issue<br> 1,442,778 unregistered Class A common shares (based on an agreed value of $2.00 per share) to the individuals designated by the selling<br> shareholder of Weijia Bio-Tech within 20 business days after signing the agreement. On April 17, 2018, the parties signed an addendum<br> to extend 20 business days to 40 business days. Effective as of April 9, 2018, we issued 1,442,778 unregistered Class A common shares<br> pursuant to the agreement. On or about April 11, 2018, we completed the acquisition of the 49% equity interest in Weijia Bio-Tech.
●	April 16, 2019, Hebron<br> Technology entered into a securities purchase agreement with Wise Metro Development Co., Ltd. (“Wise Metro”), Zuoqiao<br> Sun Zhang (“Sun Zhang”; and together with Wise, “Sellers”) and NiSun Cayman, pursuant to which NiSun Cayman<br> would acquire 7,778,400 Class B Common Shares from the Sellers. Upon the consummation of the share purchase transaction in July 2019,<br> all of the Class B common shares were automatically converted into Class A common shares.
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●	July 12, 2019, Hebron<br> Technology acquired all of the equity of NiSun BVI for a consideration of $7 million. NiSun BVI effectively controls Fintech through<br> a series of variable interest agreements. At acquisition, Fintech was the parent company of Khorgos Fintech Network Technology Co.,<br> Ltd (“Khorgos”), Jilin Lingang Trade Co., Ltd (“Jilin”) and NiSun Family Office (Guangzhou) Co., Ltd (“Guangzhou”).
●	November 8, 2019, NiSun<br> BVI entered into a cooperation agreement with Tai’an Keyuan Infrastructure Investment Construction Co., Ltd. (“Keyuan”)<br> to form a joint venture entity, Shandong Taiding International Investment Co., Ltd (“Taiding”), of which NiSun BVI and<br> Keyuan hold 80% and 20%, respectively, of the equity interest in Taiding. Taiding was formed on November 12, 2019.
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●	December<br>15, 2019, Hebron Technology entered into a share exchange agreement with Hengpu and shareholders of Hengpu to acquire a controlling interest<br>in Hengpu in exchange for issuance of 1,440,894 Class A Common Share of the Company to Hengpu’s shareholders. The Company, through<br>its subsidiary NingChen, obtained an effective control of Hengpu upon the entry into a series of VIE agreements with Hengpu. At acquisition,<br>Hengpu owned a 92% equity interest of Hangzhou Fengtai Technology Co., Ltd (“Fengtai”) and 100% equity interest of Dunhua<br>Midtown Assets Management Registration Center Co., Ltd.
●	May<br>31, 2020, Hebron Technology acquired Nami Cayman, and its subsidiaries and consolidated affiliated entity (collectively, “Nami”<br>or “Nami Subsidiary Group”) pursuant to a share purchase agreement. At acquisition, Nami Cayman owned all of the equity in<br>Nami HK and Naqing, and Naqing controlled Nami Shanghai through a series of VIE agreements. Nami provides financial advisory and intermediary<br>financing solutions services matching small- and mid-sized enterprises and high quality investors in China.
●	September 22, 2020, we changed our corporate name from “Hebron<br>Technology Co., Ltd.” to “Nisun International Enterprise Development Group Co., Ltd” and in connection with the name<br>change, the trading symbol of our Class A common shares on the Nasdaq Capital Market was changed to “NISN” from “HEBT,”<br>effective on November 16, 2020. The new corporate name reflects our Company’s current core business and enables different service<br>business to integrate various brands under one corporate identity.
●	November<br>30, 2020, to streamline our businesses, we disposed of Xibolun HK to Wise Metro, an entity controlled by our former Chairman and CEO,<br>Mr. Anyuan Sun. The disposition of Xibolun HK (the “Disposition”) was consummated pursuant to a Call Option Agreement we<br>entered on April 16, 2019 with Wise Metro under which Wise Metro was granted an option to purchase all of the equity of the Xibolun Group<br>for a period beginning six months after the effective date of the Call Option Agreement and expiring two years and six months after the<br>agreement effective date. Upon exercise, the purchase price to exercise the Call Option Agreement would be equal to the fair market value<br>of the Xibolun Group at the time of exercise of the Call Option as determined by a qualified and experienced business appraisal firm<br>appointed by us and Wise Metro. On June 14, 2019, our shareholders approved our entry into the Call Option Agreement. On May 11, 2020,<br>Wise Metro exercised the Call Option to acquire the Xibolun Group. We completed the Disposition on November 30, 2020.
●	December<br>15, 2020, based on a preliminary agreement with the local government, the Company established a wholly owned subsidiary, Nisun (Shandong)<br>Industry Development Co., Ltd (“Nisun Shandong”), in Tai’an, Shandong province. Nisun Shandong is a holding company<br>for our PRC operating subsidiaries and is expected to be a key operations platform.
●	December<br>21, 2020, the Company announced that Fintech entered into a strategic collaboration agreement with Shanghai Petroleum and Natural Gas<br>Exchange (“SHPGX”). SHPGX is a national-level energy trading platform for energy products approved by the Shanghai municipal<br>government and operates under the direct guidance of the National Development and Reform Commission and the National Energy Administration.<br>Under the agreement, Fintech and SHPGX agreed to join forces to expand technology support services to members of SHPGX’s trading<br>platform through the provision of supply chain management and financial services, targeting upstream and downstream enterprises in the<br>energy industry.

●	August through December<br> 2020, Fintech formed a number of operating subsidiaries in different regions of China in response to the operational demands in our<br> supply chain solutions services, including:
●	Fintech<br> (Henan) Supply Chain Management Co., Ltd. (“Fintech Henan”), a wholly owned subsidiary<br> of Fintech;
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●	Fintech<br> (Jiangsu) Supply Chain Management Co., Ltd. (“Fintech Henan”), a wholly owned<br> subsidiary;
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●	Fanlunke<br> Supply Chain Management (Shanghai) Co., Ltd. (“Fanlunke”), a wholly owned subsidiary;
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●	Fintech<br> Supply Chain Management (Ningbo) Co., Ltd, a wholly owned subsidiary;
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●	Nanjing<br> Nisun Gold Co., Ltd. (“Nisun Gold”), a wholly owned subsidiary;
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●	Fintech<br> (Shandong) Supply Chain Management Co., Ltd. (“Fintech Shandong”), a wholly owned<br> subsidiary;
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●	Jilin<br> Lingang Hengda Supply Chain Management Co., Ltd. (“Lingang Hengda”), a wholly<br> owned subsidiary of Jilin Lingang Supply Chain Management Co., Ltd, a wholly owned subsidiary<br> of Fintech;
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●	Shanxi<br> Fintech Supply Chain Management Co., Ltd (“Fintech Shanxi”), a 80%-owned subsidiary;
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●	Inner<br> Mongolia Fintech Supply Chain Management Co., Ltd (“Fintech Inner Mongolia”),<br> a 70%-owned subsidiary.
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B.	Business Overview
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We are a technology-driven, integrated supply chain solutions and financial services provider focused on transforming China’s corporate finance industry. Leveraging our rich industry experience, we provide supply chain solutions to both PRC and non-PRC enterprises and financial institutions. Our full range of service solutions span from technology supply chain management, to technology asset routing, and digital transformation of technology and financial institutions, enabling the industries we serve to strengthen and grow. Further, we offer a wide range of technology-driven customized financing solutions to small- and mid-sized enterprises (SMEs) in China to improve SMEs’ access to capital through our closed-loop ecosystem built on fintech platforms. Furthermore, we provide direct banking solutions to small- and medium-sized commercial banks and other financial institutions in their distribution and management of direct banking and other financial products. Built on our proprietary financial technology, our fintech platforms offer specialized asset allocation and financial planning services to institutional and individual investors.

Prior to the disposition of the Xibolun Group in November 2020, we conducted our business operations primarily in two industries, our legacy equipment and engineering and the financial services. Following the disposition, we no longer operate in the equipment and engineering industry, and the financial services industry and its related industries are the only sector of the PRC economy we serve. Our financial services operations have experienced rapid growth since July 2019 and have quickly evolved to become our core business, while the performance of our legacy equipment and engineering business had not met management expectations in the prior several years before the disposition.

In 2019, we provided comprehensive financing solution services to SMEs primarily in connection with SME financings sponsored or underwritten by financial institutions (previously referred to by us as underwriting related advisory services) and also provided distribution and management service for direct banking products issued by small- and medium-sized commercial banks in China. SME financing solution services are operated by Fintech and Hengpu. Nami provides financial advisory and intermediary financial services matching SMEs and high quality investors in China. Fintech also provides banking product distribution and management services.

We commenced our supply chain solutions business in January 2020. Fintech and its subsidiaries provide our customers with professionally tailored solutions for supply chain management, technology asset routing, and digital transformation of technology and financial institutions. With a focus on finance and industry linkage, we serve the upstream and downstream enterprises and transactions of the supply chain industry while facilitating supply-side sub-sector reforms. Our digitally linked platform connects commercial banks, securities firms, trusts, funds, insurance companies, state-owned enterprises and other participants in the supply chain industry.

Our business operations are comprised of three main service models: SME Financing Solutions, Supply Chain Solutions and Other Financing Solutions. We earn one-time advisory fees for our services provided to SMEs for offerings on PRC provincial or national financial assets exchanges or other designated capital markets underwritten by financial institutions in accordance with the service agreements with underwriters, financial institutions or financial product providers. In addition, we also provide ongoing customer management services to small and medium commercial banks and financial institutions in distributing and sourcing funds for their direct banking and other financial products in exchange for recurring service fees. Our intermediary matching service fee is earned upon the purchase of the financial products.

We use cutting-edge technologies, including big data, artificial intelligence, Internet of Things, and blockchain in the financial service. We are committed to leveraging our open fintech platforms and ecosystem and providing comprehensive financial solutions to facilitate digital transformation of financial institutions and enterprise customers.

OurStrengths

We believe our following strengths enable us to seize the opportunities in China’s financial services and supply chain industries:

●	Scaleand capacity to offer a comprehensive set of financial solutions to SMEs by leveraging our closed-loop finance ecosystem. We have<br>built multi-faceted integrated closed-loop finance ecosystems in which each line of our operations complements the services provided<br>by other subsidiaries while our customers benefit from the combined service capacity and a full set of financing solutions we offer.<br>Our systems of comprehensive solutions enable SMEs to acquire financings in an efficient and customized manner to facilitate a healthy<br>enterprise development process.
●	In-depthunderstanding of the supply chain industry. As a key intermediary to facilitate every step of the transaction in the procurement<br>process, we understand the complexity of the supply chain system and the needs of core enterprises, suppliers, buyers and other parties<br>in the procurement process, and our expertise insight enables us to design tailored supply chain solutions for our customers and build<br>mutually benefited relationships with the industry participants.
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●	Dataintelligence and technology capability affording added value to SMEs. Our data processing and analytical capacity help industry participants<br>optimize their decision making in their transaction and financing processes. Supported by big data, artificial intelligence, Internet<br>of Things, blockchain and other cutting-edge technologies, we are well positioned to support the enterprise development of SMEs and other<br>industry participants, help tackle challenges of corporate capital turnover, reduce financing costs, and improve business efficiency.
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●	Diversifiedhigh-quality customers. Our core customers are government-owned enterprise (GOEs), which have high quality accounts receivable, capital<br>resources and favorable customer profiles as relative to other businesses. We form strategic partnerships and cooperation relationships<br>with GOEs and other credit-worthy entities in selected industries. As our supply chain solutions business model is suitable for commodity-based<br>industries, and GOEs and other well-funded companies generally play a dominant role in such industries, we expect our supply chain industry<br>solutions will continue to attract high quality customers to join our finance ecosystem platforms aiming to serve different industries.
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●	Controlledrisk exposure. As we facilitate GOEs, financial institutions and other credit-worthy customers to execute the transactions in the<br>procurement process, we are not only able to decrease contract processing costs and improve working capital for core enterprises and<br>other transaction parties, but also are positioned to keep track the status of the transaction and the financial health of the buyer<br>and the supplier and as a result, achieve risk controls for all parties involved in the transaction.
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●	Experiencedmanagement team with proven track record of delivering value and growth. Our experienced management team is comprised of professionals<br>from both fintech market leaders and financial industry experts who bring insights from different aspects of the financial industry and<br>abundant customer resources. The foresight of our management team, combined with their industry experience and strong execution capabilities,<br>has been a key driver for the rapid transformation and operational resilience against the backdrop of the changing regulatory landscape<br>in China.
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OurStrategy

Our mission is to transform the corporate finance industry by promoting a finance ecosystem of openness and empowerment. We intend to achieve our growth and strengthen our competitive position by implementing the following strategies:

●	Growthe scale of our supply chain solutions and SME financing services ecosystems. We have established development expertise and capabilities<br>in the SME financing and supply chain solutions business. We strive to become a leader in the corporate finance industry and transform<br>the industries we serve through leveraging the our closed-loop finance ecosystems, promote the application of our developed advanced<br>financing solutions to new customers and grow the scale of our solutions ecosystems.
●	Focuson industry segmentation through the integration of industry and finance. We seek to expand supply chain management and financial<br>services to certain targeted industries in which fintech finance has played an increasingly important and effective role in the procurement<br>and distribution processes. We aim to build supply chain platforms that link commercial banks, securities firms, trusts, funds, insurance<br>companies and state-owned enterprises through the continued introduction of big data, artificial intelligence, Internet of Things, blockchain<br>and other cutting-edge technologies into those industry supply chains.
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●	Deepenmarket penetration by cultivating existing relationships with GOEs and cooperation partners while forge new collaborations in targetedindustries. Most recently we expanded our supply chain management and financial services to the energy industry by entering into<br>a strategic collaboration relationship with Shanghai Petroleum and Natural Gas Exchange, a national energy trading platform for energy<br>products. We intend to continue to explore strategic cooperation relationships with prominent players in selected industries.
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●	Continueto innovate and advance cutting-edge financial technologies to enhance our ability to adapt and respond to rapid industry and technologychanges. Innovation is part of our long-term growth strategy and is key to improving our technology solution products and developing<br>new technologies to meet the ever-changing customer needs. We have made and will continue to make significant investments in our technology<br>infrastructure and research and development efforts to enhance our competitiveness and ability to adapt in response to the customer and<br>industry changes in a timely and effective manner.
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●	Pursuestrategic acquisitions and growth opportunities. In addition to growing our business organically, we consider it a growth strategy<br>to continue to pursue strategic alliances, investments and potential acquisitions that are complementary to our business and operations,<br>including opportunities that further promote our brand, expand product and solution offerings on our or partners’ platforms, strengthen<br>our technology infrastructure and capabilities, or expand our geographic reach.
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ContractualArrangements with Consolidated Affiliates

We conduct our business through our PRC subsidiaries, NingChen and Naqing, and three consolidated affiliates, Fintech, Hengpu and Nami (“VIEs”), and subsidiaries of VIEs. Our relationships with the VIEs and their respective nominee shareholders are governed by a series of contractual arrangements, including:

Managementand Consulting Service Agreement

Under the Consulting Services Agreement, NingChen and Naqing have the exclusive right to provide management and consulting and other services to their respective VIEs for a consulting service fee from VIEs and to authorize the VIEs to use our trademarks, technologies and related intellectual property rights. VIEs agree to pay NingChen and Naqing or their designated agents for the management and consulting service in the amount equivalent to VIEs’ net profits after tax. The agreement shall be effective as of the date of agreement and shall remain effective until the date when NingChen and Naqing terminate such agreements or a VIE ceases to exist.

EquityInterest Pledge Agreements

Pursuant to the Equity Pledge Agreements, each shareholder of the VIEs agreed to pledge his equity interest in the VIEs to NingChen to secure nominal loans provided to the shareholders of VIEs for a loan term of 100 years. Each shareholder of VIEs agrees that the repayment of loan can only happen on loan maturity date or NingChen or Naqing agrees to collect the loan repayment. If VIEs or their shareholders breach their contractual obligations under these agreements, NingChen and Naqing, as pledgees, will have the right to dispose of the pledged equity interests and will have priority in receiving the proceeds from the auction or sale of the pledged equity interests. NingChen and Naqing are entitled to any dividends declared or paid in connection with the pledged equity interests during the term of this agreement. The VIEs and their shareholders have further agreed that they will not transfer or encumber the pledged equity interests without the prior written consent from NingChen or Naqing during the term of this agreement. The Equity Pledge Agreement remains effective and no provision of this agreement may be amended, modified, supplemented discharged or terminated unless all parties consent thereto in writing.

VotingRights Proxy Agreement

Under the Voting Rights Proxy Agreement, each shareholder of the VIEs irrevocably authorizes NingChen and Naqing to exercise rights and powers as the shareholders of the VIEs, including but not limited to, convening and attending shareholders’ meetings, voting on all matters of the VIEs requiring shareholder approval and appointing directors and senior management members. The Voting Rights Proxy Agreement will remain in force unless otherwise terminated in writing by NingChen or Naqing or with the written consent of all parties.

ExclusiveCall Option Agreement

Under the Exclusive Call Option Agreement, the VIEs and their shareholders have irrevocably granted NingChen and Naqing an exclusive option to purchase, or authorize their designated persons to purchase all or part of each shareholder’s equity interests in VIEs. The purchase price shall be equal to the minimum price required by the relevant PRC laws. Without prior written consent of NingChen and Naqing, VIEs shall not to, among other things, amend their articles of association, sell or otherwise dispose of their assets or beneficial interests, enter into transactions which may adversely affect their assets, liabilities, business operations, equity interests and other legal interests, or merge with any other entities or make any investments, or distribute dividends. NingChen and Naqing have rights to transfer the rights and obligations pursuant to the Exclusive Call Option Agreement to any third party, which does not require any prior consent of VIEs and their shareholders. The Exclusive Call Option Agreement will remain effective until NingChen or Naqing terminates this agreement with 30 days advance notice.

Those contractual arrangements enable us to exercise effective control over our VIEs, have the right to all net profits earned by the VIEs, is obligated to absorb all of net losses borne by VIEs, and have an exclusive option to purchase 100% of the equity interest in our VIEs, when and to the extent permitted by PRC law. Through such arrangements, our VIEs have become our contractually controlled affiliates and their financial statements are consolidated with that of our Company for financial reporting purposes.

DiscontinuedOperations -- Equipment and Engineering Business

Prior to the disposition of our legacy equipment and engineering business in November 2020, we also engaged in the research, development and manufacture of fluid equipment including valves, pipe fittings and others, with an emphasis on the manufacture and installation of intelligentized valves, used in the pharmaceutical, biological, food and beverage, and other clean industries. A significant majority of our revenues from equipment and engineering service had come from these installation services.

Xibolun Group developed, manufactured and provided customized installation of valves and pipe fittings for use in the pharmaceutical, biological, food and beverage, and other clean industries. Xibolun Group offered customers comprehensive pipeline design, installation, construction, ongoing maintenance services as well as holistic solution services. Xibolun Group provided our installation services and valve and pipe fitting products in the following areas: pharmaceuticals, biology, food and beverage. The sales network had presence in Shanghai, Wenzhou and Taiwan. Xibolun Group mainly provided installation services for the customers, although it also sold our products to third parties for installation. A significant majority of the revenues have come from these installation services. The profit margins associated with installing our customized valve and pipe fitting designs have historically been higher than those associated with the sale of our products for installation by third parties.

Prior to November 30, 2020, our offices and facilities for the equipment and engineering business was in Wenzhou in the South-eastern Zhejiang Province.

OurProducts and Services

SMEFinancing Solutions

We provide a system of technology-driven customized financing solutions to small- and mid-sized enterprises (SMEs) in China to improve SMEs’ access to financing and innovative solutions to unlock sources of capital. Each of our three subsidiary groups, Hengpu, Fintech and Nami, is an integral and indispensable part of our SME financing solutions operations. Fintech provides comprehensive financing solution services, such as designing debt financial products, preparing product descriptions and other related advisory services, to underwriters and financial institutions in SME issuers’ offerings of debt securities on PRC provincial and municipal financial assets exchanges or other designated markets. Hengpu provides a full set of financing solution services, such as due diligence investigation, government registration, customer recommendation, investor education and maintenance, and other related services. Nami matches the SMEs with institutional and individual investors based on SMEs’ financing needs. We help SMEs channel working capital and liquidity resources by utilizing funds supplied by investors from Henpu’s original three-board equity pledge financing-based intermediary services and high-quality investors from Nami’s financial advisory and intermediary matching services.

By connecting the asset and capital ends and solving risk control issues in the financing process, we leverage our closed-loop system in the financings of SMEs and provide a full set of financial solutions to SMEs. Our comprehensive solutions enable SMEs to acquire financings in an efficient and customized manner to facilitate a healthy enterprise development process starting from the birth to the growth and mature development stages of the SMEs.

SupplyChain Solutions

We launched our technology-driven integrated supply chain solutions business in January 2020, which has become the fastest growing among all of our operations. We provide multi-level financing and supply chain solutions to core enterprises and SMEs by focusing on industry and finance integration and industry segmentation. Our supply chain solutions services mainly target the agriculture, infrastructure, maritime logistics, energy and plastics products markets. We streamline the supply chain finance process, participate as an intermediary and a partner in the merchandise flows in the procurement and distribution transactions, automate the transaction payments and offer the most favorable trading terms to both suppliers and buyers.

Our supply chain industry services provide cash flow solutions to help businesses free up working capital locked in the supply chains. Our offerings cover a broad category of trade financing solutions encompassing all the financing opportunities across a supply chain. We facilitate merchandise purchases from suppliers with payment terms desirable to the suppliers who can access working capital quickly and at a lower cost. Meanwhile our collaborations with merchandise buyers enable the buyers to make payments on a delayed basis often with an extended trade credit. Our solutions optimize working capital and allow for buyers to extend payments on supplies at no cost to the supplier. Pursuant to the agreements with our supply chain customers, we earn service fees when suppliers receive their financings, and our service fees are calculated as a fixed charge rate on the financing amount. Our services allow both suppliers and buyers to unlock working capital as well as reduce the risks associated with merchandise flows.

In the first half of 2020, our supply chain solutions services were mainly focused on the agriculture, infrastructure, and maritime logistics markets. In December 2020, we expanded our services into the energy industry through a strategic collaboration with Shanghai Petroleum and Natural Gas Exchange (“SHPGX”), a national trading platform for energy products. This partnership provides us with the opportunity to offer the supply chain management and financing solutions services to members of SHPGX’s trading platform and establish our presence and market share in the energy industry. Based on this cooperation, we have developed a new “supply chain +” business model, which will be applied in our services to clients in other industries.

We aim to build supply chain platforms that link commercial banks, securities firms, trusts, funds, insurance companies and state-owned enterprises through the continued introduction of big data, artificial intelligence, Internet of Things, blockchain and other cutting-edge technologies into the supply chain industry. In supply chain procurement and sales transactions, we play an instrumental role in reducing the purchase cost, communication cost and financial risks for core enterprises, buyers and suppliers. For our first year of the supply chain solutions operations in 2020, the gross merchandise volume of the transactions for which we facilitated the financing and procurement amounted to approximately $43.5 million (RMB 300 million).

OtherFinancing Solutions (Director Banking Solutions)

Fintech provides direct banking solutions to small- and medium-sized commercial banks and other financial institutions in their distribution and management of direct banking and other financial products. Our banking customers launch various financial products on Fintech’s online platform, “Huijingshe” (the “Huijingshe Platform”), directly reaching institutional and individual investors, market their banking financial products, and complete sales to investment institutions and individuals. Leveraging our proprietary financial technology, Huijingshe Platform offers specialized asset allocation and financial planning services to institutional and individual investors. It optimizes risk controls and asset management procedures to meet the investors’ financial planning needs and minimize their investment risks.

The Huijingshe Platform, through integrating four-dimensional elements of Internet finance, Internet plus, finance and advanced technology, builds a fintech ecosystem platform serving banks, investment institutions and individuals. The Huijingshe Platform features the following functionality:

●	Customer<br>financial needs and bank financial products matching
●	API<br>direct connection, one-click account opening, improved user experience
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●	Unified<br>interface of cooperation channels
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●	Precision<br>marketing of banking products
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Fintech provides ongoing customer management services to small and medium commercial banks and other financial institutions in their distribution and management of direct banking and other financial products through the Huijingshe Platform that Fintech owns. The Huijingshe Platform provides specialized asset allocation and financial planning services for various institutions or individual investors. In the meantime, the Huijingshe Platform optimizes and improves risk and asset management procedures to meet the investors’ financial planning needs and minimize their investment risks. The Huijingshe Platform focuses on helping our clients, licensed small and medium commercial banks, to achieve the best matching and configuration of directing bank financial product and distributes and manages financial products. By connecting with the Huijingshe Platform, those licensed small and medium commercial banks can launch various financial products through our online channels, directly reach various institutional or individual investors, efficiently market the banking financial products and effectively match with investment institutions and individuals.

Khorgos, a subsidiary of Fintech, and Hengpu provide consulting and advisory services to investment companies, financial institutions and SME issuers of debt financial products on PRC provincial and municipal financial assets exchanges or other designated markets. In general, a service provider is required to register as a member of these municipal or provincial financial asset exchanges to provide full services of underwriting for financial product issuance and distribution. Khorgos, a participating member of several local financial assets exchanges, provides underwriting related services, such as designing debt financial products, preparing product descriptions and other related advisory services, to underwriters or financial institutions. Hengpu, also a member of a number of provincial or municipal asset exchanges, provides full services in connection with financial product underwriting, such as due diligence investigations, government registration, customer recommendations, investor education and maintenance, and other related services.

The financial assets products traded on the assets exchanges are backed by financial assets of registered members of those assets exchanges and issued by exchange designated product issuers (typically investment or asset management companies). The financial assets exchanges list qualified financial products for trading after evaluation and provide payment clearance and settlement, credit rating and custodian services. The underlying listed products administered by these exchanges primarily include commercial loans, receivables, creditors’ right and other financial products.

DiscontinuedBusiness - Equipment and Engineering Products and Services

Xibolun Group provided installation services and fluid equipment sales for the years ended December 31, 2020, 2019 and 2018. We discontinued our legacy equipment and engineering services in November 2020 upon the completion of the Disposition. Below were products and services our legacy business offered before December 2020.

Xibolun Engineering Services

Prior to December 2020, Xibolun Group, as our legacy subsidiary, was specialized in installing valves and pipes for customers that require customized fluid control system solutions. It provided designing and implementing solutions for industries with a high need for sanitary fluid systems. Its customers were mainly in the industries of pharmaceuticals, dairy products, water purification, beverage production, cosmetics and chemical industries.

Xibolun Equipment Products

The product line was originally focused on the construction service and pharmaceutical engineering sectors. In 2005, Xibolun Group shifted its product line to focus primarily on the pharmaceutical engineering sector. The products have been used in the pharmaceutical, biological, food and beverage, and other clean industries.

Examples of the equipment and engineering products included:

Diaphragm Valve. Variations of the diaphragm valve included the process control diaphragm valve, pneumatic diaphragm valve, manual diaphragm valve and three-way diaphragm valve and diaphragm tank bottom valve, all widely used in the bio-pharmacy, bio-vaccines, electronic semiconductor, water purification and food and beverage industries.

Angle Seat Valve. A pneumatic valve widely used in the process of food and chemicals, and sterilization, including high-pressure sterilization.

Sanitary Centrifugal Pump. A centrifugal pump with an open impeller design made from stainless steel to provide for better pressurization, earthquake resistance, impact resistance, lower operating noise and to protect against corrosive substances.

Sanitary Liquid-Ring Pump, specially designed for pumping with gas or other gas liquids used in the food, chemical and pharmaceutical industries.

Clean-in-Place (“CIP”) Return Pump, specially designed for pumping with gas or other gas liquids used in the food, chemical and pharmaceutical industries.

Sanitary Ball Valves used in the biological, pharmaceutical, water purification, food and beverage industries.

Sanitary Pipe Fittings, used in biological, pharmaceutical, water purification, electronics and semi-conductor fields and are commonly used in the water injection process.

Expanded View of Intelligent Process Control Valve, mostly used in sterile workshops, workshops with automated production lines and other environments which are unfit for manual operation.

DistributionChannels and Methods of Competition

DomesticMarkets and Customers

Our marking network has a presence in different regions in China, including several main offices such as Shanghai, Tai’an, Shandong, and Khorgos, Xinjiang.

InternationalMarkets

All of our products and services are available for international markets. We may explore the international market, though there is no guarantee that we will be able to materialize the plan. We intend to focus our growth efforts within China with regards to the services we provide as a result of the Company’s assessment of current market opportunities.

ActivityDistribution of Revenues

The chart below is a breakdown of total revenues by activities for the year ended December 31, 2020, 2019 and 2018, respectively.


SME Financing Solutions	97	%	100	%
Supply Chain Solutions	3	%	-	%
Other Financing Solutions	-	%	-
Total	100	%	100	%

Nearly all (approximately 99%) of the Company’s revenue were generated in the PRC.

CustomerConcentration

For the years ended December 31, 2020, three customers accounted for 31%, 21% and 12% of our total financial service revenue, respectively.

For the year ended December 31, 2019, one customer accounted for approximately 100% of our total financial service revenue from financial services.

Methodsof Competition

We plan to compete domestically by establishing new branch offices in more cities in China. We will also promote more products and services through our platforms, which will enable our customers to communicate with us online and order, purchase and have our products and services delivered in a more convenient and faster manner.

Most of our service customers are SMEs in the supply chain, financial institutions and corporate clients, which has great development potential and customer demand in China. We compete on the basis of the experience and technology we have developed in serving customers.

OurCompetitive Position

We have set forth our assessment of our Company’s relative strengths and challenges. The tables below represent our belief about our competitive position and is based on our observations, rather than objective data. Our assessment may not be shared by others, including such competitors, but it does represent management’s assessment of our industry position.

We compete with the following listed companies in different areas. Currently there is no competitor that competes with us in all areas.

Competitors	Services	Comparative Strengths/Challenges
Client<br>Service International Inc<br><br> <br>(“Client Service”)	Financial<br> software and<br><br> financial solution service<br><br> provider	●	Client service focuses<br> on providing financial software development
		●	Fintech integrates the<br> financial product management service with technology service.
		●	Fintech assists the commercial<br> banks to analyze and gain better understanding of their business needs, while Client Service only develops software to meet client<br> needs
Orbian	Supply Chain<br> Finance<br><br> Provider	●	Unlimited funding capacity<br> (true multi-bank, source-agnostic funding)
		●	Multi-currency capacity
		●	True sale, non-recourse<br> cash purchase of receivable(ensure payables treatment)
Beijing<br>Udomedia Advertising Co., Ltd.<br><br> <br>(“Udomedia”)	Financial product <br><br> recommendation	●	Amarsoft focuses on providing<br> financial product comparison and recommendations to investors
		●	Fintech offers asset-side<br> options to financial institutions as well as the financial planning service to investors
		●	Fintech competes against<br> Amarsoft on financial product distribution service
PUYI<br> INC.<br><br> <br>(“PUYI”)	Third-party<br> wealth management services provider	●	The business goal of PUYI<br> is to provide investor various financial product and asset allocation service to investor, which is similar to the goal of Hengpu
		●	PUYI is mainly engaged<br> in private fund, and supply chain financing
		●	Hengpu is primarily engaged<br> in underwriting related service for debt financial product

Researchand Development

We are committed to researching and developing financial technologies in financial services, supply chain and other relevant industries. We believe scientific and technological innovations will help our Company achieve its long-term strategic objectives. Our research and development efforts are an integral part of our operations and the crux of its competitive advantage and differentiation strategy.

For the years ended December 31, 2020 and 2019, we spent $817,770 and $155,216, respectively, on R&D. The R&D expenses in 2020 were primary used to maintain and develop our supply chain financing and other financing services APPs and platform. We anticipate that we will continue to focus our research and development efforts on developing new technology and improving existing products in the coming years.

OurIntellectual Property

We have the right to use the following trademark registrations issued in the PRC:

Reg. No.	Issue<br><br> Date	Expiration<br><br> Date	Owner	Goods/Services
26449617	9/7/2018	9/6/2028	Hengpu	Arrange and organize the<br> conference; Translated; Planning a party (entertainment); Provide online electronic publications (non-download); Manuscript writing;<br> Journalist Service; Zoo Service; Online publishing of e-books and magazines; Arrange and organize seminars; Arrange and organize<br> on-site education forum
26432309	9/7/2018	9/6/2028	Hengpu	Insurance Broker; Real<br> estate agency; Guarantee; Raise Charity Fund; Fiduciary management; Pawn; Finance lease; Financial Information; Coin valuation; Brokerage
26434423	9/7/2018	9/6/2028	Hengpu	Downloadable mobile application<br> software; Computer program (downloadable software); Computer peripherals; Animation; Electronic Notepad; Automatic Teller Machine<br> (ATM); Portable media player; Interactive touch screen terminal; Computer software (recorded); Mobile phone; Automatic<br> teller machine (ATM)
26428912	9/7/2018	9/6/2028	Hengpu	Online publishing of e-books<br> and magazines; Translated; Arrange and organize the conference; Journalist Service; Planning a party (entertainment); Provide online<br> electronic publications (non-download); Arrange and organize seminars; Arrange and organize on-site education forum; Zoo Service; Manuscript<br> writing
26438038	10/28/2018	10/27/2028	Hengpu	Interactive touch screen<br> terminal; Computer software (recorded); Computer peripherals; Automatic Teller Machine (ATM); Portable media player; Animation; Downloadable<br> mobile application software; Electronic Notepad; Mobile phone; Computer program (downloadable software)

26449606	3/14/2020	9/6/2028	Hengpu	Urban<br>planning; Computer Programming; Data Security Consulting; Technical Studies; Cloud computing; Art identification; Intangible assets assessment;<br>Energy audit; Provide Internet Search Engine Information Technology Consulting Services; Intangible assets evaluation (-)
26434403	10/28/2019	10/27/2029	Hengpu	Technical Studies; Urban<br> planning; Energy audit; Data Security Consulting; Art identification; Intangible assets assessment; Information Technology Consulting<br> Services; Cloud computing; Computer Programming; Provide Internet Search Engine; Intangible assets evaluation (-)
26438039	10/28/2018	10/27/2028	Hengpu	Provide Internet chat rooms;<br> Digital file transfer; Provide database access service; Data streaming; Telephone service; Provide online forums; Information<br> transmission; Email transmission; Provide telecommunications connection services with global computer networks; Video on demand transmission
26448031	3/14/2020	9/6/2028	Hengpu	Looking<br> for sponsorship; Purchasing for others (purchasing goods or services for other companies); Marketing; Retail or wholesale services<br> of pharmaceutical, veterinary, hygienic preparations and medical supplies (-); Franchise business management; Sell for<br> others; Advertising; Online advertising on computer networks;<br><br> <br><br><br> <br>Import<br>and export agent; Provide online markets for buyers and sellers of goods and services
26438032	1/14/2019	1/13/2029	Hengpu	Electronic<br>Notepad; Animation; Computer software (recorded); Computer program (downloadable software); Computer peripherals; Mobile phone; Portable<br>media player Automatic Teller Machine (ATM); Interactive touch screen terminal; Downloadable mobile application software
26443894	9/7/2018	9/6/2028	Hengpu	Information<br>transmission; Telephone service; Provide Internet chat rooms Provide online forums; Provide telecommunications connection services with<br>global computer networks; Digital file transfer; Video on demand transmission; Email transmission; Provide database access service; Data<br>streaming

26428917	10/28/2018	10/27/2028	Hengpu	Technical<br>Studies; Information Technology Consulting Services; Cloud computing; Art identification; Intangible assets assessment; Urban planning;<br>Energy audit; Computer Programming; Provide Internet Search Engine; Data Security Consulting
26434429	10/28/2018	10/27/2028	Hengpu	Online<br>advertising on computer networks; Purchasing for others (purchasing goods or services for other companies); Provide online markets for<br>buyers and sellers of goods and services; Marketing; Looking for sponsorship; Advertising; Retail or wholesale services of pharmaceutical,<br>veterinary, hygienic preparations and medical supplies (-); Franchise business management; Import and export agent; Sell for others
26439293	10/28/2018	10/27/2028	Hengpu	Guarantee;<br>Fiduciary management; Financial Information; Brokerage; Pawn; Insurance Broker; Finance lease; Coin valuation; Real estate agency; Raise<br>Charity Fund
26443885	01/28/2019	01/27/2029	Hengpu	Interactive<br>touch screen terminal; Computer program (downloadable software); Electronic Notepad; Mobile phone; Portable media player; Downloadable<br>mobile application software; Computer software (recorded); Automatic Teller Machine (ATM); Animation; Computer peripherals
26428913	1/14/2019	1/13/2029	Hengpu	Coin<br>valuation; Pawn; Fiduciary management; Finance lease; Real estate agency; Guarantee; Brokerage (3605) Financial Information (3602) Raise<br>Charity Fund (3607)
20689649	9/14/2017	9/13/2027	Hengpu	Insurance<br>Underwriting; Financial Services; Financial Management; Financial loans; Art valuation; Real estate management; Brokerage; Guarantee;<br>Raise Charity Fund; Pawn

17764453	12/21/2016	12/20/2026	Hengpu	Quality<br>assessment; Technical Project Research; Hosted computer station (website); Provide Internet Search Engine; Computer system remote monitoring;<br>Create and maintain websites for others; Art identification; Intangible assets assessment; Intangible assets evaluation (-)
26008168	10/28/2018	10/27/2028	Fintech	Looking for<br> sponsorship; Provide online markets for buyers and sellers of goods and services; Accounting; Provide business information through<br> the website; Business intermediary services; Personnel management consulting; Advertising; Commercial enterprise relocation; Update<br> and maintain data in computer databases; Sell for others; Franchise business management.
26008168	10/28/2018	10/27/2028	Fintech	Provide global computer<br> network user access service; Telephone communication; TV broadcast; Communication equipment rental; Computer terminal communication; Satellite<br> transmission; Provide database access service; Provide telecommunications connection services with global computer networks; Provide<br> Internet chat rooms; Wireless broadcasting
26008168	10/28/2018	10/27/2028	Fintech	Internal<br>communication device; Electronic monitoring device (-) Downloadable computer application software; Computer software (recorded); Computer<br>program (downloadable software); Recorded computer program; Cash register; Remote control device; Electronic Publication (-); Electronic<br>Notepad; Electronic Note (-); cashier(-); Electronic monitoring device (-) Remote control device (-)
26008168	10/28/2018	10/27/2028	Fintech	Credit<br>card related investigations Financial loans; Art valuation; Real estate agency; Brokerage; Insurance Underwriting; Guarantee; Raise Charity<br>Fund; Fiduciary management; Capital investment; Organize collections; Financial Information; Provide financial information through the<br>website Insurance information; Pawn; Trust; Financial Management; Financial Consulting; Bank; Jewelry valuation

26008168	10/28/2018	10/27/2028	Fintech	Adoption<br>Agent; Security and anti-theft alarm system monitoring; Open the safety lock Clothing rental; Computer Software License (Legal Service);<br>Social companionship; Online social networking services; Lost and Found; Dating Service; Safe rental; Adoption agents; security and anti-theft<br>alarm system monitoring; unlocking locks; clothing rental; computer software licensing (legal services); social companionship; online<br>social networking services; lost and found; dating services; safe rental (-)
26008168	10/28/2018	10/27/2028	Fintech	Quality<br>system certification; Convert tangible data or files into electronic media; Technical Studies; Computer system remote monitoring; Interior<br>Design; Computer Software Design; Electronic data storage; Cosmetic Research; Industrial design; Intangible assets assessment
48343254	06/21/2019	06/20/2029	Nami	Insurance Broker; Insurance<br> coverage; Life insurance underwriting; Insurance consultation; Insurance information; Rental of real estate; Real estate agency;<br> Real estate brokerage; Real estate valuation; Real estate management
32919214	08/28/2019	8/27/2029	Nami	Business<br>management consulting Commercial intermediary services Provide business information through website; Market intelligence service; Temporary<br>business management; Appointment service (office affairs); Registration of written messages and data accounting; Draw up bill and account<br>report marketing management; Appointment service (Office affairs)
48343254	04/14/2021	04/13/2031	Nami	Financial audit; Business<br> administration assistance advertisement; Personnel management consulting; Business management consulting; Management service of business<br> enterprise migration marketing management; Sell for others; Looking for sponsorship; Appointment service (office affairs)

We own the following copyrights:

Copyright Name	Reg. No.	Completion<br><br> Date	Owner
Hengpu<br> online RMB withdrawal system	2020SR1554067	11/09/2020	Hengpu
Hemp<br> Online Mobile Investment System	2020SR1554106	11/09/2020	Hengpu
Hengpu<br> online RMB recharge system	2020SR1554066	11/09/2020	Hengpu
Hengpu<br> online authentication system	2020SR1554072	11/09/2020	Hengpu
Hengpu<br> online entrusted trading system	2020SR1554073	11/09/2020	Hengpu
Hengpu<br> Fund Information Display System	2020SR0774260	07/15/2020	Hengpu
Hemp<br> Fund Mobile Redemption System	2020SR0776761	07/15/2020	Hengpu
Hengpu<br> Fund Management System	2020SR0774255	07/15/2020	Hengpu
Hengpu<br> Fund Trading System	2020SR0774266	07/15/2020	Hengpu
Hengpu<br> Fund Mobile Requisition System	2020SR0769122	07/14/2020	Hengpu
Huijingshe<br> CRM customer management system	2020SR0331868	04/14/2020	Fintech
Jetcom<br> wallet background management system	2020SR0330745	04/14/2020	Fintech
Huijingshe<br> Financial Management System	2020SR0332562	04/14/2020	Fintech
Huijingshe<br> Financial Products Management Platform	2020SR0332553	04/14/2020	Fintech
Huijingshe<br> sales channel cost accounting and operation management system	2020SR0332191	04/14/2020	Fintech
Huijingshe<br> integrated financial management APP system	2020SR0332195	04/14/2020	Fintech
Equity<br> trading system	2020SR0332587	04/14/2020	Fintech
Huijingshe<br> website content management system	2020SR0331400	04/14/2020	Fintech
Huijing<br> Fund Finance APP System	2020SR0332558	04/14/2020	Fintech
Huijingshe<br> system monitoring alarm management platform	2020SR0331454	04/14/2020	Fintech
Employee<br> loan system	2020SR0331462	04/14/2020	Fintech
Huijingshe<br> distributed message management platform	2020SR0332591	04/14/2020	Fintech
Huijingshe<br> Insurance APP System	2020SR0331872	04/14/2020	Fintech
Huijingshe<br> risk control management system	2020SR0331518	04/14/2020	Fintech

Huijingshe<br> Financial Leasing System	2020SR0330193	04/14/2020	Fintech
Jetcom<br> wallet back-office management system	2020SR0332521	04/14/2020	Fintech
Huijingshe<br> Big Data Reporting Platform	2020SR0332497	04/14/2020	Fintech
New three board data mobile<br> display system	2019SR0914974	9/3/2019	Hengpu
Hengpu offline financial<br> management system	2019SR0914982	9/3/2019	Hengpu
Application and display<br> system of equity pledge financing	2019SR0915056	9/3/2019	Hengpu
Hengpu offline financing<br> mobile investment system	2019SR0912121	9/2/2019	Hengpu
Hengpu offline financial<br> investment system	2019SR0912070	9/2/2019	Hengpu
Hengpu Financial RMB Withdrawal<br> System	2018SR498978	6/28/2018	Hengpu
Hengpu Financial Bank Depository<br> Docking System	2018SR269474	4/20/2018	Hengpu
Hengpu Financial Mobile<br> Investment System	2018SR265882	4/19/2018	Hengpu
Hengpu Financial Transaction<br> Return System	2018SR265875	4/19/2018	Hengpu
Hengpu financial product<br> search recommendation system	2018SR265870	4/19/2018	Hengpu
Hengpu Financial Identity<br> Verification System	2018SR178293	3/19/2018	Hengpu
Hengpu financial investment<br> marketing activity system	2018SR178208	3/19/2018	Hengpu
Hengpu Financial Virtual<br> Account System	2018SR178316	3/19/2018	Hengpu
Hengpu Financial Commission<br> Trading System	2018SR178319	3/18/2019	Hengpu
Hengpu Financial Personal<br> Name Coin Recharge System	2018SR178295	3/19/2018	Hengpu
Huijingshe APP platform	2018SR241757	4/10/2018	Fintech

Discontinued Operations – IP of Equipment and Engineering Business

Prior to November 30, 2020, we had the right to use the following trademark registrations issued in the PRC, among which two registrations are held by our former Chief Executive Officer, Anyuan Sun:

Reg. No.	Issue<br><br> Date	Expiration<br><br> Date	Owner	Goods/Services
3903979	12/28/2005	12/27/2025	Anyuan Sun	Metal pipe elbows; metal<br> pipe joints; metal valves (not machine accessories); metal pipe fittings; additional materials for metal pipe; metal reinforce materials<br> for pipes; metal pipe clams; metal sleeves; metal pipes; steel pipes
5610464	12/7/2009	12/6/2019<br><br> <br>Renewal<br>application pending	Anyuan Sun	Steel pipes; metal pipes,<br> metal pipe clams; metal water pipes; metal pipe elbows; metal pipe fittings; metal pipe joints, metal collecting tubes; metal sleeves
14488573	6/14/2015	6/13/2025	Xibolun Automation	Construction status check;<br> construction; heating equipment installation and repair; indoor construction; machine installation, maintenance, and repair; medical<br> equipment installation and repair; vehicle maintenance service; machine installation and repair; sanitary equipment installation<br> and repair; water pipe installation
14488475	7/28/2015	7/27/2025	Xibolun Automation	Steel alloy; metal valves<br> (not machine accessories); metal pipes; steel moulds; metal tracks; common metal alloy wire (except fuses); metal grommets; metal<br> hinge; metal tools; padlock

Prior to November 30, 2020, patents Xibolun Group held were as follows:

Patent Name	Patent No.	Patent<br><br> Type	Application<br><br> Date	Issuance<br><br> Date	Expiration<br><br> Date	Owner
Valve pneumatic actuator<br> with prompting switch	ZL 2010 2 0668775.3	Utility model	12/20/2010	7/20/2011	12/19/2020	Xibolun Automation
Sampling valves	ZL 2010 2 0668776.8	Utility model	12/20/2010	7/20/2011	12/19/2020	Xibolun Automation
Three-way diaphragm valves	ZL 2010 2 0668430.8	Utility model	12/20/2010	7/20/2011	12/19/2020	Xibolun Automation
Microporous membrane filters	ZL 2010 2 0668429.5	Utility model	12/20/2010	7/20/2011	12/19/2020	Xibolun Automation
Tank bottom valve	ZL 2010 2 0668772. X	Utility model	12/20/2010	7/20/2011	12/19/2020	Xibolun Automation
Angle seat valve	ZL 2011 2 0513124.1	Utility model	12/9/2011	8/22/2012	12/8/2021	Xibolun Automation
Diaphragm valve body	ZL 2011 2 0512271.7	Utility model	12/9/2011	8/22/2012	12/8/2021	Xibolun Automation
Diaphragm valve	ZL 2011 2 0512279.3	Utility model	12/9/2011	8/29/2012	12/8/2021	Xibolun Automation
Angle seat valve	ZL 2011 2 0510956.8	Utility model	12/9/2011	8/22/2012	12/8/2021	Xibolun Automation
A type of valve stem of<br> sterile respondent valve	ZL 2014 2 0616427. X	Utility model	10/23/2014	2/25/2015	10/22/2024	Xibolun Automation
A type of sterile respondent<br> valve	ZL 2014 2 0616627.5	Utility model	10/23/2014	4/1/2015	10/22/2024	Xibolun Automation
A type of diaphragm valve<br> with double diaphragms	ZL 2013 2 0890760.5	Utility model	12/30/2013	6/18/2014	12/29/2023	Anyuan Sun
A type of valve terminal<br> on valve controller	ZL 2014 2 0617591.2	Utility model	10/23/2014	2/25/2015	10/22/2024	Xibolun Automation
A type of blow-down valve	ZL 2014 2 0616636.4	Utility model	10/23/2014	3/11/2015	10/22/2024	Xibolun Automation
A type of valve pneumatic<br> actuator	ZL 2014 2 0617900.6	Utility model	10/23/2014	2/25/2015	10/22/2024	Xibolun Automation
A type of sanitary grade<br> ball valve	ZL 2014 2 0616568.1	Utility model	10/23/2014	2/25/2015	10/22/2024	Xibolun Automation
A type of manual and pneumatic<br> combine sterile sampling valve	ZL 2014 2 0027096.6	Utility model	1/16/2014	6/25/2014	1/15/2024	Anyuan Sun

Patent Name	Patent No.	Patent<br><br> Type	Application<br><br> Date	Issuance<br><br> Date	Expiration<br><br> Date	Owner
Process control diaphragm<br> valve	ZL 2012 3 0602853.4	Design	12/5/2012	5/1/2013	12/4/2022	Xibolun Automation
Process control angle seat<br> valve	ZL 2012 3 0602850.0	Design	12/5/2012	4/17/2013	12/4/2022	Xibolun Automation
A type of manual sterile<br> sampling valve	ZL 2013 1 0751950.3	Invention	12/30/2013	1/13/2016	12/29/2033	Anyuan Sun

Our former Chief Executive Officer, Mr. Anyuan Sun, personally holds three patents that Xibolun has the license to use pursuant to agreements that provide the right, without further payment, to use such patents for their applicable terms.

