UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, ~~2022~~2023

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

For the transition period from ____ to ____

Commission file number 000-30264

NETWORK CN INC.

(Exact name of registrant as specified in its charter)

Delaware	90-0370486
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Unit 705B, 7th Floor, New East Ocean Centre, 9 Science Museum Road, TST, KLN, Hong Kong ~~00000~~0000

(Address of principal executive offices)

+ (852) 9625-0097

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock	NWCN	OTC

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 Par Value

(Title of Each Class)

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

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 þ 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 þ No ¨

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

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

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

Indicate by check mark whether the registrant 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. ¨

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes ¨ No þ

As of June 30, ~~2022~~2023, the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold was approximately $611,~~380~~929,000.

The number of shares outstanding of each of the issuer’s classes of common stock, as of April 1329, ~~2023~~2024 is as follows:

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		2125,~~355~~088,~~899~~592

NETWORK CN INC.

TABLE OF CONTENTS

PART I
	Item 1.	Business	1
	Item 1A.	Risk Factors	518
	Item 1B.	Unresolved Staff Comments	533
	Item 2.	Properties	5
	Item 1C.	Cypersecurity	34
	Item 3.	Legal Proceedings	6
	Item 2.	Properties	34
	Item 4.	Mine Safety Disclosures	6
	Item 3.	Legal Proceedings	34
	Item 4.	Mine Safety Disclosures	34
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	735
	Item 6.	Reserved	936
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	937
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	1743
	Item 8.	Financial Statements and Supplementary Data	1844
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	1844
	Item 9A.	Controls and Procedures	1844
	Item 9B.	Other Information	1945
	Item 9C.	Disclosure Regarding Foreign Jurisdiction that Prevent Inspections.	1945
PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	2046
	Item 11.	Executive Compensation	2349
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2854
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	3157
	Item 14.	Principal Accounting Fees and Services	3258
PART IV
	Item 15.	Exhibits, Financial Statement Schedules	3359
	Item 16.	Form 10-K Summary	3460
SIGNATURES			3460
FINANCIAL STATEMENTS			F-1

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this annual report include “forward-looking statements” within the meaning of such term in Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized. Forward-looking statements made in this annual report generally are based on our best estimates of future results, performances or achievements, predicated upon current conditions and the most recent results of the companies involved and their respective industries. Forward-looking statements may be identified by the use of forward-looking terminology such as “may”, “will”, “could”, “should”, “project”, “expect”, “believe”, “estimate”, “anticipate”, “intend”, “continue”, “potential”, “opportunity” or similar terms, variations of those terms or the negative of those terms or other variations of those terms or comparable words or expressions. Potential risks and uncertainties include, among other things, such factors as:

our potential inability to raise additional capital;

changes in domestic and foreign laws, regulations and taxes;

uncertainties related to China's legal system and economic, political and social events in China;

Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks;” and

changes in economic conditions, including a general economic downturn or a downturn in the securities markets.

Readers are urged to carefully review and consider the various disclosures made by us in this annual report and our other filings with the U.S. Securities and Exchange Commission (the “SEC”). These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this annual report speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

USE OF TERMS

Except as otherwise indicated by the context, references in this annual report to:

“BVI” are references to the British Virgin Islands;

“China” and “PRC” are to the People’s Republic of China;

l the “Company”, “NCN”, “we”, “us”, or “our”, are references to Network CN Inc., a Delaware corporation and its direct and indirect subsidiaries: NCN Group Limited, or NCN Group, a BVI limited company; NCN Media Services Limited, a BVI limited company; NCN Group Management Limited, or NCN Group Management, a Hong Kong limited company; NCN Group (Global) Limited, or NCN Global, a Hong Kong Limited company and its subsidiaries; and Crown ~~Winner~~Eagle ~~International~~Investments Limited, ~~or Crown Winner,~~ a Hong Kong ~~Limited~~limited company, and its ~~subsidiaries;~~subsidiary. ~~Crown~~Such ~~Eagle~~references ~~Investments~~are ~~Limited,~~based aon ~~Hong~~the ~~Kong~~business ~~limited~~or ~~company;~~businesses ~~Cityhorizon~~conducted ~~Limited,~~and orall ~~Cityhorizon~~the ~~Hong~~subsidiaries ~~Kong,~~are areferenced ~~Hong~~our ~~Kong~~organization ~~limited~~chart ~~company,~~on ~~and~~pages ~~its~~9 ~~subsidiary~~and 10;

“WFOE” a wholly foreign owned enterprise incorporated in PRC;

“RMB” are to the Renminbi, the legal currency of China;

the “Securities Act” are to the Securities Act of 1933, as amended; and the “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

“U.S. dollar”, “$” and “US$” are to the legal currency of the United States.