OurEmployees

As of December 31, 2020, we employed total of 736 full-time employees in the following functions:

Department
Management and administration	107	28
Research and Development	10	33
Production and operation	48	50
Sales	571	31
Total	736	142

We had no part-time employees in 2020.

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work stoppages.

We are required under PRC law to make contributions to employee benefit plans at specified percentages of our after-tax profit. In addition, we are required by PRC law to cover employees in China with various types of social insurance. We believe that we are in material compliance with the relevant PRC employment laws.

Regulation

We operate in an increasingly complex legal and regulatory environment. We are subject to a variety of PRC and foreign laws, rules and regulations across numerous aspects of our business. This section sets forth a summary of the principal PRC laws, judicial interpretations, rules and regulations relevant to our business and operations in the PRC.

RegulationsRelating to Foreign Investment

The establishment, operation and management of corporate entities in the PRC, including foreign-invested companies, are subject to the Company Law of the PRC, or the Company Law, which was issued by the Standing Committee of the National People’s Congress, or the NPC Standing Committee, on December 29, 1993 and took effect on July 1, 1994. It was last amended on October 26, 2018. Unless otherwise provided in the PRC’s foreign investment laws, the provisions of the Company Law shall prevail.

The establishment procedures, filing and approval procedures, registered capital requirements, foreign exchange restrictions, accounting practices, taxation and labor matters of a wholly foreign-owned enterprise are governed by the Wholly Foreign-owned Enterprise Law of the PRC, which was issued on April 12, 1986 and last amended on September 3, 2016 and took effect on October 1, 2016; the Implementation Regulations of the Wholly Foreign-owned Enterprise Law of the PRC, which was issued on December 12, 1990 and last amended on February 19, 2014 and took effect on March 1, 2014; and the Interim Measures for Record-filing Administration of the Establishment and Change of Foreign-invested Enterprises, which was issued on October 8, 2016 and last amended on June 30, 2018.

Investments in the PRC by foreign investors and foreign-invested enterprises are regulated by the Catalogue of Industries in which Foreign Investment is Encouraged (2020 Edition), or the 2020 Catalog, and the Special Administrative Measures for Foreign Investment Access (Negative List 2020), or the 2020 Negative List. The establishment of wholly foreign-owned enterprises is generally allowed in industries not included in the Negative List. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other applicable Chinese regulations. Under the 2020 Negative List, foreign equity in companies providing value-added telecommunications services, excluding e-commerce, domestic multi-party communications, data collection and transmission services, and call centers, should not exceed 50%. Part of our business is subject to such 50% foreign invested equity cap.

On March 15, 2019, the NPC Standing Committee issued the Foreign Investment Law of the PRC, or the Foreign Investment Law, which took effect on January 1, 2020. It replaced the major existing laws and regulations governing foreign investment in the PRC, namely, the Law of the PRC on Sino-foreign Equity Joint Ventures, the Wholly Foreign-owned Enterprise Law of the PRC and the Law of the PRC on Sino-foreign Cooperative Joint Ventures. The PRC Company Law and the PRC Partnership Enterprise Law generally govern the organization of a foreign invested enterprise.

The Foreign Investment Law mainly stipulates four forms of foreign investments: (a) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within PRC; (b) a foreign investor acquires stock shares, equity shares, interests in assets, or other like rights and interests of an enterprise within PRC; (c) a foreign investor, individually or collectively with other investors, invests in a new project within the PRC; and (d) foreign investors invest in the PRC through any other methods under laws, administrative regulations, or provisions prescribed by the State Council of the PRC. It does not mention the relevant concept and regulatory regime of VIE structures and uncertainties still exist in relation to its interpretation and implementation.

Under the Foreign Investment Law, foreign investment is accorded pre-admission national treatment, which means that treatment given to foreign investors and their investment shall not be less favorable than those given to domestic investors and their investments, except where a foreign investment falls under the Negative List. It also provides several protective rules and principles for foreign investors and their investments in the PRC, including, foreign investors’ funds can be freely transferred out and into the territory of the PRC through the entire life cycle from the entry to the exit of foreign investment, a comprehensive system to guarantee fair competition among foreign-invested enterprises and domestic enterprises will be established, and the state shall not expropriate any foreign investment except under special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner.

In addition, the Foreign Investment Law subjects foreign investors and foreign-invested enterprises to legal liabilities for failing to report their investment information in accordance with the requirements of an information reporting system that will be established. It also provides that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their structure and corporate governance within five years after the implementation of the Foreign Investment Law, which means that foreign invested enterprises may be required to adjust their structure and corporate governance in accordance with the PRC Company Law and other laws and regulations governing the corporate governance.

On December 26, 2019, the State Council promulgated the Implementation Regulations for the Foreign Investment Law, which became effective on January 1, 2020. The Implementation Regulations for the Foreign Investment Law implement the legislative principles and purpose of the Foreign Investment Law, emphasize on promoting the foreign investment and refine the specific measures, and also replaced the implementation rules of the Law of the PRC on Sino-foreign Equity Joint Ventures, the Wholly Foreign-owned Enterprise Law of the PRC and the Law of the PRC on Sino-foreign Cooperative Joint Ventures. On December 26, 2019, the Supreme People’s Court issued an Interpretation on Several Issues Concerning the Application of the Foreign Investment law of the PRC, which also came into effect on January 1, 2020. The interpretation applies to any contractual dispute arising from acquisition of the relevant rights and interests by a foreign investor through gift, division of property, merger of enterprises, division of enterprises, etc. On December 30, 2019, MOFCOM and the SAMR jointly issued the Measures on Reporting of Foreign Investment Information, which replaced the existing filing and approval procedures regarding the establishment and change of foreign-invested companies. On December 31, 2019, MOFCOM issued the Announcement on Matters Relating to Foreign Investment Information Reporting, emphasized the information reporting requirements provided by the Measures on Reporting of Foreign Investment Information, and stipulated the forms for information reporting.

On December 19, 2020, NDRC and the Ministry of Commerce jointly issued the Measures which became effective on January 18, 2021. According to the Measures, a working mechanism shall be established for organizing, coordinating, and guiding the security review of foreign investments, and the office in charge of the security review work will be set up by the NDRC and the Ministry of Commerce. Furthermore, the Measures provide that if foreign investors or their related parties in China engage in any foreign investment in industry with national security concerns such as information technology, internet products and services, or financial services, they shall make applications to the office in charge of the security review work in advance of national security review.

RegulationsRelating to Value-Added Telecommunication Services

The Telecommunications Regulations of the PRC, or the Telecommunications Regulations, issued by the State Council of the PRC on September 25, 2000 and last amended on February 6, 2016, provide the general framework for the provision of telecommunication services by PRC companies. It requires a telecommunication service provider in China to obtain an operating license from the Ministry of Industry and Information Technology, or MIIT, or its provincial counterparts, prior to commencement of operations.

The Telecommunications Regulations categorize telecommunication services in China as either basic telecommunications services or value-added telecommunications services. According to the Catalog of Telecommunications Business, attached to the Telecommunications Regulations and issued by MIIT, on December 28, 2015 and last amended on June 6, 2019, online data processing, transaction processing and information services provided via fixed network, mobile network and internet, call center service and internet data center services are value-added telecommunication services.

On July 3, 2017, MIIT issued the Administrative Measures for Telecommunications Business Operating Permit, or the Telecom Permit Measures, which took effect on September 1, 2017. The Telecom Permit Measures set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining the licenses and the administration and supervision of these licenses. Operators are required to submit an application within the prescribed period to the original permit-issuing authority with respect to changes in the business scope or the operating entity resulting from shareholder changes or the merger and division of the company as prescribed under relevant regulations.

On June 8, 2020, MIIT issued the Notice of Strengthening the Administration of Call Center Service, which provides that any entities engaging in call center service shall obtain corresponding business permits as required by the relevant laws and regulations, and shall conduct the business subject to the Catalog of Telecommunications Business.

Regulationson Foreign Investment in the Value-Added Telecommunications Industry

Foreign direct investment in telecommunications companies in China is governed by the Administrative Rules on Foreign-invested Telecommunications Enterprises, or the FITE Regulations, which was issued by the State Council on December 11, 2001 and last amended on February 6, 2016. Under the FITE Regulations, a foreign investor’s beneficial equity ownership in an entity providing value-added telecommunications services in China shall not exceed 50%. In addition, for a foreign investor to acquire any equity interest in a business providing value-added telecommunications services in China, it must demonstrate a good track record and experience in providing these services. However, under the Circular on Loosening the Restriction on Foreign Shareholdings in Online Data Processing and Transaction Processing Business (for E-commerce), or Circular 196, issued by MIIT on June 19, 2015, foreign investors may hold up to 100% of all equity interest in an online data processing and transaction processing business operating e-commerce in China, while other requirements provided by the FITE Regulations shall still apply. Apart from e-commerce, the 2020 Negative List also provides that foreign investors may hold 100% equity interest in domestic multi-party communications, data collection and transmission services and call centers. The MIIT’s Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business, or the MIIT Circular, issued on July 13, 2006, requires foreign investors to set up foreign-invested enterprises and obtain a license for value-added telecommunications services. It prohibits domestic companies holding value-added telecommunications services licenses from leasing, transferring or selling their licenses in any form, or providing any resource, sites or facilities, to any foreign investors intending to conduct this type of businesses in China.

In addition to restricting dealings with foreign investors, the MIIT Circular contains a number of detailed requirements applicable to operators of value-added telecommunications services, including that operators or their shareholders must legally own the domain names and trademarks used in their daily operations and each operator must possess the necessary facilities for its approved business operations and maintain its facilities in the regions covered by its license. The MIIT or its provincial counterparts have the power to require corrective actions after they discover any non-compliance by operators, and where operators fail to take those steps, the MIIT or its provincial counterparts can revoke the value-added telecommunications services licenses.

In view of the foregoing foreign ownership restrictions, we have established several VIEs to engage in the business of value-added telecommunications services. Due to the lack of interpretative guidance from the relevant PRC governmental authorities, there are uncertainties regarding whether PRC governmental authorities would consider our corporate structure and contractual arrangements compliant with applicable PRC foreign investment laws and regulations.

Regulationson Internet Information Services

The Administrative Measures on Internet Information Services, or the Internet Information Measures, which was issued by the State Council on September 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. Pursuant to the Internet Information Measures, “internet information services” are defined as services that provide information to online users through the internet. The Internet Information Measures require internet information services operators to obtain a value-added telecommunications business operating license for internet information services, or the ICP License, from the relevant government authorities before engaging in any commercial internet information services operations in China.

In addition, internet information service providers are required to monitor their websites to ensure that they do not contain content prohibited by law or regulation. The PRC government may require corrective actions to address non-compliance by ICP License holders or revoke their ICP License for serious violations. Furthermore, the MIIT Circular on Regulating the Use of Domain Names in Internet Information Services, issued on November 27, 2017 and that took effect on January 1, 2018, requires internet information service providers to register and own the domain names they use in providing internet information services.

Regulationson Mobile Internet Application Information Services

On June 28, 2016, the Cyberspace Administration of China issued the Administrative Provisions on Mobile Internet Application Information Services on June 28, 2016, which took effect on August 1, 2016, requiring internet information service providers, or ICPs, who provide information services through mobile internet applications, or APPs, to authenticate the identity of the registered users, establish procedures for protection of user information, establish procedures for information content censorship and management, ensure that users are given adequate information concerning an APP and are able to choose whether an App is installed and whether or not to use an installed App and its functions and keep records of users’ logs for 60 days. If an ICP violates these regulations, mobile app stores through which the ICP distributes its APPs may issue warnings, suspend the release of its APPs, or terminate the sale of its APPs, and/or report the violations to governmental authorities.

ICPs are also required under the Interim Measures on the Administration of Pre-Installation and Distribution of Applications for Mobile Smart Terminals, which was issued on December 16, 2016 and took effect on July 1, 2017, to ensure that APPs, as well as its ancillary resource files, configuration files and user data, can be conveniently uninstalled by a user, unless it is a basic function software (i.e., software that supports the normal functioning of hardware and operating system of a mobile smart device).

On July 22, 2020, the MIIT issued the Notice on the Special Program to Further Rectify the Infringement on Users’ Personal Rights and Interests by APPs, or the Notice. The Notice requires inspection of certain practices of application service providers, including: (i) collecting personal information without user’s consent, collecting or using personal information beyond the necessary scope of service provided, and forcing users to receive advertisements; (ii) frequently or automatically launching third-parties apps without user permission, and (iii) deceiving and misleading users to download apps or providing personal information. The Notice also specifies the period of special inspection of the Apps for supervision, the Ministry of Industry and Information Technology will order the offending party to rectify the business within five working days, otherwise a public announcement will be made, and the App will be removed from the Apps store, and the offending party will be subject to other administrative penalties.

RegulationsRelating to Information Security and Privacy Protection

Regulationson Information Security

In recent years, PRC government authorities have enacted laws and regulations with respect to internet information security and protection of personal information from abuse or unauthorized disclosure. Pursuant to the Decision on the Maintenance of Internet Security issued by the NPC Standing Committee on December 28, 2000, which was amended on August 27, 2009, persons may be subject to criminal liabilities in China for any attempt to: (i) gain improper entry to a computer or system of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe upon intellectual property rights and other activities prohibited by relevant laws and regulations.

The Administration Measures on the Security Protection of Computer Information Network with International Connections, issued by the Ministry of Public Security, or MPS, on December 16, 1997 and amended by the State Council of the PRC on January 8, 2011, prohibits using the internet in ways that result in a leak of state secrets or a spread of socially destabilizing content. The MPS has supervision and inspection powers and relevant local security bureaus may also have jurisdiction. If a value-added-telecommunications service license holder violates these measures, the government of the PRC may revoke its value-added-telecommunications service license and shut down its websites.

On November 7, 2016, the NPC Standing Committee promulgated the Cyber Security Law of the PRC, or Cyber Security Law, which took effect on June 1, 2017, pursuant to which, network operators must comply with laws and regulations and fulfil their obligations to safeguard security of the network when conducting business and providing services. Those who provide services through networks must take technical measures and other necessary measures pursuant to laws, regulations and compulsory national requirements to safeguard the safe and stable operation of the networks, respond to network security incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality and usability of network data. It also states that: network operator may not collect personal information that is irrelevant to the services it provides or collect or use the personal information in violation of the provisions of laws or agreements between both parties. The Regulations on Cyber Security Supervision and Inspection of Public Security Organs, which was issued by the MPS on September 15, 2018 and came into effect on November 1, 2018, is an important basis for the Public Security Bureau to strengthen the enforcement of the Cyber Security Law.

Pursuant to the Ninth Amendment to the Criminal Law issued by the NPC Standing Committee on August 29, 2015, which took effect on November 1, 2015, any Internet service provider that fails to fulfil the obligations related to internet information security administration as required by applicable laws and refuses rectification orders is subject to criminal penalty for (i) any dissemination of illegal information in large scale, (ii) any severe effect due to leakage of the client’s information, (iii) any serious loss of criminal evidence, or (iv) other severe situation. These amendments also state that any individual or entity that (i) sells or provides personal information to others that violates applicable law, or (ii) steals or illegally obtains any personal information, is subject to criminal penalty for severe violations. On May 8, 2017, the Supreme People’s Court and the Supreme People’s Procuratorate released the Interpretations 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 Involving Infringement of Citizens’ Personal Information, which took effect on June 1, 2017. It clarifies several concepts regarding the crime of “infringement of citizens’ personal information,” including “citizen’s personal information,” “provision,” and “unlawful acquisition.”

Pursuant to the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Apps, which was issued on January 23, 2019, app operators should collect and use personal information in compliance with the Cyber Security Law and should be responsible for the security of personal information obtained from users and take effective measures to strengthen the personal information protection. Furthermore, app operators should not force their users to make authorization by means of bundling, suspending installation or in other default forms and should not collect personal information in violation of laws, regulations or breach of user agreements. Such regulatory requirements were emphasized by the Notice on the Special Rectification of APPs Infringing upon User’s Personal Rights and Interests, which was issued by MIIT on October 31, 2019.

On October 21, 2019, the Supreme People’s Court and the Supreme People’s Procuratorate jointly issued the Interpretations on Certain Issues Regarding the Applicable of Law in the Handling of Criminal Case Involving Illegal Use of Information Networks and Assisting Committing Internet Crimes, which came into effect on November 1, 2019, and further clarifies the meaning of Internet service provider and the severe situations of the relevant crimes.

The recommended national standard, Information Security Technology Personal Information Security Specification, puts forward specific refinement requirements on the collection, preservation, use and commission processing, sharing, transfer, public disclosure, etc. Although it is not mandatory, in the absence of clear implementation rules and standards for the law on cyber security and other personal information protection, it will be used as the basis for judging and making determinations. On November 28, 2019, The Notice of Identification Method of Application Illegal Collection and Use of Personal Information was issued, which provides a reference for the identification of App illegal collection and use of personal information, and provides guidance for App operators’ self-inspection and self-correction and netizens’ social supervision.

On December 15, 2019, the Provisions on Ecological Governance of Network Information Content was issued by the Cyberspace Administration of China, which has come into effect on March 1, 2020. These provisions require network information content service platform to perform its duties as the information content administrator, strengthen ecological governance of the network information contents of its own platform, and foster a positive, healthy, progressive and amicable cyber culture.

The Measures on Cyber Security Review was jointly issued on April 13, 2020 and took effect on June 1, 2020. It provides detailed rules regarding cyber security review, any operator in violation of the regulations shall be penalized in accordance with Article 65 of the Cyber Security Law.

On July 3, 2020, the Data Security Law (Draft) was published to solicit public comments. The Data Security Law (Draft) mainly sets forth specific provisions regarding establishing basic systems for data security management, including data classification management system, risk assessment system, monitoring and early warning system, and emergency disposal system. In addition, it clarifies the data security protection obligations of organizations and individuals carrying out data activities and implementing data security protection responsibility.

Regulationson Privacy Protection

On December 13, 2005, the MPS issued the Regulations on Technological Measures for Internet Security Protection, or the Internet Protection Measures, which took effect on March 1, 2006, requiring internet service providers to utilize standard technical measures for internet security protection.

Under the Several Provisions on Regulating the Market Order of Internet Information Services issued by the MIIT on December 29, 2011 and that took effect on March 15, 2012, ICPs are also prohibited from collecting any personal user information or providing any information to third parties without the consent of the user. The Cyber Security Law provides an exception to the consent requirement where the information is anonymous, not personally identifiable and unrecoverable. ICPs must expressly inform the users of the method, content and purpose of the collection and processing of user personal information and may only collect information necessary for its services. ICPs are also required to properly maintain user personal information, and in case of any leak or likely leak of user personal information, ICPs must take remedial measures immediately and report any material leak to the telecommunications regulatory authority.

In addition, the Decision on Strengthening Network Information Protection issued by the NPC Standing Committee on December 28, 2012 emphasizes the need to protect electronic information that contains individual identification information and other private data. The decision requires ICPs to establish and publish policies regarding the collection and use of personal electronic information and to take necessary measures to ensure the security of the information and to prevent leakage, damage or loss. Furthermore, MIIT’s Order on Protection of Personal Information of Telecommunications and Internet Users, which was issued on July 16, 2013 and took effect on September 1, 2013, contains detailed requirements on the use and collection of personal information as well as the security measures to be taken by ICPs.

On August 22, 2019, the Cyberspace Administration of China promulgated the Provisions on the Cyber Protection of Children’s Personal Information, which took effect on October 1, 2019, requiring that before collecting, using, transferring or disclosing the personal information of a child, any Internet service operator should inform that child’s guardians in a noticeable and clear manner and obtain their consents. Meanwhile, Internet service operators should take measures like encryption when storing children’s personal information.

On May 28, 2020, the Civil Code of the PRC was issued by the National People’s Congress and became effective from January 1, 2021. The Civil Code defines the processing of personal information as the collection, storage, use, processing, transmittal, provision, and disclosure of personal information. Furthermore, according to the Civil Code, any entity that engages in the processing of personal information shall follow the principles of lawfulness, fairness, and necessity and not overuse personal information, and they shall obtain the consent from the natural person or his or her guardian, except as otherwise provided by laws and regulations.

On August 31, 2020, the Administrative Provisions for Text Message and Voice Call Service (Draft) were published for public comments. It provides that no entity or individual can send commercial text messages or make commercial calls to users without their consent. The relevant governmental authorities may order rectification, impose warnings or fines, make public announcements, or enforce other administrative measures on violation. Under severe circumstances, the relevant governmental authorities may revoke telecommunication licenses and phone number sources of the violating entity or individual.

On September 22, 2020, the Ministry of Public Security issued the Guiding Opinions on Implementing the Network Security Level Protection System and Critical Information Infrastructure Security Protection System. It stipulates that internet operators shall cooperate with public security authorities to crack down on illegal and criminal online activities. In the event of online crimes, or material cyber security threats and incidents, the internet operators shall promptly report and provide necessary assistance to the public security authorities.

On October 21, 2020, the Standing Committee of the National People’s Congress published a consultation draft of the Personal Information Protection Law, which sets a high bar for Chinese data protection, taking consent as basis for data processing, introducing restrictions on international data transfers and imposing revenue-based fines as the penalty for non-compliance.

Regulationson Anti-Monopoly Matters Related to Internet Platform Companies

The PRC Anti-Monopoly Law, which took effect on August 1, 2008, prohibits monopolistic conducts such as entering into monopoly agreements, abusing market dominance, and undertaking concentrations that may have the effect of eliminating or restricting competition. On February 7, 2021, the Anti-Monopoly Commission of the State Council officially promulgated the Anti-Monopoly Guidelines on Platform Economics. The guidelines prohibit certain monopolistic conducts of internet platforms to protect market competition, safeguard interests of users and operators who participate in internet platform economics, including without limitation, prohibiting platforms with dominant position from abusing their market dominance (such as discriminating customers in terms of pricing and other transactional conditions using big data and analytics, coercing counterparties into exclusivity arrangements, using technology methods to block competitors’ interface, tying or attaching unreasonable trading conditions, compulsory collection of unnecessary user data). In addition, the guidelines also reinforce the requirement of antitrust merger review for internet platform related transactions to safeguard market competition.

RegulationsRelating to Loan Facilitation

On December 1, 2017, the Group Head Office of Internet Financial Risk Special Rectification and the Group Head Office of the P2P Network Loan Risks jointly issued the Notice on the Regulation and Rectification of the “Cash Loan” Business, or Circular 141, which regulates “cash loan” businesses conducted by internet micro-finance companies, banking financial institutions and online lending information intermediaries. Circular 141 defines “cash loans” as loans that are unrelated to the circumstances of their use, with no designated use for the loan proceeds, no qualification requirement for the borrower and no collateral for the loan. The definition of a cash loan under Circular 141 is vague and subject to further regulatory interpretation. Circular 141 sets forth various prohibitions and obligations on banking financial institutions participating in “cash loan” businesses, including that: (i) extension of loans jointly with any third-party institution that has not obtained approvals for the lending business, or funding to such institutions for the purpose of extending loans in any form, is prohibited; (ii) with respect to a lending business conducted in collaboration with a third-party institution, outsourcing of the core business (including the credit assessment and risk control) is prohibited, and any credit enhancement service, whether or not in disguised form (including the commitment to bear the risk of default), provided by any third-party institutions without guarantee qualification are also prohibited, and (iii) banking financial institutions must require and ensure that such third-party institutions do not collect any interest or fees from the borrowers. Any violation of Circular 141 may result in criminal liability and various penalties, including suspension or cessation of business operations, sanctions, rectification, rejection of filing, and revocation of license.

In addition, the Notice on Specific Rectification Implementation Plans for Risk of Online Microfinance Businesses of Microfinance Companies, or Circular 56, provides that the online lending business conducted by microfinance companies in collaboration with a third-party institution, may not include any credit enhancement service in disguised form (including the provision of a “drawer agreement” guarantee) or underlying commitments by the third-party institution. Third-party institutions collaborating with microfinance companies are also prohibited from collecting any interest or fees from borrowers. Violation of Circular 56 may result in various penalties.

On August 1, 2019, the General Office of the State Council issued and promulgated the Guidance on Promoting the Healthy Development of the Platform Economy, which provides that the market-access management and supervision of financial services provided through online platforms in the finance sector are regulated by the laws, regulations and other relevant rules. In addition, entities conducting financial information intermediaries services and transaction-matching services are subject to the market-access management pursuant to relevant laws.

On July 12, 2020, the Interim Measures came into effect. While the Interim Measures apply to commercial banks, consumer finance companies and auto finance companies directly, the Interim Measures also require these banking financial institutions to strengthen the management of cooperation related to loan business, which would affect the cooperated institutions in internet loan business and their existing business models. Pursuant to these Interim Measures, commercial banks shall evaluate their cooperation agencies and implement name list management. Commercial banks shall not accept direct and disguised credit enhancement services from unqualified cooperation agencies, nor entrust third-party collection agencies with illegal records. The Interim Measures also provide that, except for cooperating institutions that jointly provide loans, commercial banks shall not entrust cooperating institutions to perform key operations, such as loan issuance, loan principal and interest recovery, and suspension of funding. Pursuant to the Interim Measures, commercial banks shall independently carry out risk assessment and credit approval for loans they fund, and take primary responsibility for post-loan management. Commercial banks shall not entrust third-party institutions with records of violent collection or other illegal records to collect loans. Furthermore, according to the Interim Measures, commercial banks shall forbid third-party partners from charging any fees or interests on borrowers, and shall clarify such rule in written agreements with their partners. The CBIRC and its local branches shall evaluate reports and relevant materials submitted by commercial banks, and the key assessment factors include independent control of credit approval procedures, contract signing and other core risk management procedures of commercial banks.

On February 19, 2021, the CBIRC issued the Notice of Further Regulating Online Loan Business of Commercial Banks, and it provides that commercial banks shall not outsource material procedures of loan origination, loan servicing, and delinquency management to third-party institutions, and in addition, commercial banks shall not engage in online loan business outside its registered place.

Regulationrelated to Exchange Administered Financial Asset Securities Distribution

The distribution of exchange administered financial asset securities is currently regulated by the Decision Regarding Straightening out and Rectifying Various Types of Trading Venues to Effectively Prevent Financial Risks (“Document 38”) and the Implementation Opinions on Straightening out and Rectifying Various Types of Trading Venues (“Document 37”), promulgated by the General Office of the State Council on November 11, 2011 and July 12, 2012, respectively. Both Document 38 and Document 37 stipulate that exchanges that are subject to the approval of the State Council or its administration department of finance for establishment, shall be regulated by the administration department of finance of the State Council; all other exchanges shall be regulated by the local People’s Government at the provincial level, which in practice, are the offices of finance at municipal and provincial levels. Document 38 and Document 37 emphasize on the prohibitive activities relating to the issuance and distribution of exchange administered funds, for example, that the number of investors of exchange administered funds shall not exceed 200 accumulatively.

Regulationon Foreign Exchange Control

Foreign exchange in China is primarily regulated by:

●	The Foreign Currency Administration<br> Regulations (1996), as amended on January 14, 1997 and August 5, 2008; and
●	The Administration Rules<br> of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.
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Under the Foreign Currency Administration Regulations, the Renminbi is convertible for current account items, including the distribution of dividends, interest payments and trade and service-related foreign exchange transactions. Conversion of Renminbi into foreign currency for capital account items, such as, loans, investment in securities and repatriation of investments, however, remains subject to the registration of the SAFE or its local counterparts as required by law. Under the Administration Rules, foreign-invested enterprises may buy, sell and remit foreign currencies at banks authorized to conduct foreign exchange transactions for settlement of current account transactions after providing valid commercial documents and, in the case of capital account item transactions, only after registration with the SAFE and, as the case may be, other relevant PRC government authorities as required by law. Capital investments directed outside of China by foreign-invested enterprises are also subject to restrictions, which include registration filing with MOFCOM. If the investment is made to the sensitive countries, districts, or industries, it needs to be approved by MOFCOM.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. The conversion of Renminbi into foreign currencies, including U.S. dollars, has been based on rates set by the People’s Bank of China. On July 21, 2005, the PRC government changed its policy of pegging the value of the Renminbi to the U.S. dollar. Under the new policy, the Renminbi will be permitted to fluctuate within a band against a basket of certain foreign currencies. We receive a significant portion of our revenue in Renminbi, which is not a freely convertible currency. Under our current structure, our income will be primarily derived from dividend payments from our subsidiaries in China. Even though we may remit the income from China to anywhere we want, the fluctuation of exchange rate may be a disadvantage to us if the Renminbi depreciated.

Regulationon Foreign Exchange Registration of Offshore Investment by PRC Residents

The Notice on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, promulgated by SAFE on July 14, 2014 and designed to replace the former circular commonly known as “Notice 75”, requires registration of PRC residents with local branches of SAFE with respect to their direct establishment or indirect control of an offshore entity (referred to in Notice 37 as “special purpose vehicle.”), where such offshore entity are established for the purpose of overseas investment or financing, provided that PRC residents contribute their legally owned assets or equity into such entity.

Notice 37 further requires amendment to the registration where any significant changes with respect to the special purpose vehicle capitalization or structure of the PRC resident itself (such as capital increase, capital reduction, share transfer or exchange, merger or spin off).

Regulationon Dividend Distributions

Our PRC subsidiaries, Xibolun Automation and Xibolun Equipment, are wholly foreign-owned and joint venture enterprises under the PRC law. The principal regulations governing the distribution of dividends paid by wholly foreign-owned enterprises include:

●	Corporate Law (1993) as<br> amended in 2005 and 2013;
●	The Wholly Foreign-Owned<br> Enterprise Law (1986), as amended in 2000;
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●	The Wholly Foreign-Owned<br> Enterprise Law Implementation Regulations (1990), as amended in 2001; and
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●	The Enterprise Income Tax<br> Law (2007) and its Implementation Regulations (2007).
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Under these regulations, wholly foreign-owned and joint venture enterprises in China may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations. In addition, an enterprise in China is required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until its cumulative total reserve funds reaches 50% of its registered capital. Our Company’s reserve fund has not yet reached this level. The board of directors of a wholly foreign-owned enterprise has the discretion to allocate a portion of its after-tax profits to its employee welfare and bonus funds. These reserve funds, however, may not be distributed as cash dividends.

On March 16, 2007, the National People’s Congress enacted the Enterprise Income Tax Law, and on December 6, 2007, the State Council issued the Implementation Regulations on the Enterprise Income Tax Law, both of which became effective on January 1, 2008. Under this law and its implementation regulations, dividends payable by a foreign-invested enterprise in the PRC to its foreign investor who is a non-resident enterprise will be subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a lower withholding tax rate. See “Taxation.”

M&ARules and Regulation on Overseas Listings

On August 8, 2006, six PRC regulatory agencies, MOFCOM, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, CSRC and SAFE, jointly adopted the Regulation on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006. The M&A Rules purport, among other things, to require that offshore SPVs that are controlled by PRC companies or individuals and that have been formed for overseas listing purposes through acquisitions of PRC domestic interests held by such PRC companies or individuals, obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. On September 21, 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings.

While the application of the M&A Rules remains unclear, our prior PRC counsel, our PRC legal counsel advised us that, based on their understanding of the current PRC laws and regulations as well as the notice announced on September 21, 2006:

●	the CSRC currently has<br> not issued any definitive rule or interpretation concerning whether offerings such as our initial public offering are subject to<br> the CSRC approval procedures under the M&A Rules; and
●	despite the lack of any<br> definitive rule or interpretation from CSRC, the main purpose of the M&A rule is for national security and national industrial<br> policy and so far none of the Chinese companies that have completed their public listing in the U.S. have obtained such approval;<br> and
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●	Our business operations<br> in China do not belong to a prohibited industry by foreign investment; and
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●	Our M&A to our Chinese<br> subsidiary companies have all obtained properly the approval from local governmental authorizations; and
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●	Our BVI company is not<br> established by a Chinese citizen. Accordingly, although the purpose of BVI incorporation is for overseas listing, the M&A rule<br> should not apply to us.
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Our PRC counsel also advises us, however, that there is still uncertainty as to how the M&A Rules will be interpreted and implemented. If the CSRC or other PRC regulatory agencies, subsequently determine that CSRC approval was required for our initial public offering, we may need to apply for remedial approval from the CSRC and we may be subject to penalties and administrative sanctions administered by these regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, or take other actions that could materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A common shares. Consequently, even though our PRC counsel believes the probability for the aforementioned actions is small, if you engage in market trading or other activities in anticipation of, and prior to, settlement and delivery, you do so at the risk settlement and delivery may not occur.

In addition, if the CSRC later requires that we obtain its approval for our initial public offering, we may be unable to obtain a waiver of the CSRC approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding the CSRC approval requirements could have a material adverse effect on the trading price of our Class A common shares.

Regulationson Offshore Parent Holding Companies’ Direct Investment in and Loans to Their PRC Subsidiaries

An offshore company may invest equity in a PRC company, which will become the PRC subsidiary of the offshore holding company after investment. Such equity investment is subject to a series of laws and regulations generally applicable to any foreign-invested enterprise in China, which include the Wholly Foreign Owned Enterprise Law, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Contractual Joint Venture Enterprise Law, all as amended from time to time, and their respective implementing rules; the Tentative Provisions on the Foreign Exchange Registration Administration of Foreign-Invested Enterprise; and the Notice on Certain Matters Relating to the Change of Registered Capital of Foreign-Invested Enterprises.

Under the aforesaid laws and regulations, the increase of the registered capital of a foreign-invested enterprise is subject to the prior approval by the original approval authority of its establishment. In addition, the increase of registered capital and total investment amount shall both be registered with SAIC.

Shareholder loans made by offshore parent holding companies to their PRC subsidiaries are regarded as foreign debts in China for regulatory purposes, which debts are subject to a number of PRC laws and regulations, including the PRC Foreign Exchange Administration Regulations, the Interim Measures on Administration on Foreign Debts, the Tentative Provisions on the Statistics Monitoring of Foreign Debts and its implementation rules, and the Administration Rules on the Settlement, Sale and Payment of Foreign Exchange.

Under these regulations, the shareholder loans made by offshore parent holding companies to their PRC subsidiaries shall be registered with SAFE. Furthermore, the total amount of foreign debts that can be incurred by such PRC subsidiaries, including any shareholder loans, shall not exceed the difference between the total investment amount and the registered capital amount of the PRC subsidiaries, both of which are subject to governmental approval.

Regulationson Enterprise Income Tax

On March 16, 2007, the NPC Standing Committee issued the Enterprise Income Tax Law of the PRC, which took effect on January 1, 2008, or the Old EIT Law. On December 6, 2007, the State Council enacted the Implementation Rules for the Enterprise Income Tax Law of the PRC, or the EIT Rules, which also took effect on January 1, 2008 and was amended on April 23, 2019. The Old EIT Law was amended on February 24, 2017 and December 29, 2018. The Old EIT Law, as amended, and the EIT Rules are collectively referred to as the EIT Law. According to the EIT Law, taxpayers consist of resident enterprises and non-resident enterprises. Resident enterprises are defined as enterprises that are established in China in accordance with the PRC laws, or that are established in accordance with the laws of foreign countries but whose actual or de factocontrol entity is within the PRC. Non-resident enterprises are defined as enterprises that are set up in accordance with the laws of foreign countries and whose actual administration is conducted outside the PRC, but (i) have entities or premises in China, or (ii) have no entities or premises but have income generated from China. According to the EIT Law, foreign-invested enterprises in the PRC are subject to a uniform enterprise income tax rate of 25%. A non-resident enterprise that has an establishment or premises within the PRC must pay enterprise income tax at a rate of 25% on its income that is derived from such establishment or premises inside the PRC and that is sourced outside the PRC but is actually connected with the said establishment or premises. However, if non-resident enterprises have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment institutions or premises in the PRC but there is no actual relationship between the relevant income derived in the PRC and the established institutions or premises set up by them, the enterprise income tax is, in that case, set at the rate of 10% for their income sourced from inside the PRC.

Enterprises that are recognized as high and new technology enterprises in accordance with the Notice of the Ministry of Science, the Ministry of Finance and the State Administration of Taxation on Amending and Issuing the Administrative Measures for the Determination of High and New Tech Enterprises are entitled to enjoy a preferential enterprise income tax rate of 15%. Pursuant to the Administrative Measures for the Recognition of High and New Technology Enterprises, the validity period of the high and new technology enterprise qualification shall be three years from the date of issuance of the certificate of high and new technology enterprise. An enterprise can re-apply for such recognition as a high and new technology enterprise before or after the previous certificate expires.

On February 3, 2015, the State Administration of Taxation, or SAT, issued the Announcement on Several Issues Concerning Enterprise Income Tax on Indirect Transfer of Assets by Non-Resident Enterprises, or Circular 7. Circular 7 provides comprehensive guidelines relating to, and heightening the Chinese tax authorities’ scrutiny of, indirect transfers by a non-resident enterprise of assets (including assets of organizations and premises in the PRC, immovable property in the PRC, and equity investments in PRC resident enterprises), or the PRC Taxable Assets. For instance, when a non-resident enterprise transfers equity interest in an overseas holding company that directly or indirectly holds certain PRC Taxable Assets and if the transfer is believed by the Chinese tax authorities to have no reasonable commercial purpose other than to evade enterprise income tax, Circular 7 allows the Chinese tax authorities to reclassify the indirect transfer of PRC Taxable Assets into a direct transfer and therefore impose PRC enterprise income tax at a rate of a 10% on the non-resident enterprise. On the other hand, indirect transfers falling into the scope of the safe harbors under the Circular 7 may not be subject to PRC tax under the Circular 7. The safe harbors include qualified group restructurings, public market trades and exemptions under tax treaties or arrangements.

On October 17, 2017, the SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the SAT Circular 37, which took effect on December 1, 2017 and was amended on June 15, 2018. According to SAT Circular 37, the balance after deducting the equity net value from the equity transfer income shall be the taxable income amount for equity transfer income.

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

Regulationson Dividend Tax

Pursuant to the SAT Circular on Relevant Issues relating to the Implementation of Dividend Clauses in Tax Agreements, which took effect on February 20, 2009, all of the following requirements must be satisfied to enjoy the preferential tax rates provided under the tax agreements: (1) the tax resident that receives dividends should be a company as provided in the tax agreement; (2) the equity interest and voting shares of the PRC resident company directly owned by the tax resident satisfy the percentages specified in the tax agreement; and (3) the equity interest of the PRC resident company directly owned by such tax resident at any time during the 12 months prior to receiving the dividends satisfy the percentage specified in the tax agreement.

The EIT Law provides that an income tax rate of 10% will normally be applicable to dividends payable to investors that are “non-resident enterprises,” and gains derived by such investors, which (a) do not have an establishment or place of business in the PRC or (b) have an establishment or place of business in the PRC, but the relevant income is not effectively connected with the establishment or place of business to the extent such dividends and gains are derived from sources within the PRC. The income tax on the dividends may be reduced pursuant to a tax treaty between China and other applicable jurisdictions. 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 with Respect to Taxes on Income, or the Double Tax Avoidance Arrangement, issued by the SAT on August 21, 2006 that took effect on December 8, 2006, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement, its protocols and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5% upon receiving approval from the in-charge tax authority. However, based on the SAT Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, issued and 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. Based on the SAT Announcement of Taxation on Issues Relating to “Beneficial Owner” in Tax Treaties, issued on February 3, 2018 and effective from April 1, 2018, to determine the “beneficial owner” status of a resident of the treaty counterparty seeking to enjoy tax treaty benefits, a comprehensive analysis must be carried out in accordance with the factors set out in the announcement.

On August 27, 2015, the SAT issued the Announcement on Promulgating the Administrative Measures for Tax Convention Treatment for Non-resident Taxpayers, which took effect on November 1, 2015 and was amended on June 15, 2018. The aforementioned announcement was repealed by the Announcement of State Taxation Administration on Promulgation of the Administrative Measures on Non-resident Taxpayers Enjoying Treaty Benefits, which was propagated on October 14, 2019 and took effect on January 1, 2020. Under such announcement, non-resident taxpayers meeting conditions for enjoying the convention treatment may be entitled to the convention treatment themselves when filing a tax return or making a withholding declaration through a withholding agent, subject to the subsequent administration by the tax authorities. Such taxpayers who make their own declaration must self-assess whether they are entitled to tax treaty benefits, make truthful declarations and submit the relevant reports, statements and materials required by the relevant tax authorities.

Regulationson Value-added Tax

All entities and individuals engaged in the sale of goods, provision of processing, repairs and replacement services, and the importation of goods within the territory of the PRC must pay value-added tax, or the VAT, in accordance with the Provisional Regulations on Value-added Tax of the PRC, or the Provisional Regulations on VAT, and its implementation rules, or collectively, the VAT Law. The Provisional Regulations on VAT, which was issued by the State Council on December 13, 1993 and took effect on January 1, 1994, was amended by the Notice of Adjustment of VAT Rates issued on April 4, 2018 and by the Notice of Strengthening Reform of VAT Policies issued on March 20, 2019. Pursuant to the VAT Law, VAT payable is calculated as “output VAT” minus “input VAT”. The rate of VAT varies among 13%, 9% and 6% depending on the product type.

In accordance with the Circular of the Ministry of Finance and SAT on Comprehensively Promoting the Pilot Program of the Collection of Value-added Tax in Lieu of Business Tax, issued on March 23, 2016 and effective from May 1, 2016, upon approval of the State Council of the PRC, the pilot program of the collection of VAT in lieu of business tax shall be promoted nationwide in a comprehensive manner as at May 1, 2016.

Regulationson Trademarks

Trademarks are protected by the PRC Trademark Law adopted in 1982, as subsequently amended, as well as the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and 2013. The Trademark Office under the SAIC handles trademark registrations. Trademarks can be registered for a term of ten years and can be extended for another ten years if requested upon expiration of the first or any renewed ten-year term. The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration. Where a trademark for which a registration application has been made is identical or similar to another trademark which has already been registered or been subject to a preliminary examination and approval for use on the same type of or similar commodities or services, the application for such trademark registration may be rejected. Any person applying for the registration of a trademark may not prejudice the existing right 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 other party’s use. Trademark license agreements must be filed with the Trademark Office or its regional offices. We are currently using at no expense two trademarks registered in China and owned by Mr. Anyuan Sun. Meanwhile, we have successfully applied on our own name two trademarks in 2015, for both of which we have obtained the certificate issued by the authority (SAIC).

Regulationson Copyright and Software Products

Under the Copyright Law of the PRC issued by the NPC Standing Committee on September 7, 1990, which has been replaced by its latest amendment on June 1 2020, works of Chinese citizens, legal persons or other organizations, whether published or not, enjoy copyright in their works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software. Similarly, under the Computer Software Protection Regulations issued by the State Council on June 4, 1991, last amended on January 30, 2013 and effective on March 1, 2013, Chinese citizens, legal persons and other organizations shall enjoy copyright on the software they develop, regardless of whether the software has been released publicly. Software copyright commences from the date on which the development of the software is completed. A software copyright owner may register with the software registration institution recognized by the copyright administration department of the State Council of the PRC. A registration certificate issued by the software registration institution is a preliminary proof of the registered items. The protection period for software copyright of a legal person or other organizations shall be fifty years, concluding on December 31 of the fiftieth year after the software’s initial release. In order to further implement the Computer Software Protection Regulations, the National Copyright Administration issued the Measures for the Registrations of Computer Software Copyright effective on February 20, 2002, which provides procedures for software copyright registration, license contract registration and transfer contract registration. The Copyright Protection Center of the PRC is mandated as the software registration institution under the regulations.

EmploymentLaws

In accordance with the PRC National Labor Law, which became effective in January 1995, and the PRC Labor Contract Law, which became effective in January 2008, as amended subsequently in 2012, employers must execute written labor contracts with full-time employees in order to establish an employment relationship. All employers must compensate their employees equal to at least the local minimum wage standards. All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and standards and provide employees with appropriate workplace safety training. In addition, employers in China are obliged to pay contributions to the social insurance plan and the housing fund plan for employees.

We have entered into employment agreements with all of our full-time employees. We have contributed to the basic and minimum social insurance plan. Due to a high employee turnover rate in our industry, it is difficult for us to comply fully with the law. While we believe we have made adequate provision of such outstanding amounts of contributions to such plans in our financial statements, any failure to make sufficient payments to such plans would be in violation of applicable PRC laws and regulations and, if we are found to be in violation of such laws and regulations, we could be required to make up the contributions for such plans as well as to pay late fees and fines.

C.	Organizational structure

CorporateStructure

The following chart illustrates our Company’s organizational structure, including our subsidiaries and consolidated affiliated entities as of the date of this annual report:

D.	Property, plant and equipment

Descriptionof Property

There is no private land ownership in China. Individuals and entities are permitted to acquire land use rights for specific purposes. Following is a list of our properties, all of which we currently lease:

Property	Rental Term
99 Damba Road, Putuo District, Shanghai	May 20, 2019 – October 19, 2023	354	m^2^
Gubei SOHO, 188 HongBaoShi Road, Changning District, Shanghai	October 01, 2019 – July 31, 2022	1000	m^2^
Unit 605, 6 / F, block B, 33 Financial Street, Xicheng District, Beijing	Janury 01, 2020 – December 31, 2020	278	m^2^

During 2020 before its disposition, Xibolun Group was granted land use rights for our facilities in Wenzhou, which extend until December 31, 2036. Property in No.936 Jinhai 2^nd^ Ave. Airport New District, LongwanPutuo District, Wenzhou, Zhejiang Province, China was our office and manufacturing facility for Xibolun Group. At this location, we had a variety of heavy equipment required to produce our valves, pipefittings and other products, including computer numerical control (“CNC”) milling machines, office equipment and product testing equipment. None of our properties are encumbered by debt, and we are not aware of any environmental concerns or limitations on the use of our properties for the purposes we currently use them or intend to use them in the future.

Item 4A.	Unresolved Staff Comments

None.

Item 5.	Operating and Financial Review and Prospects

Thefollowing discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and related notes that appear in this annual report. In addition to historical consolidated financial information,the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results coulddiffer materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differencesinclude those discussed below and elsewhere in this annual report, particularly in “Risk Factors.”

Overview

Nisun International Enterprise Development Group Co., Ltd (“Nisun International” or the “Company”), formerly known as Hebron Technology Co., Ltd, is a holding company established under the laws of the British Virgin Islands (“BVI”) on May 29, 2012. On September 22, 2020, the Company changed its name from “Hebron Technology Co., Ltd” to “Nisun International Enterprise Development Group Co., Ltd”, which the management believes more closely reflects the Company’s new financial services business. The Company is a holding company and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs in the PRC.

The Company began to conduct its financial services business in 2019 through the Company’s newly acquired entities, Fintech (Shanghai) Digital Technology Co., Ltd. (“Fintech”), Beijing Hengtai Puhui Information services Co., Ltd. (“Hengpu”), Shanghai Nami Financial Consulting Co., Ltd (“Nami Shanghai”) and their subsidiaries. The Company provides a set of technology-driven customized financing solutions to small-and mid-size enterprises through Hengpu, Fintech, Nami Shanghai and their subsidiaries. Hengpu and Fintech provide comprehensive financing solutions for small to medium-sized enterprises, while Nami facilitates the matching of investors and small to medium-sized enterprises. The Company commenced a technology-driven integrated supply chain solutions through Fintech and its subsidiaries in January 2020 by providing service that the lender and borrower together.

On May 31, 2020, the Company acquired 100% of Nami Holding (Cayman) Co., Ltd. (“Nami Cayman”) for $25.34 million, consisting of $7.01 million (RMB 50 million) to be paid in cash and 1,562,726 shares of our common stock valued at $11.73 per share valued totaling $18.33 million, from Nami Cayman’s original shareholder. Prior to the acquisition, Nami Cayman effectively controlled Nami Shanghai through a series of agreements.

On November 30, 2020, the Company completed the disposition of its manufacturing and installation business. The Company sold all its equity interests in its subsidiary, Hong Kong Xibolun Technology Co., Ltd. (“Xibolun HK”) to Wise Metro Development Co., Ltd. for consideration of approximately $15.0 million (RMB 98.3 million), a company owned by the prior executive officer of the Company. As a result of the disposition, the Company sold all the equity interests it held in Zhejiang Xibolun Automation Project Technology Co., Ltd, Wenzhou Xibolun Fluid Equipment Co., Ltd., and Xuzhou Weijia Biotechnology Co., Ltd. The manufacturing and installation business has been presented as discontinued operations (“Discontinued Operations”) retroactively for the periods presented in the consolidated financial statements.

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts of the world in the first quarter of 2020, which has caused significant volatility in the PRC and international financial markets. For fiscal year 2020 and subsequent period up to the date of this report, the COVID-19 pandemic did not have a material negative impact on the Company’s financial services business. The extent of the impact on the Company’s fiscal 2021 results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on the Company’s future operations, financial condition, liquidity and results of operations if the current situation continues. For fiscal year 2020, the COVID-19 pandemic resulted in material adverse effects on the Company’s discontinued manufacturing and installation business. During the temporary business closure period in the Spring of 2020, employees had very limited access to the Company’s manufacturing facilities, and as a result, the Company experienced difficulty providing manufacturing and installation services. In addition, due to the COVID-19 outbreak, some of the Company’s customers and suppliers experienced financial distress, delayed or defaulted on their payments, reduced the scale of their business, and suffered disruptions in their business, which in turn had caused further adverse impact on the manufacturing and installation business. On November 30, 2020, the Company disposed of the manufacturing and installation business.