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PART I

ITEM 1.

BUSINESS

Overview of Our Business

Network CN Inc. is not a Chinese operating company but a Delaware holding company with operations conducted by its PRC subsidiaries.

Our mission is to become a leader in advertising media and actively serve brand customers. Our service is to provide our brand customers with integrated intelligent marketing solutions based on big data. We are committed to actively developing a new core retail channel “Community Channel" in the advertising field and strive to continue to develop this core to the whole of China in the future of each large and small community that makes us a leader in the core of the advertising industry.

History

We were incorporated under the laws of the State of Delaware on September 10, 1993, under the name EC Capital Limited. Our predecessor companies were involved in a variety of businesses and were operated by various management teams under different operating names. Between 2004 and 2006 we operated under the name Teda Travel Group Inc., which was primarily engaged in the provision of management services to hotels and resorts in China. On August 1, 2006, we changed our name to “Network CN Inc.” in order to better reflect our new vision to build a nationwide information and entertainment network in China.

Network CN Inc. a Delaware holding company with headquarter in Hong Kong and its operations conducted in China. During the latter half of 2006, we adjusted our primary focus away from the tourism and hotel management business to the building of a media network with the goal of becoming a nationwide leader in out-of-home, digital display advertising, roadside LED digital video panels and mega-size video billboards. Since PRC regulations limit foreign ownership of companies that provide advertising services, our advertising business was initially provided through our contractual arrangements with our Variable Interest Entities (VIEs).

In early 2010, the Company fulfilled the requirements to directly own 100% of advertising business company in China, in order to increase our operational efficiency and effectiveness, we restructured our organization by consolidating our PRC operations into one directly owned PRC entity and no VIEs conduct business. Since 2010, we conduct 100% of our business through our wholly owned subsidiaries in PRC.

In August 2022, we focus in developing a new core retail channel “Community Channel” and we restarted our advertising business through our new PRC subsidiaries. The Company conducts 100% of our business through our wholly owned subsidiaries in PRC. During the year ended December 31, 2022, we conducted all of our business in the PRC through our PRC subsidiary in Ningbo only.

In 2023, the Company has established two newly subsidiaries, NCN (Chengdu) Culture Media Co., Ltd, (“NCN Chengdu”) and NCN (Tianjin) Culture Co., Ltd (“NCN Tianjin”), a wholly foreign-owned enterprise in Chengdu and Tianjin, China. The Company owns 100% of the established subsidiary companies. In January 2023, NCN Chengdu and NCN Tianjin started its operation and acquired rights to operate advertising panels in Chengdu and Tianjin. On January 1, 2023, NCN Chengdu and NCN Tianjin entered into employment contracts which the employees agreed to bring in the advertising rights in Chengdu and Tianjin to the Company.

The Company has established a newly subsidiary, NCN (Beijing) advertising Co. Ltd (“NCN Beijing”), a wholly foreign-owned enterprise in Beijing, China. The Company owns 100% of the established subsidiary companies. In January 2024, NCN Beijing started its operation and acquired rights to operate advertising panels in Beijing. On January 1, 2024, NCN Beijing entered into employment contract which the employee agreed to bring in the advertising rights in Beijing to the Company.

Currently, the Company has three subsidiaries, NCN (Ningbo) Culture Media Co., Ltd (“NCN Ningbo”), NCN (Chengdu) Culture Media Co., Ltd, (“NCN Chengdu”) and NCN (Beijing) advertising Co. Ltd has its operation.

Our Holding Company Structure and Operations in Hong Kong and China

We are a Delaware holding company without any operation and our operations are conducted by our wholly owned subsidiaries in Hong Kong and China and this structure involves unique risks to investors. See “Summary of Certain Risks Associated with Our Businesses” beginning on page 5 of this report, including “Risks Related to Doing Business in China” beginning on page 23.