FinancialResults for fiscal year 2020 and 2019

The following table presents an overview of our results of operations for fiscal year 2020 and 2019:

	Year ended December 31,						Changes
	2020			2019			()		(%)
Revenue	$	42,190,191		$	2,525,524					1571	%
Cost of revenue		19,973,656			19,492					102371	%
Gross profit		22,216,535			2,506,032					787	%
Selling, general and administrative expenses		12,188,316			1,331,467					815	%
Income (loss) from operations		10,028,219			1,174,565					754	%
Other income (expense), net		829,451			(1,371	)				60600	%
Income (loss) before income taxes		10,857,670			1,175,936					824	%
Income taxes (benefit)		941,064			(55,731	)				1,789	%
Net income (loss) from continuing operations		9,916,606			1,231,667					705	%
(Loss) income from discontinued operations, net of tax		(22,971,016	)		1,508,323			)		(1623	)%
Net (loss) income		(13,054,410	)		2,739,990			)		(575	)%
Less: net income (loss) attributed to non-controlling interest		37,380			-					100	%
Net income (loss) attributed to the shareholders		(13,091,790	)		2,739,990			)		(578	)%
Foreign currency translation income (loss)		5,507,420			(561,091	)				(1082	)%
Comprehensive (loss) income	$	(7,584,370	)	$	2,178,899			)		(448	)%

All values are in US Dollars.

The following table presents an overview of our results of operations for fiscal year 2019 and 2018:

	Year ended December 31,						Changes
	2019			2018			()		(%)
Revenue	$	2,525,524		$	-					100	%
Cost of revenue		19,492			-					100	%
Gross profit		2,506,032			-					100	%
Selling, general and administrative expenses		1,331,467			2,093,994			)		(36	)%
Income (loss) from operations		1,174,565			(2,093,994	)				156	%
Other income (expense), net		(1,371	)		-			)		(100	)%
Income (loss) before income taxes		1,175,936			(2,093,994	)				156	%
Income taxes (benefit)		(55,731	)		-			)		(100	)%
Net income (loss) from continuing operations		1,231,667			(2,093,994	)				159	%
Net income (loss) from discontinued operations, net of tax		1,508,323			(3,050,751	)				149	%
Net (loss)		2,739,990			(5,144,745	)				153	%
Less: net income (loss) attributed to non-controlling interest		-			-					-
Net income (loss) attributed to the shareholders		2,739,990			(5,144,745	)				153	%
Foreign currency translation income (loss)		(561,091	)		(1,755,528	)				(68	)%
Comprehensive income (loss)	$	2,178,899		$	(6,900,273	)				132	%

All values are in US Dollars.

Revenues

The following table presents a breakdown of our revenue from continuing operations for fiscal year 2020 and 2019.

	Year ended December 31,										Changes	Changes
	2020		%			2019		%			()	(%)
Small and Medium Enterprise financing solutions	$	40,779,794		97	%	$	2,522,143		100	%			1517	%
Supply chain financing solutions		1,369,859		3	%		-		-	%			100	%
Other financing solutions		40,538		0	%		3,381		-	%			1099	%
Total revenue	$	42,190,191		100	%	$	2,525,524		100	%			1571	%

All values are in US Dollars.

The following table sets forth the breakdown of our revenue from continuing operations for fiscal year 2019 and 2018:

	Year ended December 31,										Changes	Changes
	2019		%			2018		%			()	(%)
Small and Medium Enterprise financing solutions	$	2,522,143		100	%	$	-		-	%			100	%
Supply chain financing solutions		-		-	%		-		-	%			-	%
Other financing solutions		3,381		0	%		-		-	%			100	%
Total revenue	$	2,525,524		100	%	$	-		-	%			100	%

All values are in US Dollars.

For fiscal year 2020, total revenue from continuing operations was approximately $42.2 million, comprised of $40.8 million of revenue from Small and Medium Enterprise financing solutions services, $1.4 million of revenue from supply chain financing solutions business and $0.04 million of revenue from other financing solutions services.

For fiscal year 2019, total revenue from continuing operations was approximately $2.5 million, comprised of $2.5 million of revenue from Small and Medium Enterprise financing solutions services and $3,381 of revenue from other financing solutions services.

The Company commenced its financial services business in July 2019 providing a set of financing solutions to Small and Medium Enterprises, including design, issuance, distribution, and management of financing solutions. The Company has experienced significant growth of its revenue from Small and Medium Enterprise financing solutions due to an increase in demand from SME enterprises in the PRC to seek for alternative financing solutions to bank financing.

The Company commenced its supply chain financing solutions business in January 2020. With a focus on finance and industry linkages, the Company aims to serve the upstream and downstream enterprises and transactions of the supply chain industry while facilitating supply chain financing reforms. For fiscal year 2020, revenue from the Company’s supply chain solutions was $1.4 million and the total supply chain transaction volume achieved by the Company during fiscal year 2020 amounted to approximately $50.6 million (RMB349.6 million). We expect our revenue from our supply chain financing solutions will continue to grow.

The Company commenced its other financing services business in July 2019. For fiscal year 2020, revenue from other financing solutions was $0.04 million.

Costof Revenue

The following table presents a breakdown of our cost of revenue for fiscal year 2020 and 2019:

	Year ended December 31,										Changes	Changes
	2020		%			2019		%			()	(%)
Small and Medium Enterprise financing solutions	$	19,311,193		96	%	$	19,492		100	%			*
Supply chain financing solutions		724,111		4	%		-		-	%			100	%
Other financing solutions		-		-	%		-		-	%			-	%
Total cost of revenue	$	20,035,304		100	%	$	19,492		100	%			*

All values are in US Dollars.

*	Not<br>meaningful

The cost of revenue from continuing operation was $20.0 million and $0.02 million for fiscal year 2020 and 2019, respectively.

The cost of revenue of $20.0 million for fiscal year 2020 was primarily comprised of direct advertising and marketing costs, direct costs associated with staff who designed and managed the Small and Medium Enterprises financing solutions, supply chain solutions and other financing solutions business and sales related taxes, office rent and expenses, excluding depreciation and amortization expenses which have been separately presented.

For fiscal year 2019, the cost of revenue from continuing operation was primarily the business and sales related taxes related to Small and Medium Enterprise financing solutions.

GrossProfit

The following table presents a breakdown of gross profit for fiscal year 2020 and 2019:

	Year ended December 31,										Changes	Changes
	2020		%			2019		%			()	(%)
Small and Medium Enterprise financing solutions	$	21,530,249		97	%	$	2,502,651		100	%			760	%
Supply chain financing solutions		645,748		3	%		-		-	%			100	%
Other financing solutions		40,538		-	%		3,381		-	%			1099	%
Total cost of revenue	$	22,216,535		100	%	$	2,506,032		100	%			787	%

All values are in US Dollars.

For the years ended December 31, 2020 and 2019, gross profit from continuing operations was $22.2 million and $2.5 million, respectively, representing an increase of approximately $19.7 million. The increase was primarily due to the fact that the Company commenced its financial services business in July 2019 and has experienced a significant increase in demand from SME enterprises in the PRC to seek for standardized financing solutions alternative to bank financing.

Selling,General and Administrative Expenses

	Year ended December 31,										Changes	Changes
	2020		%			2019		%			()	(%)
Selling expenses	$	3,181,810		67	%	$	93,620		7	%			3299	%
General and administrative expenses		8,188,736		26	%		1,082,631		81	%			656	%
Research and development expenses		817,770		7	%		155,216		12	%			427	%
Total cost of revenue	$	12,188,316		100	%	$	1,331,467		100	%			815	%

All values are in US Dollars.

Selling, general and administrative expenses are comprised of indirect advertising and marketing costs, office rent and expenses, costs associated with staff and support personnel who manage the Company’s business activities, and professional fees paid to third parties.

For fiscal year 2020, the Company incurred selling expenses of approximately $3.2 million, as compared to approximately $0.1 million for fiscal year 2019, an increase of approximately $3.1 million. The increase in expenses was mainly due to the fact that the Company’s newly acquired subsidiary, Nami, incurred advertising and marketing expenses of $2.6 million in fiscal 2020 to promote its business.

For fiscal year 2020, the Company incurred general and administrative expenses of approximately $8.2 million, as compared to approximately $1.1 million for fiscal year 2019, representing an increase of approximately $7.1 million. The increase in general and administrative expenses was mainly because (i) more labor and managerial expenses incurred in fiscal 2020 mainly because the Company started to conduct its financial services business in July 2019, (ii) the Company spent more in professional fees related to mergers and acquisitions (M&A) in fiscal 2020, and (iii) the Company incurred share-based compensation expenses of approximately $1.1 million, compared to in 2019.

For fiscal 2020, our research and development (R&D) expenses were $0.8 million, representing an increase of $0.6 million, compared to $0.2 million in R&D expenses in fiscal 2019. The increase in R&D expenses was primarily attributable to the R&D in the development of our supply chain financing and other financing services APPs and platform in 2020.

Otherincome (expense), net

Other income (expense), net, is used to record our non-operating income and expenses, interest income and expenses, investment income and other income and expenses.

For fiscal year 2020, the Company had a net other income of 0.8 million, as compared to none for fiscal year 2019. The increase was due to an increase in investment income from the short-term investment and interest income from loans to third parties.

Incometax expense (benefit)

For fiscal year 2020 and 2019, Hengpu was recognized as a High-Technology (“High-Tech”) Company by the Chinese government and subject to a reduced income tax rate of 15%, a reduction from the normal unified rate of 25%. The High-Tech certificate is valid for three years starting from November 2018 and subject to renewal. In fiscal year 2020, Fintech was recognized as a High-Tech Company and is subject to a reduced income tax rate of 15%. In accordance with the implementation rules of the Income Tax Law of the PRC, for the enterprises newly established in the Horgos Development Zone within the scope of “Catalogue of EIT Incentives for Industries Specially Encouraged for Development by Poverty Areas of Xinjiang”, the enterprise income from income tax shall be exempt for five years beginning from the first year in which the manufacturing or business operational revenue is earned. Khorgos is established in the Horgos Development Zone and its income is eligible to be exempt for five years starting from 2019. The Company’s remaining subsidiaries, VIEs and subsidiaries of VIEs are subject to corporate income tax at the unified rate of 25%.

For fiscal year 2020, income tax expense was $0.9 million, as compared to $0.1 million of income tax benefit for fiscal year 2020, which was mainly because the Company realized an income before taxes of approximately $10.9 million, compared with an income before tax of approximately $1.2 million in fiscal 2019. The effective tax rate in fiscal 2020 was approximately 8.7%, compared to the effective tax rate of approximately negative 4.7% for fiscal year 2019.

Netincome from continuing operations

For fiscal year 2020, the Company had a net income from continuing operations of $9.9 million, compared to the net income of $1.2 million for fiscal year 2019, representing an increase of $8.7 million. The increase in net income was mainly due to the fact that the Company began to conduct its financial services business in July 2019 through the Company’s newly acquired entities, Fintech, Hengpu and Nami Shanghai and their subsidiaries.

Netloss from discontinued operations

For fiscal year 2020 and 2019, the Company had a loss from discontinued operations of $23.0 million and a gain of $1.5 million from the equipment and engineering business, respectively. The net loss was mainly due to an impairment loss of $22.4 million on the equipment and engineering business’s assets because of its continuous losses.

Netincome (loss)

For fiscal year 2020, the Company incurred a net loss of $13.1 million, as compared to a net income of approximately $2.7 million for fiscal year 2019. This change was a result of the combination of the changes as discussed above.

For fiscal year 2020, the net loss of $13.1 million was primarily derived from $9.9 million of net income from the Company’s financial services business offset by the $23.0 million of net loss from discontinued operations.

Netincome (loss) per share

For fiscal year 2020, the net loss per share was $0.71, compared to a net income per share of $0.17 for fiscal year 2019. The net income per share from continuing operation was $0.53 for fiscal year 2020, compared to $0.08 for fiscal year 2019, representing the increase of $0.45 per share.

Liquidityand Capital Resources

As of December 31, 2020, the Company had cash, cash equivalents and restricted cash of $22.2 million, compared to $2.8 million as of December 31, 2019. This increase was primarily attributable to $2.2 million from operating activities, $19.1 million from financing activities, against $4.7 million used in investing activities.

In assessing our liquidity, the Company monitors and analyzes our cash on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital requirements, operating expenses, and capital expenditure obligations.

Based on the above considerations, management is of the opinion that we have sufficient funds to meet our working capital requirements for the next twelve months from the date of this report.

Substantially all of our operations are conducted in China and all of our revenues, expenses, and cash are denominated in Renminbi (RMB). RMB is subject to the exchange control regulation in China and, as a result, we may have difficulty distributing any dividends outside of China due to PRC exchange control regulations that restrict its ability to convert RMB into U.S. Dollars.

Under applicable PRC regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, an enterprise in China is required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until the cumulative amount of such reserve reaches 50% of its registered capital. These reserves are not distributable as cash dividends. As of December 31, 2020, and December 31, 2019, the statutory reserve balance for the Company’s entities established in the PRC was $2,190,847 (RMB 15,126,025) and $516,193 (RMB 3,593,632), respectively. The board of directors of a foreign-invested enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation. Under PRC law, RMB is currently convertible into U.S. Dollars under a company’s “current account,” which includes dividends, trade and service-related foreign exchange transactions, without prior approval of the State Administration of Foreign Exchange (SAFE), but is not from a company’s “capital account,” which includes foreign direct investments and loans, without the prior approval of the SAFE.

We have not declared or paid any cash dividends to our shareholders. We did not pay any dividends out of our retained earnings for the years ended December 31, 2020 and 2019. Our Board of Directors may declare dividends in the future after taking into account our operations, earnings, financial condition, cash requirements and availability and other factors as it may deem relevant at such time. Any declaration and payment, as well as the amount of dividends will be subject to our Memorandum and Articles of Association, as amended, and applicable PRC, BVI and U.S. securities laws and regulations

The following table provides summary information about our net cash flows for financial statement periods presented in this report:

	For the Years Ended December 31,
	2020			2019			2018
Net cash provided by (used in) operating activities from continuing operations	$	2,250,373		$	598,709		$	(80	)
Net cash provided by (used in) operating activities from discontinued operations		436,389			(263,476	)		(725,000	)
Net cash used by investing activities from continuing operations		(4,712,912	)		(1,806,054	)		-
Net cash used in investing activities from discontinued operations		(6,713	)		(157,440	)		(115,210	)
Net cash provided by financing activities from continuing operations		19,147,918			4,149,141			-
Net cash provided by (used in) financing activities from discontinued operations		(788,599	)		(996,355	)		730,669
Effect of exchange rate change in cash, cash equivalents and restricted cash		2,806,981			(184,449	)		(94,239	)
Net change in cash, cash equivalents and restricted cash		19,133,437			1,340,076			(203,860	)
Net change in cash, cash equivalents and restricted cash from discontinued operations		(283,314	)		(1,440,823	)		(203,710	)
Net change in cash, cash equivalents and restricted cash from continuing operations	$	19,416,751		$	2,780,899		$	(150	)

OperatingActivities

Net cash provided by operating activities for fiscal 2020 was approximately $2.3 million, which was primarily attributable to a net income of approximately $9.9 million, adjusted for non-cash items of approximately $2.0 million and adjustments for changes in working capital of approximately negative $9.8 million. The adjustments for changes in working capital mainly included (i) an increase $10.7 million in other receivable related to supply chain solutions business launched in January 2020, (ii) an increase in account payable of $1.0 million, (iii) a decrease in other payable of $2.1 million, and (iv) an increase in tax payable of $1.6 million due to higher earnings.

Net cash provided by operating activities for fiscal 2019 was approximately $0.6 million, which was primarily attributable to a net income of approximately $1.2 million, adjusted for non-cash items of approximately $0.2 million and adjustments for changes in working capital of approximately $(0.8) million. The adjustments for changes in working capital mainly included an increase in accounts receivable of $0.8 million from Small and Medium Enterprise financing solutions business.

InvestingActivities

Net cash used in investing activities was $4.7 million for fiscal year 2020, primarily attributable to (i) the $5.0 million in cash acquired in connection with the Company’s acquisition of Nami, (ii) $15.6 million of investment in debt securities, (iii) $3.1 million of investment in short-term investment, and (iv) $11.0 million of repayment of loans to third parties less $1.8 million in new loans to third parties

Net cash used in investing activities was $1.8 million for fiscal year 2019, including $0.2 million paid for property and equipment purchase, $3.6 million of loans to third parties and $2.0 million of cash acquired from the business acquisitions of Fintech, Hengpu and Nami Shanghai.

Financing activities

Net cash provided by financing activities was $19.1 million for fiscal year 2020, primarily attributable to (i) the proceeds of $6.5 million from the private placement, (ii) $10.5 million of loans from Nisun Cayman, (iii) $3.1 million capital contribution from non-controlling interest in Taiding, (iv) $4.6 million of capital contribution from Nisun Cayman, and (v) $6.8 million of repayments to related parties.

Net cash provided by financing activities was approximately $4.1 million for fiscal 2019. It was primarily attributable to a $3.6 million additional capital contribution and additional advances of approximately $0.6 million during the year from related parties.

Obligationsunder Material Contracts

The future undiscounted aggregate minimum lease payments under non-cancellable operating leases were as follows as of December 31, 2020:

Year ended December 31, 2020	Amount
2021	$	783,955
2022		539,558
2023		154,367
2024		11,723
2025		-
thereafter		-
Total undiscounted future minimum lease payments		1,489,603
Less: Amounts representing interest		(72,619	)
Total present value of operation lease liabilities		1,416,984
Less: current portion of operating lease liabilities		(736,854	)
Non-current portion of operating lease liabilities	$	680,130

Impactof Inflation

We do not believe the impact of inflation on our Company has been material. Almost all our operations are in China and China’s inflation rates have been relatively stable in the last three years: 2.5% in 2020, 2.9% in 2019, and 2.1% in 2018.

Impactof Foreign Currency Fluctuations

We do not believe the impact of foreign currency fluctuations on our Company is material.

We have not and do not have any foreign currency hedge investments, borrowings, or other hedging instruments. We manage our price risks through productivity improvements and cost-containment measures.

Researchand Development

During fiscal year 2020, we spent $0.8 million on developing our proprietary financial technology platform “Huijingshe” and supply chain fintech platform. During fiscal year 2019, the Company spent $0.2 million on developing our proprietary financial technology platform “Huijingshe”.

Off-balanceSheet Arrangements

We have not entered any derivative contracts that are indexed to our shares and classified as shareholders’ 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 or that engages in leasing, hedging or research and development services with us.

TabularDisclosure of Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2020:

	Payment Due by Period
Contractual Obligations	Total		Less than<br><br>1 year		1 – 3<br><br>years		3 – 5<br><br>years		More than<br><br>5 years
Operating lease arrangement	$	1,489,603	$	783,955	$	693,925	$	11,723	$	-
Total	$	1,489,603	$	783,955	$	693,925	$	11,723	$	-

Recentlyissued and adopted accounting pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses onFinancial Instruments. The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The effective date for all public companies, except smaller reporting companies, is fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The effective date for all other entities is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect the new standard to have a material impact on the consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance removes certain exceptions to the general principles in Topic 740 and enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. This standard is effective for the Company for the annual reporting periods beginning January 1, 2022 and interim periods beginning January 1, 2023. Early adoption is permitted. The Company does not expect any material impact on the Company’s consolidated financial statements.

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This guidance addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. This standard is effective for the Company beginning January 1, 2022 including interim periods within the fiscal year. Early adoption is permitted. The Company does not expect any material impact on the Company’s consolidated financial statements.

Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that will have material impact on the Company’s consolidated financial position, statements of operations and cash flows.

SafeHarbor

See “SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS.”

Item 6.	Directors, Senior Management and Employees
A.	Directors and Management
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The following table provides information regarding our executive officers and directors:

Name	Age	Position(s)
Xiaoyun Huang	36	Chief Executive Officer<br> and Chairman of the Board
Changjuan Liang	37	Chief Financial Officer
Jinbao Li	41	Director
Xin Liu	32	Director
Christian DeAngelis	51	Independent Director
Xiaofeng Ma	45	Independent Director
Sheng Tang	43	Independent Director
Haiying Xiang	39	Independent Director

The business address of each of the directors and senior management is c/o Nisun International Enterprise Development Group Co., Ltd, C9, 99 Danba Rd, Putuo District, Shanghai, PRC 200336.

XiaoyunHuang. Mr. Huang has served as the Chairman of the Board and Chief Executive Officer since September 2020. Prior to join our Company, he had held the President and Chief Executive Officer of Huizhong Business Consulting (Beijing) Co., Ltd. From June 2018 to September 2020. In those roles, he oversees and is responsible for all aspects of the company’s business operations, planning and development. From June 2017 to May 2018, he had served as the General Manager and Chairman of the board of directors of Beijing Hengtai Puhui Information Service Co., Ltd., a subsidiary company we acquired in 2019. Mr. Huang had been the President and Chief Executive Officer of Hangzhou Rongdu Technology Co., Ltd. from 2015 to May 2017. Mr. Huang received a bachelor’s degree in Computer Science and Technology in 2007 from Shanghai University of Electric Power. We have chosen Mr. Huang to serve as a director because of his entrepreneurial experience holding the top leadership positions as CEOs and Chairmen of the companies he had previously served and his expertise in financial technologies.

ChangjuanLiang. Ms. Liang has been our Chief Financial Officer since August 2019. Ms. Liang has served as Chief Financial Officer of Fintech (Shanghai) Investment Holding Co., Ltd. since May 2019. From August 2018 through April 2019, Ms. Liang was a senior financial manager for Shanghai NiSun Enterprise Management Group Co., Ltd., a PRC company controlled by Bodang Liu, the largest shareholder of our Company. From October 2010 through August 2017, Ms. Liang was a Financial Officer of Chubutsu Precise Electronic Company Limited, a PRC company engaged in the air conditioning industry. Ms. Liang obtained her bachelor’s degree in Accounting from China Central Radio and TV University in January 2010.

JinbaoLi. Mr. Li has served as a director since September 2020. Since April 2016, Mr. Li has been the Chief Executive Officer of Shanghai Nami Financial Consulting Co., Ltd (“Shanghai Nami”), a consolidated affiliate of our Company. Mr. Li is also the controlling shareholder of Shanghai Nami. As the CEO of Nami, he oversees and is responsible for all aspects of business operations, financial performance, and development of Shanghai Nami. From July 2014 to April 2016, he was the general manager of Shandong branch of Huizhong Business Consulting (Beijing) Co., Ltd. Mr. Li received an associate degree in Marketing in 2008 from Shandong Technology University. We have chosen Mr. Li to serve as a director because of his marketing and customer resources and business management experience as a senior business executive.

XinLiu. Mr. Liu has served as a director since September 2020. Mr. Liu has been the Vice President of Shanghai Nima since April 2016. In that role, he manages operations aspects of Shanghai Nami’s business. From October 2014 to March 2016, he was the Head Manager of the administration and operations department of Shandong branch of Huizhong Business Consulting (Beijing) Co. Mr. Li had been the Head of the International Trade department of Qingdao Antaixin Group Co., Ltd. from September 2012 to October 2014. Mr. Liu received a bachelor’s degree in International Business in 2012 from Shandong University of Technology. We have chosen Mr. Liu to serve as a director because of his management skills and cross-border trade and business experience.

ChristianDeAngelis. Mr. DeAngelis has served as an independent director since September 2020. From March 2009, Mr. DeAngelis has served as the General Manager and Head of China office of Alliance Business Consulting and Advisory Company in Beijing, China. Mr. DeAngelis received a bachelor’s degree in Accounting in 1992 from Lehigh University in Pennsylvania. He received a master’s degree in Business Administration in 1999 from Columbia Business School. We have chosen Mr. DeAngelis as a director because of his expertise in the business consulting and advisory industry and his business management experience as a senior business executive.

XiaofengMa. Dr. Ma has served as an independent director since September 2020. Dr. Ma has been an associate professor at Tongji University in Shanghai, China since 2012. From 2017, Dr. Ma has also served as the Chairman of the Board of Directors of Hangzhou Blockchain Research Institute Co., Ltd. with oversight responsibility for the strategic planning and development of the blockchain enterprise. In these roles, Dr. Ma has leveraged his expertise in the finance and innovative technology industries. Dr. Ma received a bachelor’s degree in Industrial Electrical Automation in 1997 from Taiyuan University of Technology, China and a master’s degree in Control Science and Engineering in 2000 from Tongji University, China. Dr. Ma received a doctorate degree in Technology Management in 2008 from Leiden University in the Netherlands. We have chosen Mr. Ma to serve as a director because of the perspective he brings to innovative finance industry in China and his reputation as a well-respected scholar.

ShengTang. Dr. Tang has served as an independent director since September 2020. Dr. Tang has served as the Director of the Dean’s Office at Shanghai Advanced Institute of Finance since February 2009. In that role, Dr. Tang is responsible for the operations of Dean’s Office and administering of the Board Council. From January 2008 to January 2009, Dr. Tang was the General Manager of the electric power business unit of Shanghai Huahong Group Co., Ltd. and managed the overall operations of the business unit. From April 2003 to December 2007, Dr. Tang was a marketing director of Shanghai Huahong Group Co., Ltd. promoting the sale of semiconductor products for the company. Dr. Tang received a bachelor’s degree in Civil Engineering in 2000 and a master’s degree in Computer Science in 2003 from Zhejiang University. Dr. Tang received a doctorate degree in Business Administration in 2011 from Shanghai Jiaotong University. We have chosen Mr. Tang to serve as a director because of his expertise in the financial technology industry and management experience.

HaiyingXiang. Ms. Xiang is a Commercial Officer at China Tiesiju Civil Engineering Group Co., Ltd Angolan Branch and responsible for contract management, commercial information management and marketing management. Previously she was a Senior Internal Controller with Siemens Limited China where she worked since 2012. She works in the Controlling Department of Industry Sector and is tasked with Sarbanes-Oxley compliance and support, coordination of compliance with global risk management and internal control programs for eighteen operating companies and analysis and optimization of business processes. She has been a Supervisor of Shanghai Bobo Biological Technology Co., Ltd. since 2011. Previously she was an Internal Controller at Siemens Mechanical Drive (Tianjin) Co., Ltd. from 2008 through 2011, where she focused on compliance, internal controls and risk control. Before that, Ms. Xiang was a member of the Trading Department of Qingdao Far East Gem and Jewelry Co., Ltd. from 2006 through 2007. Ms. Xiang obtained her certified Internal Auditor qualification in 2012. She received her bachelor’s degree in Economics from Nankai University in 2004. She also received her master’s degree in Economics from Nankai University in 2006. We have chosen Ms. Xiang as a director because of her experience with financial matters and experience with public company compliance matters. We appointed Ms. Xiang as our audit committee financial expert.

Electionof Officers

Our executive officers are elected by, and serve at the discretion of, our board of directors. There is no family relationship among any of our directors or executive officers.

Boardof Directors and Board Committees

Our board of directors consists of seven (7) directors. We expect that all current directors will continue to serve until the next annual meeting of shareholders at which their respective class of directors is re-elected or until their successors have been duly elected and qualified. A majority of our Board of Directors (namely, Mr. Christian DeAngelis, Mr. Xiaofeng Ma, Mr. Sheng Tang and Ms. Haiying Xiang) are independent, as such term is defined by The Nasdaq Capital Market.

The directors are divided into three classes, as nearly equal in number as the then total number of directors permits. Class II directors shall face re-election at our annual general meeting of shareholders in 2021 and every three years thereafter. Class III directors shall face re-election at our annual general meeting of shareholders in 2022 and every three years thereafter. Class I directors shall face re-election at our annual general meeting of shareholders in 2023 and every three years thereafter.

If the number of directors changes, any increase or decrease will be apportioned among the classes so as to maintain the number of directors in each class as nearly as possible. Any additional directors of a class elected to fill a vacancy resulting from an increase in such class will hold office for a term that coincides with the remaining term of that class. Decreases in the number of directors will not shorten the term of any incumbent director. These board provisions could make it more difficult for third parties to gain control of our company by making it difficult to replace members of the Board of Directors.

A director may vote in respect of any contract or transaction in which he is interested, provided, however that the nature of the interest of any director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote on that matter. A general notice or disclosure to the directors or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof of the nature of a director’s interest shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice relating to any particular transaction. A director may be counted for a quorum upon a motion in respect of any contract or arrangement which he shall make with our company, or in which he is so interested and may vote on such motion.

Mr. Xiaoyun Huang currently holds both the positions of Chief Executive Officer and Chairman of the Board. We do not have a lead independent director because we believe our independent directors are encouraged to freely voice their opinions on a relatively small company board. We believe this leadership structure is appropriate because we are a relatively small company; as such we deem it appropriate to be able to benefit from the guidance of Mr. Sun as both our principal executive officer and Chairman of the Board. Our Board of Directors plays a key role in our risk oversight. The Board of Directors makes all relevant Company decisions. As a smaller company with a relatively small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters.

BoardCommittees

We have established three standing committees under the board: the audit committee, the compensation committee and the nominating committee. The audit committee is responsible for overseeing the accounting and financial reporting processes of our Company and audits of the financial statements of our Company, including the appointment, compensation and oversight of the work of our independent auditors. The compensation committee of the board of directors reviews and makes recommendations to the board regarding our compensation policies for our officers and all forms of compensation, and also administers our incentive compensation plans and equity-based plans (but our board retains the authority to interpret those plans). The nominating committee of the board of directors is responsible for the assessment of the performance of the board, considering and making recommendations to the board with respect to the nominations or elections of directors and other governance issues. The nominating committee considers diversity of opinion and experience when nominating directors.

Haiying Xiang qualifies as an audit committee financial expert and she is the chair of the audit committee. Christian DeAngelis and Xiaofeng Ma serve on the audit committee. Xiaofeng Ma is the chair of the compensation committee. Christian DeAngelis and Sheng Tang serve on the compensation committee. Sheng Tang is the chair of the nominating committee. Xiaofeng Ma and Haiying Xiang are members of the nomination committee, Each member of the three committees is an independent director.

Dutiesof Directors

Under British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated memorandum and articles of association. We have the right to seek damages if a duty owed by our directors is breached.

The functions and powers of our board of directors include, among others:

●	appointing officers and<br> determining the term of office of the officers;
●	authorizing the payment<br> of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;
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●	exercising the borrowing<br> powers of the company and mortgaging the property of the company;
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●	executing checks, promissory<br> notes and other negotiable instruments on behalf of the company; and
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●	maintaining or registering<br> a register of mortgages, charges or other encumbrances of the company.
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InterestedTransactions

A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the board or otherwise contained in the minutes of a meeting or a written resolution of the board or any committee of the board that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.

Remunerationand Borrowing

The directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors. Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property 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.

Qualification

There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting. There are no other arrangements or understandings pursuant to which our directors are selected or nominated.

Limitationof Director and Officer Liability

Under British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with a view to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. British Virgin Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.

Under our memorandum and articles of association, we may indemnify our directors, officers and liquidators against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigative proceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled to indemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings, they must have had no reasonable cause to believe their conduct was unlawful. Such limitation of liability does not affect the availability of equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.

We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We may only indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director had no reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in good faith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence of fraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interests or that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of any proceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the director or officer in connection with the proceedings.

We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers and incurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liability as provided in our amended and restated memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers or persons controlling our company under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Involvementin Certain Legal Proceedings

To the best of our knowledge, none of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has any been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Codeof Business Conduct and Ethics

The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, officers, employees and advisors. The Code of Ethics is attached as an exhibit to this annual report. We have also posted a copy of our code of business conduct and ethics on our website at https://www.fintaike.com/.

B.	Compensation

DirectorCompensation

All directors hold office until the next annual meeting of shareholders at which their respective class of directors is re-elected or until their successors have been duly elected and qualified. Officers are elected by and serve at the discretion of the Board of Directors. Employee directors do not receive any compensation for their services. Non-employee directors are entitled to receive compensation in cash or stock, or both, for serving as directors and may receive option grants from our company. Haiying Xiang is entitled to receive $10,000 per year for serving as a director and may receive option grants from our company. Christian DeAngelis is entitled to receive $30,000 in cash and 1,500 common shares per year. Sheng Tang and Xiaofeng Ma each is entitled to receive 3,000 common shares per year. In addition, non-employee directors are entitled to receive reimbursement for their actual travel expenses for each Board of Directors meeting attended.

During fiscal 2020, 2019 and 2018, no employee members of our Board of Directors received compensation in their capacity as directors.

During the year ended December 31, 2020, we paid an annual director fee of $10,000 to each of three former independent directors (Xianpang Hu, Xuesong Liu and Hua Zhang) and two current directors (Haiying Xiang and Christian DeAngelis). We also reimburse all directors for any out-of-pocket expenses incurred by them in connection with their services provided in such capacity. In addition, we may provide incentive grants of stock, options or other securities convertible into or exchangeable for, our securities.

ExecutiveCompensation

We have a compensation committee approving our salary and benefit policies. Our compensation committee determines the compensation to be paid to our executive officers based on our financial and operating performance and prospects, and contributions made by the officers’ to our success. Each of the named officers will be measured by a series of performance criteria by the board of directors, or the compensation committee on a yearly basis. Such criteria will be set forth based on certain objective parameters such as job characteristics, required professionalism, management skills, interpersonal skills, related experience, personal performance and overall corporate performance.

Our board of directors has not adopted or established a formal policy or procedure for determining the amount of compensation paid to our executive officers. The board of directors will make an independent evaluation of appropriate compensation to key employees, with input from management. The board of directors has oversight of executive compensation plans, policies and programs.

SummaryCompensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of the named executive officers for services rendered to us for the year ended December 31, 2020 and 2019.

Name and Principal Position	Fiscal<br> Year	Salary ()	Bonus ()	Stock Awards ()	All Other Compensation ()	Total ()
Xiaoyun Huang	2020
Chief Executive Officer^(1)^	2019
Anyuan Sun^(2)^	2020
Former Chief Executive Officer	2019
Changjuan Liang	2020
Chief Financial Officer	2019

All values are in US Dollars.

(1)	Xiaoyun Huang<br> was appointed as our Chief Executive Officer, effective on September 4, 2020.
(2)	Anyuan Sun<br> resigned as the Chief Executive Officer, effective on September 4, 2020.
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Equity-BasedCompensation

In addition to base salary, we also offer certain equity-based incentive compensation awards to employees, directors or consultants. Our existing stock-based incentive compensation plan, the 2019 One Million Share Incentive Plan, was approved by our Board of Directors on November 20, 2019 and ratified by shareholders on December 20, 2019. This plan serves as the primary vehicle by which we offer long-term incentives and rewards to our executive officers and key employees. We regard the 2019 stock incentive plan as a key retention tool. Retention serves as an important factor in our determination of the type of award to grant and the number of underlying shares that are granted in connection with that award.

EmploymentAgreements

Our employment agreements with our officers generally provide for employment for a specific term (typically approximately two years at a time) and pay annual salary, health insurance, pension insurance, and paid vacation and family leave time. The agreement may be terminated by either party as permitted by law. In the event of a breach or termination of the agreement by our company, we may be obligated to pay the employee twice the ordinary statutory rate. In the event of a breach or termination causing loss to our company by the employee, the employee may be required to indemnify us against loss.

XiaoyunHuang

We entered an employment agreement with our Chief Executive Officer, Mr. Huang, effective as of September 4, 2020 and running through December 31, 2014 that provided a base gross annual salary of $120,000.00.

ChangjuanLiang

We entered an employment agreement with our Chief Financial Officer, Mr. Changjuan Liang, effective as of August 8, 2019 and running through July 31, 2022 that provide an annual salary of $48,468.

Item 7.	Major Shareholders and Related Party Transactions

MajorShareholders

The following table sets forth information with respect to beneficial ownership of our common shares as of April 30, 2021 by:

●	Each person who is known<br> by us to beneficially own more than 5% of our outstanding common shares;
●	Each of our director, director<br> nominees and named executive officers; and
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●	All directors and named<br> executive officers as a group.
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The number and percentage of Common Shares beneficially owned are based on 20,555,129 Common Shares issued as of April 30, 2021. Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of 5% or greater of our Common 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 Common Shares beneficially owned by a person listed below and the percentage ownership of such person, Common Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of April 30, 2021 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 Common Shares shown as beneficially owned by them. Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD, C9, 99 Danba Rd, Putuo District, Shanghai, People’s Republic of China PRC 200336. As of April 30, 2021, we had 115 shareholders of record.

Named Executive Officers and Directors	Amount of Beneficial Ownership^(1)^
Directors and Named Executive Officers:
Xiaoyun Huang, Chief Executive Officer and Chairman^(2)^		288,179	1.40	%
Changjuan Liang, Chief Financial Officer^(3)^		67,000	*
Jinbao Li, Director^(4)^		1,562,726	7.60	%
Xin Liu, Director		-	-
Christian DeAngelis, Director		-	-
Xiaofeng Ma, Director		-	-
Sheng Tang, Director		-	-
Haiying Xiang, Director		-	-
All directors and executive officers as a group (8 persons)		1,917,905	1	%
5% Beneficial Owners:
NiSun International Enterprise Management Group Co., Ltd.^(5)^		7,778,400	37.84	%
Nami Holding (BVI) Co., Ltd^(4)^		1,562,726	7.60	%
Yung Kong Chin^(6)^		1,200,000	5.84	%
Guoya Asset Management Co. Ltd (BVI)^(7)^		1,152,715	5.61	%
*	Less than 1% of our outstanding<br> shares.
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(1)	Beneficial ownership is<br> determined in accordance with the rules of the SEC and includes voting or investment power with respect to the Common Shares. All<br> shares represent only Common Shares held by shareholders as no options are issued or outstanding.
(2)	Hong Kong D&L Technology<br> Co., Limited, a Hong Kong company, owning 288,179 Class A Common Shares of the Company, is controlled by Mr. Xiaoyun Huang, who may<br> be deemed to have the voting and dispositive power of such shares.
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(3)	67,000 Class A Common Shares<br> were part of the shares granted to Company employees under the restricted stock award on April 6, 2020 pursuant to the Company’s<br> 2019 One Million Share Incentive Plan.
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(4)	Nami Holding (BVI) Co.,<br> Ltd, holding 1,562,726 Class A Common Shares of the Company, is controlled by Mr. Jinbao Li, who may be deemed to have the voting<br> and dispositive power of such shares.
(5)	NiSun International Enterprise<br> Management Group Co., Ltd., a Cayman Islands company, holding 7,778,400 Class A Common Shares of the Company, is solely owned by<br> Mr. Bodang Liu, who may be deemed to have the voting and dispositive power of such shares.
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(6)	Mr. Yung Kong Chin owns<br> 90% of Paces Battle Group, Inc., a capital broker/dealer, through Westwind LLC owned by him. He is not a FINRA registered person,<br> and has no role in the operations of Paces Battle Group.
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(7)	Guoya<br> Asset Management Co. Ltd (BVI), holding 1,152,715 Class A Common Shares of the Company, is controlled by Mr. Chao Zhang, who may<br> be deemed to have the voting and dispositive power of such shares.
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Relatedparty transactions

In addition to the executive officer and director compensation arrangements discussed in “Executive Compensation,” below we describe transactions since January 1, 2010, to which we have been a participant, in which the amount involved in the transaction is material to our company and in which any of the following is a party: (a) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, our Company; (b) associates; (c) individuals owning, directly or indirectly, an interest in the voting power of our Company that gives them significant influence over our Company, and close members of any such individual’s family; (d) key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling the activities of our Company, including directors and senior management of companies and close members of such individuals’ families; and (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence.

There are no other related party transactions for the years ended December 31, 2020, 2019 and 2018, except the transactions mentioned below.

The table below sets forth major related parties of our Company and their relationships with our Company:

Entity or individual name	Relationship with the Group
Shanghai<br> NiSun Enterprise Management Group Co., Ltd (“NiSun Shanghai”)	An<br> affiliated entity controlled by our ultimate controlling shareholder
Huizhong<br> Business Consulting (Beijing) Co., Ltd. (“Huizhong”)	An<br> affiliated entity controlled by our ultimate controlling shareholder
Nisun International Enterprise<br> Management Group Co., Ltd (“Nisun Cayman”)	The largest shareholder who owns 37.8% of the shares of the Company
Mr. Bodang Liu	The ultimate controlling<br> shareholder of the Company
Mr. Anyuan Sun	Former CEO and former Chairman<br> of the Board
Mr. Jian Lin	The shareholder of Wenzhou<br> Jinda
Hong Kong Xibolun Technology<br> Limited (“Xibolun HK”)	The entity disposed by<br> us on November 30, 2020

(a)	We<br>entered into the following related party transactions:

Starting on July 12, 2019, we rented office from NiSun Shanghai and incurred $63,749.0 rent expense for the year ended December 31, 2019 and $127,565.0 rent expense for the year ended December 31, 2020.

We have commercial arrangements with Huizhong Business Consulting (Beijing) Co., Ltd. (“Huizhong”) to provide SME financing solution services. In connection with the services provided by Nami Shanghai to Huizhong, we generated revenue of $3,908,134.0 (RMB26,982,503) from SME financing solutions for the period from May 31, 2020, the acquisition date of Nami, to December 31, 2020.

(b)	We<br>had the following significant related party balances:

As of December 31, 2020, We had a due to related party balance of $393,148.0 payable to Mr. Bodang Liu, the controlling person of our largest shareholder, Nisun Cayman. For the year ended December 31, 2020, we paid approximately $6.5 million (RMB 45.9 million) related to the purchase price payable for the acquisition of Nisun BVI. As of December 31, 2019, we had a due to related party balance of $7,345,399.0 to Mr. Bodang Liu, of which $7.0 million was related to the purchase price payable for the acquisition of NiSun BVI. The due to related party balance is non-interest bearing and due on demand.

As of December 31, 2020, and 2019, we had a due to related party balance of $1,379,310.0 and nil, respectively, payable to Nisun Shanghai, an entity under common control. The due to related party balance is non-interest bearing and was repaid on February 26, 2021.

As of December 31, 2020, and 2019, we had a due to related party balance of nil and $414,044.0 respectively, due to Mr. Anyuan Sun, our former chief executive officer. The due to related party balance was non-interest bearing and was offset by the payment for the disposition of Xibolun HK.

As of December 31, 2020, and 2019, we had a due to related party balance of $298,851.0 and $280,100.0 respectively, due to Mr. Jian Lin, the shareholder of Wenzhou Jinda. We own a 23.08% equity interest in Wenzhou Jinda. The due to related party balance is non-interest bearing and due on demand.

As of December 31, 2019, we had a due from the discontinued operation of $9,201,432 related to Xibolun HK and its affiliates, which was disposed on November 30, 2020. For the year ended December 31, 2020, the Company transferred Xibolun HK to the Purchaser, Wise Metro Development Co., Ltd. which agreed to pay for approximately $15.0 million (RMB98.3 million) in accordance with the Equity Transfer Agreement. As of December 31, 2020, we had a consideration receivable of approximately $15.0 million from the disposition. We collected approximately $7.7 million by the end of March 2021 and expect to collect the remaining amount by the end of April 2021.

Our former chief executive office, Mr. Sun and his immediate family members had jointly provided guarantees or personal assets as collateral to our loan agreements, trade financing agreements, letters of guarantee, funding agreements and other credit agreements with commercial banks. For the years ended December 31, 2020, 2019 and 2018, the outstanding bank loan balance amounted to nil, $861,846, and $1,698,058, respectively, were guaranteed by the former chief executive officer and his immediate family members.

FutureRelated Party Transactions

Our Corporate Governance Committee of our board of directors (which consists solely of independent directors) have approved all related party transactions. All material related party transactions are made or entered into on terms that are no less favorable to use than can be obtained from unaffiliated third parties.

C.	Interests of experts and counsel

Not applicable for annual reports on Form 20-F.

ITEM 8.	Financial Information
A.	Consolidated Statements and Other Financial Information
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Please refer to Item 18.

We incorporate by reference in the Registration Statement on Form F-8 (File No. 333- 236843) our consolidated balance sheets as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2020, which appears in this Annual Report on Form 20-F.

Legaland Administrative Proceedings

We are currently a party to one legal proceeding. A shareholder class action lawsuit has been filed against us with the United States District Court for the Southern District of New York which is currently pending. On June 3, 2020, a short seller issued a report alleging that, among other things, the private placement we consummated in December 2019, Hengpu and Nami acquisitions were related party transactions which we failed to disclose. We had conducted an independent investigation by special counsel that concluded that the allegations were substantially unfounded. A shareholder class action lawsuit was filed against us and certain of our directors and officers. On March 19, 2021, we submitted a motion to the court to dismiss the lawsuit. No decision has been made by the court, and it is unclear when a decision will be made. Although the ultimate outcome is uncertain at this time, we will defend our position vigorously and believe that the ultimate outcome will not have a material adverse effect on our financial position.

Except the above proceeding, we are not aware of any other pending or threatened material legal or administrative proceedings against us. We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.

DividendPolicy

We have never declared or paid any cash dividends on our common shares. We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our Board of Directors and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the Board of Directors may deem relevant.

Under British Virgin Islands law, we may only pay dividends from surplus (the excess, if any, at the time of the determination of the total assets of our company over the sum of our liabilities, as shown in our books of account, plus our capital), and we must be solvent before and after the dividend payment in the sense that we will be able to satisfy our liabilities as they become due in the ordinary course of business; and the realizable value of assets of our company will not be less than the sum of our total liabilities, other than deferred taxes as shown on our books of account, and our capital.

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

In addition, pursuant to the EIT Law and its implementation rules, dividends generated after January 1, 2008 and distributed to us by our PRC subsidiaries are subject to withholding tax at a rate of 10% unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations in China may be used to pay dividends to our company.

B.	Significant Changes

We have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

Item 9.	The Offer and Listing
A.	Offer and listing details
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Our common shares (or Class A common shares since March 19, 2018) have been listed and traded on the Nasdaq Capital Market since December 27, 2016 under the symbol “HEBT” until November 15, 2020 and under the symbol “NISN” since November 16, 2020.

B.	Plan of distribution

Not applicable for annual reports on Form 20-F.

C.	Markets

Our Class A common shares are listed on the Nasdaq Capital Market under the symbol “NISN.”

D.	Selling shareholders

Not applicable for annual reports on Form 20-F.

E.	Dilution

Not applicable for annual reports on Form 20-F.

F.	Expenses of the issue

Not applicable for annual reports on Form 20-F.

Item 10.	Additional Information
A.	Share capital
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Not applicable for annual reports on Form 20-F.

B.	Memorandum and articles of association

The information required by this item is incorporated by reference to the material headed “Description of Share Capital” in our Registration Statement on Form F-1, File no. 333-208583, filed with the SEC on July 13, 2016, as amended. We incorporate by reference into this annual report our Fourth Amended and Restated Memorandum and Articles of Association filed as Exhibit 1.1 to our current report on Form 6-K with the Securities and Exchange Commission on November 16, 2020.

C.	Material contracts

We have not entered into any material contracts other than in the ordinary course of business and otherwise described elsewhere in this annual report.

D.	Exchange controls

ForeignCurrency Exchange

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, may be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans or foreign currency is to be remitted into China under the capital account, such as a capital increase or foreign currency loans to our PRC subsidiaries.

In August 2008, SAFE issued the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency-registered capital into RMB by restricting how the converted RMB may be used. In addition, SAFE promulgated Circular 45 on November 9, 2011 in order to clarify the application of SAFE Circular 142. Under SAFE Circular 142 and Circular 45, the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable government authority and may not be used for equity investments within the PRC. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of foreign-invested enterprises. The use of such RMB capital may not be changed without SAFE’s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used.

In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

We typically do not need to use our offshore foreign currency to fund our PRC operations. In the event we need to do so, we will apply to obtain the relevant approvals of SAFE and other PRC government authorities as necessary.

SAFECircular 75

Under the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, issued by SAFE on October 21, 2005 and its implementation rules, a PRC resident (whether a natural or legal person) is required to complete an initial registration with its local SAFE branch before incorporating or acquiring control of an offshore special purpose vehicle, or SPV, with assets or equity interests in a PRC company, for the purpose of offshore equity financing. The PRC resident is also required to amend the registration or make a filing upon (1) the injection of any assets or equity interests in an onshore company or undertaking of offshore financing, or (2) the occurrence of a material change that may affect the capital structure of a SPV. SAFE also subsequently issued various guidance and rules regarding the implementation of SAFE Circular 75, which imposed obligations on PRC subsidiaries of offshore companies to coordinate with and supervise any PRC-resident beneficial owners of offshore entities in relation to the SAFE registration process.