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There are legal and operational risks associated with being based in and having all our operations in Hong Kong and China. The Chinese government recently took regulatory actions on certain U.S. listed Chinese companies and made statement that it will exert more oversight and control over offerings and listings by Chinese companies that are conducted overseas, such as those related to the use of variable interest entities and data security or anti-monopoly concerns. On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued an announcement to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. On December 28, 2021, Cybersecurity Review Measures were published by Cyberspace Administration of China or the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission (“CSRC”), State Secrecy Administration and State Cryptography Administration and became effective on February 15, 2022, which provides that, Critical Information Infrastructure Operators (“CIIOs”) that purchase internet products and services and Online Platform Operators engaging in data processing activities that affect or may affect national security shall be subject to the cybersecurity review by the Cybersecurity Review Office. On November 14, 2021, CAC published the Administration Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber Data Security Measure (Draft)”, which requires cyberspace operators with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity Review. On April 2, 2022, the CSRC released the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), which provide that a domestic company that seeks to offer and list its securities in a overseas market shall strictly abide by applicable PRC laws and regulations, enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system, and take necessary measures to fulfill confidentiality and archives administration obligations.

On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC. On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the “New Overseas Listing Rules”) with five interpretive guidelines, which took effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas. According to the Notice on Arrangements for Overseas Securities Offering and Listing by Domestic Enterprises, published by the CSRC on February 17, 2023, a company that (i) has already completed overseas listing or (ii) has already obtained the approval for the offering or listing from overseas securities regulators or exchanges but has not completed such offering or listing before effective date of the new rules and also completes the offering or listing before September 30, 2023 will be considered as an existing listed company and is not required to make any filing until it conducts a new offering in the future. Furthermore, upon the occurrence of any of the material events specified below after an issuer has completed its offering and listed its securities on an overseas stock exchange, the issuer shall submit a report thereof to the CSRC within 3 working days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other competent authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting. The new rules provide that the determination as to whether a domestic company is indirectly offering and listing securities on an overseas market shall be made on a substance over form basis, and if the issuer meets the following conditions, the offering and listing shall be determined as an indirect overseas offering and listing by a Chinese domestic company: (i) any of the revenue, profit, total assets or net assets of the Chinese domestic entity is more than 50% of the related financials in the issuer’s audited consolidated financial statements for the most recent fiscal year; (ii) the senior managers in charge of business operation and management of the issuer are mostly Chinese citizens or with regular domicile in China, the main locations of its business operations are in China or main business activities are conducted in China.

We are headquartered in Hong Kong with all our executive officers and directors based in Hong Kong who are not Chinese citizens and most of our revenues and profits are generated by our subsidiaries in China. As of the date of this report, these new laws and guidelines have not impacted the Company’s ability to conduct its business, accept foreign investments, or list and trade on a U.S. or other foreign exchange. The Company is headquartered in Hong Kong and it owns 100% equity interest of all its subsidiaries and our VIEs did not conduct any business and we conduct advertising services and believes the new data security or anti-monopoly laws and regulations of China do not apply to the Company or its subsidiaries. However, any change in foreign investment regulations, and other policies in China or related enforcement actions by China government could result in a material change in our operations and the value of our ordinary shares and could significantly limit or completely hinder our ability to offer our ordinary shares to investors or cause the value of our ordinary shares to significantly decline or be worthless. The Company’s auditor is headquartered in the U.S. and it is not subject to the determinations announced by the PCAOB on December 16, 2021, which determinations were vacated on December 15, 2022, and Holding Foreign Companies Accountable Act and related regulations currently do not affect the Company as the Company’s auditor is subject to PCAOB’s inspection on a regular basis.

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Permissions Required from the PRC Authorities with respect to the Operations of our PRC Subsidiaries

We conduct substantially all of our business in the PRC through our PRC subsidiaries, which are wholly foreign-owned enterprise operating business in Ningbo, Chengdu and Tianjin, China. The Company has established three subsidiaries, namely NCN (Ningbo) Culture Media Co., Ltd (“NCN Ningbo”), NCN (Chengdu) Culture Media Co., Ltd, (“NCN Chengdu”) and NCN (Tianjin) Culture Co., Ltd (“NCN Tianjin”). Each of our PRC subsidiaries is required to obtain, and has obtained, a business license issued by the PRC State Administration for Market Regulation and its local counterparts. Our PRC subsidiaries are not covered by permissions requirements from the China Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that is required to approve our business and operations.

According to the Measures for Administration of Advertising Operation Permits which became effective on January 1, 2005, our PRC subsidiaries’ business scope does not fall under the category of advertising company that require to obtain advertising operation permit. Under applicable regulations governing advertising businesses in China, companies that engage in advertising activities must obtain from the SAIC or its local branches a business license which specifically includes within its scope the operation of an advertising business. Companies conducting advertising activities without such a license may be subject to penalties, including fines, confiscation of advertising income and orders to cease advertising operations. SAIC of its local branches informed us we are not required to obtain the Advertising Operation Permit when we established the subsidiaries. In the opinion of our PRC counsel, we are not required to obtain permit or approval from Chinese governing authorities to operate, other than business license.

As of the date of this report and to the Company’s knowledge, we have not received any notice and have not been subject to any penalty or other disciplinary action from any PRC authority for the failure to obtain or the insufficiency of any approval or permit in connection with the conduct or service of our business operations. We have not been denied by any PRC authority with respect to the application of any requisite permissions by us and our PRC subsidiaries in China.

Our PRC subsidiaries are not covered by permissions requirements from the China Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that is required to approve our business and operations. However, the Chinese government may intervene or influence our operations in China or any securities offering at any time, which could result in a material change in our operations and our ordinary shares could decline in value or become worthless. We provide media and advertising services through lightboxes or billboards and services do not pose national security risks, we are not subject to the report requirement under Cybersecurity Review Measures published by Cyberspace Administration of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography Administration on December 28, 2021, which became effective on February 15, 2022.

As of the date of this report, we (1) are not required to obtain permissions from any PRC authorities to issue our ordinary shares to foreign investors, (2) are not subject to permission requirements from CSRC, CAC or any other entity that is required to approve of our operations in China, and (3) have not received or were denied such permissions by any PRC authorities.

We are headquartered in Hong Kong with our chief executive officer, chief financial officer and all members of the board of directors based in Hong Kong who are not Chinese citizens. Although we don’t believe we are a Chinese domestic entity as defined in the New Overseas Listing Rules published by CSRC on February 17, 2023, it is not certain whether we might be determined as a Chinese entity under new rules, which will require us to file related documents with CSRC. Also, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Given the current PRC regulatory environment, it is uncertain when and whether our PRC subsidiary, will be required to obtain permission from the PRC government in connection with our listing on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. If we or our subsidiaries do not receive or maintain such permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline or become worthless.

Transfer of Cash To and From Our Subsidiaries

The Company is incorporated in State of Delaware as a holding company with no actual operations and it currently conducts its business through its subsidiaries in China and our corporate headquarter is in Hong Kong. There has been no cash flows and transfers of other assets between the holding company and its subsidiaries other than that as of December 31, 2023, NCN Group Limited (BVI) and NCN Group Management Limited, a wholly owned subsidiaries of the Company have paid approximately $100,728 and $16,299 for corporate expenses on behalf of the holding company respectively and not as the dividend payment or distribution. None of our subsidiaries has made any dividend payment or distribution to our holding company as of the date this report and they have no plans to make any distribution or dividend payment to the holding company in the near future. Neither the Company nor any of its subsidiaries has made any dividends or distributions to U.S. investors as of the date of this report.

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Cash may be transferred within our consolidated group in the following manner:

we may transfer funds to our subsidiaries by way of capital contributions or loans, through intermediate holding companies or otherwise;

we may provide loans to our subsidiaries and vice versa; and

our subsidiaries may make dividends or other distributions to us, through intermediate holding companies or otherwise.

Cash transfers were generally for maintain minimum working capital purpose for each subsidiary, we intend to keep any future earnings to finance the expansion of its business, and it does not anticipate that any cash dividends will be paid in the foreseeable future. We have established stringent controls and procedures for cash flows within our Company. Each transfer of cash between our subsidiaries is subject to internal approval.

We have made the following aggregate cash intercompany payments and transfers from January 1, 2023 to December 31, 2023.