Regulationof Dividend Distribution

The principal laws, rules and regulations governing dividend distribution by foreign-invested enterprises in the PRC are the Company Law of the PRC, as amended, the Wholly Foreign-owned Enterprise Law and its implementation regulations and the Equity Joint Venture Law and its implementation regulations. Under these laws, rules and regulations, foreign-invested enterprises may pay dividends only out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. Both PRC domestic companies and wholly-foreign owned PRC enterprises are required to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount of such reserves reaches 50% of their registered capital. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

E.	Taxation

The following sets forth the material British Virgin Islands, Chinese and U.S. federal income tax consequences related to an investment in our Class A common shares. It is directed to U.S. Holders (as defined below) of our Class A common shares and is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This description does not deal with all possible tax consequences relating to an investment in our Class A common shares, such as the tax consequences under state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Class A common shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, 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 shares and you are, for U.S. federal income tax purposes,

●	an individual who is a<br> citizen or resident of the United States;
●	a corporation (or other<br> entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof<br> or the District of Columbia;
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●	an estate whose income<br> is subject to U.S. federal income taxation regardless of its source; or
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●	a trust that (1) is subject<br> 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<br> or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
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Generally

Nisun International and Nisun BVI are tax-exempt companies incorporated in the British Virgin Islands. Nami Cayman is tax-exempt company incorporated in the Cayman Islands. Nisun HK and Nami Hong Kong are subject to Hong Kong profits tax rate. The rest of the Company’s subsidiaries and VIEs and subsidiaries of VIEs in PRC are governed by PRC laws.

Our company pays PRC enterprise income taxes, value added taxes and business taxes in China for revenues from our subsidiaries, VIEs and VIEs’ subsidiaries (The business tax has been incorporated into VAT since May 1, 2016.).

People’sRepublic of China Enterprise Taxation

The following brief description of Chinese enterprise laws 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.”

PRC enterprise income tax is calculated based on taxable income determined under PRC accounting principles. The Enterprise Income Tax Law (the “EIT Law”), effective as of January 1, 2008, enterprises pay a unified income tax rate of 25% and unified tax deduction standards are applied equally to both domestic-invested enterprises and foreign-invested enterprises.

Fintech and Hengpu are recognized as a High-technology Company by the Chinese government and is subject to a favorable income tax rate of 15%. Both Fintech and Hengpu’s High-technology certificates are valid for three years and subject to renewal. In accordance with the implementation rules of the Income Tax Law of the PRC, for the enterprises newly established in the Horgos Development Zone within the scope of “preferential catalogue of income tax for key industries encouraged to develop in Xinjiang’s difficult areas”, the enterprise income tax shall be exempt for five years from the tax year of the first production and operations income. Khorgos is established in the Horgos Development Zone and its income tax is eligible to be exempt for five years starting from 2019. The Company’s other PRC subsidiaries, VIEs and VIEs’ subsidiaries are subject to corporate income tax at the PRC unified rate of 25%.

Under the EIT Law, an enterprise established outside of the PRC with “de facto management bodies” within the PRC is considered a resident enterprise and will normally be subject to the enterprise income tax at the rate of 25% on its global income. If the PRC tax authorities subsequently determine that we, NiSun BVI, NiSun HK, Nami Cayman, Nami HK, or any future non-PRC subsidiary should be classified as a PRC resident enterprise, then such entity’s global income will be subject to PRC income tax at a tax rate of 25%. In addition, under the EIT Law, payments from our subsidiaries and VIEs in PRC to us may be subject to a withholding tax. The EIT Law currently provides for a withholding tax rate of 20%. If NiSun HK or Nami HK is deemed to be a non-resident enterprise, then it will be subject to a withholding tax at the rate of 10% on any dividends paid by its Chinese subsidiaries to such entity. In practice, the tax authorities typically impose the withholding tax rate of 10% rate, as prescribed in the implementation regulations; however, there can be no guarantee that this practice will continue as more guidance is provided by relevant government authorities. We are actively monitoring the proposed withholding tax and are evaluating appropriate organizational changes to minimize the corresponding tax impact.

According to the Sino-U.S. Tax Treaty which was effective on January 1, 1987 and aimed to avoid double taxation disadvantage, income that is incurred in one nation should be taxed by that nation and exempted from the other nation, but for the dividend that is generated in China and distributed to foreigner in other nations, a rate 10% tax will be charged.

Our Company will have to withhold that tax when we are distributing dividends to our foreign investors. If we do not fulfill this duty, we will receive a fine up to five times of the amount we are supposed to pay as tax or other administrative penalties from government. The worst case could be criminal charge of tax evasion to responsible persons. The criminal penalty for this offense depends on the tax amount the offender evaded, and the maximum penalty will be 3-7 years imprisonment plus fine.

PRCValue Added Tax

Pursuant to the Provisional Regulation of China on Value Added Tax and its implementing rules, issued in December 1993, all entities and individuals that are engaged in the businesses of sales of goods, provision of services and importation of goods into China are generally subject to a VAT at a rate ranging from 6% to 13% of the gross sales proceeds received, less any VAT already paid or borne by the taxpayer on the goods or services purchased by it and utilized in the production of goods or provisions of services that have generated the gross sales proceeds.

PRCBusiness Tax

Companies in China are generally subject to business tax and related surcharges by various local tax authorities at rates ranging from 3% to 20% on revenue generated from providing services and revenue generated from the transfer of intangibles. However, since May 1, 2016, the Business Tax has been incorporated into Value Added Tax in China, which means there will be no more Business Tax and accordingly some business operations previously taxed in the name of Business Tax will be taxed in the manner of VAT thereafter. In general, this newly implemented policy is intended to relieve many companies from heavy taxes under currently slowing down economy. In the case of our Chinese subsidiaries, even though the VAT rate ranges from 6% to 13%, with the deductibles the company may get in the business process, it will bear less burden than previous Business Tax.

BritishVirgin Islands Taxation

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

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

There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the British Virgin Islands.

CaymanIslands Taxation

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 our company levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not a party to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

UnitedStates Federal Income Taxation

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

●	banks;
●	financial institutions;
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●	insurance companies;
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●	regulated investment companies;
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●	real estate investment<br> trusts;
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●	broker-dealers;
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●	traders that elect to mark-to-market;
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●	U.S. expatriates;
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●	tax-exempt entities;
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●	persons liable for alternative<br> minimum tax;
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●	persons holding our common<br> shares as part of a straddle, hedging, conversion or integrated transaction;
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●	persons that actually or<br> constructively own 10% or more of our voting shares;
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●	persons who acquired our<br> common shares pursuant to the exercise of any employee share option or otherwise as consideration; or
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●	persons holding our common<br> shares through partnerships or other pass-through entities.
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Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. Federal 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 common shares.

TaxTreaties

As above mentioned, according to the Sino-U.S. Tax Treaty which was effective on January 1, 1987 and aimed to avoid double taxation disadvantage, income that is incurred in one nation should be taxed by that nation and exempted from the other nation, but for the dividend that is generated in China and distributed to foreigners in other nations, a rate 10% tax will be charged.

Taxationof Dividends and Other Distributions on our Common Shares

Subject to the passive foreign investment company rules discussed below, the gross amount of distributions made by us to you with respect to the common 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). 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 common shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Under U.S. Internal Revenue Service authority, common 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 The NASDAQ Capital Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our common shares.

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 common shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A common 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.

Taxationof Dispositions of Common Shares

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a 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 common shares. The gain or loss will generally be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Class A common 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.

PassiveForeign Investment Company

A non-U.S. corporation is considered a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year if either:

●	at least 75% of its gross<br> income is passive income, defined as income from interest, dividends, rents, royalties, gains on property producing foreign personal<br> holding company income and certain other income that does not involve the active conduct of a trade or business; or
●	at least 50% of the value<br> of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce<br> or are held for the production of passive income (the “asset test”).
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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.

Based on the market price of our common shares, the value of our assets and the composition of our assets and income, we believe that we were not a PFIC for our taxable year ended December 31, 2019, December 31, 2018 or December 31, 2017. However, given the factual nature of the analyses and the lack of guidance, no assurance can be given. We do not expect to be a PFIC for our taxable year ending December 31, 2019. However, because PFIC status is a factual determination for each taxable year which cannot be made until the close of the taxable year, our actual PFIC status will not be determinable until the close of the taxable year and, accordingly, there is no guarantee that we will not be a PFIC for the current taxable year or any future taxable year.

We must make a separate determination each year as to whether we are a PFIC. As a result, our PFIC status may change. In particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our common shares, our PFIC status will depend in large part on the market price of our common shares. Accordingly, fluctuations in the market price of the common 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 raised in our initial public offering. If we are a PFIC for any year during which you hold common shares, we will continue to be treated as a PFIC for all succeeding years during which you hold common shares. However, if we cease to be a PFIC, you may avoid some of the adverse effects of the PFIC regime by making a “deemed sale” election with respect to the common shares.

If we are a PFIC for any taxable year during which you hold common 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 common 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 common shares will be treated as an excess distribution. Under these special tax rules:

●	the excess distribution<br> or gain will be allocated ratably over your holding period for the common shares;
●	the amount allocated to<br> the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary<br> income, and
---	---
●	the amount allocated to<br> each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments<br> 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 common shares cannot be treated as capital, even if you hold the common shares as capital assets.

A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for the common shares, you will include in income each year an amount equal to the excess, if any, of the fair market value of the common shares as of the close of your taxable year over your adjusted basis in such common shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the common shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the common 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 common shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the common shares, as well as to any loss realized on the actual sale or disposition of the common shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such common shares. Your basis in the common 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 Common shares” generally would not apply.

The mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including The NASDAQ Capital Market. If the common shares are regularly traded on The NASDAQ Capital Market and if you are a holder of common 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 with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold common shares in any year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the common shares and any gain realized on the disposition of the common shares.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our common shares and the elections discussed above.

InformationReporting and Backup Withholding

Dividend payments with respect to our common shares and proceeds from the sale, exchange or redemption of our common shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding. 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.

Under the Hiring Incentives to Restore Employment Act of 2010, certain United States Holders are required to report information relating to common shares, subject to certain exceptions (including an exception for common 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 common shares. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

F.	Dividends and paying agents

Not applicable for annual reports on Form 20-F.

G.	Statement by experts

Not applicable for annual reports on Form 20-F.

H.	Documents on display

We are subject to the information requirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC. You may read and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the SEC.

I.	Subsidiary Information

Not applicable.

Item 11.	Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of financial risks, including market risk (including currency risk, price risk and cash flow and fair value interest rate risk), credit risk and liquidity risk. Our overall risk management program focuses on preservation of capital and the unpredictability of financial markets and has sought to minimize potential adverse effects on our financial performance and position.

ForeignExchange Risk

While our reporting currency is the U.S. Dollar, all of our consolidated sales and consolidated costs and expenses are denominated in the RMB. All of our assets are denominated in the RMB. As a result, we are exposed to foreign exchange risk as our sales and results of operations may be affected by fluctuations in the exchange rate between the U.S. Dollar and the RMB. If the RMB depreciates against the U.S. Dollar, the value of our RMB sales, earnings and assets as expressed in our U.S. Dollar financial statements will decline.

Assets and liabilities are translated at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any resulting translation adjustments are not included in determining net income but are included in determining other comprehensive income, a component of stockholders’ equity. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

The value of the RMB against the U.S. dollar and other currencies is affected by, among other things, changes in China’s political and economic conditions. Since July 2005, the RMB has not been pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar or the Euro in the medium to long term. Moreover, it is possible that in the future, PRC authorities may lift restrictions on fluctuations in RMB exchange rate and lessen intervention in the foreign exchange market. The RMB depreciated approximately 2% in 2020.

InterestRate Risk

Our interest rate risk arises from short and long-term borrowings. As of December 31, 2020 and 2019, we had no borrowings with variable rates and we were not exposed to cash flow interest rate risk. Borrowings issued at fixed rates expose us to fair value interest rate risk.

As of December 31, 2020 and 2019, we had no long-term interest-bearing assets or long-term interest-bearing liabilities.

CreditRisk

Our cash is invested primarily in savings and deposit accounts with original maturities of three months or less. Savings and deposit accounts generate a small amount of interest income.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, and accounts receivable. As of December 31, 2020 and 2019, $25,263,391 and $2,781,506 of our cash and cash equivalents and restricted cash was on deposit at financial institutions in the PRC, which the management believes are of high credit quality. In May 1, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Group’s accounts, as its aggregate deposits are much higher than the compensation limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Group believes that those Chinese banks that hold the Group’s cash and cash equivalents, restricted cash and short-term investments are financially sound based on public available information.

Accounts receivables are typically unsecured and derived from revenue earned from customers, thereby they are exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

Inflation

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

Item 12.	Description of Securities Other than Equity Securities

With the exception of Items 12.D.3 and 12.D.4, this Item 12 is not applicable for annual reports on Form 20-F. As to Items 12.D.3 and 12.D.4, this Item 12 is not applicable, as the Company does not have any American Depositary Shares.

PART

Item 13.	Defaults, Dividend Arrearages and Delinquencies

We do not have any material defaults in the payment of principal, interest, or any instalments under a sinking or purchase fund.

Item 14.	Material Modifications to the Rights of Securities Holders and Use of Proceeds

MaterialModifications to the Rights of Security Holders

See “Item 10. Additional Information” for a description of the rights of shareholders, which remain unchanged.

Useof Proceeds

Not applicable as we disclosed application of all the offering proceeds in our Annual Report on Form 20-F, File 001-37829, filed with the SEC on May 15, 2019.

Item 15.	Controls and Procedures
(a)	Disclosure Controls and<br> Procedures.
---	---

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Security Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow for timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of December 31, 2020, the end of the fiscal year covered by this report, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2020, our disclosure controls and procedures were ineffective. Such conclusion is due to the presence of material weakness in internal control over financial reporting as described below.

(b)	Management’s annual<br> report on internal control over financial reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. We assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. In making its assessment, management used the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 COSO Framework”). The 2013 COSO Framework outlines the 17 underlying principles and the following fundamental components of a company’s internal control: (i) control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Our management has implemented and tested our internal control over financial reporting based on these criteria and identified certain material weaknesses set forth below. Based on the assessment, management determined that, as of December 31, 2020, we did not maintain effective internal control over financial reporting due to the existence of the following material weaknesses:

●	The Company does not have<br> adequate internal accounting personnel with sufficient knowledge of the US GAAP and SEC reporting standards, which could lead to<br> material misstatements being undetected in a timely manner.
(c)	Attestation report of the<br> registered public accounting firm.
---	---

Not applicable.

(d)	Changes in internal control<br> over financial reporting.

The following changes in our internal controls over financial reporting occurred during the twelve months ended December 31, 2020 and have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting:

●	We have begun to maintain<br> written policies and procedures, and prepare Board minutes and resolutions for significant transactions on a timely basis. We believe<br> these efforts will improve our internal controls.

Although we believe there is room to improve our segregation of duties related to certain job responsibilities for initiating, authorizing, and recording of certain transactions, our ability to improve such segregation is limited as a small-size public company.

Item 15T.	Controls and Procedures

Not applicable.

Item 16.	[Reserved]
Item 16A.	Audit Committee Financial Expert
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The Company’s board of directors has determined that Ms. Haiying Xiang qualifies as an “audit committee financial expert” in accordance with applicable Nasdaq Capital Market standards. The Company’s board of directors has also determined that Ms. Xiang and the other members of the Audit Committee are all “independent” in accordance with the applicable Nasdaq Capital Market standards.

Item 16B.	Code of Ethics

Item 16C.	Principal Accountant Fees and Services

Wei, Wei & Co., LLP was appointed by the Company on February 26, 2019 to serve as its independent registered public accounting firm for the year ended December 31, 2018 and re-appointed to serve for the years ended December 31, 2019 and 2020.

Audit services provided by Wei, Wei & Co., LLP for the years of 2020 and 2019 included the examination of the consolidated financial statements of the Company and services related to periodic filings made with the SEC.

FeesPaid To Independent Registered Public Accounting Firm

AuditFees

Wei, Wei & Co., LLP’s fees for the annual audit of our financial statements and review of the financial statements for fiscal 2020 was $390,000.

Wei, Wei & Co., LLP’s fees for the annual audit of our financial statements and review of the financial statements for fiscal 2019 were $$275,000.

Audit-RelatedFees

The Company has not paid Wei, Wei & Co., LLP for audit-related services in fiscal 2020 and 2019.

TaxFees

The Company has not paid Wei, Wei & Co., LLP for tax services in fiscal 2020 and 2019.

AllOther Fees

The Company has not paid Wei, Wei & Co., LLP for any other services in fiscal 2020 and 2019.

AuditCommittee Pre-Approval Policies

Before Wei, Wei & Co., LLP was engaged by the Company to render audit or non-audit services, the engagement was approved by the Company’s audit committee. All services rendered by Wei, Wei & Co., LLP have been so approved.

Percentageof Hours

All hours expended on the principal accountants’ engagement to audit our consolidated financial statements for 2020 were attributed to work performed by Wei, Wei & Co., LLP’s full-time permanent employees.

Item 16D.	Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Neither the Company nor any affiliated purchaser has purchased any shares or other units of any class of the Company’s equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act during the fiscal year ended December 31, 2020.

Item 16F.	Change in Registrant’s Certifying Accountant

Not applicable.

Item 16G.	Corporate Governance

We are incorporated in the British Virgin Islands and our corporate governance practices are governed by applicable British Virgin Islands law. In addition, because our Class A common shares are listed on The Nasdaq Capital Market, we are subject to Nasdaq’s corporate governance requirements.

Other than as described in this section, our corporate governance practices do not differ from those followed by domestic companies listed on the NASDAQ Capital Market. NASDAQ Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the NASDAQ Capital Market prior to issuance (or potential issuance) of securities equaling 20% or more of the company’s common stock or voting power for less than the greater of market or book value. Notwithstanding this general requirement, NASDAQ Listing Rule 5615(a)(3)(A) permits foreign private issuers like the Company to follow their home country practice rather than this shareholder approval requirement. The Company, therefore, is not required to obtain such shareholder approval prior to entering into a transaction with the potential to issue securities as described above.

Item 16H.	Mine Safety Disclosure

Not applicable.

PART

III

Item 17.	Financial Statements

See Item 18.

Item 18.	Financial Statements

Our consolidated financial statements are included at the end of this annual report, beginning with page F-1.

Item 19.	Exhibits
Exhibit No.	Description of Exhibit
---	---
1.1^(1)^	Articles of Association of Hebron Technology Co., Ltd.
1.2^(2)^	First Amended and Restated Articles of Association of Hebron Technology Co., Ltd.
1.3^(1)^	Memorandum of Association of Hebron Technology Co., Ltd.
1.4^(1)^	First Amended and Restated Memorandum of Association of Hebron Technology Co., Ltd.
1.5^(2)^	Second Amended and Restated Memorandum of Association of Hebron Technology Co., Ltd.
1.6^(3)^	Third Amended and Restated Memorandum of Association of Hebron Technology Co., Ltd.
1.7^(5)^	Fourth Amended and Restated Memorandum and Articles of Association
2.1^(6)^	Registrant’s Form of Class A common share Certificate
2.2*	Description of Securities Registered under Section 12 of the Exchange Act
4.1^(7)^	English Translation of Office Lease dated April 25, 2019 between Shanghai Ningsheng Enterprise Management Group Co., Ltd. and Fintech (Shanghai) Digital Technology Co., Ltd.
4.2^(7)^	Trademarks, Technologies & Management and Consulting Services Agreement dated May 17, 2019 among NingChen (Shanghai) Enterprise Management Group Co., Ltd., Fintech (Shanghai) Digital Technology Co., Ltd., Shanghai Ningsheng Enterprise Management Group Co., Ltd. and Peng Jiang
4.3^(7)^	Equity Interest Pledge Agreement dated May 17, 2019 among NingChen (Shanghai) Enterprise Management Group Co., Ltd., Fintech (Shanghai) Digital Technology Co., Ltd., Shanghai Ningsheng Enterprise Management Group Co., Ltd. and Peng Jiang
4.4^(7)^	Equity Interest Holders’ Voting Rights Proxy Agreement dated May 17, 2019 among NingChen (Shanghai) Enterprise Management Group Co., Ltd., Shanghai Ningsheng Enterprise Management Group Co., Ltd. and Peng Jiang
4.5^(7)^	Exclusive Right and Option to Purchase Agreement dated May 17, 2019 among NingChen (Shanghai) Enterprise Management Group Co., Ltd., Fintech (Shanghai) Digital Technology Co., Ltd., Shanghai Ningsheng Enterprise Management Group Co., Ltd. and Peng Jiang
4.6^(8)^	Employment Contract dated August 8, 2019 between Hebron Technology Co. Ltd. and Changjuan Liang
4.7^(9)^	2019 One Million Share Incentive Plan (incorporated by reference to Exhibit 99.1 to Form 6-K filed with the Commission on November 20, 2019)

4.8^(7)^	Trademarks,<br> Technologies & Management and Consulting Services Agreement dated December 31, 2019 among NingChen (Shanghai) Enterprise Management<br> Group Co., Ltd., Beijing Hengtai Puhui Information Service Co. Ltd and Guoya Asset Management (Shenzhen) Co. Ltd.
4.9^(7)^	Equity<br> Interest Pledge Agreement dated Equity Interest Pledge Agreement dated December 31, 2019 among NingChen (Shanghai) Enterprise Management<br> Group Co., Ltd., Beijing Hengtai Puhui Information Service Co. Ltd and Guoya Asset Management (Shenzhen) Co. Ltd.
4.10^(7)^	Equity<br> Interest Holders’ Voting Rights Proxy Agreement dated December 31, 2019 between NingChen (Shanghai) Enterprise Management Group<br> Co., Ltd. and Guoya Asset Management (Shenzhen) Co. Ltd.
4.11^(7)^	Exclusive<br> Right and Option to Purchase Agreement dated December 31, 2019 among NingChen (Shanghai) Enterprise Management Group Co., Ltd., Beijing<br> Hengtai Puhui Information Service Co. Ltd and Guoya Asset Management (Shenzhen) Co. Ltd.
4.12^(7)^	First<br> Amendment to Share Exchange Agreement dated April 8, 2020 among Hebron Technology Co., Ltd., Beijing Hengtai Puhui Information Service<br> Co. Ltd, Guoya Asset Management Co. Ltd. (BVI) and HongKong D&L Technology Co., Limited
4.13*	Share<br> Purchase Agreement dated May 12, 2020 among Hebron Technology Co., Ltd., Nami Holding (BVI) Co.,<br> Ltd (SPV) and Nami Holding (Cayman) Co., Ltd.
4.14^(10)^	Employment<br> Agreement, dated September 4, 2020, between Hebron Technology Co., Ltd. and Xiaoyun Huang
8.1*	List<br> of Subsidiaries of the Registrant
11.1^(4)^	Code<br> of Business Conduct and Ethics
12.1*	Certification<br> of Chief Executive Officer Required by Rule 13a-14(a)
12.2*	Certification<br> of Chief Financial Officer Required by Rule 13a-14(a)
13.1**	Certification<br> of Chief Executive Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States<br> Code
13.2**	Certification<br> of Chief Financial Officer Required by Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States<br> Code
15.1*	Consent Letter of Wei, Wei & Co., LLP
99.1*	Unaudited<br> Pro Forma Condensed Combined Financial Information
99.2*	Audited Consolidated Financial Statements of Nami Holding (Cayman) Co., Ltd.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension<br> Schema Document.
101.CAL*	XBRL Taxonomy Extension<br> Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension<br> Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension<br> Labels Linkbase Document.
101.PRE*	XBRL Taxonomy Extension<br> Presentation Linkbase Document.
^(1)^	Incorporated by reference<br> to the Company’s Form F-1/A filed with the SEC on April 29, 2016.
---	---

^(2)^	Incorporated by reference<br> to the Company’s Form F-1/A filed with the SEC on June 13, 2016.
^(3)^	Incorporated by reference<br> to the Company’s Form 6-K filed with the SEC on March 9, 2018.
---	---
^(4)^	Incorporated by reference<br> to Form 20-F filed with the SEC on April 11, 2017
---	---
^(5)^	Incorporated by reference<br> to Exhibit 1.1 to Form 6-K filed with the SEC on November 16, 2020
---	---
^(6)^	Incorporated by reference<br> to Exhibit 2.1 to Form 6-K filed with the SEC on November 16, 2020
---	---
^(7)^	Incorporated by reference<br> to Form 20-F filed with the SEC on April 24, 2020
---	---
^(8)^	Incorporated<br>by reference to Exhibit 10.1 to Form 6-K filed with the Commission on August 13, 2019
---	---
^(9)^	Incorporated<br>by reference to Exhibit 99.1 to Form 6-K filed on November 20, 2019
---	---
^(10)^	Incorporated by reference<br> to Exhibit 99.3 to Form 6-K filed with the Commission on September 4, 2020
---	---
*	Filed herewith
---	---
**	Furnished herewith
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SIGNATURES

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

	NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD
	By:	/s/<br> Xiaoyun Huang
		Name:	Xiaoyun Huang
		Title:	Chief Executive Officer
Date: May 3, 2021

NISUN

INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

	Page
ConsolidatedFinancial Statements
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2020 and 2019	F-5
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2020 and 2019	F-6
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2020 and 2019	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019	F-8
Notes to Consolidated Financial Statements	F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM To the Board of Directors and Shareholders of Nisun International Enterprise Development Group Co., Ltd. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Nisun International Enterprise Development Group Co., Ltd. (previously known as Hebron Technology Co., Ltd.) (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive income (loss) income, changes in shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, 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 consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-2

Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Valuation of Investment in Limited Partnership The Company holds a 99.9% equity interest in a limited partnership (“LP”) that is engaged primarily investing in debt securities of private companies. The main asset of the LP is the value of these investments. As discussed in Notes 2 and 10 to the consolidated financial statements, the Company reviews this investment for possible impairment on an annual basis or when events or changes in circumstances indicate that the carrying value of the investment could be impaired. As of December 31, 2020, the value of this investment was approximately $15.7 million or 14.6% of the Company’s total assets. We identified the valuation of this investment as a critical audit matter not only because of the unique nature of this asset and its materiality in the consolidated financial statements but also the challenge, difficulty and extent of judgement involved in determining the fair value of this asset. The primary procedures we performed to address this critical audit matter included the following. We evaluated the Company’s approach in assessing the fair value of this investment and discussed with management its evaluation process, specifically the manner in which it conducts the assessment of the LP’s financial condition. We obtained and reviewed the audited financial statements of the LP as of and for the year ended December 31, 2020, noting its critical accounting policies and financial results for the year ended 2020 and obtained an understanding of the procedures and analysis performed by the LP’s audit firm. Goodwill Valuation Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired net of liabilities assumed in a business acquisition. The Company’s goodwill is approximately $25.2 million and represents approximately 23.2% of total assets. Goodwill is subject to annual impairment tests, and if it is determined to be impaired, is to be written down to its estimated fair value. We identified the Company's goodwill as a critical audit matter not only because of the materiality in the consolidated financial statements but also due to the significant estimates, assumptions and judgment management utilizes to determine if goodwill is impaired, especially considering the impact of the COVID-19 pandemic. This required a high degree of auditor judgment and additional effort was required in performing the audit procedures to evaluate the methodology and the reasonableness of related assumptions, as well as the inputs and calculations related to the forecasts of future revenues and earnings in determining if goodwill was impaired.

F-3

The primary procedures we performed to address this critical audit matter included the following. We obtained an understanding of management’s process to estimate the fair value of goodwill and reviewed the key data and assumptions used in its determination of the fair value of goodwill. We evaluated management's forecasts including revenues and earnings for reasonableness by comparing the forecasts to historical results, obtaining supporting evidence for assumptions and estimates related to management's forecasts. We assessed the sensitivity of the Company's impairment conclusions to changes in the forecasts, discount rates, and earnings multiples and evaluated the assumptions used by management, including testing the underlying source information and the mathematical accuracy of the calculations by developing a range of independent estimates and comparing those to the rates. Business Acquisition As discussed in Notes 1 and 3 to the consolidated financial statements, the Company acquired 100% of the outstanding shares of Nami Holding (Cayman) Co., Ltd on May 31, 2020 for approximately $20.3 million (net of cash acquired of approximately $5.0 million) comprised of Company stock valued at approximately $18.3 million and the balance to be paid in cash. The Company applied the acquisition method of accounting for the business combination which requires the purchase price allocation to the assets acquired and liabilities assumed, in each case based on estimates of their respective fair values at the acquisition date. The purchase price paid in excess of the estimated fair value of the net assets acquired was recorded as goodwill. We identified the Company’s business combination as a critical audit matter because of the significant estimates and judgements in determining the fair values assigned to the acquired assets and assumed liabilities especially considering management’s assumptions surrounding estimated future operating results and cash flows. The Company, with the assistance of an independent valuation firm, determined the fair values using discounted cash flow and market multiple analyses. These types of analyses require assumptions and estimates regarding industry and economic factors, the profitability of future business strategies, discount rates, revenue growth rates and future cash flows. These significant estimates and assumptions are forward-looking and could be affected by future economic and market conditions. The primary procedures we performed to address this critical audit matter included the following. We obtained an understanding of management’s process to estimate the fair values of the acquired assets and assumed liabilities and reviewed the key data used in its fair value calculations. We also evaluated the key controls used by management to develop its fair value estimates. We evaluated the appropriateness of specific key inputs supporting management’s estimates, including revenue growth rates and future cash flows, and we obtained and reviewed the independent valuation report issued by the independent valuation firm on the business, noting the valuation methodology and assumptions used in the determination of the related fair value of the business as well as the relevant qualifications, and experience of the firm in the preparation of the valuation report. We engaged a valuation specialist to assist us in assessing the reasonableness of the significant assumptions and valuation methodology and its mathematical accuracy of the valuation report. We also reviewed the calculation of the valuation of the common stock issued. /s/ Wei, Wei & Co., LLP We have served as the Company’s auditors since 2019. Flushing, New York May 3, 2021

F-4

NISUN

INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONSOLIDATED

BALANCE SHEETS

AS

OF DECEMBER 31, 2020, AND 2019

(EXPRESSEDIN US DOLLARS)

			December 31,<br> <br>2019*
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	22,135,310		$	2,756,490
Restricted cash	62,947			25,016
Short-term investments	4,680,843			-
Accounts receivable, net	4,939,912			1,233,038
Receivables from supply chain financing	10,741,981			-
Prepaid expenses and other current assets	971,839			280,202
Loans to third parties - current portion	1,915,709			2,434,715
Due from discontinued operations	-			9,201,432
Receivable from sale of discontinued operations	14,950,730			-
Assets of discontinued operations - current	-			36,985,779
TOTAL CURRENT ASSETS	60,399,271			52,916,672
NON-CURRENT ASSETS:
Property and equipment, net	655,643			287,057
Intangible assets, net	3,726,602			4,189,350
Right-of-use assets, net	1,464,745			502,670
Loans to third parties - non-current	-			2,872,820
Equity investments	484,864			500,715
Investment in limited partnership	15,736,927			-
Goodwill	25,172,407			11,074,864
Deferred tax assets, net	456,370			20,040
Assets of discontinued operations - non-current	-			21,636,501
TOTAL NON-CURRENT ASSETS	47,697,558			41,084,017
TOTAL ASSETS	108,096,829		$	94,000,689
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	1,312,560		$	224,045
Accrued expenses and other current liabilities	2,001,031			674,169
Operating lease liabilities - current	736,854			138,133
Advance from customers	11,624			28,728
Taxes payable	3,133,038			138,157
Loan from related party	10,528,965			-
Due to related parties	2,071,309			7,759,443
Purchase price payable for acquisition	7,007,905			-
Liabilities of discontinued operations - current	-			28,472,022
TOTAL CURRENT LIABILITIES	26,803,286			37,434,697
Operating lease liabilities – non-current	680,130			368,019
Deferred tax liabilities	676,015			805,826
Liabilities of discontinued operations - non-current	-			1,456,634
TOTAL LIABILITIES	28,159,431			40,065,176
Commitments and contingencies
EQUITY:
Class A common stock, 0.001 par value, 40,000,000 shares authorized, 20,555,129 and 17,710,471 shares issued and outstanding as of December 31, 2020 and 2019, respectively	20,555			17,710
Class B common stock, 0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and 2019	-			-
Additional paid-in capital	59,472,255			28,369,076
Retained earnings	14,380,976			27,472,766
Unearned compensation	(624,455	)
Accumulated other comprehensive income (loss)	3,593,188			(1,914,232	)
TOTAL SHAREHOLDERS’ EQUITY	76,842,519			53,945,320
Non-controlling interests	3,094,879			(9,807	)
TOTAL EQUITY	79,937,398			53,935,513
TOTAL LIABILITIES AND EQUITY	108,096,829		$	94,000,689

All values are in US Dollars.

*	Theamounts have been reclassified to conform with the Group’s decision to classify Hebron HK as assets and liabilities of discontinuedoperations.

The

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

F-5

NISUN

INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(EXPRESSEDIN US DOLLARS)

	For the Years Ended December 31,
	2020			2019			2018
REVENUE:
Small and Medium Enterprise financing solutions	$	40,779,794		$	2,522,143		$	-
Supply Chain financing solutions		1,369,859			-			-
Other financing solutions		40,538			3,381			-
Financial services		42,190,191			2,525,524			-
COST OF REVENUE AND RELATED TAXES:								-
Cost of revenue		(19,740,267	)		-			-
Business and sales related taxes		(233,389	)		(19,492	)		-
GROSS PROFIT		22,216,535			2,506,032			-
OPERATING EXPENSES:
Selling expenses		3,181,810			93,620			-
General and administrative expenses		8,188,736			1,082,631			1,170,900
Research and development expenses		817,770			155,216			923,094
Total operating expenses		12,188,316			1,331,467			2,093,994
INCOME (LOSS) FROM OPERATIONS		10,028,219			1,174,565			(2,093,994	)
OTHER INCOME (EXPENSE):
Interest and investment income		585,177			-			-
Other income (expense), net		244,274			1,371			-
Total other income (expense), net		829,451			1,371			-
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		10,857,670			1,175,936			(2,093,994	)
PROVISION (BENEFIT) FOR INCOME TAXES		941,064			(55,731	)		-
NET INCOME (LOSS) FROM CONTINUING OPERATIONS		9,916,606			1,231,667			(2,093,994	)
DISCONTINUED OPERATIONS:
(Loss) income from discontinued operations, net of tax		(23,107,066	)		1,508,323			(3,050,721	)
Net gain on sale of discontinued operations, net of tax		136,050			-			-
NET (LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX		(22,971,016	)		1,508,323			(3,050,721	)
NET (LOSS) INCOME		(13,054,410	)		2,739,990			(5,144,715	)
Net income attributable to non-controlling interests		37,380			-			-
NET (LOSS) INCOME ATTRIBUTABLE TO SHAREHOLDERS	$	(13,091,790	)	$	2,739,990		$	(5,144,715	)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation income (loss)		5,507,420			(561,091	)		(1,755,528	)
COMPREHENSIVE (LOSS) INCOME		(7,584,370	)		2,178,899			(6,900,243	)
Comprehensive loss attributable to non-controlling interests		(2,172	)		-			-
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO SHAREHOLDERS	$	(7,582,198	)	$	2,178,899		$	(6,900,243	)
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) from continuing operations	$	0.53		$	0.08		$	(0.13	)
Income (loss) from discontinued operations		(1.24	)		0.09			(0.20	)
TOTAL (LOSS) EARNINGS PER COMMON SHARE	$	(0.71	)	$	0.17		$	(0.33	)
Weighted average number of shares outstanding-basic and diluted		18,587,674			16,269,577			15,760,633

The

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

F-6

NISUN

INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF CHANGES IN EQUITY

FOR

THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018

	Class<br> A<br> Common Stock				Class B<br> <br>Common Stock						Additional<br><br> Paid in		Unearned			Retained			Accumulated<br><br> Other<br> Comprehensive			Non-controlling
	Shares		Amount		Shares			Amount			Capital		Compensation			Earnings			Income<br> (Loss)			Interests			Total
Balance<br> at January 1, 2018		6,916,947	$	6,917		7,778,400		$	7,778		$	10,237,965	$	-		$	29,877,491		$	402,387		$	-		$	40,532,538
Net<br> (loss)		-		-		-			-			-		-			(5,144,715	)		-			-			(5,144,715	)
Foreign<br> currency translation adjustment		-		-		-			-			-		-			-			(1,755,528	)		-			(1,755,528	)
Issuance<br> of class A common stock for consulting services		131,452		131		-			-			239,369		-			-			-			-			239,500
Issuance<br> of common stock for equity investment		1,442,778		1,443		-			-			2,884,113		-			-			-			-			2,885,556
Balance<br> at December 31, 2018		8,491,177		8,491		7,778,400			7,778			13,361,447		-			24,732,776			(1,353,141	)	$	-			36,757,351
Net<br> income		-		-		-			-			-		-			2,739,990			-			-			2,739,990
Foreign<br> currency translation adjustment		-		-		-			-			-		-			-			(561,091	)		-			(561,091	)
Capital<br> contribution by shareholder		-		-		-			-			3,582,781		-			-			-			-			3,582,781
Shares<br> issued for business acquisition		1,440,894		1,441		-			-			11,424,848		-			-			-			(9,807	)		11,416,482
Reclassification<br> of common stock		7,778,400		7,778		(7,778,400	)		(7,778	)		-		-			-			-			-			-
Balance<br> at December 31, 2019		17,710,471		17,710		-			-			28,369,076		-			27,472,766			(1,914,232	)		(9,807	)		53,935,513
Capital<br> contributed by shareholder		-		-		-			-			4,550,000		-			-			-			-			4,550,000
Net<br> (loss)		-		-		-			-			-		-			(13,091,790	)		-			37,380			(13,054,410	)
Foreign<br> currency translation adjustment		-		-		-			-			-		-			-			5,507,420			2,172			5,509,592
Private<br> placement		1,048,932		1,049		-			-			6,502,329		-			-			-			-			6,503,378
Shares<br> issued for business acquisition		1,562,726		1,563		-			-			18,329,213		-			-			-			-			18,330,776
Shares<br> issued for share-based compensation		233,000		233		-			-			1,721,637		(624,455	)		-			-			-			1,097,415
Capital<br>contribution from non-controlling interest		-		-		-			-			-		-			-			-			3,065,134			3,065,134
Balance<br> at December 31, 2020		20,555,129	$	20,555		-		$	-		$	59,472,255		(624,455	)	$	14,380,976		$	3,593,188		$	3,094,879		$	79,937,398

The

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

F-7

NISUN

INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONSOLIDATED

STATEMENTS OF CASH FLOWS

(EXPRESSEDIN US DOLLARS)

	For<br> the Years Ended December 31,
	2020			2019		2018
CASH<br> FLOWS FROM OPERATING ACTIVITIES:
Net<br> (loss) income	$	(13,054,410	)				)
Net<br> (loss) income from discontinued operations		(22,971,016	)				)
Net<br> income (loss) from continuing operations		9,916,606					)
Adjustments<br> to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation<br> and amortization		1,686,518
Stock-based<br> compensation		1,097,415
Bad<br> debt expense		-
Loss<br> on disposition of property and equipment		42,534
(Income)<br> from investments		(169,720	)
Deferred<br> taxes		(584,760	)		)
Changes<br> in operating assets and liabilities:
Decrease<br> (increase) in accounts receivable		573,418			)
Decrease<br> (increase) in prepaid expenses and other current assets		16,009			)
(Increase)<br> in operating lease right-of-use assets		(56,831	)
(Increase)<br>in receivable from supply chain financing		(10,741,981	)
Increase<br> in accounts payable		1,014,227
Increase<br> in advance from customers		(17,977	)
(Decrease)<br> in other payable		(2,112,886	)
Increase<br> in taxes payable		1,609,498
(Decrease)<br> in operating lease liabilities		(523,797	)
Increase<br> in accrued expenses and other current liabilities		502,100
Net<br> cash provided by (used in) operating activities from continuing operations		2,250,373					)
Net<br> cash provided by (used in) operating activities from discontinued operations		436,389			)		)
NET<br> CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		2,686,762					)
CASH<br> FLOWS FROM INVESTING ACTIVITIES:
Acquisition<br> of property and equipment		(204,904	)		)
Acquisition<br> of intangible assets		(94,400	)
Proceeds<br> from disposal of equipment		41,688
Cash<br> acquired with business acquisitions		4,990,754
Investment<br> in limited partnership		(15,589,966	)
Purchase of short-term investment		(3,065,134	)
Repayments<br> from loan to third parties		11,019,545
Loans<br> to third parties		(1,810,495	)		)
Net<br> cash (used in) investing activities from continuing operations		(4,712,912	)		)
Net<br> cash (used in) investing activities from discontinued operations		(6,713	)		)		)
NET<br> CASH (USED IN) FINANCING ACTIVITIES		(4,719,625	)		)		)
CASH<br> FLOWS FROM FINANCING ACTIVITIES:
Repayment to related parties		(6,803,115	)
Advances from related parties		1,303,556
Loan<br> from related parties		10,528,965
Proceeds<br> from private placement		6,503,378
Capital<br> contribution from non-controlling interest		3,065,134
Capital<br> contribution from shareholder		4,550,000
Net<br> cash provided by financing activities from continuing operations		19,147,918
Net<br> cash (used in) provided by financing activities from discontinued operations		(788,599	)		)
NET<br> CASH PROVIDED BY FINANCING ACTIVITIES		18,359,319
EFFECT<br> OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENT		2,806,981			)		)
NET<br> INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		19,133,437					)
Add:<br> decrease in cash and cash equivalents from discontinued operations		283,314
NET<br> INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS		19,416,751					)
CASH<br> AND CASH EQUIVALENTS AND RESTRICTED CASH-BEGINNING		2,781,506
CASH<br> AND CASH EQUIVALENTS AND RESTRICTED CASH-ENDING	$	22,198,257
SUPPLEMENTAL<br> CASH FLOW DISCLOSURES:
Cash<br> paid for income taxes	$	552,783
Cash<br> paid for interest	$	124,778
SUPPLEMENTAL<br> DISCLOSURE OF NON-CASH ACTIVITIES:
Payment<br> payable to related parties for business acquisition	$	7,007,905
Issuance<br> of shares for business acquisition	$	18,330,776
Receivable<br> from sale of discontinued operations	$	14,950,730
Issuance<br> of shares for share based compensation	$	1,721,870
Issuance<br> of shares for consulting services	$	-
Issuance<br> of shares for equity investment	$	-
CASH<br> AND CASH EQUIVALENTS FROM CONTINUING OPERATION COMPRISE OF THE FOLLOWING:
Cash<br> and cash equivalents	$	22,135,310
Restricted<br> cash		62,947
Total<br> cash, cash equivalents and restricted cash	$	22,198,257

All values are in US Dollars.

The

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

F-8

NISUN

INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

NOTES

TO CONSOLIDATED FINANCIAL STATEMENTS

Note1 — ORGANIZATION AND BUSINESS DESCRIPTION

Organizationand description of business

Nisun International Enterprise Development Group Co., Ltd (“Nisun International” or the “Company”), formerly known as Hebron Technology Co., Ltd, is an investment holding company established under the laws of the British Virgin Islands (“BVI”) on May 29, 2012. On November 16, 2020, the Company officially changed its Nasdaq trading symbol to “NISN” and its name from “Hebron Technology Co., Ltd” to “Nisun International Enterprise Development Group Co., Ltd”, which the management believes more closely reflects the Company’s new financial services business. The Company conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”) in the People’s Republic of China (‘‘PRC’’).

The Group began to conduct its financial services business in 2019 through the Group’s newly acquired entities, Fintech (Shanghai) Digital Technology Co., Ltd. (“Fintech”), Beijing Hengtai Puhui Information services Co., Ltd. (“Hengpu”), Nami Shanghai Financial Consulting Co., Ltd (“Nami Shanghai”) and their subsidiaries. The Group provides a set of technology-driven customized financing solutions to small-and mid-size enterprises through Hengpu, Fintech, Nami Shanghai and their subsidiaries. Hengpu and Fintech provide comprehensive financing solutions for small to medium-sized enterprises, while Nami facilitates the matching of investors and small to medium-sized enterprises. The Group commenced a technology-driven integrated supply chain financing solutions through Fintech and its subsidiaries in January 2020 by involvement in bringing the lender and borrower together.

Acquisition of Nami Holding (Cayman) Co., Ltd (Note 3)

On May 31, 2020, the Group acquired 100% of Nami Holding (Cayman) Co., Ltd. (“Nami Cayman”) for $25.34 million, consisting of $7.01 million (RMB 50 million) to be paid in cash and 1,562,726 shares of our common stock issued at $11.73 per share valued at $18.33 million, to Nami Cayman’s original shareholders (See Note 3). Nami Cayman effectively controls Nami Shanghai through a series of contractual agreements (“VIE Agreements”).

Disposition of Hong Kong Xibolun Technology Co., Ltd (Note 4)

On November 30, 2020, the Group completed the disposition of its valve manufacturing and installation business. The Group sold all equity interests in its subsidiary, Hong Kong Xibolun Technology Co., Ltd. (“Hebron HK”) to Wise Metro Development Co., Ltd. (a company owned by the Company’s prior CEO and another officer) for consideration of approximately $14.95 million (RMB 98.3 million). As a result of the disposition, the Group sold all the equity interests it held in Zhejiang Xibolun Automation Project Technology Co., Ltd, Wenzhou Xibolun Fluid Equipment Co., Ltd., and Xuzhou Weijia Biotechnology Co., Ltd. The manufacturing and installation business have been presented as discontinued operations (“Discontinued Operations”) retroactively for the periods presented in the consolidated financial statements.

COVID-19

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts of the world in the first quarter of 2020, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. For the year ended December 31, 2020 and subsequent period up to the date of this report, the COVID-19 pandemic did not have a material negative impact on the Group’s financial services business. For the year ended December 31, 2020, the COVID-19 pandemic resulted in material adverse effects on the Group’s discontinued manufacturing and installation business. During the temporary business closure period, employees had very limited access to the Group’s manufacturing facilities, and as a result, the Group experienced difficulty providing manufacturing and installation services on a timely basis. In addition, due to the COVID-19 outbreak, some of the Group’s customers and suppliers experienced financial distress, delayed or defaulted on their payments, reduced the scale of their business, and suffered disruptions in their business. On November 30, 2020, the Group disposed of the manufacturing and installation business.

The extent of the impact on the Group’s fiscal 2021 results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Group is currently unable to quantify the expected impact of the COVID-19 pandemic on the Group’s future operations, financial condition, liquidity and results of operations if the current situation continues.

F-9

Note

1 — ORGANIZATION AND BUSINESS DESCRIPTION - CONTINUED

As of December 31, 2020, the Group’s subsidiaries and consolidated VIEs are as follows:

	Date of incorporation/ acquisition	Place of incorporation	Percentage<br> of direct or indirect economic interest
Subsidiaries
NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd. (“NiSun BVI”)	July 12, 2019	BVI	100	%
NiSun International Enterprise Management Group (Hong Kong) Co., Limited (“NiSun HK”)	July 12, 2019	Hong Kong	100	%
Nisun (Shandong) Industrial Development Co., Ltd (“Nisun Shandong” or “WOFE”)	December 15, 2020	PRC	100	%
NingChen (Shanghai) Enterprise Management Co., Ltd.(“NingChen”)	July 12, 2019	PRC	100	%
Shandong Taiding International Investment Co., Ltd. (“Taiding”)	November 12, 2019	PRC	80	%
Nami Holding (Cayman) Co., Ltd (“Nami Cayman”)	April 09, 2019	Cayman Islands	100	%
Nami Holding (Hong Kong) Co., Limited (“Nami HK”)	May 02, 2019	Hong Kong	100	%
Shanghai Naqing Enterprise Management Co., Ltd (“Naqing” or “WOFE”)	April 10, 2019	PRC	100	%
VIEs	,
Fintech (Shanghai) Digital Technology Co., Ltd. (“Fintech Shanghai”)	July 12, 2019	PRC	100	%
Beijing Hengtai Puhui Information Services Co., Ltd (“Hengpu”)	December 31, 2019	PRC	100	%
Nami Shanghai Financial Consulting Co., Ltd (“Nami Shanghai”)	June 04, 2015	PRC	100	%
Subsidiaries of the VIEs
Khorgos Fintech Network Technology Co., Ltd. (“Khorgos”)	July 12, 2019	PRC	100	%
Jilin Lingang Supply Chain Management Co., Ltd (“Lingang”)	November 27, 2019	PRC	100	%
NiSun Family Office (Guangzhou) Co., Ltd. (“Guangzhou”)	October 29, 2019	PRC	100	%
Hangzhou Fengtai Supply Chain Management Co., Ltd. (“Fengtai”)	December 31, 2019	PRC	100	%
Dunhua Midtown Asset Management Registration Center Co., Ltd. (“Midtown”)*	December 31, 2019	PRC	100	%
Nanjing Nisun Gold Co., Ltd. (“Nisun Gold”)	December 10, 2020	PRC	100	%
Fintech (Henan) Supply Chain Management Co., Ltd. (“Fintech Henan”)	August 26, 2020	PRC	100	%
Fintech (Jiangsu) Supply Chain Management Co., Ltd. (“Fintech Jiangsu”)	November 06, 2020	PRC	100	%
Fintech (Shandong) Supply Chain Management Co., Ltd. (“Fintech Shandong”)	November 04, 2020	PRC	100	%
Fanlunke Supply Chain Management (Shanghai) Co., Ltd. (“Fanlunke Shanghai”)	December 29, 2020	PRC	100	%
Shanxi Fintech Supply Chain Management Co., Ltd (“Fintech Shanxi”)	December 30, 2020	PRC	80	%
Jilin Province Lingang Hengda Supply Chain Management Co., Ltd. (“Lingang Hengda”)	August 18, 2020	PRC	100	%
*	The<br>entity was deregistered on February 19, 2021. Since the entity did not have significant operations, the deregistration did not have a<br>material impact to the Group’s consolidated financial statements for the years ended December 31, 2020, 2019 and 2018.
---	---

F-10

Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basisof presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basisof consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and the subsidiaries of the VIEs for which the Company or its subsidiary is the primary beneficiary.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors under a statute or agreement among the shareholders or equity holders.

A consolidated VIE is an entity in which the Company, or its subsidiaries, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiaries are the primary beneficiary of the entity.

All transactions and balances among the Group, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation.

VIEcompanies

1)	ContractualAgreements with VIE

The following is a summary of the VIE agreements:

Managementand Consulting Service Agreement.

Under the Consulting Services Agreements, the Group has the exclusive right to provide management and consulting and other services to the VIEs for a consulting service fee from the VIEs and agree to authorize the VIEs to use the trademarks, technologies and related intellectual property rights held by the Group. The VIEs agree to pay the Group or the designated agent of the Group for the management and consulting services in the amount equivalent to all the VIEs net profits after tax. The agreement shall be effective as of the date of agreement and shall remain effective until the date when the Group terminates such agreements and Fintech, Hengpu or Nami Shanghai cease to exist.

EquityInterest Pledge Agreements

Pursuant to the Equity Interest Pledge Agreements, each Shareholder of the VIEs agreed to pledge his equity interest in the VIEs to the Group to secure the performance of the VIEs’ obligations under the Exclusive Business Cooperation Agreements and any such agreements to be entered into in the future. Each shareholder of the VIEs agrees not to transfer, sell, pledge, dispose of or otherwise create any encumbrance on their equity interests in the VIEs without the prior written consent of the Group. The Pledges became effective on such date when the pledge of the Equity Interest contemplated herein were registered with the relevant Administration for Industry and Commerce (the “AIC”) and remain effective until all contract obligations have been fully performed and all secured indebtedness has been fully paid.

VotingRights Proxy Agreement.

Under the Voting Rights Proxy Agreement, each shareholder of the VIEs irrevocably authorizes the Group to exercise rights and powers as the shareholders of the VIEs, including but not limited to, convening and attending shareholders’ meetings, voting on all matters of the VIEs requiring shareholder approval and appointing directors and senior management members. The Voting Rights Proxy Agreements will remain in force unless otherwise terminated in writing by the Group or with the written consent of all parties.

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Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

ExclusiveCall Option Agreement.

Under the Exclusive Call Option Agreement, the VIEs and their shareholders have irrevocably granted the Group an exclusive option to purchase or authorize their designated persons to purchase all or part of each shareholder’s equity interests in the VIEs. The purchase price shall be equal to the minimum price required by the relevant PRC laws. Without prior written consent of the Group, the VIEs shall not among other things, amend their articles of association, sell or otherwise dispose of their assets or beneficial interests, enter into transactions which may adversely affect their assets, liabilities, business operations, equity interests and other legal interests, or merge with any other entities or make any investments, or distribute dividends. The Group has the right to transfer the rights and obligations pursuant to the Exclusive Call Option Agreement to any third party, which do not require any prior consent of the VIEs and their shareholders. The Exclusive Call Option Agreement will remain effective until the Group terminates this agreement with 30 days advance notice.

2)	Risksin relation to the VIE structure

The Group believes that the contractual arrangements with its VIEs and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Group’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

●	revoke the<br> business and operating licenses of the Group’s PRC subsidiaries and VIEs;
●	discontinue<br> or restrict the operations of any related-party transactions between the Group’s PRC subsidiaries and VIEs;
---	---
●	limit the Group’s<br> business expansion in China by way of entering into contractual arrangements;
---	---
●	impose fines<br> or other requirements with which the Group’s PRC subsidiaries and VIEs may not be able to comply;
---	---
●	require the<br> Group’s PRC subsidiaries and VIEs to restructure the relevant ownership structure or operations; or
---	---
●	restrict or<br> prohibit the Group’s use of the proceeds of a public offering to finance the Group’s business and operations in China.
---	---

The Group’s ability to conduct its financial services business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Group may not be able to consolidate its VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs – Fintech, Hengpu, and Nami Shanghai and their respective shareholders and it may lose the ability to receive the economic benefits from the VIEs. The Group, however, does not believe such actions would result in the liquidation or dissolution of the Group, its PRC subsidiaries and VIEs.

The interests of the shareholders of VIEs may diverge from that of the Group and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. The Group cannot assure that when conflicts of interest arise, shareholders of the VIEs will act in the best interests of the Group or that conflicts of interests will be resolved in the Group’s favor. Currently, the Group does not have existing arrangements to address potential conflicts of interest the shareholders of the VIEs may encounter in their capacity as beneficial owners and directors of the VIEs, on the one hand, and as beneficial owners and directors of the Group, on the other hand. The Group believes the shareholders of the VIEs will not act contrary to any of the contractual arrangements and the exclusive option agreements provide the Group with a mechanism to remove the current shareholders of the VIEs should they act to the detriment of the Group. The Group relies on certain current shareholders of the VIEs to fulfill their fiduciary duties and abide by laws of the PRC and act in the best interest of the Group. If the Group cannot resolve any conflicts of interest or disputes between the Group and the shareholders of the VIEs, the Group would have to rely on legal proceedings, which could result in disruption of its business, and there are substantial uncertainties as to the PRC legal system and the outcome of any such legal proceedings.

F-12

Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiaries taken as a whole, which were included in the Group’s consolidated financial statements for continuing operations with intercompany balances and transactions eliminated between the VIEs and their subsidiaries:

	December 31,<br> 2020		December 31,<br> 2019
Total current asset	$	43,832,012	$	5,988,899
Total assets	$	47,223,358	$	9,793,910
Total current liabilities	$	11,146,286	$	1,295,055
Total liabilities	$	11,826,417	$	1,295,055
	For the year ended<br> <br>December 31,<br> <br>2020		For the year ended<br> <br>December 31,<br> <br>2019
---	---	---	---	---
Financial services revenue	$	42,190,191	$	2,525,524
Net income	$	11,583,787	$	1,600,661
	For the year ended<br> <br>December 31,<br> <br>2020			For the year ended<br> <br>December 31,<br> <br>2019
---	---	---	---	---	---	---
Net cash provided by operating activities	$	2,560,400		$	824,462
Net cash (used in) investing activities	$	(13,321,524	)	$	(3,132,684	)
Net cash provided by financing activities	$	4,051,162		$	3,044,235

As of December 31, 2020, there were no consolidated assets of the VIEs that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. There were no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Group in the normal course of business. The Group neither provides nor intends to provide additional financial or other support not previously contractually required to the VIEs and subsidiaries of the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of its net assets, equivalent to the balance of its paid-in capital, capital reserve and statutory reserves, to the Group in the form of loans, advances or cash dividends. Please refer to Note 18 for disclosure of restricted net assets.

Non-controllinginterests

Non-controlling interests are recognized to reflect the portion of the equity that is not attributable, directly, or indirectly, to the Group. Non-controlling interests are presented as a separate component of equity in the consolidated balance sheets and earnings and other comprehensive income (loss) are attributed to controlling and non-controlling interests. As of December 31, 2020, non-controlling interest relates to the 20% equity interest in Taiding.

Usesof estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during each reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include: the allowance for doubtful accounts, the valuation of inventory, realizability of deferred tax assets, costs to complete contracts, estimated useful lives and fair values in connection with the impairment of property and equipment, the valuation of intangible assets, and goodwill, accruals for income tax uncertainties, and the determination of fair values related to business acquisitions.

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Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Businesscombinations

The Group accounts for business combinations using the purchase method of accounting in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) topic 805, Business Combinations. The purchase method of accounting requires the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Group acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent consideration and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total acquisition cost, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earnings as a bargain purchase gain.

The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed, and non-controlling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Group determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets, the forecasted life cycle and forecasted cash flows over that period. The fair value of the identifiable assets acquired, and liabilities assumed at the acquisition date is based on a valuation performed by an independent valuation firm engaged by the Group.

Discontinuedoperations

A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. Included in the consolidated statements of operations and comprehensive income (loss), the results from discontinued operations are reported separately from the income and expense from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenues and expenses arising from intra-group transactions are eliminated except for those revenues and expenses that are considered to continue after the disposal of the discontinued operations, if any.

Revenuerecognition

The Group adopted FASB ASC Topic 606 Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018 using the modified retrospective approach. Revenues are presented under ASC 606, and there was no adjustment to the opening balance of retained earnings at January 1, 2018 since there was no significant change to the timing and pattern of revenue recognition upon adoption of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Group’s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. All of the Group’s contracts with customers do not contain cancelable and refund-type provisions.

Under the guidance of ASC 606, the Group is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract and (e) recognize revenue when (or as) the Group satisfies its performance obligation. In determining the transaction price, the Group includes variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur. Revenues are recorded, net of sales related taxes and surcharges.

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Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Smalland medium enterprise financing solution

The Group earns one-time advisory fees from its services provided to small-and mid-size enterprises. The Group enters into one-time advisory fee agreements with small-and mid-size enterprises, underwriters, financial institutions and issuers, which specifies the key terms and conditions of the arrangement. Such agreements generally do not include rights of return, credits or discounts, rebates, price protection or other similar privileges. The Group earns a one-time advisory fee from its clients upon offerings completed on the PRC provincial or national asset exchanges or other designated markets. Revenue is calculated at a fixed charge rate based on the amount and length of the offering (prorated by the financing term). The Group believes such arrangement represents a performance obligation that is satisfied at a point of time, therefore, the underwriting related advisory fees are recognized as revenue upon the closing of the offerings.

Otherfinancing solutions

The Group also provides ongoing user management services to small and medium commercial banks and financial institutions in distributing and sourcing funds for their direct banking and other financial products in exchange for a recurring service fee. Recurring service agreements do not include rights of return, credits or discounts, rebates, price protection or other similar privileges. Recurring service fees are calculated as a fixed percentage of the qualified investments made by users during the contractual investment period of the direct banking and other financial products. Payment of recurring service fees by commercial banks and financial institutions are normally on a regular basis (typically quarterly or annually). The Group believes such arrangement requires the Group to provide ongoing management services including but not limited to direct banking account reconciliation between the financial institution and investors and maintaining investors’ account portfolios over the contractual term, which represents a performance obligation that the Group satisfies over time. Therefore, the recurring service revenue is recognized over the contract term on a straight-line basis.

Supplychain financing solution

For the year ended December 31, 2020, the Group started to offer supply chain financing advisory services through Fintech and its subsidiaries by integrating the working capital needs of suppliers and merchants in the supply chain and assisting them to obtain sufficient funds.

One-timecommission fees: The Group provides fund sourcing services to suppliers and merchants in the supply chain in exchange for a one-time commission fee. The Group merely acts as an agent to facilitate the transactions and earns a commission fee based on the volume of products transacted through the supply chain. Pursuant to the agreements with related suppliers and merchants, the Group recognizes the one-time commission fee when the service is facilitated. Such agreements generally do not include rights of return, credits or discounts, rebates, price protection or other similar privileges.

Recurringsupply chain management service fees: The Group provides ongoing supply chain management services to suppliers in exchange for a recurring management fee. Recurring management fees are calculated based on a fixed charge rate on the financing amount facilitated for the supplier over the service period. Payment of recurring management fees are normally on semi-monthly or monthly basis. The Group believes such arrangement requires the Group to provide ongoing supply chain management services, including but not limited to vender account reconciliation on a periodic basis and monitoring purchase-sales transaction cycle and related payment information on a regular basis, which represents a performance obligation that the Group satisfies over time. Therefore, the recurring service revenue is recognized over the contract term on a straight-line basis.

Disaggregationof revenue

The Group derives revenue primarily from one-time commissions and recurring service fees paid by clients or financial product providers. The following tables show the revenue from financial services disaggregated by nature for the years ended December 31, 2020 and 2019:

	For the year ended<br> <br>December 31 2020		For the year ended<br> <br>December 31,<br> <br>2019
One-time commission fees	$	42,082,585	$	2,522,143
Recurring service fees		107,606		3,381
Total revenue	$	42,190,191	$	2,525,524

F-15

Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

The Group provides small and medium enterprise financing solutions, supply chain financing solutions and other financing solutions. The following tables show the revenue from financial services disaggregated by revenue line for the years ended December 31, 2020 and 2019:

	For the year ended<br> <br>December 31 2020		For the year ended<br> <br>December 31, 2019
Small and medium enterprise financing solutions	$	40,779,794	$	2,522,143
Supply chain financing solutions		1,369,859
Other financing solutions		40,538		3,381
Total revenue	$	42,190,191	$	2,525,524

Practicalexpedient

The Group has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Group recognizes revenue in proportion to the amount the Group has the right to invoice for services performed.

Cashand cash equivalent

Cash and cash equivalents consist of cash on hand, money market fund investments, time deposits, as well as highly liquid investments, which have original maturities of three months or less.

RestrictedCash

The Group had restricted cash of $62,947 and $25,016 at December 31, 2020 and December 31, 2019, respectively, which are primarily security deposits related to our financing services. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts presented in the statement of cash flows.

Short-terminvestments

The Group’s short-term investments include the Group’s investments in wealth management products issued by commercial banks and financial institutions that have a stated maturity within one year and normally pay a prospective fixed interest rate. The wealth management products are unsecured and primarily invested in financial instruments with high credit ratings and good liquidity in the interbank and exchange markets, including but not limited to debt securities issued by financial institutions, central bank bills, interbank and exchange-traded bonds, and asset backed securities. The Group measures the short-term investments at fair value using the quoted subscription or redemption prices published or by discounting the future cash flows at the expected yield rate with reference to the expected benchmark yield rates of the wealth management product.

Fairvalue of financial instruments

The Group follows the provisions of FASB ASC Section 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2 — Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 — Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions market participants would use in pricing the asset or liability based on the best available information.

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Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

The carrying amounts reported in the balance sheets for cash and cash equivalents, short term investments, accounts receivable, receivables from supply chain financing, loans to third parties, accounts payable, advances from customers, taxes payable, due to related parties and accrued expenses and other current liabilities, approximate their fair value based on the short-term maturity of these instruments. The Group believes that the carrying amount of the investment in debt securities approximates fair value based on the terms of the investments and current market rates as the interest rates are reflective of the current market rates.

Transfers into or out of the fair value hierarchy classifications are made if the significant inputs used in the financial models measuring the fair value of the assets and liabilities became unobservable or observable in the current marketplace. These transfers are considered to be effective as of the beginning of the period in which they occur. The Group did not transfer any assets or liabilities in or out of Level 2 and Level 3 during the years ended December 31, 2020 and 2019.

Fairvalue measurements on a recurring basis

As of December 31, 2019, the Group did not have any financial instruments measured at fair value on a recurring basis. As of December 31, 2020, the financial instruments measured at fair value on a recurring basis are as follows:

	Fair value<br><br>as of<br><br>December 31,		Fair value measurement at reporting date
Description	2020		(Level 1)		(Level 2)		(Level 3)
Short-term investments:
Wealth management products	$	4,680,843	$	-	$	4,680,843	$	-

Accountsreceivable

Accounts receivable is stated at the historical carrying amount net of an allowance for uncollectible accounts. An allowance for uncollectable accounts is established based on the management’s assessment of the recoverability of accounts and other receivables. Judgment is required in assessing the realizability of these receivables, including the current credit worthiness of each customer and the related aging analysis. An allowance is provided for accounts when management has determined that the likelihood of collection is doubtful. The Group writes off accounts and contract receivables against the allowance when a balance is determined to be uncollectible.

Investmentin debt securities

The Group’s investments in debt securities that have a stated maturity and normally pay a prospective fixed rate of return. The Group classifies the investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded at amortized cost and are classified as long-term or short-term according to their contractual maturity. Long-term investments are reclassified as short-term when their contractual maturity date is less than one year. Investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value with changes in fair value recognized in earnings. Investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value deferred in other comprehensive income.

Longterm investments

FASB ASU 2016-01 (“ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The main provisions require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through earnings, unless they qualify for a measurement alternative. The Group adopted the new financial instruments accounting standard on January 1, 2019. Prior to January 1, 2019, the Group did not have any long-term investments, so the adoption of ASU 20106-01 did not have any material impact to the Group’s consolidated financial statements upon adoption.

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Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Equityinvestments without readily determinable fair values

After the adoption of this new accounting standard, the Group elected to record equity investments without readily determinable fair values and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Reasonable efforts are be made to identify price changes that are known or that can reasonably be known.

Equityinvestments with readily determinable fair values

Equity investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets at the reporting date.

Equityinvestments accounted for using the equity method

The Group accounts for its equity investments over which it has significant influence (usually 20% to 49.9%) but does not own a majority equity interest or otherwise control, using the equity method. The Group adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment. The Group assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary.

The investment held by the Group as of December 31, 2020 and 2019 represented the Group’s 23.08% equity interest in Wenzhou Jinda Holding Co., Ltd (“Jinda”). The Group considers it has significant influence over Jinda due to the level of ownership and its participation in their significant business operating and strategic decisions. Accordingly, the Group accounts for the investment using the equity method. For the year ended December 31, 2020, the Group did not receive any dividends from this investment. For the years ended December 31, 2020 and 2019, the Group recognized its share of loss in Jinda of $46,659 and $0, respectively.

Propertyand equipment, net

Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight-line method, as follows:

	Useful life
Transportation equipment	4 years
Office equipment	3 - 5 years
Electronic equipment	3 - 5 years
Leasehold improvements	Shorter of remaining lease term or life of assets

The Group charges maintenance, repairs and minor renewals directly to expense as incurred; major additions and betterments to equipment are capitalized.

Intangibleassets, net

Intangible assets acquired are recorded at cost less accumulated amortization. Amortization is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight-line method, as follows:

	Useful life
Software	3 - 5 years
Trademark	3-5 years
Technology	5-10 years

The estimated useful lives of amortizable intangible assets are reassessed if circumstances occur that indicate the original estimated useful lives have changed.

F-18

Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Impairmentof long-lived assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as significant adverse changes to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment charge was recognized for the years ended December 31, 2020, 2019 and 2018.

Goodwill

Goodwill represents the excess of the consideration over the fair value of the identifiable assets and liabilities acquired at the date of acquisition. In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350), simplifying the test for goodwill impairment”. The guidance removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value. The ASU is applicable for the annual or any interim goodwill impairment tests beginning after December 15, 2019. The adoption of this standard did not have a material impact on the Group’s consolidated financial statements. The Group tests goodwill at least annually for impairment at the reporting unit level. A reporting unit is the operating service, or one level below that operating service (the component level) if discrete financial information is prepared and regularly reviewed by management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. The Group recognizes an impairment charge if the carrying amount of a reporting unit exceeds its fair value and the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill. When a portion of a reporting unit is disposed, goodwill is allocated to the gain or loss on disposition based on the relative fair values of the business or businesses disposed and the portion of the reporting unit that will be retained. For the year ended December 31, 2020, 2019 and 2018, the Group did not recognize any goodwill impairment charges.

Leases

The Group adopted FASB ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) on January 1, 2019 by using the modified retrospective method and did not restate the prior periods. The Group has elected the package of practical expedients, which allows the Group 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. The Group also elected the practical expedient not to separate lease and non-lease components of contracts, Lastly, the Group elected the short-term lease exemption for all contracts with lease terms of 12 months or less.

The Group determines if an arrangement is a lease or contains a lease at lease inception. For operating leases, the Group recognizes a “right of use” asset (“ROU”) and a lease liability based on the present value of the lease payments over the lease term on the consolidated balance sheets at commencement date. For finance leases, assets are included in property and equipment on the consolidated balance sheets. As most of the Group’s leases do not provide an implicit rate, the Group estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in the economic environment where the leased asset is located. The Group’s leases often include options to extend and lease terms include such extended terms when the Group is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Group is reasonably certain not to exercise those options. Lease expense is recorded on a straight-line basis over the lease term.

The Group recognized ROU assets and total lease liabilities (including current and non-current) for operating leases as of January 1, 2019 upon adoption.

F-19

Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Stock-basedcompensation

The Group recognizes share based compensation based on the fair value of equity awards on the date of the grant, with compensation expense recognized using a straight-line vesting method over the requisite service periods of the awards, which is generally the vesting period. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination rates. The risk-free interest rate for the expected term of an option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based on the Group’s current and expected dividend policy.

Researchand development expenses

Research and development expenses mainly consist of salary and welfare benefits and bandwidth costs incurred for the development and enhancement to the Group’s websites and platform applications. Research and development expenditures are expensed as incurred.

Incometaxes

The Group’s subsidiaries in China are subject to the income tax laws of the PRC and Hong Kong. No taxable income was generated outside the PRC and Hong Kong for the year ended December 31, 2020, 2019 and 2018. The Group accounts for income tax under FASB ASC Section 740 which utilizes the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the differences between financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Deferred tax assets are also provided for carryforward losses which can be used to offset future taxable income. Deferred income taxes will be recognized if significant temporary differences between tax and financial statements occur. A valuation allowance is established against net deferred tax assets when it is more likely than not that some portion or all of the net deferred tax asset will not be realized. The Group provided a valuation allowance of $368,165 and $1,341,877 on the net deferred tax assets as of December 31, 2020 and 2019, respectively.

The Group continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a greater than 50% likelihood of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest related to underpayment of income taxes for uncertain tax positions are classified as income tax expense in the period incurred. No penalties or interest relating to uncertain tax positions has been incurred during the years ended December 31, 2020, 2019 and 2018. As of December 31, 2020, the tax years ended December 31, 2018 through December 31, 2020 for the Group’s PRC subsidiaries remain open for statutory examination by PRC tax authorities.

Under the Provisional Regulations of the PRC Concerning Income Tax on Enterprises promulgated by the PRC, income tax is payable by enterprises at a rate of 25% of their taxable income determined under PRC accounting rules. The Group believes that it has provided the best estimates of its accrued tax liabilities because those accruals are based on the prevailing tax rates stipulated under the laws.

Valueadded tax (“VAT”)

Revenue represents the invoiced value of goods and services, net of VAT. VAT is based on the gross sales price and VAT rates range from 6% to 13%, depending on the type of goods or service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. The net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Group’s subsidiaries in China, have been and remain subject to examination by the tax authorities for five years from the date of filing.

F-20

Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Foreigncurrency translation

Since the Group operates primarily in the PRC, the Group’s functional currency is the Chinese Yuan (“RMB”). The Group’s financial statements have been translated into the reporting currency of the United States Dollar. Assets and liabilities of the Group are translated at the exchange rate at each reporting period end date. Equity is translated at the historical exchange rate when the transaction occurred. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translation of foreign currency transactions and balances are reflected in the results of operations.

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USDs at the rates used in translation. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

	December 31,2020	November 31,2020	December 31,2019
Balance sheet items, except for equity accounts	US$1=RMB 6.5250	US$1=RMB 6.5760	US$1=RMB 6.9618
Items in the statements of operations and cash flows	US$1=RMB 6.9042	US$1=RMB 6.9377	US$1=RMB 6.9081
Balance sheet items, except for equity accounts	US$1=HKD 7.7534	US$1=HKD 7.7522	US$1=HKD 7.7894
Items in the statements of operations and cash flows	US$1=HKD 7.7559	US$1=HKD 7.7563	US$1=HKD 7.8351

Comprehensiveincome (loss)

Comprehensive income (loss) consists of two components, net income (loss) 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 (loss). Other comprehensive income (loss) consists of foreign currency translation adjustments resulting from the Group not using the U.S. dollar as its functional currencies.

Creditrisk and concentration

Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and accounts receivable. As of December 31, 2020, and 2019, $22,198,257 and $2,781,506 of the Group’s cash and cash equivalents and restricted cash from continuing operations was on deposit at financial institutions in the PRC, which the management believes are of high credit quality. On May 1, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them for up RMB 500,000 (USD $72,000). Such Deposit Insurance Regulations would not be effective in providing complete protection for the Group’s accounts, as its aggregate deposits are much higher than the coverage limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Group believes that those Chinese banks that hold the Group’s cash and cash equivalents, restricted cash and short-term investments are financially sound based on public available information. Balances in excess of the insured amount at December 31, 2020 was approximately $24,628,000.

Accounts receivable is typically unsecured and derived from revenue earned from customers, and is thereby exposed to credit risk. The risk is mitigated by the Group’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

Substantially all of the Group’s revenues are derived from customers that are located primarily in China. The Group has a concentration of its revenues with specific customers. For the year ended December 31, 2020, three customers accounted for 31%, 21% and 12%, of the Group’s total revenue from the financial service business. For the year ended December 31, 2019, one customer accounted for almost all of the Group’s total revenue from the financial services business.

F-21

Note2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Earnings(loss) per share

The Group computes earnings (loss) per share (“EPS”) in accordance with FASB ASC 260, “Earnings per Share” (“ASC 260”). Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2020, 2019, and 2018, no dilutive outstanding instruments were included in the computation of diluted EPS.

Statementsof cash flows

In accordance with FASB ASC Topic 230, Statement of Cash Flows, cash flows from the Group are calculated based upon the local currencies and translated at the average exchange rates during the reporting period. As a result, amounts related to assets and liabilities reported on the Group’s statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform with current year presentation of discontinued operations.

Recentaccounting pronouncements

The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses onFinancial Instruments. The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The effective date for all public companies, except smaller reporting companies, is fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The effective date for all other entities is fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Group does not expect the new standard to have a material impact on the consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance removes certain exceptions to the general principles in Topic 740 and enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax laws. This standard is effective for the Group for the annual reporting periods beginning January 1, 2022 and interim periods beginning January 1, 2023. Early adoption is permitted. The Group does not expect any material impact on the Group’s consolidated financial statements.

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This guidance addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. This standard is effective for the Group beginning January 1, 2022 including interim periods within the fiscal year. Early adoption is permitted. The Group does not expect any material impact on the Group’s consolidated financial statements.

Except for the above-mentioned pronouncements, there are no other recently issued accounting standards that should have a material impact on the Group’s consolidated financial position, statements of operations and cash flows.

F-22

Note3 — BUSINESS COMBINATIONS

Acquisitionof Nami Cayman

The Group completed the acquisition of 100% of Nami Cayman on May 31, 2020 (the “closing date”). Nami Cayman effectively controls Nami Shanghai, a company that provides intermediate matching services to small-and mid-size enterprises and high-quality investors in the PRC. The Group believes the acquisition provides an opportunity for the Group to offer comprehensive financing solutions to small and medium size enterprises in the market with significant growth potential.

The Group’s acquisition of Nami Cayman was accounted for as business combination in accordance with FASB ASC 805. Pursuant to the acquisition agreement, the Group is required to pay cash consideration of approximately $7.0 million (RMB 50 million) within 12 months following the close of the transaction and issued 1,562,726 the Group’s Class A common shares to the original shareholders of Nami Cayman as purchase consideration. The fair value of common shares paid was approximately $18.3 million based on the weighted average of the closing share price of the Group for five trading days up to the date immediately prior to the signing date of the purchase agreement. Acquisition-related costs incurred for the acquisitions are not material. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Group:

	May 31,<br><br>2020
Cash and cash equivalents acquired	$	4,990,754
Short-term investments		1,402,632
Accounts receivable, net		3,869.453
Prepayments and other current assets		621,735
Loans to third parties		5,484,531
Right-of-use assets		1,305,961
Property and equipment, net		407,678
Intangible assets, net		144,153
Accounts payable		(322	)
Advance from customers and other payables		(1,839,558	)
Salary payable		(891,347	)
Taxes payable		(1,172,980	)
Operating lease liabilities		(1,308,864	)
Goodwill		12,324,856
Total consideration	$	25,338,682

The goodwill is attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets and comprise (a) the assembled work force with their knowledge and experience in the industry and (b) the expected but unidentifiable business growth potential as a result of the synergy resulting from the acquisition. None of the goodwill is expected to be deductible for income tax purposes.

The total revenue and net income from Nami Cayman that are included in the Group’s consolidated statement of operations for the year ended December 31, 2020 were $16.2 million (RMB 114.3 million) and $3.0 million (RMB20.6 million), respectively.

The following unaudited pro forma consolidated financial information reflects the combined results of operations of the Group and Nami Cayman for the years ended December 31, 2019 and 2018, as if the acquisition of Nami Cayman had occurred on January 1, 2018, and after giving effect to purchase accounting adjustments. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what operating results would have been had the acquisition actually taken place as of the beginning of the periods presented and may not be indicative of future operating results.

	For the Year Ended<br> <br>December 31, 2019		For the Year Ended<br> <br>December 31, 2018
Revenue from continuing operations	$	21,436,553	$	11,407,879
Net income (loss) from continuing operations		4,686,302		(6,289,702	)

F-23

Note4 — DISCONTINUUED OPERATIONS

On November 30, 2020, the Group sold all its equity interests in its subsidiary- Hong Kong Xibolun Technology Co., Ltd. (“Hebron HK”) to Wise Metro Development Co., Ltd. (an entity owned by the Group’s chief executive officer and another officer) for cash consideration of approximately $15.0 million (RMB 98.3 million), which was fully collected subsequently on April 9, 2021. The disposition resulted in a gain from disposition of $136,050 for the year ended December 31, 2020. The discontinued equipment and engineering business represent a strategic shift that has a significant effect on the Group’s operations and financial results, which trigger discontinued operations accounting in accordance with FASB ASC 205-20-45. The assets and liabilities related to the discontinued operations are classified as assets/liabilities of discontinued operations, while results of operations related to the discontinued operations, including comparatives, were reported as income (loss) from discontinued operations. The results of discontinued operations for the years ended December 31, 2020, 2019 and 2018 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			2019			2018
REVENUE
Installation service	$	876,972		$	10,490,191		$	17,297,212
Fluid equipment sales		3,344,328			8,087,399			7,992,848
		4,221,300			18,577,590			25,290,060
COST OF REVENUE
Cost of revenue		(3,439,279	)		(12,882,094	)		(17,458,252	)
Business and sales related taxes		(22,759	)		(144,907	)		(253,856	)
GROSS PROFIT		759,262			5,550,589			7,577,952
OPERATING EXPENSES:
General and administrative expenses		1,226,966			1,484,200			2,127,288
Selling and marketing expenses		161,389			891,632			1,337,321
Bad debt expenses		22,376,509			2,079,837			6,990,348
Research and development expenses		-			337,480			358,411
Total operating expenses		23,764,864			4,793,149			10,813,368
(LOSS) INCOME FROM OPERATIONS		(23,005,602	)		757,440			(3,235,416	)
OTHER INCOME (EXPENSES)
Other expenses, net		72,170			1,253,778			(426,585	)
Interest (expenses)		(59,517	)		(158,119	)		(208,306	)
(Loss) income from investments		(90,541	)		153,554			168,534
Total other (expense), net		(77,888	)		1,249,213			(466,357	)
(Loss) income (Loss) before income taxes		(23,083,490	)		2,006,653			(3,701,773	)
Income tax expense (benefit)		23,576			498,330			(651,052	)
Net loss from discontinued operations	$	(23,107,066	)	$	1,508,323		$	(3,050,721	)

F-24

Note4 — DISCONTINUUED OPERATIONS - continued

The carrying amounts of major classes of assets and liabilities from discontinued operations in the consolidated balance sheets as of December 31, 2019 are as follow:

	December 31,<br>2019
CURRENT ASSETS:
Cash and cash equivalents
Restricted cash
Contracts receivable, net
Accounts receivable, net
Bank acceptance notes receivable
Inventories
Other receivables, net
Prepaid expenses and other current assets
TOTAL CURRENT ASSETS OF DISCONTINUED OPERATIONS
Property and equipment at cost, net of accumulated depreciation
Intangible asset, net
Retainage receivables, net
Operating lease right-of-use assets, net
Rent and other deposits
Equity investments
Deferred tax assets, net
TOTAL NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS
CURRENT LIABILITIES:
Short-term loans
Bank acceptance notes Payable
Accounts payable
Accrued expenses and other current liabilities
Operating lease liabilities
Advances from customers
Taxes payable
Due to Nisun International
TOTAL CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
Loan payable – long-term
Operating lease liabilities - non-current
TOTAL NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS

All values are in US Dollars.

Note5 — ACCOUNTS RECEIVABLES, NET

The accounts receivable consists of the following:

	December 31<br> 2020			December 31,<br> 2019
Accounts receivable	$	5,018,839		$	1,307,013
Less: allowance for doubtful accounts		(78,927	)		(73,975	)
Accounts receivable, net	$	4,939,912		$	1,233,038

F-25

Note6 — RECEIVABLES FROM SUPPLY CHAIN FINANCING

	December 31,<br> <br>2020		December 31,<br> 2019
Receivables related to supply chain financing	$	10,741,981	$	-
Less: allowance for doubtful accounts		-		-
Receivables related to supply chain financing business, net	$	10,741,981	$	-

The age of these financing receivables is generally within 12 months. Since the related suppliers pledge their inventory to guarantee the repayment of these receivables in the short term, no provision for doubtful accounts was recorded for the year ended December 31, 2020.

Note 7— LOANS TO THIRD PARTIES

Loans to third parties consist of the following:

	December 31,<br> 2020		December 31,<br> 2019
Jianuo Finance Lease (Shanghai) Co., Ltd. (“Jianuo”) ^(1)^	$	-	$	1,723,692
Shandong Daohong Industry and Trade Co., Ltd ^(2)^		-		711,023
Qingdao Manster Digital Technology Co., Ltd ^(3)^		-		2,872,820
Sichuan Jingpin Construction Decoration Engineering Co., Ltd ^(4)^		306,514		-
Henan Tianxia Kang Trading Co., Ltd ^(5)^		1,609,195		-
Total		1,915,709		5,307,535
Less: current portion		1,915,709		2,434,715
Loans to third parties – noncurrent portion	$	-	$	2,872,820
(1)	Hengpu<br>had a loan receivable of $1,723,692 (or RMB 12 million) from Jianuo Finance Lease (Shanghai) Co., Ltd.(“Jianuo”) The loan<br>earned interest of 1.2% and its principal and interest matured on January 10, 2020. The Group fully collected the loan receivable on<br>January 9, 2020.
---	---
(2)	Taiding, a subsidiary of the Group, made a loan of $711,023 (or RMB 4.95 million) to Shandong Daohong industry and Trade Co., Ltd. (“Daohong”) on December 26, 2019. The loan earned interest of 7% and its principal and interest matured on December 25, 2020. The Group fully collected the loan receivable on December 24, 2020.
---	---
(3)	Fintech,<br>had a loan receivable of $2,872,820 (or RMB 20 million) from Qingdao Manster Digital Technology Co., Ltd (“Manster”) that<br>earned interest of 4.8%. The principal of the loan was due on December 9, 2024 and the interest was due on an annual basis. The Group<br>fully collected the loan receivable on December 16, 2020.
---	---
(4)	Hengpu,<br>made a loan of $306,514 (or RMB 2 million) to Sichuan Jingpin Construction Decoration Engineering Co., Ltd (“Jingpin”) on<br>February 10, 2020. The loan earns interest of 18% and its principal and interest are due on February 10, 2021, which was subsequently<br>extended to June 10, 2021.
---	---
(5)	Taiding<br>made a loan of $1,609,195 (or RMB 10.5 million) to Henan Tianxia Kang Trading Co., Ltd (“Tianxia Kang”) on December 28, 2020.<br>The loan is interest free due to the short term and due on January 28, 2021. The loan was repaid on January 13, 2021.
---	---

The Group classifies loans to third parties as held-to-maturity investments, because the loans have a stated maturity and normally pay a fixed rate of return. In addition, the Group has the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded at amortized cost and are classified as long-term or short-term according to their contractual maturity.

F-26

Note8 — PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consists of the following:

	December 31,<br> 2020			December 31,<br> 2019
Transportation equipment	$	505,423		$	284,922
Office equipment		258,420			13,716
Electronic equipment		375,991			59,473
Leasehold improvements		388,792			18,244
Subtotal		1,528,626			376,355
Less: accumulated depreciation		(872,983	)		(89,298	)
Property, plant and equipment, net	$	665,643		$	287,057

Depreciation expense was $211,796 and $15,551 for the year ended December 31, 2020 and 2019, respectively.

Note9 — INTANGIBLE ASSETS, NET

The following is a summary of intangible assets as of December 31, 2020 and 2019:

	December 31,<br> <br>2020			December 31,<br> 2019
Software	$	479,000		$	185,215
Technology		4,551,724			4,266,138
Total intangible assets		5,030,724			4,451,353
Less: accumulated amortization		(1,304,122	)		(262,003	)
Intangible assets, net	$	3,726,602		$	4,189,350

Amortization expense was $ 945,744 and $226,858 for the year ended December 31, 2020 and 2019, respectively.

Note 10– INVESTMENT IN LIMITED PARTNERSHIP

During the year end December 31, 2020, the Group invested, as a limited partner, $15,589,966 (RMB101,724,531) into a Limited partnership (“LP”), which invests the funds in debt securities of private companies. Pursuant to the agreement, the LP’s investment in debt securities have a fixed interest rate of 8% starting in August 2020 for a term of 5 years. The interest is due on an annual basis. The Group values its investment in the LP at amortized cost and classified it as long-term according to the underlying debts contractual maturities. As of December 31, 2020, the carrying value of this investment principal was $15,589,966 (RMB101,724,531) and the Group accrued interest income of $146,961 (RMB 958,921) for the year ended December 31, 2020. For the year ended December 31, 2020, the Group did not recognize any impairment loss for the investment in the LP.

Note11—LEASES

Leases are classified as operating leases or finance leases in accordance with FASB ASC 842. The Group’s operating leases mainly relats to office facilities. For leases with terms greater than 12 months, the Group records the related right-of-use asset and lease liability at the present value of lease payments over the term. The right of use Asset is amortized using the straight-line method over the life of the lease. Certain leases include rental escalation clauses, renewal options and/or termination options, which are factored into the Group’s determination of lease payments when appropriate.

As of December 31, 2020, the weighted average remaining lease term was 1.99 years and the weighted average discount rate was 4.75% for the Group’s operating leases. The Group’s lease costs are included within cost of revenue, and selling and administrative expenses on the consolidated statements of operations. For the year ended December 31, 2020, the lease cost amounted to $578,689.

F-27

Note11—LEASES - continued

As of December 31, 2019, the weighted average remaining lease term was 3.75 years and the weighted average discount rate was 4.75% for the Group’s operating leases. The Group’s lease costs are included within selling and administrative expenses on the consolidated statement of operations. For the year ended December 31, 2019, the lease cost amounted to $63,749.

The future undiscounted aggregate minimum lease payments under non-cancellable operating leases are as follows as of December 31, 2020:

Year ended December 31, 2020	Amount
2021	$	783,955
2022		539,558
2023		154,367
2024		11,723
2025		-
thereafter		-
Total undiscounted future minimum lease payments		1,489,603
Less: Amounts representing interest		(72,619	)
Total present value of operating lease liabilities		1,416,984
Less: current portion of operating lease liabilities		(736,854	)
Non-current portion of operating lease liabilities	$	680,130

Note12 – INCOME TAXES

Taxes payable consisted of the following:

	December 31,<br> <br>2020		December 31,<br> 2019
Income taxes payable	$	2,045,559	$	57,761
Value added taxes payable		889,257		57,317
Business taxes payable		43,704		-
Withholding taxes payable		112,113		-
Other taxes payable		42,405		23,079
Total taxes payable	$	3,133,038	$	138,157

BVI

Nisun International, formerly known as Hebron Technology, and Nisun BVI were incorporated in the BVI and are not subject to income taxes under the current laws of the BVI.

Cayman

Nami Cayman is incorporated in the Cayman Islands and is not subject to income taxes under the current laws of the Cayman Islands.

Hong Kong

Nisun HK and Nami HK are registered in Hong Kong and subject to a corporate income tax of 17.5% if revenue is generated in Hong Kong. No revenue was generated in Hong Kong for the years ended December 31, 2020 and 2019.

F-28

Note12 – INCOME TAXES - continued

PRC

Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%. Starting from the year ended December 31, 2018, Hengpu was qualified as a High-technology Company and subject to a favorable income tax rate of 15%. Hengpu’s High-technology certificate is valid for three years starting from November 2018 and subject to renewal. Starting from the year ended December 31, 2020, Fintech was recognized as a High-technology Company by the Chinese government and is subject to a favorable income tax rate of 15%. In accordance with the implementation rules of the Income Tax Law of the PRC, for the enterprises newly established in the Horgos Development Zone within the scope of “preferential catalogue of income tax for key industries encouraged to develop in Xinjiang’s difficult areas”, the enterprise income tax shall be exempt for five years from the tax year of the first production and operations income. Khorgos is established in the Horgos Development Zone and its income is exempt for five years starting from 2019. The remaining Group’s subsidiaries VIEs and VIEs’ subsidiaries from the financial services business are subject to corporate income taxes at the PRC unified rate of 25%. The PRC does not allow the filling of consolidated tax returns and accordingly, each subsidiary and VIE and their subsidiaries file their own tax Returns.

i)	Thecomponents of the income tax provision (benefit) are as follows:
	For the year ended<br> December 31,<br> 2020			For the year ended<br> December 31,<br> 2019			For the year ended<br> December 31,<br> 2018
---	---	---	---	---	---	---	---	---
Current tax provision	$	1,525,824		$	-		$	-
Deferred tax provision (benefit)		(584,760	)		(55,731	)		-
Total	$	941,064		$	(55,731	)	$	-
ii)	Thefollowing table summarizes deferred tax assets resulting from differences between financial accounting basis and tax basis of assetsand liabilities and net operating loss carryforwards:
---	---
	December 31,<br> 2020			December 31,<br> 2019
---	---	---	---	---	---	---
Deferred tax assets
Provision for doubtful accounts	$	368,165		$	346,864
Operating loss carryforwards		456,370			1,015,053
Total deferred tax assets		824,535			1,361,917
Less: valuation allowance		(368,165	)		(1,341,877	)
Net deferred tax assets	$	456,370		$	20,040

The change in valuation allowance for the year ended December 31, 2020, and 2019 amounted to $ 973,712, and $ 1,341,877, respectively.

	December 31,<br> 2020		December 31,<br> 2019
Deferred tax liabilities
Intangible assets acquired from business combinations	$	676,015	$	805,826
Total deferred tax liabilities	$	676,015	$	805,826

F-29

Note12 – INCOME TAXES - continued

The following table reconciles the China statutory rates to the Group’s effective tax rate for the year ended, 2020 and 2019:

	For the year ended<br> December 31,<br> 2020
China Income tax statutory rate		25.0	%	25.0	%	-
Effect of favorable income tax rates		(23.8	)%	(25	)%	-
Effect of temporary differences		1.2	%	(4.7	)%	-
Effect of non-deductible expenses		10	%	-		-
Effect of previous year net operating loss		(3.8	)%	-		-
Effective tax rate for the continuing operation		8.7	%	(4.7	)%	-
*	For<br>the year ended December 31, 2018, all the Group business was related to the equipment and engineering businesses, which was disposed in<br>November 2020 and included in discontinued operations.
---	---

The Group continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. As of December 31, 2020, the tax years ended December 31, 2018 through December 31, 2020 for the Group’s PRC subsidiaries and VIEs remain open for statutory examination by PRC tax authorities.

The per share effect of favorable income tax rates for the year ended December 31, 2020, and 2019 were $0.14, and $ 0.02, respectively.

Note13 — CONCENTRATION OF MAJOR CUSTOMERS

Substantially all of the Group’s financial services revenue is derived from customers that are located primarily in China. The Group has a concentration of its revenues with specific customers. For the year ended December 31, 2020, three customers accounting for 31%, 21% and 12% of the Group’s total revenue. For the year ended December 31, 2019, one customer accounts for approximately 100% of the Group’s total revenue from the financial services business. As of December 31, 2020, three customers accounted for approximately 45%, 20% and 17%, of the Group’s total accounts receivable balance. As of December 31, 2019, one customer accounted for approximately 62% of the Group’s total accounts receivable balance.

Note14 — SHAREHOLDERS’ EQUITY

The Group has 50,000,000 authorized common shares at $0.001 par value, consisting of 40,000,000 authorized Class A common shares and 10,000,000 Class B common shares, of which 20,555,129 and 17,710,471 Class A common shares were issued and outstanding as of December 31, 2020 and 2019, respectively. No Class B common shares were issued and outstanding as of December 31, 2020 and 2019.

On June 14, 2019, the Shareholders of the Group approved a share transfer transaction by Wise Metro Development Co., Ltd., a British Virgin Islands company (“Wise”) and Mr. Zuoqiao Sun Zhang, a citizen of Guatemala (“Sun Zhang”); and together with Wise, (“Sellers”) of all of such Sellers’ Class B common shares of the Group to NiSun International Enterprise Management Group Co., Ltd., a company organized under the laws of Cayman Islands (“NiSun Cayman”). Upon the close of the transaction, NiSun Cayman purchased (i) Wise’s 1,800,000 Class B common shares of The Group and (ii) Sun Zhang’s 5,978,400 Class B common shares of The Group, which constituted approximately 47.8% of all of The Group’s outstanding common shares at the time of the Closing on a fully diluted basis (Wise’s and Sun Zhang’s Class B common shares are referred to as the “Shares”). The Shares were automatically converted into Class A common shares upon transfer from the Sellers to the Buyer, and upon such transfer the Group had no remaining issued and outstanding Class B common shares. Upon this conversion, the Shares are entitled to one vote per share. The transaction was closed in July 2019.

Additional paid-in capital

On November 20, 2019, NiSun Cayman, the controlling shareholder of the Group, contributed additional capital of $3,582,781 which has been shown as additional paid-in capital. On June 30, 2020, Nisun Cayman contributed additional capital of $4,550,000 which has been shown as additional paid-in capital.

F-30

Note14 — SHAREHOLDERS’ EQUITY - continued

Shares issued for acquisition of Hengpu

In connection of the acquisition of Hengpu on December 31, 2019, the Group issued 1,440,894 Class A common shares to the original shareholders of Hengpu as purchase consideration. The fair value of the purchase consideration was $11,426,289 based on the weighted average of the closing share price of the Group for five trading days up to the date immediately prior to the signing date of purchase agreement.

Private placement 2019

On December 6, 2019, the Group and certain institutional investors entered into a share purchase agreement pursuant to which the Group sold 1,048,932 Class A common shares at $6.21 per share. The transaction was closed on May 1, 2020 and the Group received net proceeds of $6,503,378.

Shares issued for acquisition of Nami

In connection of the acquisition of Nami on May 31, 2020, the Group issued 1,562,726 Class A common shares to the shareholders of Nami as purchase consideration. The fair value of the stock consideration was $18,330,776 based on the weighted average of the closing share price of the Group for five trading days up to the date immediately prior to the signing date of purchase agreement.

Share incentive plan

The Board of directors approved the 2019 One Million Share Incentive Plan (the “2019 Plan”) on December 20, 2019, which permits the grant of restricted shares and options to employees, directors, officers and consultants to purchase the Group’s Class A common shares. The maximum aggregate number of Class A common shares, which may be issued pursuant to all awards under the 2019 Plan, is 1 million shares. The Plan is valid and effective for a term of ten years commencing from its adoption.

On April 6, 2020, the Board granted an aggregate of 300,000 restricted Class A common shares to the Group’s CFO and two officers of which 67,000 shares were subsequently forfeited and cancelled. The fair value of these restricted Class A common shares was $1,721,870, determined using the closing price of $7.39 on April 6, 2020. Pursuant to the agreement, one-third (33%) of the shares of restricted stock issued will vest on the date of the grant and the first anniversary of the date of grant; and the remaining 34% will vest on the second anniversary of the date of the grant. For the year ended December 31, 2020 and 2019, the Group recognized shares-based compensation of $1,097,415 and $0, respectively. As of December 31, 2020, the Group had unrecognized share-based compensation of $624,455, which is expected to be recognized in the remaining 1.25 years.

Note15 — RELATED PARTY TRANSACTIONS

The table below sets forth major related parties of the Group and their relationships with the Group:

Entity or individual name	Relationship with the Group
Shanghai<br> NiSun Enterprise Management Group Co., Ltd (“NiSun Shanghai”)	An affiliated entity controlled by the ultimate controlling shareholder of the Group
Huizhong<br> Business Consulting (Beijing) Co., Ltd. (“Huizhong”)	An affiliated entity controlled by the ultimate controlling shareholder of the Group
Nisun International Enterprise<br> Management Group Co., Ltd (“Nisun Cayman”)	A shareholder who owns 37.8% equity interest of the Group
Mr. Bodang Liu	The ultimate controlling shareholder of the Group
Mr. Anyuan Sun	Former Chief executive officer of the Group
Mr. Jian Lin	The shareholder of Wenzhou Jinda
Hong Kong Xibolun Technology<br> Limited (“Hebron HK”)	The entity disposed on November 30, 2020

F-31

Note15 — RELATED PARTY TRANSACTIONS - continued

(a)	The<br>Group entered into the following related party transactions:

Starting on July 12, 2019, the Group rented an office from NiSun Shanghai and incurred $127,565 and $63,749 of rent expense for the year ended December 31, 2020 and 2019, respectively.

The Group has commercial arrangements with Huizhong to provide small and medium enterprise financing solution services. In connection with these services provided by Nami to Huizhong $3,908,134 (RMB26,982,503) was recorded as revenue from Small and Medium Enterprise financing solutions in the consolidated statement of operations for the period from the acquisition date May 31,2020 through December 31, 2020.