DATE

DISTRIBUTOR

RECIPIENT

AMOUNT

DISCRIPTION

2/13/2023

NCN Group Management

HK to

Chenxing (Beijing)

PRC

US$1,473

Loan to subsidiary

2/13/2023

NCN Group Management

HK to

NCN (Beijing)

PRC

US$347

Loan to subsidiary

2/13/2023

NCN Group Management

HK to

NCN (Nanjing)

PRC

US$347

Loan to subsidiary

2/13/2023

NCN Group Management

HK to

Ruibo (Shenzhen)

PRC

US$383

Loan to subsidiary

3/1/2023

NCN Group

BVI to

NCN Global

US$36,506

Loan to subsidiary

3/1/2023

NCN Global

HK to

NCN (Ningbo)

PRC

US$14,602

Loan to subsidiary

3/1/2023

NCN Global

HK to

NCN (Chengdu)

PRC

US$21,903

Loan to subsidiary

5/31/2023

NCN Group Management

HK to

Ruibo (Shenzhen)

PRC

US$615

Loan to subsidiary

8/3/2023

NCN Group

BVI to

NCN Group Management

US$8,974

Loan to subsidiary

11/3/2023

NCN Group Management

HK to

Chenxing (Beijing)

PRC

US$890

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

Chenxing (Beijing)

PRC

US$1,815

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

NCN (Beijing)

PRC

US$277

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

NCN (Nanjing)

PRC

US$123

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

Ruibo (Shenzhen)

PRC

US$277

Loan to subsidiary

These payments reflect that cash provided by proceeds from short-term loans from our Hong Kong subsidiary and transfer of funds among our Hong Kong subsidiaries or BVI subsidiaries. Transfers of funds among our Hong Kong subsidiaries or from our Hong Kong subsidiaries to our BVI subsidiaries are free of restrictions. We may transfer of funds from Hong Kong subsidiaries or BVI subsidiaries to PRC subsidiaries are subject to review and conversion of HK$ or US$ to Renminbi Yuan (“RMB”), which represents the SAFE to monitor foreign exchange activities. Under the existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements with the banks. Currently, we don’t have any intention to distribute earnings or settle amounts owed under our operating structure.

All transfers of cash are related to the operations of the subsidiaries in the ordinary course of business. For our Hong Kong subsidiaries, our subsidiary in British Virgin Islands and the holding company (“Non-PRC Entities”), there is no restrictions on foreign exchange for such entities and they are able to transfer cash among these entities, across borders and to US investors. Also, there is no restrictions and limitations on the abilities of Non-PRC Entities to distribute earnings from their businesses, including from subsidiaries to the parent company or from the holding company to the U.S. investors as well as the abilities to settle amounts owed.

We may face difficulties or limitations on our ability to transfer cash to any wholly foreign-owned enterprises: Under PRC laws and regulations, our PRC subsidiaries, as wholly foreign-owned enterprises in China, may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve funds, until the aggregate amount of such funds reaches 50% of its registered capital. At its discretion, a wholly foreign-owned enterprise may allocate a portion of its after-tax profits based on PRC accounting standards to discretional funds. These reserve funds and discretional funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE and declaration and payment of withholding tax. Additionally, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends or make other distributions or payments to us. As a holding company, we may rely on dividends and other distributions on equity paid by our subsidiaries, including our PRC subsidiaries, for our cash and financing requirements. However, our PRC subsidiaries will not be able to pay dividends until they generate accumulated profits and meet the requirements described above. Also, PRC may impose greater restrictions on our Hong Kong subsidiaries’ abilities to transfer cash out of Hong Kong and to the holding company, which could adversely affect our business, financial condition and results of operations. PRC laws and regulations allow an offshore holding company to provide funding to our wholly owned subsidiary in China only through loans or capital contributions, subject to the filing or approval of government authorities and limits on the amount of capital contributions and loans. Subject to satisfaction of applicable government registration and approval requirements, we may extend inter-company loans to our wholly owned subsidiaries in China or make additional capital contributions to fund their capital expenditures or working capital. For an increase of its registered capital, the subsidiaries need to file such change of registered capital with the MOFCOM or its local counterparts. If the holding company provides funding to its subsidiaries through loans, the total amount of such loans may not exceed the difference between the entity’s total investment as approved by the foreign investment authorities and its registered capital. Such loans must be registered with SAFE or its local branches.

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The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends and other distributions may be subject to tighten scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. There are no other material restrictions on foreign currency restrictions with respect to our ability to transfer payments among our subsidiaries to the holding company and by holding company as a distribution to the holders of the Company. Other than discussed above, we don’t have any cash management policies that dictate the amount of such funding among our subsidiaries.