(b)	The<br> Group had the following significant related party balances:

During the year ended December 31, 2020, Nisun Cayman advanced $10,528,965 (RMB 69,883,631) as a loan to the Group. The loan is due on demand and without interest.

As of December 31, 2020, the Group had a due to related party balance of $393,148 owing to Mr. Bodang Liu. For the year ended December 31, 2020, the Group paid approximately $6.5 million (RMB 45.9 million) related to the purchase price payable the for acquisition of Nisun BVI. As of December 31, 2019, the Group had a due to related party balance of $7,345,399 owning to Mr. Bodang Liu, of which, $7 million was related to the purchase price payable for the acquisition of NiSun BVI. The due to related party balance is non-interest bearing and due on demand.

As of December 31, 2020, and 2019, the Group had a due to related party balance of $1,379,310 and $0, respectively, payable to Nisun Shanghai, an affiliated entity controlled by our controlling shareholder. The due to related party balance is non-interest bearing and was repaid on February 26, 2021.

As of December 31, 2020, and 2019, the Group had a due to related party balance of $0 and $414,044, respectively, due to Mr. Anyuan Sun, the former chief executive officer of the Group. The due to related party balance is non-interest bearing and was offset against the the amount due from the sale of discontinued operations for the disposition of Hebron HK.

As of December 31, 2020, and 2019, the Group had a due to related party balance of $298,851 and $280,100, respectively, due to Mr. Jian Lin, the shareholder of Wenzhou Jinda. The Group owns a 23.08% equity interest in Wenzhou Jinda. The due to related party balance is non-interest bearing and due on demand.

As of December 31, 2019, the Group had a due from discontinued operations of $9,201,432 related to Hebron HK and its affiliates, which was received during the year ended December 31, 2020. For the year ended December 31, 2020, the Group disposed of Hebron HK and the Purchaser - Wise Metro Development Co., Ltd. agreed to pay approximately $15.0 million (RMB98.3 million) in accordance with the Equity Transfer Agreement. As of December 31,2020, the Group has a receivable from sale of discontinued operations of approximately $15.0 million from the disposition, which was fully collected in April 2021.

Note16 — COMMITMENTS AND CONTINGENCIES

The Group may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Group determines whether an estimated loss for a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Group was not aware of any litigation, lawsuits or claims against them as of December 31, 2020 except for the following.

On June 3, 2020, a short seller issued a report alleging that, among other things, the private placement the Group consummated in December 2019, Hengpu and Nami acquisitions were related party transactions which the Group failed to disclose. The Group had conducted an independent investigation by special counsel that concluded that the allegations were substantially unfounded. A shareholder class action lawsuit was filed against the Group and certain of the Group’s directors and officers. On March 19, 2021, the Group submitted a motion to the court to dismiss this lawsuit. No decision has been made by the court and it is unclear when a decision will be made. Although the ultimate outcome is uncertain at this time, the Group will defend its position vigorously and believes that the ultimate outcome will not have a material adverse effect on its financial position.

Note17 — SUBSEQUENT EVENTS

On January 15, 2021, Fintech incorporated a majority-owned subsidiary, Inner Mongolia Fintech Supply Chain Management Co., Ltd. (“Fintech Mongolia”), in the Inner Mongolia Province, China. On January 15, 2021, Fintech incorporated another subsidiary, Fintech Supply Chain Management (Ningbo) Co., Ltd (“Fintech Ningbo”) in Zhejiang Province, China. Both subsidiaries provide a technology-driven integrated supply chain financing in China.

In December 2020, based on a preliminary agreement with the local government, the Group established a wholly owned subsidiary, Nisun (Shandong) Industry Development Co., Ltd (“Nisun Shandong”), in Tai’an, Shandong province. Nisun Shandong is a holding company for our existing PRC operating subsidiaries and is expected to be a key operations platform. In March 2021, the ownership of Naqing transferred to Nisun Shandong from Nami HK

F-32

Note18 — RESTRICTED NET ASSETS

The Group’s ability to pay dividends is primarily dependent on the Group receiving distributions of funds from its subsidiaries and VIEs. Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s subsidiaries and VIEs incorporated in the PRC only out of their retained earnings, after required statutory reserves, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Group’s subsidiaries and VIEs.

In accordance with the PRC laws and regulations, statutory reserve funds shall be made and can only be used for specific purposes and are not distributable as cash dividends. As a result of these PRC laws and regulations that require annual appropriation of 10% of net after-tax profits determined in accordance with PRC accounting standards and regulations to be set aside prior to payment of dividends as a general reserve fund or statutory surplus fund until such reserve reaches 50% of the registered capital. The Group’s PRC subsidiaries and VIEs are restricted in their ability to transfer a portion of their net assets to the Group. For the years ended December 31, 2020 and 2019, the statutory reserve balance for the Group’s entities established in the PRC was $2,190,847 and $516,193, respectively.

Note 19 — CONDENSEDFINANCIAL INFORMATION OF THE PARENT COMPANY

The Group performed a test on the restricted net assets of its consolidated subsidiaries and VIEs (the “restricted net assets”) in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements”. Such restricted net assets amounted to approximately $46.5 million, or 60.5% of the Group’s total consolidated net assets, as of December 31, 2020. Based upon this percentage, the Group is required to disclose the financial information for the parent company.

No dividends have been paid to the Group for the periods presented. For the purpose of presenting parent only financial information, the group records it investment in its subsidiaries under the equity method of accounting. Such investment is presented on the separate consolidated balance sheets as “Investment in Subsidiaries, VIEs and VIEs’ subsidiaries” and the income of the subsidiaries, VIEs and VIEs’ subsidiaries as “Share of Profit (Loss) in Subsidiaries, VIEs and VIEs’ subsidiaries.” Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

The Group did not have any significant or other commitments, long-term obligations or guarantees as of December 31, 2020 and 2019.

F-33

ADDITIONAL

FINANCIAL INFORMATION OF PARENT COMPANY

a)	Condensed<br> parent company balance sheets
			December 31,<br> 2019
---	---	---	---	---	---
Assets:
Cash and cash equivalents	2,426		$	5,213
Prepayments and advances, net	-			38,221
Due from intercompany and others	14,951,086			6,147,054
TOTAL CURRENT ASSETS	14,953,512			6,190,488
Investment in subsidiaries, VIE, and VIEs’ subsidiaries	61,889,007			48,218,876
TOTAL ASSETS	76,842,519		$	54,409,364
LIABILITIES
CURRENT LIABILITIES
Accrued expenses and other current liabilities	-		$	464,044
TOTAL CURRENT LIABILITIES	-			464,044
Commitments and contingencies
Shareholders’ equity
Class A common stock, 0.001 par value, 40,000,000 shares authorized, 20,555,129 and 17,710,471 shares issued and outstanding as of December 31, 2020 and 2019, respectively.	20,555			17,710
Class B common stock, 0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and 2019	-			-
Additional paid-in capital	59,472,255			28,369,076
Unearned compensation	(624,455	)		-
Retained earnings	14,380,976			27,472,766
Accumulated other comprehensive income (loss)	3,593,188			(1,914,232	)
Total shareholders’ equity	76,842,519			53,945,320
Total liabilities and shareholders’ equity	76,842,519		$	54,409,364

All values are in US Dollars.

b)	Condensed<br> statements of comprehensive income (loss)
	For the year ended December 31,
---	---	---	---	---	---	---	---	---
	2020		2019			2018
Selling and marketing			$	(15,005	)	$	-
Administrative		)		(408,656	)		(2,093,307	)
Other income (expense)				(820	)		(686	)
Share of profit (loss) in subsidiaries, VIEs and VIEs’ subsidiaries		)	$	3,164,471		$	(3,050,722	)
Net income (loss)		)		2,739,990			(5,144,715	)
Other comprehensive income
Foreign currency translation adjustment				(561,091	)		(1,755,528	)
Comprehensive income (loss)		)	$	2,178,899		$	(6,900,243	)

All values are in US Dollars.

F-34

ADDITIONAL

FINANCIAL INFORMATION OF PARENT COMPANY

c)	Condensed<br> statement of cash flows
	For the years ended December 31,
---	---	---	---	---	---	---	---	---	---
	2020			2019			2018
Cash flows from operating activities:
Net income(loss)	$	(13,092,293	)	$	2,739,990		$	(5,144,715	)
Adjustments to reconcile net income to net cash used in operating activities
Share of profit (loss) in subsidiaries, VIEs and VIEs’ subsidiaries		11,992,091			(3,164,471	)		3,050,722
Shares-based compensation		1,097,415			-			-
Impairment charge recognized		-			-			923,094
Due from intercompany and others		-			(38,561	)		1,170,749
Accrued expenses and other current liabilities		-			467,648			-
Net cash provided by (used in) operating activities		(2,787	)		4,606			(150	)
Net (decrease)/increase in cash and cash equivalents		(2,787	)		4,606			(150	)
Cash and cash equivalents at beginning of the year		5,213			607			757
Cash and cash equivalents at end of the year	$	2,426		$	5,213		$	607

Basisof presentation

Condensed financial information is used for the presentation of the Group, or the parent company. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that the parent company uses the equity method to account for investment in its subsidiaries and VIEs.

The parent company records its investment in its subsidiaries and VIEs under the equity method of accounting as prescribed in FASB ASC 323, Investments-Equity Method and Joint Ventures. Equity method accounting ceases when the carrying amount of the investment, including any additional financial support, in a subsidiary and VIE is reduced to zero unless the parent company has guaranteed obligations of the subsidiary and VIE or is otherwise committed to provide further financial support. If the subsidiary and VIE subsequently reports net income, the parent company shall resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.

The parent company’s condensed financial statements should be read in conjunction with the Group’s consolidated financial statements.

F-35

Exhibit2.2

Descriptionof Securities

Registeredunder Section 12 of the Securities Exchange Act of 1934

As of December 31, 2020, NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD (“Nisun International,” the “Company,” “we,” “us,” and “our”) had one class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, as follows:

Title of each class	Symbol	Name of each exchange on which registered
Class A common shares, par<br> value $0.001 per share	NISN	Nasdaq Capital Market

CommonShares

Under our memorandum and articles of association, as amended, the Company is authorized to issue a maximum of 50,000,000 common shares divided into (i) 40,000,000 Class A Common Shares of a nominal or par value of US$0.001 each and (ii) 10,000,000 Class B Common Shares of a nominal or par value of US$0.001 each. As of December 31, 2020, 20,555,129 Class A Common Shares were issued and outstanding and 0 Class B Common Share issued and outstanding. The Class A Common Shares are registered for trading on the NASDAQ Capital Market under the trading symbol NISN.

Capitalized terms used but not defined herein shall have the meanings given to them in the annual report on Form 20-F.

This Exhibit sets forth a description of our common shares and certain provisions of our memorandum and articles of association which are summaries and are qualified in their entirety by reference to the full text of our Fourth Amended and Restated Memorandum and Articles of Association, which was previously filed as exhibit 1.1 to the Company’s current report on Form 6-K on November 16, 2020 (referred to hereafter as our “Memorandum and Articles”).

DividendDistributions

The holders of our common shares are entitled to such dividends as may be declared by our board of directors subject to the BVI Business Companies Act.

Votingrights

Any action required or permitted to be taken by the shareholders must be effected at a duly called annual or special meeting of the shareholders entitled to vote on such action and may be effected by a resolution in writing. At each shareholder’s meeting, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will be entitled to one vote for each Class A common share which such shareholder holds and be entitled to five votes for each Class B Common Share which such shareholder holds on all matters subject to vote at each shareholders’ meeting of the Company.

Electionof directors

Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of the British Virgin Islands, however, do not specifically prohibit or restrict the creation of cumulative voting rights for the election of our directors. Cumulative voting is not a concept that is accepted as a common practice in the British Virgin Islands, and we have made no provisions in our memorandum and articles of association to allow cumulative voting for elections of directors.

Meetings

We must provide written notice of all meetings of shareholders, stating the time, place and, in the case of a special meeting of shareholders, the purpose or purposes thereof, at least 7 days before the date of the proposed meeting to those persons whose names appear as shareholders in the register of members on the date of the notice and are entitled to vote at the meeting. Our board of directors shall call a special meeting upon the written request of shareholders holding at least 30% of our outstanding voting shares. In addition, our board of directors may call a special meeting of shareholders on its own motion. A meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90 percent of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all the shares which that shareholder holds.

The management of us is entrusted to our board of directors, who will make corporate decisions by board resolution. Our directors are free to meet at such times and in such manner and places within or outside the BVI as the directors determine to be necessary or desirable. A 3 days’ notice of a meeting of directors must be given. At any meeting of directors, a quorum will be present if half of the total number of directors is present, unless there are only 2 directors in which case the quorum is 2. If a quorum is not present, the meeting will be dissolved. If a quorum is present, votes of half of present directors are required to pass a resolution of directors.

As few as one third of our outstanding shares may be sufficient to hold a shareholder meeting. Although our memorandum and articles of association require that holders of at least one-third of our outstanding shares appear in person or by proxy to hold a shareholder meeting, to the extent we fail to have quorum on this initial meeting date, we can reschedule the meeting for the next business day or later, at which second meeting the holders of one third or more of our outstanding shares will constitute a quorum. As mentioned, at the initial date set for any meeting of shareholders, a quorum will be present if there are shareholders present in person or by proxy representing not less than one-third of the issued common shares entitled to vote on the resolutions to be considered at the meeting. A quorum may comprise a single shareholder or proxy and then such person may pass a resolution of shareholders and a certificate signed by such person accompanied where such person be a proxy by a copy of the proxy instrument shall constitute a valid resolution of shareholder. If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved; in any other case it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the directors may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the shares or each class or series of shares entitle to vote on the matter to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. No business may be transacted at any general meeting unless a quorum is present at the commencement of business. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders.

A corporation that is a shareholder shall be deemed for the purpose of our memorandum and articles of association to be present in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.

Protectionof minority shareholders

We would normally expect British Virgin Islands courts to follow English case law precedents, which permit a minority shareholder to commence a representative action, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) the act complained of constitutes an infringement of individual rights of shareholders, such as the right to vote and pre-emptive rights and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.

Pre-emptiverights

There are no pre-emptive rights applicable to the issue by us of new common shares under either British Virgin Islands law or our memorandum and articles of association.

Transferof common shares

Subject to the restrictions in our memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his or her common shares by written instrument of transfer signed by the transferor and containing the name and address of the transferee. Our board of directors may resolve by resolution to refuse or delay the registration of the transfer of any common share. If our board of directors resolves to refuse or delay any transfer, it shall specify the reasons for such refusal in the resolution. Our directors may not resolve or refuse or delay the transfer of a common share unless: (a) the person transferring the shares has failed to pay any amount due in respect of any of those shares; or (b) such refusal or delay is deemed necessary or advisable in our view or that of our legal counsel in order to avoid violation of, or in order to ensure compliance with, any applicable, corporate, securities and other laws and regulations.

Liquidation

If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay all amounts paid to us on account of the issue of shares immediately prior to the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the amount paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the amounts paid to us on account of the issue of shares, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the amounts paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up, the liquidator appointed by us may, in accordance with the BVI Business Companies Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of 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 and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.

Callson common shares and forfeiture of common shares

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their common shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The common shares that have been called upon and remain unpaid are subject to forfeiture.

Redemptionof common shares

Subject to the provisions of the BVI Business Companies Act, we may issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such terms and in such manner as may be determined by our memorandum and articles of association and subject to any applicable requirements imposed from time to time by, the BVI Business Companies Act, the SEC, The NASDAQ Capital Market, or by any recognized stock exchange on which our securities are listed.

Modificationsof rights

All or any of the special rights attached to any class of shares may, subject to the provisions of the BVI Business Companies Act, be amended only pursuant to a resolution passed at a meeting by a majority of the votes cast by those entitled to vote at a meeting of the holders of the shares of that class.

Changesin the number of shares we are authorized to issue and those in issue

We may from time to time by resolution of our board of directors:

●	amend<br>our memorandum of association to increase or decrease the maximum number of shares we are authorized to issue;
●	subject<br>to our memorandum, divide our authorized and issued shares into a larger number of shares; and
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●	subject<br>to our memorandum, combine our authorized and issued shares into a smaller number of shares.

Untraceableshareholders

We are entitled to sell any shares of a shareholder who is untraceable, provided that:

●	all<br>checks or warrants in respect of dividends of these shares, not being less than three in number, for any sums payable in cash to the<br>holder of such shares have remained uncashed for a period of twelve years prior to the publication of the notice and during the three<br>months referred to in the third bullet point below;
●	we<br>have not during that time received any indication of the whereabouts or existence of the shareholder or person entitled to these shares<br>by death, bankruptcy or operation of law; and
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●	we<br>have caused a notice to be published in newspapers in the manner stipulated by our memorandum and articles of association, giving notice<br>of our intention to sell these shares, and a period of three months has elapsed since such notice.
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●	The<br>net proceeds of any such sale shall belong to us, and when we receive these net proceeds we shall become indebted to the former shareholder<br>for an amount equal to the net proceeds.
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Inspectionof books and records

Under British Virgin Islands Law, holders of our common shares are entitled, upon giving written notice to us, to inspect (i) our memorandum and articles of association, (ii) the register of members, (iii) the register of directors and (iv) minutes of meetings and resolutions of members, and to make copies and take extracts from the documents and records. However, our directors can refuse access if they are satisfied that to allow such access would be contrary to our interests. See “Where You Can Find Additional Information.”

Rightsof non-resident or foreign shareholders

There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

Issuanceof additional common shares

Our memorandum and articles of association authorizes our board of directors to issue additional common shares from authorized but unissued shares, to the extent available, from time to time as our board of directors shall determine.

Differencesin Corporate Law

The BVI Business Companies Act and the laws of the British Virgin Islands affecting British Virgin Islands companies like us and our shareholders differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the laws of the British Virgin Islands applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

Mergersand similar arrangements

Under the laws of the British Virgin Islands, two or more companies may merge or consolidate in accordance with Section 170 of the BVI Business Companies Act. A merger means the merging of two or more constituent companies into one of the constituent companies and a consolidation means the uniting of two or more constituent companies into a new company. In order to merge or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation, which must be authorized by a resolution of shareholders.

While a director may vote on the plan of merger or consolidation even if he has a financial interest in the plan, the interested director must disclose the interest to all other directors of the company promptly upon becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the company.

A transaction entered into by our company in respect of which a director is interested (including a merger or consolidation) is voidable by us unless the director’s interest was (a) disclosed to the board prior to the transaction or (b) the transaction is (i) between the director and the company and (ii) the transaction is in the ordinary course of the company’s business and on usual terms and conditions.

Notwithstanding the above, a transaction entered into by the company is not voidable if the material facts of the interest are known to the shareholders and they approve or ratify it or the company received fair value for the transaction.

Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision which, if proposed as an amendment to the memorandum or articles of association, would entitle them to vote as a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote at the meeting to approve the plan of merger or consolidation.

The shareholders of the constituent companies are not required to receive shares of the surviving or consolidated company but may receive debt obligations or other securities of the surviving or consolidated company, other assets, or a combination thereof. Further, some or all of the shares of a class or series may be converted into a kind of asset while the other shares of the same class or series may receive a different kind of asset. As such, not all the shares of a class or series must receive the same kind of consideration.

After the plan of merger or consolidation has been approved by the directors and authorized by a resolution of the shareholders, articles of merger or consolidation are executed by each company and filed with the Registrar of Corporate Affairs in the British Virgin Islands.

A shareholder may dissent from a mandatory redemption of his shares, an arrangement (if permitted by the court), a merger (unless the shareholder was a shareholder of the surviving company prior to the merger and continues to hold the same or similar shares after the merger) or a consolidation. A shareholder properly exercising his dissent rights is entitled to a cash payment equal to the fair value of his shares.

A shareholder dissenting from a merger or consolidation must object in writing to the merger or consolidation before the vote by the shareholders on the merger or consolidation, unless notice of the meeting was not given to the shareholder. If the merger or consolidation is approved by the shareholders, the company must give notice of this fact to each shareholder within 20 days who gave written objection. These shareholders then have 20 days to give to the company their written election in the form specified by the BVI Business Companies Act to dissent from the merger or consolidation, provided that in the case of a merger, the 20 days starts when the plan of merger is delivered to the shareholder.

Upon giving notice of his election to dissent, a shareholder ceases to have any shareholder rights except the right to be paid the fair value of his shares. As such, the merger or consolidation may proceed in the ordinary course notwithstanding his dissent.

Within seven days of the later of the delivery of the notice of election to dissent and the effective date of the merger or consolidation, the company must make a written offer to each dissenting shareholder to purchase his shares at a specified price per share that the company determines to be the fair value of the shares. The company and the shareholder then have 30 days to agree upon the price. If the company and a shareholder fail to agree on the price within the 30 days, then the company and the shareholder shall, within 20 days immediately following the expiration of the 30-day period, each designate an appraiser and these two appraisers shall designate a third appraiser. These three appraisers shall fix the fair value of the shares as of the close of business on the day prior to the shareholders’ approval of the transaction without taking into account any change in value as a result of the transaction.

Shareholders’suits

There are both statutory and common law remedies available to our shareholders as a matter of British Virgin Islands law. These are summarized below:

Prejudicedmembers

A shareholder who considers that the affairs of the company have been, are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive, unfairly discriminatory or unfairly prejudicial to him in that capacity, can apply to the court under Section 184I of the BVI Business Companies Act, inter alia, for an order that his shares be acquired, that he be provided compensation, that the Court regulate the future conduct of the company, or that any decision of the company which contravenes the BVI Business Companies Act or our memorandum and articles of association be set aside.

Derivativeactions

Section 184C of the BVI Business Companies Act provides that a shareholder of a company may, with the leave of the Court, bring an action in the name of the company to redress any wrong done to it.

Justand equitable winding up

In addition to the statutory remedies outlined above, shareholders can also petition for the winding up of a company on the grounds that it is just and equitable for the court to so order. Save in exceptional circumstances, this remedy is only available where the company has been operated as a quasi partnership and trust and confidence between the partners has broken down.

Indemnificationof directors and executive officers and limitation of liability

British Virgin 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 provision providing indemnification may be held by the British Virgin Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime.

Under our memorandum and articles of association, we indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings for any person who:

●	is<br>or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative<br>or investigative, by reason of the fact that the person is or was our director; or
●	is<br>or was, at our request, serving as a director or officer of, or in any other capacity is or was acting for, another body corporate or<br>a partnership, joint venture, trust or other enterprise.
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These indemnities only apply if the person acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Anti-takeoverprovisions in our memorandum and articles of association

Some provisions of our memorandum and articles of association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that provide for a staggered board of directors and prevent shareholders from taking an action by written consent in lieu of a meeting. However, under British Virgin Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association, as amended and restated from time to time, as they believe in good faith to be in the best interests of our company.

Directors’fiduciary duties

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a transaction that is material to the company. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.

Under British Virgin Islands law, our directors owe the company certain statutory and fiduciary duties including, among others, a duty to act honestly, in good faith, for a proper purpose and with a view to what the directors believe to be in the best interests of the company. Our directors are also required, when exercising powers or performing duties as a director, to exercise the care, diligence and skill that a reasonable director would exercise in comparable circumstances, taking into account without limitation, the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken. In the exercise of their powers, our directors must ensure neither they nor the company acts in a manner which contravenes the BVI Business Companies Act or our memorandum and articles of association, as amended and re-stated from time to time. A shareholder has the right to seek damages for breaches of duties owed to us by our directors.

Shareholderaction by written consent

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. British Virgin Islands law provides that shareholders may approve corporate matters by way of a written resolution without a meeting signed by or on behalf of shareholders sufficient to constitute the requisite majority of shareholders who would have been entitled to vote on such matter at a general meeting; provided that if the consent is less than unanimous, notice must be given to all non-consenting shareholders. Our memorandum and articles of association permit shareholders to act by written consent.

Shareholderproposals

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum and articles of association allow our shareholders holding not less than 30% of the votes of the outstanding voting shares to requisition a shareholders’ meeting. We are not obliged by law to call shareholders’ annual general meetings, but our memorandum and articles of association do permit the directors to call such a meeting. The location of any shareholders’ meeting can be determined by the board of directors and can be held anywhere in the world.

Cumulativevoting

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under British Virgin Islands law, our memorandum and articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

Removalof directors

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, directors can be removed from office, with cause, by a resolution of shareholders or by a resolution of directors passed at a meeting of directors called for the purpose of removing the director or for purposes including the removal of the director.

Transactionswith interested shareholders

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors. British Virgin Islands law has no comparable statute.

Dissolution;Winding Up

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under the BVI Business Companies Act and our memorandum and articles of association, we may appoint a voluntary liquidator by a resolution of the shareholders or by resolution of directors.

Variationof rights of shares

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, if at any time our shares are divided into different classes of shares, the rights attached to any class may only be varied, whether or not our company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by the holders of not less than 50 percent of the issued shares in that class.

Amendmentof governing documents

Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, our memorandum and articles of association may be amended by a resolution of shareholders and, subject to certain exceptions, by a resolution of directors. Any amendment is effective from the date it is registered at the Registry of Corporate Affairs in the British Virgin Islands.

Exhibit 4.13

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement (this “Agreement”) is made and entered into as of May 12, 2020 by and among (i) Hebron Technology Co., Ltd., a British Virgin Islands limited company (the “Purchaser”), (ii) Nami Holding (Cayman) Co., Ltd., an exempt company organized under the law of the Cayman Islands (the “Company”), and (iii) Nami Holding (BVI) Co., Ltd (SPV), a British Virgin Islands limited company (the “Seller”). The Purchaser, the Company and the Seller are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” Capitalized terms, unless otherwise defined, shall have the meanings ascribed to such terms in Article hereof.

RECITALS:

WHEREAS, the Seller owns 100% of the issued and outstanding shares of the Company (the “Shares”), and the Company provides financial advisory services through its direct and indirect subsidiaries and contractually controlled affiliate in the P.R. China (the “Business”);

WHEREAS, the Company directly holds 100% issued and outstanding shares of Nami Holding (Hong Kong) Co., Limited, a company organized under the law of Hong Kong Special Administrative Region of P.R. China (“Nami HK”), which in turn holds 100% shares of Shanghai Naqing Financial Consulting Co., Ltd, a company organized under the law of P.R. China (“WFOE”), and WFOE effectively controls Shanghai Nami Financial Consulting Co., Ltd (the “Operating Company”) through a series of agreements with the Operating Company and its shareholders (Nami HK, WFOE and the Operating Company are referred to herein individually as a “Subsidiary,” and collectively as the “Subsidiaries”);

WHEREAS, the Purchaser is a company with its Class A common shares listed on the NASDAQ Capital Market with the ticker symbol “HEBT”;

WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, all of the issued and outstanding shares of the Company (and thereby all the interests in the Subsidiaries) in accordance with and subject to the terms and conditions of this Agreement (the “Transaction”).

NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE IDEFINITIONS

1.1. Definitions. The following terms, as used herein, have the following meanings:

“Act” or “Securities Act” means United States Securities Act of 1933, as amended.

“Action” means any action, suit, investigation, hearing or proceeding, including any audit for taxes or otherwise.

“Additional Agreements” means any other agreement and/or instruments that all parties hereto agree to enter into for the transaction contemplated in this Agreement.

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with such other Person. With respect to any natural person, the term Affiliate shall also include any member of said person’s immediate family, any family limited partnership, limited liability company or other entity in which said person owns any beneficial interest and any trust, voting or otherwise, of which said person is a trustee or of which said person or any of said person’s immediate family is a beneficiary.

“Agreement” means this Share Purchase Agreement.

“Arbitrator” has the meaning set forth in Section 12.1(b).

“Appraised Value” means the market value of the Company which is determined by an independent appraiser in accordance with common practice appraisal procedures in the industry on the market value and prospects of the Company.

“Authority” shall mean any governmental, regulatory or administrative body, agency or authority, any court or judicial authority, any arbitrator, or any public, private or industry regulatory authority, whether international, national, Federal, state, or local.

“Books and Records” means all books and records, ledgers, employee records, customer lists, files, correspondence, and other records of every kind (whether written, electronic, or otherwise embodied) owned or used by the Company and its Subsidiaries or in which the Company’s or any Subsidiaries’ assets, business, or transactions are otherwise reflected.

“Business” has the meaning set forth in the Recitals.

“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in China are not open for business.

“Charter Documents” has the meaning set forth in Section 3.3.

“Closing” has the meaning set forth in Section 2.2

“Closing Date” has the meaning set forth in Section 2.2

“Closing Share Price” means, with respect to each Trading Day, the closing price of the shares of the Purchaser as reported on the NASDAQ Capital Market.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the Preamble.

“Company Consent” has the meaning set forth in Section3.8.

“Company Indemnitees” has the meaning set forth in Section 11.2.

“Contracts” has the meaning set forth in Section 3.15(a).

“Core Employees” means any employee of the Company who is a member of senior management personnel, or a senior executive member of the Subsidiaries.

“Employment Agreements” means the agreements between the Subsidiaries and the Core Employees.

“Exchange Act” means the Securities Exchange Act of 1934.

“Exchange Act Filings” means filings under the Exchange Act made by the Purchaser prior to the Closing Date.

“GAAP” means generally accepted accounting principles, consistently applied and interpreted in the People’s Republic of China.

“Indebtedness” includes with respect to any Person, (a) all obligations of such Person for borrowed money, or with respect to deposits or advances of any kind (including amounts by reason of overdrafts and amounts owed by reason of letter of credit reimbursement agreements) including with respect thereto, all interest, fees and costs, (b) all obligations of such Person evidenced by bonds, debentures, notes, liens, mortgages or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than accounts payable to creditors for goods and services incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any lien or security interest on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (f) all obligations of such Person under leases required to be accounted for as capital leases under GAAP, and (g) all guarantees by such Person.

“Intellectual Property” means any and all of the following: (A) U.S., international and foreign patents, patent applications and statutory invention registrations; (B) trademarks, licenses, inventions, service marks, trade names, trade dress, slogans, logos and Internet domain names, including registrations and applications for registration thereof; (C) copyrights, including registrations and applications for registration thereof, the software and copyrightable materials; (D) trade secrets, know-how and similar confidential and proprietary information; (E) u.r.l.s, Internet domain names and Websites; and (F) any other type of Intellectual Property right in each case which is owned or filed by the Company (or by the Seller with respect to the Company) or any Subsidiaries whether registered or unregistered or domestic or foreign.

“Knowledge of the Company” or “Company’s Knowledge” means, with respect to any matter in question, the actual knowledge of any executive officer of the Company after reasonable inquiry.

“Law” means, with respect to any Person, any national, provincial or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

“Leases” has the meaning set forth in Section 3.12.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, including any agreement to give any of the foregoing and any conditional sale and including any voting agreement or proxy.

“Lock-Up Agreements” means each of the Lock-Up Agreements for lock up of the shares of Purchaser as hold by the Seller, between the Purchaser, the Seller and other relevant parties in the form to be agreed to by Seller after the date of this Agreement.

“Losses” has the meaning set forth in Section 11.1.

“Material Adverse Change” means a material adverse change in the business, assets, condition (financial or otherwise), liabilities, results of operations or prospects of the Business individually or in the aggregate; provided, however, without prejudicing whether any other matter qualifies as a Material Adverse Change, any matter individually or in the aggregate involving a loss or payment in excess of $100,000 shall constitute a Material Adverse Change, per se, provided that, except to the extent that any of the following disproportionately affect the Company and the Subsidiaries, taken as a whole, compared to similarly situated businesses, none of the following shall be deemed to constitute a Material Adverse Effect or shall be taken into account in determining whether a Material Adverse Change has occurred or would reasonably be expected to occur (A) any changes (after the date hereof) in GAAP or applicable Law, (B) any acts of God or acts of war, armed hostilities, sabotage or terrorism, (C) any changes in general economic, business or market conditions or affecting United States or foreign economies in general or (D) any changes in conditions affecting the industries or markets in which the Company operates.

“Material Adverse Effect” means a material adverse effect on the business, assets, condition (financial or otherwise), liabilities, results of operations or prospects of the Business individually or in the aggregate; provided, however, without prejudicing whether any other matter qualifies as a Material Adverse Effect, any matter individually or in the aggregate involving a loss or payment in excess of $100,000 shall constitute a Material Adverse Effect, per se, provided that, except to the extent that any of the following disproportionately affect the Company and the Subsidiaries, taken as a whole, compared to similarly situated businesses, none of the following shall be deemed to constitute a Material Adverse Effect or shall be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur (A) any changes (after the date hereof) in GAAP or applicable Law, (B) any acts of God or acts of war, armed hostilities, sabotage or terrorism, (C) any changes in general economic, business or market conditions or affecting United States or foreign economies in general or (D) any changes in conditions affecting the industries or markets in which the Company operates.

“Offices” means offices, warehouses or business locations of the Company and each Subsidiaries.

“Order” means any decree, order, judgment, writ, award, injunction, rule or consent of or by an Authority.

“Outside Closing Date” has the meaning set forth in Section 13.1.

“Owned Intellectual Property” has the meaning set forth in Section 3.13(a).

“Permits” has the meaning set forth in Section 3.16.

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.

“PRC” means the People’s Republic of China, but solely for the purposes of this Agreement and the other Additional Agreements, excluding Hong Kong, Macau and Taiwan.

“Proceeding” has the meaning set forth in Section 3.21(b).

“Purchaser” has the meaning set forth in the Preamble.

“Purchaser Common Shares” means the Class A common shares, $0.001 par value per share, of Purchaser which is issued to Seller or its nominees as the Purchase Price.

“Purchase Price” has the meaning set forth in Section 2.3(a)

“Real Property” means, collectively, all real properties and interests therein (including the right to use), together with all buildings, fixtures, trade fixtures, plant and other improvements located thereon or attached thereto; all rights arising out of the use thereof (including air, water, oil and mineral rights); and all subleases, franchises, licenses, permits, easements and rights-of-way which are appurtenant thereto.

“Regulation D” has the meaning set forth in Section 4.5(a).

“SEC” means the Securities and Exchange Commission.

“Shares” means all the issued and outstanding shares of the Company, which is currently owned by Nami Holding (BVI) Co., Ltd (SPV), free and clear of any Liens.

“Subsidiary” or “Subsidiaries” means one of the Company’s direct or indirect subsidiaries or entities contractually controlled by such subsidiaries, or all of the Company’s direct and indirect subsidiaries and entities contractually controlled by such subsidiaries, as applicable.

The organizational structure of the Company and its Subsidiaries is illustrated substantially in the form attached hereto as Exhibit A.

“Tangible Assets” means all tangible personal property and interests therein, including inventory, machinery, computers and accessories, furniture, office equipment, communications equipment, and other tangible property.

“Tax” has the meaning set forth in Section 3.21(c).

“Tax Liability” has the meaning set forth in Section 3.21(b).

“Tax Return” has the meaning set forth in Section 3.21(c). “Third Party Claim” has the meaning set forth in Section 11.3(a).

“Trading Day” means any day when the NASDAQ Capital Market is open for trading.

“Transaction” has the meaning set forth in the Recitals.

“Website(s)” shall mean all of the internet domain names for the Company.

ARTICLE II

PURCHASE AND SALE OF SHARES

2.1. Purchase and Saleof Shares. At the Closing and subject to and upon the terms and conditions of this Agreement, the Seller shall sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller, free and clear of all Liens, the Shares, which represent all of the Seller’s ownership interests in the Company and its Subsidiaries.

2.2. Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Kaufman & Canoles, P.C., Two James Center, 14th Floor, 1021 East Cary Street, Richmond, Virginia 23219, at 4:00 p.m., Eastern Time, on the second Business Day after all conditions to the Closing set forth in hereof have been satisfied or waived, or such other place, time or date as the Purchaser and the Seller agree in writing. The date of the Closing shall be referred to herein as the “Closing Date.” The Parties intend that the Closing Date shall be on or around May 31, 2020. In addition to those obligations set forth elsewhere in the Agreement, at the Closing:

(a) the Purchaser shall deliver the Purchaser Price (as set forth in Section 2.3 below) to the Seller; and

(b) the Seller shall deliver (or to cause to be delivered by the Seller) to the Purchaser stock certificate(s) evidencing the Shares held by it, together with duly executed stock transfer deeds, which shall be duly stamped and shall be executed in favor of the Purchaser.

2.3. Purchase Price.

(a) The aggregate purchase price for the Shares shall be the Appraised Price determined by an independent appraiser mutually appointed by the Purchaser and the Seller (the “Purchase Price”). The Purchaser and the Seller agree to engage Valuelink to appraise owner’s equities of the Company for the purpose of determination of the Appraised Price. The Purchaser and the Seller acknowledge that the appraisal report attached hereto as Exhibit B (the “Appraisal Report”) reflects the market value of the Company and the total purchase price for the Shares shall be Renminbi one hundred eighty million (RMB 180,000,000). The Purchase Price shall be paid by the Purchaser to the Seller by means of Renminbi fifty million (RMB 50,000,000) in cash and certain number of the Purchaser’s common shares, which in no case shall exceed 9.9% of the Purchaser’s total issued and outstanding Common Shares immediately before Closing, with the restrictions set forth in the Transaction according to Section 6.5 herein (the “Purchase Common Shares”). The number of Purchaser Common Shares payable to the Seller pursuant to this Section 2.3(a) shall be calculated by (A) Renminbi one hundred eighty million (RMB 180,000,000) minus Renminbi fifty million (RMB 50,000,000), and then divided by (B) the weighted average of the Closing Share Price (“VWAP”) of the Purchaser Common Shares for five (5) Trading Days up to the date immediately prior to the date of this Agreement, provided however, that the VWAP shall not be lower than the Closing Share Price as of the Closing of the Trading Date immediately prior to the date of this Agreement, and with the number of Purchaser Common Shares rounded up to the nearest whole number. Based on this, the VWAP of $11.73 shall be used, the Purchaser shall issue 1,562,726 new Common Shares to the Seller.

(b) The Parties agree that the payment and delivery of Renminbi fifty million (RMB 50,000,000) and the Purchaser Common Shares to the Seller shall be made at the Closing Date. The Purchaser shall deliver to the Sellers as to the Purchaser Common Shares book entry shares or stock certificate(s) which shall be duly stamped and shall be executed in favor of the Sellers or its nominees.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OFTHE COMPANY AND THE SELLER

The Company and the Seller hereby represent and warrant to the Purchaser:

3.1. Corporate Existenceand Power. The Company and the Subsidiaries are duly formed, validly existing and in good standing under and by virtue of the Laws of the jurisdiction of its organization, and has all power and authority, corporate and otherwise, and all governmental licenses, franchises, permits, authorizations, consents and approvals required to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. Neither the Company nor any Subsidiaries has taken any action, adopted any plan, or made any agreement in respect of any Transaction, consolidation, sale of all or substantially all of its respective assets, reorganization, recapitalization, dissolution or liquidation, except as explicitly set forth in this Agreement.

3.2. CorporateAuthorization. The execution, delivery and performance by each of Company and the Seller of this Agreement and each of the Additional Agreements to which any of the Company and the Seller are named as a party and the consummation by the Company and the Seller of the transactions contemplated hereby and thereby are within the corporate powers of the Company and the Seller and have been duly authorized by all necessary action on the part of the Company and the Seller. This Agreement constitutes, and, upon their execution and delivery, each of the Additional Agreements will constitute, a valid and legally binding agreement of the Company and the Seller, enforceable against the Company and the Seller in accordance with their respective terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, or (ii) rules of law governing specific performance, injunctive relief or other equitable remedies.

3.3. Charter Documents; Legality. The Company has heretofore made available to the Purchaser true and complete copies of the certificate of incorporation, articles of association, bylaws, operating agreements or other comparable organizational documents minute books and stock books, if applicable (the “Charter Documents”), as in effect or constituted on the date hereof. The execution, delivery, and performance by the Company and the Seller of this Agreement and any Additional Agreement to which the Company or any other party hereto is to be a party has not violated and will not violate, and the consummation of the transactions contemplated hereby or thereby will not violate, any of the Charter Documents or any Law. The Company has not taken any action that is in violation of its Charter Documents.

3.4. Subsidiaries. The Company and each of the Subsidiaries are not a party to any agreement relating to the formation of any joint venture, association or other Person. The Exhibit A of this Agreement discloses all of the outstanding shares of such Subsidiaries, which are validly issued, fully paid and non-assessable and are held free and clear of any Liens; (ii) there are no consignments, contracts and/or equity transfer arrangements, options, warrants or other contractual rights or arrangements outstanding which give any Person the right to acquire or Control any capital stock or any substantial part of assets of any such Subsidiaries whether or not such right is presently exercisable, except that between WFOE and the Operating Company; and (iii) there are no contracts and/or equity transfer arrangements, options, warrants or other contractual rights (oral or written), trusts or other arrangements of any nature which give any Person the right to any stock rights or equity interests in or from any such Subsidiaries, except that between WFOE and the Operating Company.

3.5. Capitalization andOwnership. No Person other than the Seller owns any securities of the Company. There is no Contract that requires or under any circumstance would require the Company or any Subsidiaries to issue, or grant any right to acquire, any securities of the Company or any Subsidiaries, or any security or instrument exercisable or exchangeable for or convertible into, the capital stock or membership interest of the Company or any Subsidiaries or to merge, consolidate, dissolve, liquidate, restructure, or recapitalize the Company or any Subsidiaries. The Shares and the securities of each Subsidiaries (i) have been duly authorized and validly issued and are fully paid and nonassessable, and (ii) were issued in compliance with all applicable Laws.

3.6. Affiliates. Other than the Seller, the Company and the Subsidiaries are not controlled by any Person and are not under the control of any other Person. With respect to related party transaction Schedule 3.6 lists each Contract, arrangement, or understanding to which the Company, the Subsidiaries and the Seller or any Affiliate of the Seller, the Company or the Subsidiaries is a party. Except as disclosed in Schedule 3.6, neither the Seller, nor the Company nor the Subsidiaries nor any of their respective Affiliates (i) own, directly or indirectly, in whole or in part, any tangible or intangible property (including Intellectual Property rights) that the Company or any Subsidiaries uses or the use of which is necessary for the conduct of the Business, or (ii) have engaged in any transaction with the Company or any Subsidiaries.

3.7. AssumedNames. Schedule 3.7 is a complete and correct list of all assumed or “doing business as” names currently or formerly used by the Company or any Subsidiaries. Neither the Company nor any Subsidiaries has used any name other than the names listed on Schedule 3.7 to conduct its business. The Company and each Subsidiaries have filed appropriate “doing business as” certificates in all applicable jurisdictions. Except as indicated on Schedule 3.7, all Websites are in good working order.

3.8. Consents. The Contracts listed on Schedule 3.8 are the only on-going material agreements, commitments, arrangements, contracts or other instruments binding upon the Company, any Subsidiaries or any of their respective properties requiring a consent, approval, authorization, order or other action of or filing with any Person as a result of the execution, delivery or performance of this Agreement or any of the Additional Agreements or the consummation of the transactions contemplated hereby or thereby (each of the foregoing, a “Company Consent”).

3.9. Financial Statements.

(a) The Audited Financial Statements as of and for each of the two fiscal years ended December 31, 2018 and 2019 (i) have been prepared from the Books and Records; (ii) except as set forth on Schedule 3.9, have been prepared in accordance with GAAP; (iii) fairly and accurately present the Company’s financial condition and the results of its operations as of their respective dates and for the periods then ended; (iv) contain and reflect all necessary adjustments and accruals for a fair presentation of the Company’s financial condition as of their dates; (v) contain and reflect adequate provisions for all reasonably anticipated liabilities for all material income, property, sales, payroll or other Taxes applicable to the Company with respect to the periods then ended, and (vi) all liabilities of the Company are disclosed in the Audited Financial Statements and there are no other liabilities.

(b) Except as specifically disclosed on the Audited Financial Statements and the consolidated, unaudited financial statements of the Company as of or for the period ending March 31, 2020 (the “Interim Financial Statements”) and for liabilities and obligations of a similar nature and in similar amounts incurred in the ordinary course of business since the date of the Interim Financial Statements and except as set forth on Schedule 3.9(b), there are no debts relating to the Company.

(c) The Audited Financial Statements and the Interim Financial Statements accurately reflects the outstanding Indebtedness of the Company as of the respective dates thereof.

(d) All Books and Records of the Company have been properly and accurately kept and completed in all material respects, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein. The Company has none of its records, systems controls, data or information recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any mechanical, electronic or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) is not under the exclusive ownership (excluding licensed software programs) and direct control of the Company and which is not located at the Offices or at locations set forth on Schedule 3.9(d).

3.10. Books and Records.

(a) The Books and Records accurately and fairly, in reasonable detail, reflect the Company and any of the Subsidiaries’ transactions and dispositions of assets. The Company and any of the Subsidiaries maintain a system of internal accounting controls to procure:

(i) transactions are executed in accordance with management’s authorization;

(ii) access to assets is permitted only in accordance with management’s authorization; and

(iii) recorded assets are compared with existing assets at reasonable intervals, and appropriate action is taken with respect to any differences.

(b) The Company and any of the Subsidiaries have heretofore made all of its Books and Records available to the Purchaser for its inspection and has heretofore delivered to the Purchaser complete and accurate copies of documents referred to in the Schedules or as the Purchaser otherwise has requested.

3.11. Absence of Certain Changes.

(a) Except as set forth in Schedule 3.11(a), since their respective incorporation date, the Company and each Subsidiaries have conducted its respective business in the ordinary course of business, and with respect to the Company and each Subsidiaries other than in the ordinary course of business there has not been:

(i) any income or fund of the Company or its Subsidiaries which has not been stated in the Audited Financial Statements;

(ii) any capital expenditure except in the ordinary course of business consistent with past practice (including with respect to kind and amount);

(iii) any sale, lease, license or other disposition of any of its assets except (i) pursuant to existing Contracts or commitments disclosed herein and (ii) sales of products or inventory in the ordinary course of business consistent with past practice;

(iv) acceptance of any returns except in the ordinary course of business, consistent with past practice (including with respect to kind and amount);

(v) the incurrence of Liens on any of its assets;

(vi) any transaction or consolidation with or acquisition of any other Person;

(vii) any change in its accounting principles or methods;

(viii) any change in location where it conducts business;

(ix) any extension of any loans, other than travel or other expense advances to employees in the ordinary course of business consistent with past practice, exceeding $30,000 individually;

(x) any dividend or distribution to the shareholder; or

(xi) any agreement to do any of the foregoing.

(b) Except as set forth on Schedule 3.11(b) and actions taken in good faith to invest in the Company’s Business, since execution of this Agreement, through and including the Closing Date, neither the Company nor any Subsidiaries have taken any action nor have had any event occur that would have violated any covenants of the Company and the Seller set forth in ARTICLE VI hereof.

3.12. Real Property. The use and operation of the Real Property or real property lease (the “Leases”) by the Company or its Subsidiaries are in full compliance in all material respects with covenants, conditions, restrictions, easements, disposition agreements and similar matters affecting the Real Property and, effective as of the Closing, each of the Company and its Subsidiaries shall have the right under all Laws to continue the use and operation of the Real Property in the conduct of their businesses. Neither the Company nor any Subsidiaries have breached or violated and is not in default under any of the Leases, the breach or violation of which could individually or in the aggregate have a Material Adverse Effect, and no notice from any Person has been received by the Company or any Subsidiaries or served upon the Company, any Subsidiaries or the Seller claiming any violation of any Lease.

(a) Each piece of Tangible Assets is in operating condition and repair and functions in accordance with its intended use (ordinary wear and tear excepted), has been properly maintained, and is suitable for its present uses.

(b) The Company or any of the Subsidiaries have, and upon consummation of the transactions contemplated hereby and in the Additional Agreements will continue to have, good, valid and marketable title in and to each piece of Tangible Assets free and clear of all Liens, except as set forth on Schedule 3.13(b).

(c) The Company or any of the Subsidiaries has good title to, or valid leasehold or license interest in, all its respective properties and assets (whether tangible or intangible), free and clear of all Liens. The personal and other properties and assets owned by the Company or any Subsidiaries or leased or licensed by the Company or any Subsidiaries from a third party constitute all such properties and assets used in and necessary to the Business as presently conducted and as presently proposed to be conducted.

(d) Other than those possessed by the Company or its Subsidiaries’ employees with the purchase invoice amount above RMB 5,000 as disclosed in the Schedule 3.13(d) of the Disclosure Schedule, all Tangible Assets are located at the Offices.

3.13. Intellectual Property.

(a) Schedule 3.13(a)(i) sets forth a true and complete list of all Intellectual Property rights owned by the Company or any Subsidiaries (the “Owned Intellectual Property”).

(b) The Owned Intellectual Property, together with the licensed intellectual property rights which the Company and the Subsidiaries can obtain from the public market without substantial difficulties, constitute all the Intellectual Property necessary to, or used or held for use in, the conduct of the business of the Company and the Subsidiaries as currently conducted. The consummation of the transactions contemplated by this Agreement will not alter, encumber, impair or extinguish any Owned Intellectual Property.