Summary of Certain Risks Associated with Our Businesses

An investment in our common stock shares involves significant risks. Our businesses are subject to a number of risks that you should consider, 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, and risks and uncertainties related to the continuing COVID-19 pandemic, global economic downturn and the regulatory environment in the PRC and the US. Below is a summary of material risks we face and these risks are discussed more fully in the section titled “Item 1A. Risk Factors.”. In particular, risks associated with our businesses include, but are not limited to, the following:

Risks Related to Our Business

The recent global coronavirus COVID-19 outbreak has caused significant disruptions to our business, which we expect will continue to materially and adversely affect our results of operations and financial condition. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading of "The recent global coronavirus COVID-19 outbreak has caused significant disruptions to our business, which we expect will continue to materially and adversely affect our results of operations and financial condition" on Page 19.

We have a limited operating history in a competitive and rapidly evolving industry; it may be difficult to evaluate our prospects, and we may not be able to effectively manage our growth. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We have a limited operating history in a competitive and rapidly evolving industry; it may be difficult to evaluate our prospects, and we may not be able to effectively manage our growth" on Page 19.

We have incurred losses and substantial doubt exists about our ability to continue as a going concern. We may not be able to generate sufficient operating cash flows and working capital. Failure to manage our liquidity and cash flows may materially and adversely affect our financial condition and results of operations. As a result, we may need additional capital, and financing may not be available on terms acceptable to us, or at all. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We have incurred losses and substantial doubt exists about our ability to continue as a going concern. We may not be able to generate sufficient operating cash flows and working capital. Failure to manage our liquidity and cash flows may materially and adversely affect our financial condition and results of operations. As a result, we may need additional capital, and financing may not be available on terms acceptable to us, or at all" on Page 19.

The media and advertising industry is highly competitive and our inability to compete with companies that are larger and better capitalized than we are may adversely affect our business and results of operations. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "The media and advertising industry is highly competitive and our inability to compete with companies that are larger and better capitalized than we are may adversely affect our business and results of operations" on Page 19.

We may not be able to recruit and retain key personnel, particularly sales and marketing personnel, which could have material and adverse effects on our business, financial condition and results of operations. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We may not be able to recruit and retain key personnel, particularly sales and marketing personnel, which could have material and adverse effects on our business, financial condition and results of operations" on Page 20.

Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted" on Page 20.

We face risks associated with managing operations in China, any of which could decrease our sales or earnings and could significantly limit or completely hinder our ability to offer our ordinary shares to investors and cause the value of such securities to significantly decline or be worthless. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We face risks associated with managing operations in China, any of which could decrease our sales or earnings and could significantly limit or completely hinder our ability to offer our ordinary shares to investors and cause the value of such securities to significantly decline or be worthless" on Page 20.

We rely on the maintenance of business relationships with our clients. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We rely on the maintenance of business relationships with our clients" on Page 20.

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We have limited business insurance coverage for our PRC subsidiaries. In the event that adequate insurance is not available or our insurance is not deemed to cover a claim, we could face liability. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We have limited business insurance coverage for our PRC subsidiaries. In the event that adequate insurance is not available or our insurance is not deemed to cover a claim, we could face liability" on Page 20.

Our subsidiaries are required to comply with relevant rules and regulations in China, failure to do so could have a material adverse effect on us. See Item1A. Risk Factors of this Report under Risk Related to Our Business under the heading "Our subsidiaries are required to comply with relevant rules and regulations in China, failure to do so could have a material adverse effect on us" on Page 20.

We may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and could potentially result in judgments against us, which may materially disrupt our business. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We may be subject to intellectual property infringement claims, which may force us to incur substantial legal expenses and could potentially result in judgments against us, which may materially disrupt our business" on Page 21.

We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business. See Item 1A. Risk Factors of this Report under Risk Related to Our Business under the heading "We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business" on Page 21.

Risks related to our Common Stock

Although publicly traded, the trading market in our common stock has been substantially less liquid than the average trading market for a stock quoted on the OTC Market and this low trading volume may adversely affect the price of our common stock. See Item 1A. Risk Factors of this Report under Risk Related to Our Common Stock under the heading "Although publicly traded, the trading market in our common stock has been substantially less liquid than the average trading market for a stock quoted on the OTC Market and this low trading volume may adversely affect the price of our common stock" on Page 21.

The market price of our common stock is volatile, leading to the possibility of its value being depressed at a time when you want to sell your holdings. See Item 1A. Risk Factors of this Report under Risk Related to Our Common Stock under the heading "The market price of our common stock is volatile, leading to the possibility of its value being depressed at a time when you want to sell your holdings" on Page 21.

A decline in the price of our shares of common stock could affect our ability to raise further working capital and adversely impact our operations. See Item1A. Risk Factors of this Report under Risk Related to Our Common Stock under the heading "A decline in the price of our shares of common stock could affect our ability to raise further working capital and adversely impact our operations" on Page 21.

If we issue additional shares, this may result in dilution to our existing stockholders. See Item 1A. Risk Factors of this Report under Risk Related to Our Common Stock under the heading "If we issue additional shares, this may result in dilution to our existing stockholders" on Page 22.

Stockholders should have no expectation of any dividends. See Item 1A. Risk Factors of this Report under Risk Related to Our Common Stock under the heading "Stockholders should have no expectation of any dividends" on Page 22.

Risks Related to Doing Business in China

Changes in the China’s economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "Changes in the China’s economic, political or social conditions or government policies could have a material adverse effect on our business and results of operations" on Page 23.

Uncertainties and quick change in the interpretation and enforcement of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business operation, decrease the value of our common stock and limit the legal protections available to us. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "Uncertainties and quick change in the interpretation and enforcement of Chinese laws and regulations with little advance notice could result in a material and negative impact on our business operation, decrease the value of our common stock and limit the legal protections available to us" on Page 23.

The Chinese government exerts substantial influence over the manner in which its subsidiaries and VIEs must conduct their business activities. See Item1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "The Chinese government exerts substantial influence over the manner in which its subsidiaries and VIEs must conduct their business activities" on Page 23.

Neither the Government of the PRC nor the Chinese legal system has ever formally acknowledged the legality of using a VIE-type contractual arrangement where direct ownership of a Chinese entity is forbidden. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "Neither the Government of the PRC nor the Chinese legal system has ever formally acknowledged the legality of using a VIE-type contractual arrangement where direct ownership of a Chinese entity is forbidden" on Page 24.

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Once a company use the VIE structure, it might rely on contractual arrangements to exercise control over the company with native shareholders (“Operating Company”), which may not be as effective as direct ownership in providing operational control. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "Once a company use the VIE structure, it might rely on contractual arrangements to exercise control over the company with native shareholders (“Operating Company”), which may not be as effective as direct ownership in providing operational control" on Page 24.

If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders" on Page 25.

Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions" on Page 28.

Substantial uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business operations and financial results. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "Substantial uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business operations and financial results" on Page 28.

Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations" in China on Page 29.

The Holding Foreign Companies Accountable Act, or HFCAA and the related regulations might pose regulatory risks to and impose restrictions on us because of our operations in mainland China. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in China under the heading "The Holding Foreign Companies Accountable Act, or HFCAA and the related regulations might pose regulatory risks to and impose restrictions on us because of our operations in mainland China" on Page 29.

Risks Related to Doing Business in Hong Kong

The Hong Kong legal system and political environment embodies uncertainties which could limit the legal protections available to you and us. See Item 1A.Risk Factors of this Report under Risk Related to Doing Business in Hong Kong under the heading "The Hong Kong legal system and political environment embodies uncertainties which could limit the legal protections available to you and us" on Page 33.

Devaluation of the Hong Kong dollar could affect our financial conditions and results of operations. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in Hong Kong under the heading "Devaluation of the Hong Kong dollar could affect our financial conditions and results of operations" on Page 33.

It will be difficult to acquire jurisdiction and enforce liabilities against us, our officers, directors and assets based in Hong Kong. See Item 1A. Risk Factors of this Report under Risk Related to Doing Business in Hong Kong under the heading "It will be difficult to acquire jurisdiction and enforce liabilities against us, our officers, directors and assets based in Hong Kong" on Page 33.

Recent Developments

Termination of commercial agreements

In May 2023, the Board of Directors agreed and approved the termination of all commercial agreements with Beijing Huizhong Bona Media Advertising Co., Ltd (“Bona”) and Xingpin Shanghai Advertising Limited (“Xingpin”). The Company delivered termination notice to terminate all the commercial agreements with Bona and Xingpin and the Company will no longer able to exert control over Bona and Xingpin when the termination notices become effective.