(c) Neither the Company’s nor any Subsidiaries’ ownership and use in the ordinary course of the Owned Intellectual Property infringes upon or misappropriates valid Intellectual Property rights, privacy rights or other right of any third party. There is no Proceeding (as defined below) pending against, or, to the Knowledge of the Company, threatened against or affecting, the Company, any of the Subsidiaries, any present or former officer, director or employee of the Company or any of the Subsidiaries (i) based upon, or challenging or seeking to deny or restrict, the rights of the Company or any Subsidiaries in any of the Owned Intellectual Property, (ii) alleging that the use of the Owned Intellectual Property or any services provided, processes used or products manufactured, used, imported or sold by the Company or any Subsidiaries do or may conflict with, misappropriate, infringe or otherwise violate any Intellectual Property of any third party or (iii) alleging that the Company or any of the Subsidiaries have infringed, misappropriated or otherwise violated any Intellectual Property of any third party. None of the Company and any Subsidiaries have received from any third person an offer to license any Intellectual Property rights of such third person.

(d) Except as set forth in Schedule 3.13(d), the Company or any Subsidiaries are entitled to use, and is using in the Business, the Owned Intellectual Property in the ordinary course. The Company and the Subsidiaries hold all right, title and interest in and to all Owned Intellectual Property, free and clear of any Lien. In each case where a patent or patent application, trademark registration or trademark application, service mark registration or service mark application, or copyright registration or copyright application included in the Owned Intellectual Property is held by assignment, the assignment has been duly recorded with the Authority from which the patent or registration issued or before which the application or application for registration is pending. To the Knowledge of the Company, the Company and the Subsidiaries have taken all actions necessary to maintain and protect the Owned Intellectual Property, including payment of applicable maintenance fees and filing of applicable statements of use.

(e) To the Knowledge of the Company, no Person has infringed, misappropriated or otherwise violated any Owned Intellectual Property. The Company and the Subsidiaries have taken reasonable steps in accordance with normal industry practice to maintain the confidentiality of all confidential Intellectual Property. None of the Intellectual Property of the Company or any Subsidiaries that are material to the business or operation of the Company or any Subsidiaries and the value of which to the Company or any Subsidiaries are contingent upon maintaining the confidentiality thereof, has been disclosed other than to employees, representatives and agents of the Company or any Subsidiaries all of whom are bound by written confidentiality agreements substantially in the form previously disclosed to the Purchaser.

3.14. Litigation. Except as set forth in Schedule 3.14, there is no Action (or any basis therefor) pending against, or to the Knowledge of the Company or any Subsidiaries, threatened against or affecting the Company or any Subsidiaries, any of their respective officers or directors, the Seller, the business of the Company or any Subsidiaries before any court or arbitrator or any governmental body, agency or official or which in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated hereby and in the Additional Agreements. There are no outstanding judgments against the Company or any Subsidiaries. Neither the Company nor any Subsidiaries are now, nor have they been in the past five years, subject to any proceeding with the Federal Trade Commission or the Equal Employment Opportunity Commission or any comparable body of any state or political subdivision in China.

3.15. Contracts.

(a) Each contract to which the Company or any Subsidiaries are a party (each, a “Contract”) is a valid and binding agreement, and is in full force and effect, and neither the Company nor any Subsidiaries, as applicable, nor, to the Knowledge of the Company or any Subsidiaries, any other party thereto, is in breach or default (whether with or without the passage of time or the giving of notice or both) under the terms of any such valid and binding Contract. Neither the Company nor any Subsidiaries has assigned, delegated, or otherwise transferred any of its rights or obligations with respect to any Contracts, or granted any power of attorney with respect thereto. The Company and each Subsidiaries have given a list of each material valid and binding Contract to Purchaser with contract value higher than $30,000.

(b) Schedule 3.15(b) lists each material valid and binding Contract (other than the Charter Documents) of the Company and each of Subsidiaries, including:

(i) any sales, distribution or other similar Contract providing for the sale by the Company or any Subsidiaries of materials, supplies, goods, services, equipment or other assets;

(ii) any Contract for the purchase of materials, supplies, goods, services, equipment or other assets providing for either (A) annual payments by the Company and the Subsidiaries of $30,000 or more or (B) aggregate payments by the Company and the Subsidiaries of $30,000 or more;

(iii) (A) any lease of real property or (B) any lease of personal property providing for either annual rental payments of $30,000 or more or aggregate rental payments of $30,000 or more;

(iv) any partnership, joint venture or other similar Contract;

(v) any Contract relating to the acquisition or disposition of any business (whether by merger, sale of stock, sale of assets or otherwise) or any real property;

(vi) any Contract (A) relating to Indebtedness (in either case, whether incurred, assumed, guaranteed or secured by any asset) or (B) creating or granting a material Lien (including Liens upon properties acquired under conditional sales, capital leases or other title retention or security devices), other than Permitted Liens;

(vii) any Contract under which the Company or any Subsidiaries have, directly or indirectly, made any loan, capital contribution to, or other investment in, any Person (other than (x) any loan to, capital contribution to, or other investment in any wholly-owned Subsidiaries and (y) interests in marketable securities acquired, in the ordinary course of business consistent with past practices);

(viii) any Contract that contains any provisions (A) restricting the Company or any Subsidiaries from competing in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any benefit or right is required to be given or lost as a result of so competing or engaging, or (B) which would have any such effect on any Person who acquires all of the outstanding capital stock of the Company;

(ix) any Contract that (A) grants any exclusive license, exclusive supply or exclusive distribution rights or other exclusive rights, (B) grants any “most favored nation” rights, rights of first refusal, rights of first negotiation or similar rights with respect to any product, service or Intellectual Property rights, or (C) contains any provision that requires the purchase of all or a given portion of the Company’s or any Subsidiaries’ requirements from a given third party, or any other similar provision;

(x) any Contract (including any prime contract, subcontract, teaming agreement or arrangement, joint venture, basic ordering agreement, letter contract, purchase order, delivery order, change order or other arrangement of any kind in writing) (A) between the Company or any Subsidiaries and (x) any Authority (acting on its own behalf or on behalf of another country or international organization), (y) any prime contractor to any Authority or (z) any subcontractor with respect to any contract described in clauses (x) or (y) above, (B) financed by any Authority or (C) subject to the rules and regulations of any Authority concerning procurement;

(xi) any Contract entered into in the last five years in connection with the settlement or other resolution of any Proceeding that (A) has any continuing material obligations, liabilities or restrictions, (B) involves any Intellectual Property rights or (C) involved payment of more than $10,000;

(xii) any Contract with (A) the Company or any of its Affiliates, (B) any Person directly or indirectly owning, controlling or holding with power to vote, 5% or more of the outstanding voting securities of the Company or any of its Affiliates, (C) any Person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by the Company or any of its Affiliates or (D) any director or officer of the Company or any of its Affiliates or any “associates” or members of the “immediate family” (as such terms are respectively defined in Rule 12b-2 and Rule 16a-1 of the 1934 Act) of any such director or officer; or

(xiii) any other “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC, other than those agreements and arrangements described in Item 601(b)(10)(iii)) with respect to the Company and the Subsidiaries, taken as whole

3.16. Licenses and Permits. Each of the Company and its Subsidiaries possess all permits necessary for the ownership and operation of their businesses (the “Permits”). True, complete and correct copies of the Permits issued to the Company and its Subsidiaries have previously been delivered to the Purchaser. Such Permits are valid and in full force and effect and, assuming the related Company Consents, if any, have been obtained or waived prior to the Closing Date, none of the Permits will be terminated or impaired or become terminable as a result of the transactions contemplated hereby. The Company or any Subsidiaries has all Permits necessary to operate the Business other than those Permits whose absence individually or in the aggregate would not cause a Material Adverse Effect.

3.17. Employees. Schedule 3.17 sets forth a true and complete list of the names, ID numbers and titles of the employees of the Company and each of Subsidiaries as of the execution date of this agreement.

3.18. Employment Contracts The Core Employees shall have entered into employment agreements, including customary confidentiality clauses, non-competition clauses and Intellectual Property assignment clauses with the Company or any of Subsidiaries (the “Employment Agreements”), the terms and conditions of which may ensure that the Core Employees keep confidential of information of the Company or Subsidiaries during the employment period and after the employment period; the Core Employees shall not directly or indirectly conduct a Business to compete with the Company or its Subsidiaries during the employment period and within one (1) year after the employment period, or for at least three (3) years following the Closing Date of this Agreement, whichever is later; and all the Intellectual Property developed by the Core Employees during the employment period shall be owned by the Subsidiaries. The photocopies of such Employment Agreements have been delivered to the Purchaser.

3.19. Compliance withLabor Laws and Agreements. The Company and each of the Subsidiaries have complied with all applicable Laws and Orders relating to employment or labor other than those Laws and Orders with which it could fail to comply, either individually or in the aggregate, without causing a Material Adverse Effect. No present or former employee, officer or director of the Company or any Subsidiaries has, or will have at the Closing Date, any claim for any matter including for wages, salary, vacation, severance, or sick pay except for the same incurred in the ordinary course of business for the last payroll period prior to the Closing Date. There is no:

(a) unfair labor practice complaint against the Company or any Subsidiaries pending before the labor Authority;

(b) pending labor strike or other material labor trouble affecting the Company or any Subsidiaries;

(d) pending representation question respecting the employees of the Company or any Subsidiaries; or

(e) pending arbitration proceeding arising out of or under any collective bargaining agreement to which the Company or any Subsidiaries are a party.

In addition, to the Company’s Knowledge: (i) none of the matters specified in Sections (a) through (e) above is threatened against the Company or any Subsidiaries; (ii) no union organizing activities have taken place with respect to the Company or any Subsidiaries; and (iii) no basis exists for which a claim may be made under any collective bargaining agreement to which the Company or any Subsidiaries are a party.

3.20. Employment Matters. The Audited Financial Statements contain an accurate and complete list of each director’s and officer’s incentive, bonus, profit sharing, retirement, deferred compensation, equity, phantom equity, option, equity purchase, equity appreciation right or severance plan of the Company now in effect or under which the Company has or might have any obligation, or any understanding between the Company and any employee concerning the terms of such employee’s employment that does not apply to such company’s employees generally.

3.21. Tax Matters.

(a) Compliance Generally. Where required by law, the Company has (A) duly and timely filed all Tax Returns required to be filed on or prior to the Closing Date, which Tax Returns are true, correct and complete in all material respects, and (B) duly and timely paid all Taxes due and payable in respect of all periods up to and including the date which includes the Closing Date or has made adequate provision in its books and records and the Audited Financial Statements in accordance with GAAP for any such Tax which is not due on or before such time. Prior to the Closing Date, the Company shall provide the Purchaser with a schedule, which sets forth each Taxing jurisdiction in which the Company or Subsidiaries have filed or are required to file Tax Returns and whether the Company or Subsidiaries have filed consolidated, combined, unitary or separate income or franchise Tax Returns with respect to each such jurisdiction, and a copy of such Tax Returns as shall have been requested by the Purchaser. Any Tax Returns of the Company filed subsequent hereto and on or prior to the Closing Date were or will be consistent with the Tax Returns furnished to the Purchaser and did not and will not make, amend or terminate any election with respect to any Tax or change any accounting method, practice or procedure. The Company and each Subsidiaries have complied with all applicable Law relating to the reporting, payment, collection and withholding of Taxes and has duly and timely withheld or collected, paid over and reported all Taxes required to be withheld or collected on or before the date hereof.

(b) No Audit. (A) No taxing authority has asserted any adjustment that could result in an additional Tax for which the Company or any Subsidiaries are or may be liable or that could result in a Lien on any of its assets which has not been fully paid or adequately provided for on the Interim Financial Statements (collectively, “Tax Liability”), or which adjustment, if asserted in another period, would result in any Tax Liability, (B) there is not pending any audit, examination, investigation, dispute, proceeding or claim (collectively, “Proceeding”) relating to any Tax Liability and, to the Knowledge of the Company, no taxing authority is contemplating such a Proceeding and there is no basis for any such Proceeding, (C) no statute of limitations with respect to any Tax Liability has been waived or extended (unless the period to which it has been waived or extended has expired), (D) there is no outstanding power of attorney authorizing anyone to act on behalf of the Company or any Subsidiaries in connection with any Tax Liability, Tax Return or Proceeding relating to any Tax, (E) there is not any outstanding closing agreement, ruling request, request to consent to change a method of accounting, subpoena or request for information with or by any taxing authority with respect to the Company or any Subsidiaries, its income, assets or business, or any Tax Liability, (F) the Company or any Subsidiaries are not required to include any adjustment under Section 481 of the Code (or any corresponding provision of applicable Law) in income for any period ending after the Closing Date, (G) the Company or any Subsidiaries are not and has never been a party to any Tax sharing or Tax allocation agreement, arrangement or understanding, (H) the Company or any Subsidiaries are not and has never been included in any consolidated, combined or unitary Tax Return, (I) all taxable periods for the assessment or collection of any Tax Liability are closed by agreement or by operation of the normal statute of limitations (without extension) or will close by operation of the normal statute of limitations for such Taxes (in each case determined without regard to any omission, fraud or other special circumstance other than the timely filing of the Tax Return), and (J) no taxing authority has ever asserted that the Company or any Subsidiaries should file a Tax Return in a jurisdiction where it does not file.

(c) Taxes and Tax Return Defined. For purposes of this Agreement, “Tax” shall mean all federal, state, local and foreign tax, charge, fee, levy, deficiency or other assessment of whatever kind or nature (including without limitation, any net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, unemployment, excise, estimated, severance, stamp, occupation, real property, personal property, intangible property, occupancy, recording, minimum, environmental and windfall profits tax), including any liability therefor as a transferee, as a result of any Tax sharing or similar agreement, together with any interest, penalty, addition to tax or additional amount imposed by any federal, state, local or foreign taxing authority. For purposes of this Agreement, “Tax Return” includes any return, declaration, report, claim for refund or credit, information return or statement, and any amendment thereto, including without limitation any consolidated, combined or unitary return or other document (including any related or supporting information or schedule), filed or required to be filed with any federal, state, local or foreign governmental entity or agency in connection with the determination, assessment, collection or payment of Taxes or the administration of any laws, regulations or administrative requirements relating to Taxes.

3.22. Business Operations;Servers. Each of the Company and Subsidiary owns all of its servers and other computer equipment (other than webservers) necessary to operate its Business as conducted as of the date hereof and as such Business will be conducted as of the Closing.

3.23. Powers of Attorneyand Suretyships. Neither the Company nor any Subsidiaries have any general or special powers of attorney outstanding (whether as grantor or grantee thereof) or any obligation or liability (whether actual, accrued, accruing, contingent, or otherwise) as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the obligation of any Person.

3.24. Other Information. Neither this Agreement, nor any of the documents or other information made available to the Purchaser or its Affiliates, attorneys, accountants, agents or representatives pursuant hereto or in connection with the Purchaser’s due diligence review of the Business or the transactions contemplated by this Agreement contained, contains or will contain any untrue statement of a material fact.

3.25. Money LaunderingLaws. The operations of the Company and each Subsidiaries are and have been conducted at all times in compliance with laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental authority (collectively, the “Money Laundering Laws”) and no Action involving the Company or any Subsidiaries with respect to the Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents to the Purchaser as follows, and at the Closing the Seller will represent:

4.1. Ownership of Shares; Authority.

(a) The Seller have good and marketable title to the Shares, free and clear of any and all Liens.

(b) The Seller have full legal capacity, power and authority to execute and deliver this Agreement and the Additional Agreements to which it is named as a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. This Agreement and the Additional Agreements to which the Seller is named as a party have been, or at Closing will be, duly executed and delivered by the Seller and are, or upon their execution and delivery will be, valid and legally binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, or (ii) rules of law governing specific performance, injunctive relief or other equitable remedies.

(c) Neither the execution and delivery by the Seller of any or all of this Agreement and the Additional Agreements to which the Seller is a party, nor the consummation by the Seller of the transactions contemplated thereby, will (i) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, or require any notice, consent or waiver under, any instrument, contract, agreement or arrangement to which the Seller is a party or by which the Seller is bound, or (ii) result in the imposition of any Lien upon the Shares.

4.2. Approvals. Except as contemplated by this Agreement, no consent, approval, waiver, authorization or novation is required to be obtained by the Seller from, and no notice or filing is required to be given by the Seller to or made by the Seller with, any Authority or other Person in connection with the execution, delivery and performance by the Seller of this Agreement and each of the Additional Agreements, and the sale and transfer of the Shares.

4.3. Non-Contravention. The execution, delivery and performance by the Seller of this Agreement and each of the Additional Agreements, and the consummation of the transactions contemplated thereby, do not and will not (a) violate any provision of the organizational documents of the Seller, or (b) violate or result in a breach of or constitute a default under any Law, judgment, injunction, Order, decree or other restriction of any Authority to which the Seller, or the Shares, are subject.

4.4. Litigationand Claims. There is no civil, criminal or administrative action, suit, demand, claim, hearing, proceeding or disclosed investigation pending or, to the knowledge of the Seller, threatened, against the Seller and the Seller is not subject to any Order, writ, judgment, award, injunction or decree of any Authority of competent jurisdiction or any arbitrator that would prevent consummation of the transactions contemplated hereby or materially impair the ability of the Seller to perform its obligations hereunder.

4.5. Investment Representations. The Seller and its beneficial owner are “accredited investors” as such term is defined in Rule 501 of Regulation D promulgated under the Act or are not U.S. persons as defined in Regulation S promulgated under the Act. The Seller acknowledges that the Purchaser has the right to require evidence of its status as an accredited investor, if necessary.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Company and the Seller as follows:

5.1. Due Incorporation. The Purchaser is a company duly organized, validly existing and in good standing under the Laws of the British Virgin Islands, the Class A common shares of which are listed on the NASDAQ Capital Market.

5.2. Corporate Authorization. Except for internal approval of the transaction contemplated by this Agreement in accordance with the Charter Documents of the Purchaser, the execution, delivery and performance by the Purchaser of this Agreement and each of the other Additional Agreements to which it is a party and the consummation by the Purchaser of the transactions contemplated hereby and thereby are within the corporate powers of the Purchaser and have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement constitutes, and upon their execution and delivery, each of the Additional Agreements will constitute, the valid and legally binding agreement of the Purchaser, as applicable, enforceable against it in accordance with their respective terms.

5.3. Governmental Authorization. None of the execution, delivery or performance by the Purchaser of this Agreement or any Additional Agreement requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with, any Authority by Purchaser, other than those required under U.S. laws and regulations including but not limited to the filings with the U.S. Securities and Exchange Commission (the “SEC”).

5.4. **No Violation.**Neither the execution and delivery of this Agreement or any Additional Agreements to be executed by the Purchaser hereunder nor the consummation of the transactions contemplated herein and therein will (a) violate any provision of the Purchaser’s or the Purchaser’s charter documents; (b) violate any Laws or Orders to which the Purchaser or its property is subject, or (c) violate the provisions of any material agreement or other material instrument binding upon or benefiting the Purchaser.

5.5. Consents. Except for internal approval of the transaction contemplated by this Agreement in accordance with the Charter Documents of the Purchaser to approve the transaction contemplated by this Agreement, there are no agreements, commitments, arrangements, contracts or other instruments binding upon the Purchaser or any of its properties requiring a consent, approval, authorization, order or other action of or filing with any Person as a result of the execution, delivery and performance of this Agreement or any of the Additional Agreements or the consummation of the transactions contemplated hereby or thereby.

5.6. Issuance of PurchaserCommon Shares. The Purchaser Common Shares, when issued in accordance with this Agreement, will be duly authorized and validly issued and nonassessable, with the lock-up restrictions as set forth in Section 6.5 and Applicable Law.

5.7. Capitalization andOwnership of the Purchaser. Except as set forth in the Exchange Act Filings, there is no Contract that requires or under any circumstance would require the Company to issue, or grant any right to acquire, any securities of the Purchaser, or any security or instrument exercisable or exchangeable for or convertible into, the capital stock of the Purchaser or to merge, consolidate, dissolve, liquidate, restructure, or recapitalize the Purchaser.

5.8. Ownership of PurchaserCommon Shares. Upon issuance and delivery of the Purchaser Common Shares to the Seller pursuant to this Agreement against payment of the consideration therefor, the Purchaser Common Shares will be duly authorized and validly issued, fully paid and nonassessable, free and clear of all Liens, other than (i) restrictions arising from applicable Laws, (ii) any Lien created by or through the Seller; or (iii) any Lien created in connection with the transactions contemplated by this Agreement and the Additional Agreements. The issuance and sale of the Purchaser Common Shares pursuant hereto will not be subject to or give rise to any preemptive rights or rights of first refusal.

5.9. Litigation. There is no action, suit, investigation, hearing or proceeding pending against any of its officers or directors, or the business of Purchaser, before any court or arbitrator or any governmental body, agency or official which if adversely determined against Purchaser, has or could reasonably be expected to have a Material Adverse Effect on the business, assets, condition (financial or otherwise), liabilities, results or operations or prospects of Purchaser, or which in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated hereby. There are no outstanding judgments against the Purchaser.

ARTICLE VI

COVENANTS OF THE COMPANY AND THE SELLER

The Company and the Seller covenant and agree that:

6.1. Conduct of theBusiness. From the date hereof through the Closing Date, the Company and its Subsidiaries shall conduct the Business only in the ordinary course (including the payment of accounts payable and the collection of accounts receivable), consistent with past practices, and shall not enter into any material transactions without the prior written consent of the Purchaser, and use its commercially reasonable efforts to preserve intact the Company’s business relationships with employees, suppliers, customers and other third parties. Without limiting the generality of the foregoing, from the date hereof until the Closing Date, without the Purchaser’s prior written consent, neither the Company nor any Subsidiaries shall:

(a) except in the ordinary course of business, amend, waive any provision of, terminate prior to its scheduled expiration date, or otherwise compromise in any way, any Contract (including contracts described in Section (b) below), or any other right or asset;

(b) except as contemplated by this Agreement, enter into any contract, agreement, lease, license or commitment, which (i) is with respect to real property, (ii) except in the ordinary course of business, extends for a term of one year or more or (iii) obligates the payment of more than $10,000 (individually or in the aggregate);

(d) sell, lease, license or otherwise dispose of any assets or assets covered by any Contract except (i) pursuant to existing contracts or commitments disclosed herein;

(e) pay, declare or promise to pay any dividends or other distributions with respect to its capital stock, or pay, declare or promise to pay any other payments to the Company and the Seller or any Affiliate of the Company and the Seller;

(f) authorize any salary increase of more than 10% for any employee or change the bonus or profit sharing policies of the Company;

(g) obtain or suffer to exist any Indebtedness in excess of $10,000 in the aggregate other than in the ordinary business consistent with past practice;

(h) suffer or incur any Lien on any asset except for Liens existing as of the date hereof as set forth on Schedule 3.13(b);

(i) suffer any material damage, destruction or loss of property related to any assets that is not covered by insurance;

(j) delay, accelerate or cancel any receivables or Indebtedness or write-off or make further reserves against the same, except in the ordinary course of business;

(k) merge or consolidate with or acquire any other Person or be acquired by any other Person;

(l) suffer any insurance policy protecting assets to lapse;

(m) make any change in its accounting principles or methods or write down the value of any assets;

(n) change the place of business of the Company or any Subsidiaries;

(o) extend any loans to any Person, other than travel or other expense advances to employees in the ordinary course of business;

(p) issue, redeem or repurchase any shares of its capital stock;

(q) effect or agree to any change in any practices or terms, including payment terms, with respect to customers or suppliers;

(r) make or rescind any election related to Taxes, file any amended income Tax Return or make any changes in its methods of Tax accounting; or

(s) agree to do any of the foregoing.

None of the Company and the Seller will (i) take or agree to take any action that might make any representation or warranty of the Company, any Subsidiaries or the Seller hereunder inaccurate in any respect at, or as of any time prior to, the Closing Date or (ii) omit to take, or agree to omit to take, any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time.

6.2. Access to Information. From the date hereof until and including the Closing Date, the Company and each Subsidiaries shall (a) continue to give the Purchaser, its counsel and other representatives full access to the Books and Records of each of them, (b) furnish to the Purchaser, its counsel and other representatives such information relating to the Business as such Persons may request and (c) cause the employees, counsel, accountants and representatives of the Company and each Subsidiaries to cooperate with Purchaser in its investigation of the Business.

6.3. Notices of CertainEvents. The Company and the Subsidiaries shall promptly notify the Purchaser of:

(a) any notice or other communication from any Person alleging or raising the possibility that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement or that the transactions contemplated by this Agreement might give rise to any claims or causes of action or other rights by or on behalf of such Person or result in the loss of any rights or privileges of the Company or any Subsidiaries to any such Person;

(b) any notice or other communication from any Authority in connection with the transactions contemplated by this Agreement;

(c) any actions, suits, claims, investigations or proceedings commenced or threatened against, relating to or involving or otherwise affecting the Company, any Subsidiaries or the Business or that relate to the consummation of the transactions contemplated by this Agreement; and

(d) the occurrence of any fact or circumstance which might make any representation made hereunder by the Company, any Subsidiaries, and/or the Seller false in any respect or result in the omission or the failure to state a material fact.

6.4. Retaining the CoreEmployees The Company shall cause Mr. Jinbao Li and Mr. Xin Liu to maintain the employment relationship with Company or its Subsidiaries for a period no less than three (3) years following the Closing Date and to sign non-competition agreement providing that they will not compete with the business currently conducted by the Company for at least three years following the Closing Date or for at least one (1) year after their employment ends, whichever is later. The Parties agree that the breach of this obligation shall constitute a material breach of this Agreement by the Seller.

6.5. Lock-Up. The Seller will enter into Lock-Up Agreements pursuant to which the Seller will not be entitled to sell, hypothecate or otherwise transfer, in any way, shape or form, the Purchaser Common Shares issued to them pursuant to the terms of this Agreement for a period of twelve months following the Closing Date of this Agreement. The Seller shall cause its shareholding structure to remain unchanged within such lock-up period. If the Seller breaches its obligation under Section 6.4 above, the Seller agrees to transfer the Purchase Common shares which are in the lock-up period to the Purchaser.

6.6. Legends. The Seller understands that the share certificates, unless and until registered, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such share certificates):

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE GOVERNED BY THAT CERTAIN SHARE PURCHASE AGREEMENT DATED MAY 12, 2020 (THE “AGREEMENT”) AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. MOREOVER, NONE OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE ONE YEAR ANNIVERSARY DATE OF THE ISSUANCE DATE; COMMENCING ON THE ONE YEAR ANNIVERSARY DATE OF THE ISSUANCE DATE, AND CONTINUING ON EACH ANNIVERSARY THEREOF, TWENTY PERCENT (20%) OF THE INITIALLY ISSUED NUMBER OF SHARES SHALL BE RELEASED FROM SUCH LOCK-UP AND MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED.”

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Purchaser Common Shares upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Shares are registered for resale under the 1933 Act or (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with a legal opinion reasonably acceptable to the Company, to the effect that such sale, assignment or transfer of the Purchaser Common Shares may be made without registration under the applicable requirements of the 1933 Act.

6.7. Post-Closing Obligations. Immediately after the Closing Date, the Company and the Seller shall deliver common seals, all original corporate documents, financial documents, commercial agreements and/or other documents relating to the Company and the Subsidiaries to the Purchaser, subject to requirement of the Purchaser at the time of delivery of such documents.

ARTICLE VII

COVENANTS OF THE PURCHASER

7.1. **Conduct of Business.**The Purchaser covenants and agrees it shall not take or agree to take any actions that would cause a breach in Purchaser’s representations or warranties contained in this Agreement or prevent the Purchaser from performing its covenants hereunder.

7.2. Fulfillment of Conditions. From the date hereof to the Closing Date, the Purchaser shall use its commercially reasonable efforts to fulfill the conditions specified in ARTICLE IX to the extent that the fulfillment of such conditions is within its control. The foregoing obligation includes (a) the execution and delivery of documents necessary or desirable to consummate the transactions contemplated hereby, and (b) taking or refraining from such actions as may be necessary to fulfill such conditions (including conducting the business of the Purchaser in such manner that on the Closing Date the representations and warranties of the Purchaser contained herein shall be accurate as though then made).

7.3. Non-Solicitation. The Purchaser and its Affiliates, prior to the Closing or in any future time within one (1) year after the execution date of this Agreement if the deal contemplated in this Agreement fails to close, may not directly or indirectly through any other individual, person or entity, maliciously employ, solicit or induce any individual who is, or was at any time during the period from the execution date of this Agreement to the Closing Date (“Restriction Period”), an employee or consultant of the Company or its Subsidiaries to terminate or refrain from renewing or extending his or her employment by or consulting relationship with the Company or its Subsidiaries, or to become employed or enter into a consulting relationship with the Purchaser or any of its Affiliates immediately prior to the Closing Date, or any other individual, person or entity.

7.4. Disclosureof Certain Matters. The Purchaser shall give the Seller prompt written notice of any event or development that occurs that had it existed or been known on the date hereof (a) would cause any of the representations and warranties of the Purchaser contained herein to be materially inaccurate or otherwise misleading, or (b) would require any amendment or supplement to this Agreement.

ARTICLE VIII

COVENANTS OF ALL PARTIES HERETO

The parties hereto, as applicable, covenant and agree that:

8.1. Commercially ReasonableEfforts; Further Assurances. Subject to the terms and conditions of this Agreement, each party shall use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable Laws, to consummate and implement expeditiously the transactions contemplated by this Agreement. The parties hereto shall execute and deliver such other documents, certificates, agreements and other writings and take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement.

8.2. Confidentiality ofTransaction. Any information (except publicly available or freely usable material obtained from another source) respecting any party or its Affiliates will be kept in strict confidence by all other parties to this Agreement and their agents. Except as required by Law or Authority, neither the Purchaser nor the Company and the Seller, nor any of their respective Affiliates, directors, officers, employees or agents will disclose the terms of the transactions contemplated hereunder at any time, currently, or on or after the Closing, regardless of whether the Closing takes place, except as necessary to their attorneys, accountants and professional advisors, in which instance such persons and any employees or agents of the Purchaser or Seller, as the case may be, shall be advised of the confidential nature of the terms of the transaction and shall themselves be required by the Purchaser nor the Company and the Seller, as the case may be, to keep such information confidential. Except as required by Law or Authority, each party shall retain all information obtained from the other and their lawyers on a confidential basis except such information may be discussed as necessary to their attorneys, accountants and professional advisors, in which instance such persons and any employees or agents of such party shall be advised of the confidential nature of the terms of the transaction and shall themselves be required by such party to keep such information confidential. In the event of disclosure as required by Law or Authority, the Parties may have a friendly consultation with each other regarding how to disclose information.

8.3. Commercially ReasonableEfforts to Obtain Consents. Each party hereby agrees to use its reasonable commercially reasonable efforts to obtain each respective consent required to consummate the Transaction as promptly as practicable hereafter.

ARTICLE IX

CONDITIONS TO CLOSING

9.1. Condition to theObligations of the Parties. The obligations of the Purchaser, the Company and the Seller to consummate the Closing are subject to the satisfaction of all the following conditions:

(a) No provision of any applicable Law or Order shall prohibit or impose any condition on the consummation of the Closing or limit in any material way the Purchaser’s right to control or operate the Company, or any material portion of the Business.

(b) There shall not be pending or threatened any proceeding by a third-party to enjoin or otherwise restrict the consummation of the Closing.

9.2. Conditions to Obligationsof the Purchaser. In addition to the terms and provisions of Section 2.3, the obligation of Purchaser to consummate the Closing is subject to the satisfaction, or the waiver at Purchaser’s sole and absolute discretion, of all the following further conditions:

(a) (i) Each of the Company and the Seller shall have duly performed in all material respects all of their respective obligations hereunder required to be performed by them at or prior to the Closing Date, (ii) the representations and warranties of the Company and the Seller contained or referred to in this Agreement, the Additional Agreements and in any certificate or other writing delivered by the Company and the Seller pursuant hereto, disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect, shall be true and correct at and as of the Closing Date, as if made at and as of such date with only such exceptions as could not in the aggregate reasonably be expected to have a Material Adverse Effect, (iii) there shall have been no event, change or occurrence which individually or together with any other event, change or occurrence, could reasonably be expected to have a Material Adverse Change or a Material Adverse Effect, regardless of whether it involved a known risk.

(b) The Purchaser shall have received (i) copies of resolutions duly adopted by (a) the Board of Director(s), Shareholders or Members of the Seller, the Company and each of Subsidiaries if required, authorizing this Agreement and the Additional Agreements (if necessary) and the transactions contemplated hereby and thereby, (ii) the updated register of shareholder or members and/or the register of directors of the Company, Seller and the Subsidiaries reflecting the change of shareholders, members and directors for the purpose of this Transaction, which shall be certified by their registered agents, (iii) a share certificate of Company reflecting owning all the Shares by the Seller; (iv) a PRC legal opinions on the Operation Company, the form and content of which has been attached hereto as Exhibit C, and (v) a certificate of the chairman or person in the similar position of the Seller, the Company and each of Subsidiaries certifying each of the foregoing, completion of covenants and correctness of representations and warranties and as to signatures of the officer(s) authorized to execute this Agreement and any certificate or document to be delivered pursuant hereto.

(c) The Purchaser shall have received updated Disclosure Schedules to this Agreement as of a date within three days prior to the Closing Date.

(d) The original stock ledgers and minute books of the Company shall be delivered to the Purchaser.

(e) The Additional Agreements shall be in full force and effect or become effective on the Closing Date.

9.3. Conditions toObligations of the Company and the Seller. In addition to the terms and provisions of Section 2.3, the obligation of the Company and the Seller to consummate the Closing is subject to the satisfaction, or the waiver at the Company and the Seller’ discretion, of all the following further conditions:

(a) The Purchaser shall have duly performed in all material respects its obligations hereunder required to be performed by it at or prior to the Closing Date, (ii) the representations and warranties of the Purchaser contained in this Agreement, the Additional Agreements and in any certificate or other writing delivered by the Purchaser pursuant hereto, disregarding all qualifications and expectations contained therein relating to materiality, shall be true and correct in all material respects at and as of the Closing Date, as if made at and as of such date, provided, however, that the Purchaser and/or its Affiliates, are permitted to enter into such arrangements as would be necessary for the Purchaser to secure the approval of its stockholders of the transactions contemplated by this Agreement (including such arrangements as would require the combined company to use monies available to satisfy its obligations due to the transactions contemplated by this Agreement), if any; and (iii) the Seller and the Company shall have received a certificate signed by an authorized officer of Purchaser to the effect set forth in Sections (i) and (ii) of this Section 9.3(a).

(b) The Company and the Seller shall have received (i) a copy of the organizational documents of the Purchaser, (ii) copies of resolutions duly adopted by the Board of Directors of the Purchaser authorizing this Agreement and the Additional Agreements (if necessary) and the transactions contemplated hereby and thereby, (iii) a certificate of the CEO or CFO of the Purchaser certifying each of the foregoing, completion of covenants and correctness of representations and warranties and as to signatures of the officer(s) authorized to execute this Agreement and any certificate or document to be delivered pursuant hereto, together with evidence of the incumbency of such Secretary, and (iv) a recent good standing certificate regarding the Purchaser from the office of the Secretary of State of its respective jurisdiction of organization and each other jurisdiction in which the Purchaser is qualified to do business, and (v) share certificates of the Purchaser reflecting owning the Purchaser Common Shares pursuant to this Agreement by the Seller and/or its nominees.

ARTICLE X

RELIANCE ON REPRESENTATIONS AND WARRANTIES

10.1. Reliance on Representationsand Warranties of the Company and the Seller. Notwithstanding any right of the Purchaser to fully investigate the affairs of the Company, and each of Subsidiaries and notwithstanding any knowledge of facts determined or determinable by the Purchaser pursuant to such investigation or right of investigation, the Purchaser shall have the right to rely fully upon the representations, warranties, covenants and agreements of the Company and the Seller contained in this Agreement.

10.2. Reliance on Representationsand Warranties of the Purchaser. Notwithstanding any right of the Company and the Seller to investigate the affairs of the Purchaser and notwithstanding any knowledge of facts determined or determinable by the Company and the Seller pursuant to such investigation or right of investigation, the Company and the Seller shall have the right to rely fully upon the representations, warranties, covenants and agreements of Purchaser contained in this Agreement.

ARTICLE XI

INDEMNIFICATION

11.1. Indemnificationof the Purchaser. In addition to other indemnity expressly provided in this Agreement, the Purchaser’s sole indemnity under this Agreement is to rescind the agreement and request for delivering back of any and all Purchase Price as delivered to the Seller.

11.2. Indemnificationof the Seller. In addition to other indemnity expressly provided in this Agreement, the Seller’ sole indemnity under this Agreement is to rescind the agreement and request for delivering back of any and all Share as delivered to the Purchaser.

11.3. Insurance. Any indemnification payments hereunder shall be reduced by any insurance proceeds or other third party reimbursement actually received by an Indemnified Party.

11.4. Survival of IndemnificationRights. The representations and warranties of the Company and the Seller and the Purchaser shall survive until the 18 month anniversary of the Closing Date. The indemnification to which any Indemnified Party is entitled from the Indemnifying Parties pursuant to Section 11.1 or 11.2 for Losses shall be effective so long as it is asserted prior to the 18 month anniversary of the Closing Date in the case of all representations and warranties of the Company, the Subsidiaries, the Seller and Purchaser hereunder.

ARTIC LE XII

DISPUTE RESOLUTION

12.1. Arbitration.

(a) In the event a dispute arises relating to this Agreement, the parties agree to meet to resolve their disputes in good faith. Any party may seek injunctive relief, without the need to post a bond, pending the completion of arbitration under this Agreement for any breach or threatened breach of any covenant contained herein.

(b) If after good faith negotiations the dispute is not resolved, the parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Agreement, or any Additional Agreement (including with respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Agreement or any Additional Agreement) or any alleged breach thereof (including any action in tort, contract, equity, or otherwise), to binding arbitration by an arbitration panel set up and administered by China International Economic and Trade Arbitration Commission (“CIETAC”) in accordance with the CIETAC rules in Beijing (“Arbitrator”). The parties agree that binding arbitration shall be the sole means of resolving any dispute, claim, or controversy arising out of or relating to this Agreement or any Additional Agreement (including with respect to the meaning, effect, validity, termination, interpretation, performance or enforcement of this Agreement or any Additional Agreement) or any alleged breach thereof (including any claim in tort, contract, equity, or otherwise).

(c) The laws of the PRC shall apply to any arbitration hereunder. In any arbitration hereunder, this Agreement and any agreement contemplated hereby shall be governed by the laws of the PRC applicable to a contract negotiated, signed, and wholly to be performed in the PRC, which laws the Arbitrator shall apply in rendering his decision. The Arbitrator shall issue a written decision, setting forth findings of fact and conclusions of law, within sixty (60) days after he shall have been selected. The Arbitrator shall have no authority to award punitive or other exemplary damages.

(d) The arbitration shall be held in Beijing in accordance with and under the then-current provisions of the rules of the CIETAC, except as otherwise provided herein.

(e) The Arbitrator may, at his discretion and at the expense of the party who will bear the cost of the arbitration, employ experts to assist him in his determinations.

(f) The costs of the arbitration proceeding and any proceeding in court to confirm any arbitration award or to obtain relief as provided in Section 12.1, as applicable (including actual attorneys’ fees and costs), shall be borne by the unsuccessful party and shall be awarded as part of the Arbitrator’s decision, unless the Arbitrator shall otherwise allocate such costs for the reasons set forth in such decision. The determination of the Arbitrator shall be final and binding upon the parties and not subject to appeal.

(g) Any judgment upon any award rendered by the Arbitrator may be entered in and enforced by any court of competent jurisdiction. The parties expressly consent to the personal and subject matter jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted to arbitration hereunder. None of the parties hereto shall challenge any arbitration hereunder on the grounds that any party necessary to such arbitration (including the parties hereto) shall have been absent from such arbitration for any reason, including that such party shall have been the subject of any bankruptcy, reorganization, or insolvency proceeding.

(h) The parties shall indemnify the Arbitrator and any experts employed by the Arbitrator and hold them harmless from and against any claim or demand arising out of any arbitration under this Agreement or any agreement contemplated hereby, unless resulting from the willful misconduct of the person indemnified.

(i) This arbitration Section shall survive the termination of this Agreement and any agreement contemplated hereby.

12.2. Attorneys’Fees. The unsuccessful party to any court or other proceeding arising out of this Agreement that is not resolved by arbitration under Section 12.1 shall pay to the prevailing party all reasonable attorneys’ fees and costs reasonably incurred by the prevailing party, in addition to any other relief to which it may be entitled.

ARTICLE XIIITERMINATION

13.1. TerminationWithout Default. In the event that the Closing of the transactions contemplated hereunder has not occurred within ninety (90) days following the execution of this Agreement (the “Outside Closing Date”) and no material breach of this Agreement by the party seeking to terminate this Agreement shall have occurred or have been made (as provided in Section 13.2 hereof), the Purchaser, on the one hand, and the Company and the Seller, on the other hand, shall have the right, at its or their sole option, to terminate this Agreement without liability to the other side. Such right may be exercised by the Purchaser, on the one hand, or the Company and the Seller, on the other, as the case may be, giving written notice to the other at any time after the Outside Closing Date.

13.2. Termination Upon Default.

(a) The Purchaser may terminate this Agreement by giving notice to the Company and the Seller on or prior to the Closing Date, without prejudice to any rights or obligations the Purchaser may have, if the Company and the Seller shall have materially breached any representation or warranty or breached any agreement or covenant contained herein or in any Additional Agreement to be performed prior to Closing and such breach shall not be cured within the earlier of the Outside Closing Date and five (5) days following receipt by the Company or the Seller of a notice describing in reasonable detail the nature of such breach.

(b) The Company and the Seller may terminate this Agreement by giving prior written notice to the Purchaser on or prior to the Closing, without prejudice to any rights or obligations the Company or the Seller may have, if the Purchaser shall have materially breached any of its covenants, agreements, representations, and warranties contained herein to be performed prior to Closing and such breach shall not be cured within the earlier of the Outside Closing Date and five (5) days following receipt by the Purchaser of a notice describing in reasonable detail the nature of such breach.

13.3. Survival. The provisions of ARTICLE XI and ARTICLE XII and Sections 7.4, 8.2 and 14.4 shall survive any termination hereof pursuant to this ARTICLE XIII.

ARTICLE XIV

MISCELLANEOUS

14.1. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Purchaser:

Hebron Technology Co., Ltd.

No. 936, Jinhai 2nd Road, Konggang New Area

Longwan District

Wenzhou City, Zhejiang Province

People’s Republic of China

Attention: Changjuan Liang, Chief Financial Officer

Copy (for informational purposes only) to:

Kaufman & Canoles, P.C.

Two James Center, 14th Floor

1021 East Cary Street

Richmond, Virginia 23219

Telephone:	(804) 771-5700
Facsimile:	(804) 771-5777
Attention:	Anthony W. Basch, Esq.

If to the Company:

Nami Holding (Cayman) Co., Ltd.

Vistra (Cayman) Limited, P. O. Box 31119

P.O.Box 31119, Grand Pavilion, Hibiscus Way,

802 West Bay Road, Grand Cayman, KY1-1205;

Cayman Islands

If to the Seller:

Nami Holding (BVI) Co., Ltd (SPV)

Vistra Corporate Services Center,

Wickhams Cay II, Road Town, Tortola, VG 1110

British Virgin Islands

Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

Any document shall be deemed to have been duly served if marked for the attention of the agent for service of process at its address (as set forth in the Schedule of Seller) or such other address in the United States as may be notified to the party wishing to serve the document and delivered in accordance with the notice provisions set forth in this Section 14.1.

14.2. Amendments; No Waivers.

(a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each party hereto, or in the case of a waiver, by the party against whom the waiver is to be effective.

(b) No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

14.3. Ambiguities. The parties acknowledge that each party and its counsel has materially participated in the drafting of this Agreement and consequently the rule of contract interpretation that, and ambiguities if any in, the writing be construed against the drafter, shall not apply.

14.4. Publicity. Except as required by Law or the rules and regulations of the SEC and/or the Nasdaq Stock Market, the parties agree that neither they nor their agents shall issue any press release or make any other public disclosure concerning the transactions contemplated hereunder without the prior approval of the other party hereto.

14.5. Expenses. Except as specifically provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

14.6. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, that (i) none of Company and the Seller may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Purchaser; and (ii) in the event the Purchaser assigns its rights and obligations under this Agreement to an Affiliate, the Purchaser shall continue to remain liable for its obligations hereunder. Except as specifically set forth in Section (ii) above, the Purchaser may not assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Subsidiaries and the Seller.

14.7. Governing Law. This Agreement has been entered into in the PRC. This Agreement shall be construed in accordance with and governed by the laws of the PRC, without giving effect to the conflict of laws principles thereof.

14.8. Counterparts; Effectiveness. This Agreement may be signed by facsimile signatures and in any number of counterparts, each of which shall be an original and all of which shall be deemed to be one and the same instrument, with the same effect as if the signatures thereto and hereto were upon the same instrument.

14.9. Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, both written and oral, among the parties with respect to the subject matter of this Agreement. No representation, inducement, promise, understanding, condition or warranty not set forth herein has been made or relied upon by any party hereto. Neither this Agreement nor any provision hereof is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder other than Indemnified Parties as set forth in Section 11.1 and 11.2 hereof, which shall be third party beneficiaries hereof.

14.10. **Severability.**If any one or more provisions of this Agreement shall, for any reasons, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

14.11. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

14.12. **Construction.**References in this Agreement to “Articles,” “Sections,” “Schedules” and “Exhibits” shall be to the Articles, Sections, Schedules and Exhibits of this Agreement, unless otherwise specifically provided; all Schedules to this Agreement are incorporated herein by reference; any use in this Agreement of the singular or plural, or the masculine, feminine or neuter gender, shall be deemed to include the others, unless the context otherwise requires; the words “herein”, “hereof” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; the word “including” when used in this Agreement shall mean “including without limitation”; and except as otherwise specified in this Agreement, all references in this Agreement (a) to any agreement, document, certificate or other written instrument shall be a reference to such agreement, document, certificate or instrument, in each case together with all exhibits, schedules, attachments and appendices thereto, and as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof; and (b) to any law, statute or regulation shall be deemed references to such law, statute or regulation as the same may be supplemented, amended, consolidated, superseded or modified from time to time.

[The remaining of this page is intentionallyleft blank]

IN WITNESS WHEREOF, each Party has caused this Agreement to be duly executed by their respective authorized officers as of the day first above written.

The Purchaser:
Hebron Technology Co., Ltd.
By:	/s/ Anyuan Sun
	Name:	Anyuan Sun
	Title:	Chief Executive Officer
By:	/s/ Changjuan Liang
---	---	---
	Name:	Changjuan Liang
	Title:	Chief Financial Officer
The Company:
---	---	---
Nami Holding (Cayman) Co., Ltd.
By:	/s/ Jinbao Li
	Name:	Jinbao Li
	Title:	Director
The Seller:
---	---	---
Nami Holding (BVI) Co., Ltd (SPV)
By:	/s/ Jinbao Li
	Name:	Jinbao Li
	Title:	Director

Exhibit8.1

Listof Subsidiaries, Variable Interest Entities and Subsidiaries of Variable Interest Entities

Subsidiary/VIE/VIE Subsidiary	Jurisdiction of incorporation or organization
NiSun International Enterprise Management Group (British<br> Virgin Islands) Co., Ltd.	British Virgin Islands
Nami Holding (Cayman) Co., Ltd.	Cayman Islands
NiSun International Enterprise Management Group (Hong<br> Kong) CO., Limited	Hong Kong
Nami Holding (Hong Kong) Co., Limited	Hong Kong
NiSun (Shandong) Industrial Development Co., Ltd.	People’s Republic of China
NingChen (Shanghai) Enterprise Management Co., Ltd	People’s Republic of China
Shandong Taiding International Investment Co., Ltd	People’s Republic of China
Shanghai Naqing Enterprise Management Co., Ltd	People’s Republic of China
Fintech (Shanghai) Digital Technology Co., Ltd.*	People’s Republic of China
Beijing Hengtai Puhui Information services Co., Ltd*	People’s Republic of China
Shanghai Nami Financial Consulting Co., Ltd*	People’s Republic of China
Khorgos Fintech Network Technology Co., Ltd**	People’s Republic of China
NiSun family office (Guangzhou) Co., Ltd**	People’s Republic of China
Nanjing NiSun Gold Co., Ltd.	People’s Republic of China
Fintech (Jiangsu) Supply Chain Management Co., Ltd.**	People’s Republic of China
Fintech (Shandong) Supply Chain Management Co. Ltd.**	People’s Republic of China
Fintech (Henan) Supply Chain Management Co. Ltd.**	People’s Republic of China
Fanlunke Supply Chain Management (Shanghai) Co., Ltd.**	People’s Republic of China
Fintech Supply Chain Management (Ningbo) Co., Ltd.**	People’s Republic of China
Shanxi Fintech Supply Chain Management Co. Ltd.**	People’s Republic of China
Inner Mongolia Fintech Supply Chain Management Co.<br> Ltd.**	People’s Republic of China
Jilin Lingang Supply Chain Management Co., Ltd.**	People’s Republic of China
Jilin Province Lingang Hengda Supply Chain Management<br> Co. Ltd.**	People’s Republic of China
Hangzhou Fengtai Supply Chain Management Co., Ltd**	People’s Republic of China
*	Consolidated<br> variable interest entities (“VIEs”)
---	---
**	Subsidiaries<br> of consolidated VIEs
---	---

Exhibit12.1

CERTIFICATION

I, Xiaoyun Huang, certify that:

1. I have reviewed this annual report on Form 20-F of NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have

(a)	Designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such<br> internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,<br> to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for<br> external purposes in accordance with generally accepted accounting principles;
---	---
(c)	Evaluated the<br> effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness<br> of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
(d)	Disclosed in<br> this report any change in the company’s internal control over financial reporting that occurred during the period covered by<br> the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control<br> over financial reporting; and
---	---

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)	All<br> significant deficiencies and material weaknesses in the design or operation of internal control<br> over financial reporting which are reasonably likely to adversely affect the company’s<br> ability to record, process, summarize and report financial information; and
(b)	Any<br> fraud, whether or not material, that involves management or other employees who have a significant<br> role in the company’s internal control over financial reporting.
---	---
	Date:<br> May 3, 2021
---	---
By:	/s/<br> Xiaoyun Huang
Name:	Xiaoyun Huang
Title:	Chief Executive Officer

Exhibit12.2

CERTIFICATION

I, Changjuan Liang, certify that:

1. I have reviewed this annual report on Form 20-F of NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD;

(a)	Designed such<br> disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure<br> that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within<br> those entities, particularly during the period in which this report is being prepared;
(b)	Designed such<br> internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,<br> to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for<br> external purposes in accordance with generally accepted accounting principles;
---	---
(c)	Evaluated the<br> effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness<br> of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
(d)	Disclosed in<br> this report any change in the company’s internal control over financial reporting that occurred during the period covered by<br> the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control<br> over financial reporting; and
---	---

(a)	All<br> significant deficiencies and material weaknesses in the design or operation of internal control<br> over financial reporting which are reasonably likely to adversely affect the company’s<br> ability to record, process, summarize and report financial information; and
(b)	Any<br>fraud, whether or not material, that involves management or other employees who have a significant role in the company’s<br>internal control over financial reporting.
---	---
	Date:<br> May 3, 2021
---	---
By:	/s/<br> Changjuan Liang
Name:	Changjuan Liang
Title:	Chief Financial Officer

Exhibit13.1

CERTIFICATION

In connection with the Annual Report of NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD (the “Company”) on Form 20-F for the fiscal year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Xiaoyun Huang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Date:<br> May 3, 2021
By:	/s/<br> Xiaoyun Huang
Name:	Xiaoyun Huang
Title:	Chief Executive Officer

Exhibit13.2

CERTIFICATION

In connection with the Annual Report of NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD (the “Company”) on Form 20-F for the fiscal year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Changjuan Liang, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Date:<br> May 3, 2021
By:	/s/<br> Changjuan Liang
Name:	Changjuan Liang
Title:	Chief Financial Officer

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM **** We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (File No. 333-222995) and Form S-8 (File No. 333-236843) of Nisun International Enterprise Development Group Co., Ltd. of our report dated May 3, 2021, with respect to our audits of the consolidated financial statements of Nisun International Enterprise Development Group Co., Ltd. and Subsidiaries for the years ended December 31, 2020 and 2019 which appears in this Annual Report on Form 20-F. We also consent to the reference to us under the heading “Experts” in such Registration Statements. /s/ Wei, Wei & Co., LLP Flushing, New York May 3, 2021

Exhibit 99.1

UNAUDITEDPRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The accounting literature establishes guidelines regarding the presentation of this unaudited pro forma information. Therefore, this unaudited pro forma information is not intended to represent, nor does the Company believe it is indicative of, the consolidated results of operations of the Company that would have been reported had the acquisition of Nami acquisition been completed as of January 1, 2019. Furthermore, this unaudited pro forma information does not give effect to the anticipated business and tax synergies of the acquisition and is not representative or indicative of the anticipated future consolidated results of operations of the Company.

The unaudited pro forma condensed combined statement of operations combined the historical results of operations of the Nisun International and its subsidiaries (the “Group”) and Nami Cayman for the year ended December 31, 2019, as if the transaction had occurred at the beginning of the period.

UNAUDITEDPRO FORMA COMBINED STATEMENT OF OPERATIONSFOR THE YEAR ENDED DECEMBER 31, 2019

(StatedIn U.S. Dollars)

	Nisun <br><br>International			Nami				Notes	Pro Forma Combined
Revenue:	$	2,525,524		$	18,911,009		-		$	21,436,533
Cost of revenue and related tax:
Cost of revenues		-			(8,599,498	)	-			(8,599,498	)
Business and sales related taxes		(19,492	)		(183,574	)	-			(203,066	)
Gross profit		2,506,032			10,127,937		-			12,633,969
Operating expenses:
Sales and marketing expenses		(93,620	)		(3,630,588	)	-			(3,724,208	)
General and administrative expenses		(1,082,631	)		(1,841,425	)	-			(2,924,056	)
Research and development expenses		(155,216	)		-		-			(155,216	)
Income (loss) from operations		1,174,565			4,655,924		-			5,830,489
Other income (expenses):
Other income (expense), net		1,371			253,037		-			254,408
Interest expenses					(43,359	)				(43,359	)
Interest and investment income		-			8,433		-			8,433
Income (loss) before provision for income taxes		1,175,936			4,874,035		-			6,049,971
Provision (benefit) for income taxes		(55,731	)		1,419,400		-			1,363,669
Net income (loss) from continuing operations	$	1,231,667	****	$	3,454,635		-		$	4,686,302
Weighted average shares outstanding, basic and diluted	$	16,269,577					1,562,726	(a)		17,832,303
Basic and diluted net income per share from continuing operations	$	0.08							$	0.26

Pro Forma Adjustments

(a)	Effect<br>of the Group’s issuance of 1,562,726 common shares in connection with the acquisition of Nami Cayman.

Exhibit 99.2

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

TABLEOF CONTENTS

	Page
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	F-2
Consolidated<br> Balance Sheets as of December 31, 2019 and 2018	F-4
Consolidated<br> Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2019 and 2018	F-5
Consolidated<br> Statements of Changes in Shareholders’ Equity (Deficit) for the years ended December 31, 2019 and 2018	F-6
Consolidated<br> Statements of Cash Flows for the years ended December 31, 2019 and 2018	F-7
Notes<br> to Consolidated Financial Statements	F-9 - F-26

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Nami Holding (Cayman) Co., Ltd. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Nami Holding (Cayman) Co., Ltd. and subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2019, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our 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.

F-2

Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion /s/ Wei, Wei & Co., LLP We have served as the Company’s auditor since 2019 Flushing, NY December 31, 2020

F-3

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

CONSOLIDATEDBALANCE SHEETS

ASOF DECEMBER 31, 2019 AND 2018

(EXPRESSEDIN US DOLLARS)

			2018
ASSETS
CURRENT<br> ASSETS
Cash<br> and cash equivalents	2,114,418		$	415,486
Accounts<br> receivable, net	2,928,776			38,125
Short-term<br> investments	-			191,404
Loans<br> to third parties	5,620,821			-
Prepayments<br> and other current assets	516,901			535,094
TOTAL<br> CURRENT ASSETS	11,180,916			1,180,109
NON-CURRENT<br> ASSETS
Property<br> and equipment, net	488,732			357,856
Intangible<br> assets, net	118,892			15,076
Long-term<br> deposits	170,214			21,669
Operating<br> lease right-of-use assets	1,657,398			-
Deferred<br> tax assets, net	230,987			1,659,276
TOTAL<br> NON-CURRENT ASSETS	2,666,223			2,053,877
TOTAL<br> ASSETS	13,847,139		$	3,233,986
LIABILITIES
CURRENT<br> LIABILITIES
Accounts<br> payable	330		$	1,091
Advances<br> from customers	-			259,656
Other<br> payables	290,380			435,116
Salary<br> payable	1,196,715			822,001
Taxes<br> payable	577,104			629,083
Due<br> to related parties	-			11,761,903
Operating<br> lease liabilities - current	776,786			-
TOTAL<br> CURRENT LIABILITIES	2,841,315			13,908,850
Operating<br> lease liabilities – non-current	883,451			-
TOTAL<br> LIABILITIES	3,724,766			13,908,850
SHAREHOLDERS’<br> EQUITY (DEFICIT):
Common<br> share, 1 par value, 50,000 shares authorized; 50,000 and no shares issued and outstanding as of December 31, 2019 and 2018, respectively	50,000			50,000
Subscription<br> receivable	-			(50,000	)
Additional<br> paid-in capital	17,104,130			-
(Deficit)	(7,499,438	)		(10,954,073	)
Accumulated<br> other comprehensive income	467,681			279,209
TOTAL<br> SHAREHOLDERS’ EQUITY (DEFICIT)	10,122,373			(10,674,864	)
TOTAL<br> LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)	13,847,139		$	3,233,986

All values are in US Dollars.

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

F-4

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FORTHE YEARS ENDED DECEMBER 31, 2019 AND 2018

(EXPRESSEDIN US DOLLARS)

	For<br> the Year Ended<br> December 31,
	2019			2018
REVENUE	$	18,911,009		$	11,407,879
COST<br> OF REVENUE AND RELATED TAX
Cost<br> of revenue		(8,599,498	)		(11,997,943	)
Business<br> and sales related tax		(183,574	)		(132,841	)
GROSS<br> PROFIT (LOSS)		10,127,937			(722,905	)
OPERATING<br> EXPENSES
Selling<br> expenses		3,630,588			2,055,517
General<br> and administrative expenses		1,841,425			1,608,722
Total<br> operating expenses		5,472,013			3,664,239
INCOME<br> (LOSS) FROM OPERATIONS		4,655,924			(4,387,144	)
OTHER<br> INCOME (EXPENSE)
Financial<br> expenses		(43,359	)		(6,847	)
Investment<br> income		8,433			18,934
Other<br> income, net		253,037			(39,778	)
Total<br> other income (expense), net		218,111			(27,691	)
INCOME<br> (LOSS) BEFORE INCOME TAXES		4,874,035			(4,414,835	)
PROVISION<br> (BENEFIT) FOR INCOME TAXES
Current<br> income tax provision		737			5,518
Deferred<br> tax provision (benefit)		1,418,663			(224,645	)
Total<br> income tax provision (benefit)		1,419,400			(219,127	)
NET<br> INCOME (LOSS)	$	3,454,635		$	(4,195,708	)
OTHER<br> COMPREHENSIVE INCOME (LOSS)
Foreign<br> currency translation adjustment		188,472			539,517
TOTAL<br> COMPREHENSIVE INCOME (LOSS)	$	3,643,107		$	(3,656,191	)
Net<br> income (loss) per common share-basic and diluted	$	69.09		$	(83.91	)
Weighted<br> average number of shares outstanding-basic and diluted		50,000			50,000

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

F-5

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

FORTHE YEARS ENDED DECEMBER 31, 2019 AND 2018

(EXPRESSEDIN US DOLLARS)

****	Common Stock				Subscription		****	Additional		****		****	Other<br><br> Comprehensive		****	Total<br><br> Shareholders’		****
****	Quantity		Amount		Receivable		****	Paid-in Capital		(Deficit)		****	Income<br> (Loss)		****	Equity<br> (Deficit)		****
Balance<br> at January 1, 2018		50,000	$	50,000	$	(50,000	)	$	-	$	(6,758,365	)	$	(260,308	)	$	(7,018,673	)
Net<br> (loss)		-		-					-		(4,195,708	)		-			(4,195,708	)
Foreign<br> currency translation income		-		-					-		-			539,517			539,517
Balance<br> at December 31, 2018		50,000		50,000		(50,000	)		-		(10,954,073	)		279,209			(10,674,864	)
Capital<br> contributions by shareholders		-				50,000			17,104,130		-			-			17,154,130
Net<br> income		-		-					-		3,454,635			-			3,454,635
Foreign<br> currency translation income		-		-					-		-			188,472			188,472
Balance<br> at December 31, 2019		50,000	$	50,000	$	-		$	17,104,130	$	(7,499,438	)	$	467,681		$	10,122,373

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

F-6

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

FORTHE YEARS ENDED DECEMBER 31, 2019 AND 2018

(EXPRESSEDIN US DOLLARS)

	For<br> the year ended<br> December 31,
	2019			2018
CASH<br> FLOWS FROM OPERATING ACTIVITIES:
Net<br> income (loss)	$	3,454,635		$	(4,195,708	)
Adjustments<br> to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation<br> and amortization		282,845			265,475
Noncash<br> operating lease expense		402,934			-
Loss<br> from disposal of properties		80,717			73
Non-cash<br> investment income		-			(17,552	)
Gain<br> on investment		(4,006	)		-
Deferred<br> tax expense (benefits)		1,418,663			(224,645	)
Changes<br> in operating assets and liabilities:
Accounts<br> receivable, net		(2,913,597	)		(39,662	)
Prepayments<br> and other current assets		46,983			268,908
Long-term<br> deposits		(149,970	)		(22,543	)
Accounts<br> payable		(753	)		(295,580	)
Advance<br> from customers		(258,431	)		(190,575	)
Other<br> payables		(140,425	)		317,515
Salary<br> payable		387,896			22,160
Operating<br> lease right of use assets		(860,657	)		-
Operating<br> lease liabilities		423,267			-
Taxes<br> payable		(79,859	)		544,772
NET<br> CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		2,090,242			(3,567,362	)
CASH<br> FLOWS FROM INVESTING ACTIVITIES:
Purchase<br> of property and equipment		(492,302	)		-
Purchase<br> of intangible assets		(112,433	)		(3,137	)
Proceeds<br> from sale of short-term investment		190,501			-
Purchase<br> of short-term investment		-			(181,571	)
Repayments<br> of third party loans		-			140,263
Loans<br> to third parties		(5,664,515	)		-
NET<br> CASH (USED IN) INVESTING ACTIVITIES		(6,078,749	)		(44,445	)
CASH<br> FLOWS FROM FINANCING ACTIVITIES:
Loans<br> from related parties		-			3,934,029
Repayment<br> of loans from related parties		(11,706,398	)		-
Capital<br> contributions from shareholders		17,154,130			-
NET<br> CASH PROVIDED BY FINANCING ACTIVITIES		5,447,732			3,934,029
EFFECT<br> OF EXCHANGE RATE CHANGE ON CASH		239,707			36,344
NET<br> INCREASE IN CASH		1,698,932			358,566
CASH — beginning<br> of year		415,486			56,920
CASH — end<br> of year	$	2,114,418		$	415,486

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

F-7

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

CONSOLIDATEDSTATEMENTS OF CASH FLOWS (CONTINUED)

FORTHE YEARS ENDED DECEMBER 31, 2019 AND 2018

(EXPRESSEDIN US DOLLARS)

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash<br> paid for income taxes	$	734	$	394
Cash<br> paid for interest	$	-	$	-
SUPPLEMENTAL DISCLOSURE<br> OF NON-CASH ACTIVITIES
Increase of right of use<br> asset and related lease liability	$	1,056,917	$	-

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

F-8

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 1– BUSINESS DESCRIPTION

Organizationand description of business

Nami Holding (Cayman) Co., Ltd. (“Nami Cayman”) is a limited company established under the laws of the Cayman Islands on April 29, 2019 by Nami Holding (BVI) Co., Ltd. (“Nami BVI”). Nami BVI was incorporated in the British Virgin Islands on April 9, 2019 by the controlling shareholder of Nami Shanghai, Jinbao Li. On May 02, 2019, the Company set up a wholly owned subsidiary, Nami Holding (Hong Kong) Co., Limited (“Nami HK”) in Hong Kong. On August 23, 2019, Nami HK set up a wholly owned subsidiary, Shanghai Naqing Enterprise Management Co., Ltd. (“Naqing”) in the People’s Republic of China (“PRC”).

Nami Shanghai Financial Consulting Co., Ltd (“Nami Shanghai”) was incorporated on June 04, 2015 in the PRC. Since November 25, 2019, Nami Shanghai was owned by the Controlling shareholder, Jinbao Lin, and another foreign shareholder, Mr. Xin Liu, by holding shares of 85% and 15%, respectively. Nami Shanghai is the main operating entity that provides intermediary matching services between financial products providers and qualified investors of various financial products offered by underwriters, financial institutions or underlying financial product providers in the People’s Republic of China (“PRC”).

As described below, Nami Cayman, through a series of transactions which have been accounted for as a reorganization of entities under common control (the “Reorganization”), became the ultimate parent entity of its subsidiaries and its variable interest entity (“VIE”), Nami Shanghai. Accordingly, the Company consolidates its wholly owned subsidiaries and Nami Shanghai’s operations, assets, and liabilities. Nami Cayman, its subsidiaries and VIE are hereinafter collectively referred to as the “Company”.

Reorganization

The following transactions were undertaken to reorganize the legal structure of the Company.

Effective on April 29, 2020, shareholders of Nami Shanghai and Naqing entered into a series of contractual agreements (“VIE Agreements” which are described below). As a result, Naqing has been determined to be the primary beneficiary of Nami Shanghai, and accordingly, the Company consolidates Nami Shanghai as its VIE.

Since the Company and its subsidiaries and VIE are effectively controlled by the same group of shareholders before and after the Reorganization, they are considered under common control. The consolidation of the Company and its subsidiaries and VIE have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the consolidated financial statements.

F-9

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 1– BUSINESS DESCRIPTION (CONTINUED)

As of December 31, 2019, the Company’s consolidated subsidiaries and VIE are as follows:

	Date of incorporation	Place of incorporation	Percentage of ownership	Principal activities
Wholly owned subsidiaries
Nami<br> Holding (Hong Kong) Co., Limited (“Nami HK”)	May<br> 02, 2019	Hong<br> Kong	100%	Investment<br> holding
Shanghai<br> Naqing Enterprise Management Co., Ltd ("Naqing”)	April<br> 10, 2019	PRC	100%	Investment<br> holding
VIE
Nami<br> Shanghai Financial Consulting Co., Ltd (“Nami Shanghai”)	June<br> 04, 2015	PRC	Consolidated<br> VIE	Providing<br> intermediary matching services between financial product providers and qualified investors

TheVIE arrangements with Nami Shanghai

Foreign ownership of internet-based businesses, including distribution of online information is subject to restrictions under current PRC laws and regulations. The Company is a Cayman Islands Company and Naqing (its PRC subsidiary) are considered foreign invested enterprises. To comply with these regulations, the Company conducts its operating activities in the PRC through its VIE, Nami Shanghai.

Naqing has entered into the following contractual arrangements with the shareholders of Nami Shanghai, that enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of Nami Shanghai and (2) receive the economic benefits of Nami Shanghai. The Company is fully and exclusively responsible for the management of Nami Shanghai, assumes all of its risk of losses and has the exclusive right to exercise all voting rights of Nami Shanghai’s shareholders. Therefore, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 810 “Consolidation”, the Company is considered the primary beneficiary of Nami Shanghai and has consolidated its assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements.

Managementand Consulting Service Agreement

Under the Consulting Services Agreement dated April 29, 2020, Naqing has the exclusive right to provide management and consulting and other services to Nami Shanghai for a consulting service fee and agrees to authorize Nami Shanghai to use the technologies and related intellectual property rights held by Naqing. Nami Shanghai agrees to pay Naqing or its designated agent for its management and consulting services in an amount equivalent to all Nami Shanghai’s net profits after tax. The agreement shall be effective as of the date of the agreement and shall remain effective until the date when Naqing terminates such agreement or Nami Shanghai ceases to exist.

F-10

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 1– BUSINESS DESCRIPTION (CONTINUED)

EquityInterest Pledge Agreements

Pursuant to the Equity Interest Pledge Agreements, each Shareholder of Nami Shanghai agreed to pledge their equity interest in Nami Shanghai to Naqing to secure the performance of the Nami Shanghai’s obligations under the Trades, Technologies & Management and Consulting Service Agreements and any such agreements to be entered into in the future. Shareholders of VIEs agreed not to transfer, sell, pledge, dispose of or otherwise create any encumbrance on their equity interests in VIEs without the prior written consent of Naqing. The Pledges became effective on such date when the pledge of the Equity Interest contemplated herein were registered with relevant administration for industry and commerce (the “AIC”) and remain effective until all contract obligations have been fully performed and all secured indebtedness has been fully paid.

VotingRights Proxy Agreement.

Under the Voting Rights Proxy Agreement, each shareholder of Nami Shanghai irrevocably authorizes Naqing to exercise rights and powers as shareholders of Nami Shanghai, including but not limited to, convening and attending shareholders’ meetings, voting on all matters of Nami Shanghai requiring shareholder approval and appointing directors and senior management members. The Voting Rights Proxy Agreements will remain in force unless otherwise terminated in writing by Naqing or with the written consent of all parties.

ExclusiveCall Option Agreement.

Under the Exclusive Call Option Agreement, Nami Shanghai and its shareholders have irrevocably granted Naqing an exclusive option to purchase, or authorize their designated persons to purchase all or part of each shareholder’s equity interests. The purchase price shall be equal to the minimum price required by the relevant PRC laws. Without prior written consent of Naqing, Nami Shanghai shall not among other things, amend its articles of association, sell or otherwise dispose of its assets or beneficial interests, enter into transactions which may adversely affect its assets, liabilities, business operations, equity interests and other legal interests, or merge with any other entities or make any investments, or distribute dividends. Naqing has right to transfer the rights and obligations pursuant to the Exclusive Call Option Agreement to any third party, which does not require any prior consent of Nami Shanghai and its shareholders. The Exclusive Call Option Agreement will remain effective until Naqing terminates this agreement with 30 days advance notice.

The Company’s ability to conduct its financial services business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate Nami Shanghai in its consolidated financial statements as it may lose the ability to exert effective control over Nami Shanghai and its respective shareholders and it may lose the ability to receive its economic benefits. The Company, however, does not believe such actions would result in the liquidation or dissolution of Nami Cayman, its subsidiaries and VIE.

The interests of the shareholders of the VIE may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing Nami Shanghai not to pay the service fees when required to do so. The Company cannot assure that when conflicts of interest arise, shareholders of Nami Shanghai will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest the shareholders of Nami Shanghai may encounter in their capacity as beneficial owners and directors of the VIE, on the one hand, and as beneficial owners and directors of the Company, on the other hand. The Company believes the shareholders of Nami Shanghai will not act contrary to any of the contractual arrangements and the exclusive option agreements provided the Company with a mechanism to remove the current shareholders of Nami Shanghai should they act to the detriment of the Company. The Company relies on certain current shareholders of Nami Shanghai to fulfill their fiduciary duties and abide by laws of the PRC and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and the shareholders of Nami Shanghai, the Company would have to rely on legal proceedings, which could result in disruption of its business and significant legal costs. There are also substantial uncertainties as to the PRC legal system and the outcome of any such legal proceedings.

F-11

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 1– BUSINESS DESCRIPTION (CONTINUED)

The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIE and its branches taken as a whole, which were included in the Company’s consolidated financial statements with intercompany balances and transactions eliminated between the VIE and the Company:

	December 31,<br> 2019		December 31,<br> 2018
Total current<br> assets	$	11,180,916	$	1,180,109
Total assets	$	13,847,139	$	3,233,986
Total current liabilities	$	2,841,315	$	13,908,850
Total liabilities	$	3,724,766	$	13,908,850
	For the year<br> <br>ended<br> <br>December 31, 2019		For the year<br> <br>ended<br> <br>December 31 , 2018
---	---	---	---	---	---
Total revenue	$	18,911,009	$	11,407,879
Net income (loss)	$	3,454,635	$	(4,195,708	)
	For the year<br> <br>ended<br> <br>December 31, 2019			For the year<br> <br>ended<br> <br>December 31, 2018
---	---	---	---	---	---	---
Net cash provided<br> by (used in) operating activities	$	2,090,242		$	(3,567,362	)
Net cash (used in) investing<br> activities	$	(6,078,749	)	$	(44,445	)
Net cash provided by financing<br> activities	$	5,447,732		$	3,934,029

There were no creditors (or beneficial interest holders) of Nami Shanghai that have recourse to the general credit of the Company in the normal course of business. The Company neither provides nor intends to provide additional financial or other support not previously contractually required to Nami Shanghai. Relevant PRC laws and regulations restrict Nami Shanghai from transferring a portion of its net assets, equivalent to the balance of its paid-in capital, capital reserve and statutory reserves, to the Company in the form of loans and advances or cash dividends. Please refer to Note 16 for disclosure of restricted net assets.

Note 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basisof presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S GAAP”).

Basisof consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries and VIE. All significant inter-company transactions and balances have been eliminated.

F-12

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Usesof estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during each reporting period. Significant accounting estimates reflected in the consolidated financial statements include but are not limited to estimates and judgments applied in the assessment of the allowance for doubtful accounts receivable, useful lives of property and equipment, impairment of short-term investments and valuation allowance for deferred tax assets. Actual results could differ from those estimates. ****

Revenuerecognition

The Company adopted FASB ASC Topic 606 “Revenue from Contracts with Customers” (“ASC 606”) on January 1, 2018 using the modified retrospective approach. Revenues for the years ended December 31, 2019 and 2018 were presented under ASC 606. There was no adjustment to the opening balance of the deficit at January 1, 2018 since there was no change to the timing and pattern of revenue recognition upon adoption of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services.

Under the guidance of ASC 606, the Company is required to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract and (e) recognize revenue when (or as) the Company satisfies each performance obligation. In determining the transaction price, the Company has included variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur. Revenues are recorded, net of sales related taxes and surcharges.

The Company earns commissions from its services provided to small and medium size enterprises, underwriters, financial institutions or underlying financial product providers. The Company enters into commission agreements with underwriters, financial institutions and financial product providers which specifies the key terms and conditions of the arrangement. Such agreements are separately negotiated for each transaction and generally do not include rights of return, credits or discounts, rebates, price protection or other similar privileges and are typically paid on or shortly after the transaction is completed. The Company earns service fees from its clients when the investor referred by the Company has entered a purchase or subscription contract with the relevant product provider and fund transfer is completed from investor to provider. Revenue is calculated as a fixed charge rate based on different maturities of the products in addition to the amount of the financial products purchased by the investor. The Company believes such arrangement represents a performance obligation that is satisfied at a point of time, therefore, the intermediary matching service fee is recognized as revenue upon the purchase of the financial products.

Cashand cash equivalents

Cash and cash equivalents consist of cash on hand, money market fund investments, time deposits, as well as highly liquid investments, which have original maturities of three months or less.

Short-termInvestments

The Company’s short-term investments include wealth management products that have a stated maturity and normally pay a prospective fixed rate of return, the underlying assets of which are loans receivable or finance lease receivables. Short-term investments are the wealth management products with a remaining contractual maturity date that is usually less than one year but more than three months.

F-13

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fairvalue of financial instruments

The Company follows the provisions of FASB ASC 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 3 — Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

There were no transfers between level 1, level 2 or level 3 measurements for the years ended December 31, 2019 and 2018. The carrying amounts reported in the balance sheets for cash, accounts receivable, prepayment and other assets, accounts payable, accruals and other liabilities approximate their fair values based on the short-term maturity of these instruments.

There were no assets or liabilities subject to fair value measurement at December 31, 2019 and the financial assets and liabilities subject to fair value measurements at December 31, 2018 were as follows:

December<br> 31, 2018	Level<br> 1		Level<br> 2		Level<br> 3		Total
Wealth<br> management products	$	-	$	191,404	$	-	$	191,404
Total<br> short-term investments	$	-	$	191,404	$	-	$	191,404

The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, other receivable, prepayment and other assets, loans to third parties, accounts payable, advances from customers, tax payable, due to related parties and accrued expenses and other current liabilities, approximate their fair value based on the short-term maturity of these instruments.

The Company believes that the carrying amount of the wealth management products approximates their fair value based on the terms of the underlying investments which are reflective of current market rates.

F-14

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accountsreceivable and allowance for doubtful accounts

Accounts receivable represents the Company’s right to consideration in exchange for intermediary matching services that the Company has provided to the customer before payment is due.

Accounts receivable are stated at the historical carrying amount net of an allowance for uncollectible accounts The Company has not experienced any significant historical uncollectable accounts, and as a policy, the Company establishes an allowance for uncollectible accounts based on estimates, historical experience and other factors surrounding the credit risk of customers. For individual customers where there is an observable indicator of impairment, a specific allowance is provided. The Company evaluates and adjusts its allowance for uncollectable accounts receivable and contract assets on a quarterly basis or more often as necessary. Uncollectible accounts are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Company has determined the balance will not be collected. The Company believes that all accounts receivable as of December 31, 2019 and 2018 are collectable and has not provided an allowance for uncollectable accounts.

Leases

In February 2016, the FASB issued a new standard on leases, ASU 2016-02, "Leases (Topic 842)", which requires a lessee to recognize assets and liabilities arising from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. In July 2018, the FASB issued an amendment, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new lease standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and to not retrospectively adjust prior periods financial statements.

The Company has adopted the new lease standard on January 1, 2019 and elected to apply practical expedients permitted under the transition method that allow the Company to use the beginning of the period of adoption as the date of initial application, to not recognize lease assets and lease liabilities for leases with a term of twelve months or less, to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs, or whether an existing or expired contract contains a lease. The Company did not retrospectively adjust the prior comparative period. Under the new lease standard, the Company determines if an arrangement is or contains a lease at inception. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. The Company considers only payments that are fixed and determinable at the time of lease commencement. The adoption of the new leasing guidance resulted in recognition of $607,713 of a right-of-use asset and a lease liability as of January 1, 2019.

Propertyand equipment, net

	Useful life
Office equipment	3-5<br> years
Electronic equipment	3-5<br> years
Automobiles	4 years
Leasehold improvements	over<br> shorter of the remaining lease term or expected useful life

The Company charges maintenance, repairs and minor renewals directly to expense as incurred; Major additions and betterment to equipment are capitalized.

F-15

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

IntangibleAssets, net

	Useful life
Software	3-5<br> years

Incometaxes

The Company, its subsidiaries and VIE are subject to the income tax laws of the Cayman Islands, Hong Kong and the PRC. No taxable income was generated outside the PRC for the years ended December 31, 2019 and 2018. The Company accounts for income taxes under FASB ASC 740 which uses the asset and liability method, which requires recognition of deferred tax assets and liabilities for differences between assets and liabilities for financial statement and tax purposes. Deferred taxes represent the future tax consequences for these differences. Deferred tax assets are also provided for carryforward losses which can be used to offset future taxable income. A valuation allowance is established against net deferred tax assets when it is more likely than not that some portion or all the net deferred tax asset will not be realized. The Company considers that no valuation allowance is necessary as of December 31, 2019 and December 31, 2018.

An uncertain tax position is recognized if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. 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, 2019 and 2018, the Company did not have any significant unrecognized uncertain tax positions. The Company does not believe that its unrecognized tax benefits will change over the next twelve months.

As of December 31, 2019, the Company’s PRC tax returns filed for the tax years ended December 31, 2017 through December 31, 2019 remain open for statutory examination by PRC tax authorities. Nami Cayman was incorporated in the Cayman Islands and is not subject to income taxes under the current laws of the Cayman Islands. Nami HK is subject to corporate income taxes at 16.5% for revenue generated in Hong Kong. No revenue was generated in Hong Kong for the years ended December 31, 2019.

Valueadded tax (“VAT”)

Revenue represents the invoiced value of goods and services, net of VAT. VAT is based on the gross sales price and ranges from 6% to 13%, depending on the type of goods or services provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. The net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company’s subsidiaries in China, have been and remain subject to examination by the tax authorities for five years from the date of filing.

F-16

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreigncurrency translation

Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (“RMB”). The Company’s financial statements have been translated into the reporting currency, the United States Dollar (“USD”). The Company did not have any operation in Hong Kong. Assets and liabilities of the Company are translated at the exchange rate at each balance sheet date. Equity is translated at historical rates. Income and expense accounts are translated at the average exchange rate during the reporting period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the consolidated statements of comprehensive income (loss).

	December 31,<br><br> 2019		December 31,<br><br> 2018
Balance<br> sheet items, except for equity accounts	US$	1=RMB<br> 6.9618	US$	1=RMB<br> 6.8755
Amounts<br> included in the statements of operations and cash flows	US$	1=RMB 6.9081	US$	1=RMB 6.6090
Balance<br> sheet items, except for equity accounts	US$	1=HKD 7.7894	US$	1=HKD 7.8305
Amounts<br> included in the statements of operations and cash flows	US$	1=HKD 7.8351	US$	1=HKD 7.8376

Comprehensiveincome (loss)

Comprehensiveincome (loss) (continued)

solely consists of foreign currency translation adjustments resulting from the Company not using the U.S. dollar as its functional currency.

Certainrisks and concentrations

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. As of December 31, 2019, and 2018, $2,114,418 and $415,486 of the Company’s cash and cash equivalents was on deposit at financial institutions in the PRC, which the management believes are of high credit quality. On May 1, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits of up to RMB 500,000 (USD $72,000). and for foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit. However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Company believes that those Chinese banks that hold the Company’s cash and cash equivalents, restricted cash and short-term investments are financially sound based on public available information. The amount in excess of insured limits at December 31, 2019 and 2018 was approximately $,1,968,000 and $330,000, respectively.

Substantially all the Company’s revenue is derived from customers that are located primarily in China. The Company has a concentration of its revenues with specific customers. For the year ended December 31, 2019, three customers accounting for 41.7%, 25.3% and 12.4% of the Company’s total revenue. For the year ended December 31, 2018, two customers accounting for 77.2% and 20.9% of the Company’s total revenue.

F-17

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 2– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings(loss) per share

The Company follows FASB ASC 260 “Earnings Per Share” (“EPS”) and presents basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of December 31, 2019 and 2018, there were no dilutive shares.

Statementsof cash flows

In accordance with FASB ASC Topic 230, Statement of Cash Flows, cash flows from the Company are calculated based upon the local currencies and translated at the average exchange rates during the reporting period. As a result, amounts related to assets and liabilities reported on the Company’s statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

RecentAccounting Pronouncements

The Company considers the applicability and impact of all new accounting standards and updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

In June 2016, the FASB amended guidance related to the impairment of financial instruments as part of ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which will be effective January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, which clarified that receivables from operating leases are not within the scope of Topic 326 and instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842. The Company does not expect this guidance will have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company does not expect this guidance will have a material impact on its consolidated financial statements.

In October 2018, the FASB issued ASU No. 2018-17 (“ASU 2018-17”), “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities.” The updated guidance requires entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this update are effective for entities other than private companies for fiscal years beginning after December 15, 2019, and interim periods within fiscal years. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Company does not expect this guidance will have a material impact on its consolidated financial statements.

Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that the Company believes will have material impact on the Company’s consolidated financial statements.

F-18

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 3– SHORT-TERM INVESTMENTS

The following table summarized the Company’s short-term investments as of December 31, 2019 and 2018:

	As<br> of December 31,
	2019		2018
Wealth management products	$	-	$	174,533
Total short-term investments at cost		-		174,533
Add: Accrued interest receivable		-		16,871
Total short-term investments, net	$	-	$	191,404

As of December 31, 2018, the short-term investments consist of wealth management products issued by financial institutions of which the underlying assets are loans receivable or capital lease receivables. The investments have a stated maturity of 12 months by March 31, 2019 or matures on March 31, 2019 and pay a prospective fixed rate of return of 12%. The Company recorded investment income on the product of $4,006 and $17,552 for the years ended December 31, 2019 and 2018, respectively, which were presented in the consolidated statements of operations.

Note 4– ACCOUNTS RECEIVABLE, NET

The following is a summary of accounts receivable as of December 31, 2019 and 2018:

	As<br> of December 31,
	2019		2018
Accounts<br> receivable	$	2,928,776	$	38,125
Less:<br> allowance for uncollectable accounts		-		-
Accounts<br> receivable, net	$	2,928,776	$	38,125

For the years ended December 31, 2019 and 2018, the Company did not write off any uncollectable accounts.

Note5 – LOAN TO THIRD PARTIES

Loan to third parties consists of the following:

	As<br> of December 31,
	2019		2018
Hangzhou<br> Qianxi Technology Co., Ltd (1)	$	5,620,821	$	-
Less:<br> current portion		5,620,821		-
Loans<br> to third parties – noncurrent portion	$	-	$	-
(1)	The<br> Company made a loan of $5,620,821 (or RMB 39,131,035) to Hangzhou Qianxi Technology Co.,<br> Ltd. on December 15, 2019. The loan is due on January 14, 2020 with no interest. On January<br> 14, 2020, the Company received repayment of the amount.
---	---

F-19

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 6– PREPAYMENTS AND OTHER CURRENT ASSETS

The following is a summary of prepayments and other current assets as of December 31, 2019 and 2018:

	As<br> of December 31,
	2019		2018
Prepaid<br> rent	$	329,331	$	308,541
Rent<br> deposit		84,949		138,003
Prepaid<br> property management fee		42,315		19,065
Other<br> prepayments and deposits		60,306		69,485
Prepayments<br> and other current assets	$	516,901	$	535,094

Note 7– PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following:

	As<br> of <br><br>December 31,			As<br> of <br><br>December 31,
	2019			2018
Office<br> equipment	$	225,829		$	319,601
Electronic<br> equipment		324,470			526,799
Automobile		134,922			-
Leasehold<br> improvement		441,871			571,985
Total<br> property and equipment		1,127,092			1,418,385
Accumulated<br> depreciation		(638,360	)		(1,060,529	)
Property<br> and equipment, net	$	488,732		$	357,856

Depreciation expense on property and equipment for the years ended December 31, 2019 and 2018 was $275,642 and $257,508, respectively. During the years ended December 31, 2019 and 2018, the Company disposed of certain obsolete equipment for no proceeds and recognized a loss of $80,717 and $73, respectively.

Note8 – INTANGIBLE ASSETS, NET

The following is a summary of intangible assets as of December 31, 2019 and 2018:

	As<br> of December 31,
	2019		2018
Software	$	131,418	$	20,101
Less:<br> accumulated amortization		12,526		5,025
Intangible<br> assets, net	$	118,892	$	15,076

Amortization expense on intangible assets for the years ended December 31, 2019 and 2018 was $7,203 and $7,967, respectively.

F-20

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note9 – OTHER PAYABLES

The following is a summary of other payables as of December 31, 2019 and 2018:

	As<br> of December 31,
	2019		2018
Payable<br> to employees	$	190,098	$	267,649
Due<br> to Chengdu Hui Chuangyu		85,682		86,757
Payable<br> to labor service agency		-		71,122
Other		14,600		9,588
Total	$	290,380	$	435,116

Note 10– RELATED PARTY BALANCES TRANSACTIONS

Due to related parties consists of the following:

	As<br> of December 31,
	2019		2018
Jing<br> Zhao (1)	$	-	$	11,252,849
Fang<br> Zhao(2)		-		509,054
Total		-		11,761,903
Less:<br> current portion		-		11,761,903
Loans<br> to third parties – noncurrent portion	$	-	$	-
(1)	The<br> Company borrowed from Jing Zhao, a relative of the controlling shareholder of Nami Shanghai,<br> Jinbao Li. The loan was due on demand with no interest. On December 27, 2019, the Company<br> repaid the loan.
---	---
(2)	On<br> September 30, 2018, the Company borrowed $509,054 (or RMB 3,500,000) Fang Zhao, a relative<br> of the controlling shareholder of Nami Shanghai, Jinbao Li. The loan was due on demand with<br> no interest. On December 27, 2019, the Company repaid the loan.
---	---

Note11 – INCOME TAXES

Taxes payable consisted of the following:

	December<br> 31,<br> 2019		December<br> 31,<br> 2018
Income taxes payable	$	-	$	-
VAT tax payable		502,087		565,229
Business tax payable		63,148		54,776
Other taxes payable		11,869		9,078
Total taxes payable	$	577,104	$	629,083

The total amount of unpaid tax liabilities was accrued based on the calculation using the current prevailing tax rates without including potential interest and penalties because management cannot be certain as to how much interest and penalties would be assessed, if any. Due to uncertainties associated with the status of examinations, including the protocols of finalizing audits by the relevant tax authorities, there is a high degree of uncertainty regarding the future cash outflows associated with the interest and penalties on these unpaid tax balances. The final outcome of this tax uncertainty is dependent upon various matters including tax examinations, interpretation of tax laws or expiration of the statute of limitations.

F-21

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note11 – INCOME TAXES (CONTINUED)

Value-addedtax ("VAT")

The Company is subject to VAT and related surcharges in China for providing intermediary matching services between financial products providers and qualified investors. The applicable VAT rate is 6%. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of services provided (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). The Company is also subject to surcharges on VAT payments according to PRC tax law.

Incometaxes ****

Cayman

Nami Cayman was incorporated in the Cayman Islands and is not subject to income taxes under the current laws of the Cayman Islands.

Hong Kong

Nami HK is subject to corporate income taxes at 16.5% for revenue generated in Hong Kong. No revenue was generated in Hong Kong for the years ended December 31, 2019 and 2018.

PRC

Naqing and Nami Shanghai and its branches are governed by the Income Tax Laws of the PRC concerning private-run enterprises, which are subject to a statutory tax rate of 25% on its net income, determined in accordance with PRC rules, reported in the statutory financial statements after appropriate tax adjustments.

The Company’s income tax provision (benefit) is as follows:

	For<br> the years ended<br><br> December 31,
	2019		2018
Current tax provision	$	737	$	5,518
Deferred tax provision<br> (benefit)		1,418,663		(224,645	)
Total	$	1,419,400	$	(219,127	)

Reconciliation between the provision for income taxes computed by applying the PRC income tax rate of 25% to loss before income taxes and the actual provision of income taxes is as follows:

	For<br> the years ended<br> December 31,
	2019			2018
Income (loss) before income<br> taxes	$	4,874,035		$	(4,414,835	)
PRC tax rate		25	%		25	%
Income tax (benefit) computed at statutory<br> tax rate		1,218,509		$	(1,103,709	)
Reconciling items:
Effect of non-deductible<br> expenses		200,891			884,582
Income<br> tax expense (benefit)	$	1,419,400		$	(219,127	)
Effective<br> tax rate		29.12	%		4.96	%

F-22

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note11 – INCOME TAXES (CONTINUED)

According to PRC tax regulations, net operating losses can be carried forward to offset future operating income for five years. As of December 31, 2019, the Company had approximately $0.23 million net operating loss carry forward for PRC tax purpose, which would expire in year 2023.

The following table summarizes deferred tax assets resulting from differences between financial accounting basis and tax basis of assets:

	December<br> 31, <br> 2019		December<br> 31, <br> 2018
Deferred tax assets
Net operating loss carryforwards	$	230,987	$	1,659,276
Less: valuation allowance		-		-
Net deferred tax assets	$	230,987	$	1,659,276
	For<br> the years ended<br><br> December 31,
---	---	---	---	---	---	---
	2019			2018
Movement of deferred tax assets:
Balance beginning of the year	$	1,659,276		$	1,525,240
Add: deferred tax provision		-			224,645
Less: deferred tax provision used		(1,418,663	)		-
Foreign currency<br> translation adjustments		(9,626	)		(90,609	)
Balance at the end<br> of the year	$	230,987		$	1,659,276

As of December 31, 2019 and 2018, no valuation allowance against the deferred tax asset was considered necessary since the Company expects to be profitable in future years and believes it will utilize the benefits.

Note 12– SHAREHOLDERS’ EQUITY

Nami Cayman was established under the laws of the Cayman Islands on May 02, 2019. The authorized number of ordinary shares is 50,000 shares with par value of $1 each. As of December 31, 2019, and 2018, 50,000 ordinary shares were issued and outstanding. The shares are presented on a retroactive basis to reflect the nominal share issuance.

Nami Shanghai, the main operating entity, was incorporated on June 4, 2015 in the PRC. On December 27, 2019, the same group of shareholders of Nami Cayman injected into Nami Shanghai $17,154,130 (or RMB 120,000,000).

StatutoryReserves

In accordance with the PRC Company Laws, a domestic company is required to provide a statutory reserve fund of at least 10% of its annual after-tax profits as reported under the PRC GAAP until such statutory reserves has reached

50% of its registered capital. A domestic company is also required to provide discretionary statutory reserves, from its annual after-tax profits as reported under the PRC GAAP. These reserves can only be used for specific purposes and are not transferable by the PRC Entities in the form of loans, advances or cash dividends.

As of December 31, 2019, and 2018, the balances of the statutory reserves were nil and nil, respectively.

F-23

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 12– SHAREHOLDERS’ EQUITY (CONTINUED)

RestrictedNet Assets

As a result of 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. The restricted net assets consist of paid-in capital of the Company’s PRC entities. As of December 31, 2019, the restricted net assets that are not available for distribution amounted to approximately $10.1 million.

Note13 – COMMITMENTS AND CONTINGENCIES

Contingencies

The Company may become involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. As of December 31, 2019, and 2018, the Company was not aware of any litigation, lawsuits or claims against them.

Note14 – OPERATING LEASE

Leases are classified as operating leases or finance leases in accordance with FASB ASC 842. The Company’s operating leases principally are for office facilities. For leases with terms greater than 12 months, the Company records the related right-of-use asset and the corresponding lease liability at the present value of lease payments over the term of the lease. Certain leases include rental escalation clauses, renewal options and/or termination options, which are factored into the Company’s determination of lease payments when appropriate. As of December 31, 2019, the weighted average remaining lease term was 2.25 years and the weighted average discount rate was 4.75% for the Company’s operating leases. The Company’s lease costs are included within selling and administrative expenses on the consolidated statement of operations. For the year ended December 31, 2019 and 2018, the lease cost amounted to $1,418,982 and $1,618,679, respectively.

The future undiscounted aggregate minimum lease payments under non-cancellable operating leases are as follows as of December 31, 2019:

For the Year Ending December<br> 31,
2020	$	837,582
2021		631,135
2022		283,451
2023		-
2024		-
thereafter		-
Total undiscounted future minimum lease payments		1,752,168
Less: Amounts representing interest		91,931
Total present value of operating lease liabilities		1,660,237
Less: current portion of operating lease liabilities		776,786
Non-current portion of operating lease liabilities	$	883,451

F-24

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note 15– SUBSEQUENT EVENTS

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. COVID-19 has spread rapidly to many parts of the PRC and other parts of the world in the first quarter of 2020, which has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies and, as such, the Company is unable to determine if it will have a material impact to its operations. The Company expects to generate approximately $38.2 million (RMB 263.5 million) revenue from its intermediary matching services in 2020.

Note16 – CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

The Company’s PRC subsidiaries and VIE are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures, and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. The Company’s subsidiary and its VIEs are also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its statutory reserve account until the cumulative amount of such reserves reaches 50% of its respective registered capital. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

The condensed financial information of the parent company has been prepared in accordance with SEC Regulation S-X Rule 5-04 and Rule 12-04, using the same accounting policies as set out in the Company’s consolidated financial statements, except that the Company uses the equity method to account for investments in its subsidiaries and VIE. The footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements are not the general-purpose financial statements of the reporting entity and should be read in conjunction with the notes to the consolidated financial statements of the Company.

a) Condensed balance sheets

	December<br> 31,<br> 2019			December<br> 31,<br> 2018
ASSETS:
Investment in subsidiaries and<br> VIE	$	10,122,373		$	(10,674,864	)
TOTAL ASSETS	$	10,122,373		$	(10,674,864	)
SHAREHOLDERS’ EQUITY<br> (DEFICIT)
Common share, US$1 par value, 50,000 shares<br> authorized, 50,000 shares issued and outstanding as of December 31, 2019 and 2018, respectively	$	50,000		$	-
Additional paid-in capital		17,104,130			-
(Deficit)		(7,499,438	)		(10,954,073	)
Accumulated other comprehensive income (loss)		467,681			279,209
TOTAL SHAREHOLDERS’<br> EQUITY (DEFICIT)	$	10,122,373		$	(10,674,864	)

F-25

NAMIHOLDING (CAYMAN) CO., LTD. AND SUBSIDIARIES

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTSIN US DOLLARS)

Note16 – CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (CONTINUED)

ADDITIONALFINANCIAL INFORMATION OF PARENT COMPANY

b) Condensed statements of comprehensive income

	For<br> the years ended<br> December 31,
	2019		2018
Equity<br> income (loss) of subsidiaries and VIE	$	3,454,635	$	(4,195,708	)
NET INCOME (LOSS)		3,454,635		(4,195,708	)
OTHER COMPREHENSIVE INCOME<br> (LOSS)
Foreign currency<br> translation adjustment		188,472		539,517
COMPREHENSIVE<br> INCOME (LOSS)	$	3,643,107	$	(3,656,191	)

c) Condensed statements of cash flow:

	For<br> the years ended<br> December 31,
	2019			2018
CASH FLOWS FROM OPERATING<br> ACTIVITIES:
Net income (loss)	$	3,454,635		$	(4,195,708	)
Equity (income) loss<br> in subsidiaries and VIE		(3,454,635	)		4,195,708
		-			-
NET CASH USED IN OPERATING<br> ACTIVITIES		-			-
NET CASH PROVIDED BY<br> INVESTING ACTIVITIES		-			-
NET CASH PROVIDED BY<br> FINANCING ACTIVITIES		-			-
					-
NET INCREASE IN CASH		-			-
CASH<br> —beginning of year		-			-
CASH<br> —end of year	$	-		$	-
SUPPLEMENTAL CASH FLOW<br> DISCLOSURES:
Cash<br> paid for income taxes	$	-		$	-
Cash<br> paid for interest	$	-		$	-

F-26

UNITED

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Washington,

FORM

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NISUN

British

99

Putuo

Changjuan

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liangchangjuan@cnisun.com

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