Our Business in Chengdu and Tianjin

The Company actively developing its advertising network and explored new media project in Chengdu and Tianjin, China. The Company has established two newly subsidiaries, NCN (Chengdu) Culture Media Co., Ltd, (“NCN Chengdu”) and NCN (Tianjin) Culture Co., Ltd (“NCN Tianjin”), a wholly foreign-owned enterprise in Chengdu and Tianjin, China. The Company owns 100% of the established subsidiary companies. In January 2023, NCN Chengdu and Tianjin started its operation and acquired rights to operate advertising panels in Chengdu and Tianjin. On January 1, 2023, NCN Chengdu and NCN Tianjin entered into employment contracts which the employees agreed to bring in the advertising rights in Chengdu and Tianjin to the Company. On April 25, 2023, the Company agreed to issue 933,964 and 1,131,960 restricted shares of the Company’s common stock to the employee, Qi Hao and Yang Wu Qiang, respectively. On January 1, 2023, NCN Chengdu and Tianjin entered into an employment contract with Qi Hao and Yang Wu Qiang (“the employees”) under which the employees agreed to bring in the advertising rights in Chengdu and Tianjin to the Company and the Company will reward him for 933,964 and 1,131,960 shares of the Company’s common stock. On May 16, 2023, Mr. Qi Hao resigned and the Company early terminated the advertising rights fee contracts in Tianjin and 933,964 shares issued were cancelled.

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Our Business in Ningbo

The Company explored new media project in Ningbo, China and decided to restart its business and expects that will improve the Company’s future financial performance. In April 2022, the Company has established a newly subsidiary, NCN (Ningbo) Culture Media Co., Ltd (“NCN Ningbo”), a wholly foreign-owned enterprise in Ningbo, China. The Company owns 100% of the established subsidiary company, NCN Ningbo. In August 2022, NCN Ningbo started its operation and acquired rights to operate advertising panels in Ningbo, China and sell advertising airtime to our customers directly. On February 1, 2023, the Company agreed to issue 606,881 restricted shares of the Company’s common stock to the employee, Chen Zhu. On October 1, 2022, NCN Ningbo entered into an employment contract with Chen Zhu (“the employee”) under which the employee agreed to bring in the advertising rights in Ningbo to the Company and the Company will reward him for 606,881 shares of the Company’s common stock. Pursuant to the terms of employment contract, if the employee can achieve the annual sales and profit before tax goal in 2023 and 2024, the Company will issue bonus shares of 303,441 and 303,441 restricted shares of the Company’s common stock to the employee, respectively.

Issuance of Convertible Promissory Note

On January 18, 2022, the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of $2,500,000. On the same date, the Company signed the 1% Senior Unsecured Convertible Note Agreement under which the Company may sell and issue to the Subscriber up to an aggregate maximum amount of $2,500,000 in principal amount of Convertible Notes prior to January 19, 2027. The Convertible Promissory Notes issued to the Investor are convertible at the holder’s option into shares of Company common stock at $1.25 per share.

Exercise of conversion option

Private Placement

On May 3, 2021, the Company entered into Common Stock Agreement with the foreign investor (the "New investor") that the Company will sell an aggregate of 200,000 shares of the Company's common stock to the New investor. Pursuant to the terms of a Common Stock Agreement between the Company and the New investor, the purchase price paid by the New investor for the shares were $3 per share for an aggregate sum of $600,000.

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Authorized capital

On April 28, 2020, the Board of Directors and Majority of stockholders of the Company approved to increase the total number of authorized shares of Common Stock from 26,666,667 to 100,000,000,000. On October 11, 2021, we filed a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State to increase our authorized shares of common stock from 26,666,667 to 100,000,000,000 and the increase had approved by Delaware secretary of state on April 5, 2022. On March 22, 2023, the Board of Directors and Majority of stockholders of the Company approved to decrease the total number of authorized shares of Common Stock from 100,000,000,000 to 100,000,000.

On December 20, 2023, the Board of Directors and Majority of stockholders of the Company approved to amend the Company's Certificate of Incorporation, as amended, to increase the total number of authorized shares of Preferred Stock from 5,000,000 to 10,000,000. On February 7, 2024, we filed a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State to to increase the total number of authorized shares of Preferred Stock from 5,000,000 to 10,000,000 and the increase had approved by Delaware secretary of state on February 8, 2024.

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Corporate Structure

The following chart reflects our organization structure as of the date of this annual report:

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Note <a> The subsidiary entity’s business license has been revoked.

Available Information

We file with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to reports to be filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, on official business days during the hours of 10 a.m. to 3 p.m. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Our corporate headquarters are located at Unit 705B, 7th Floor, New East Ocean Centre, 9 Science Museum Road, TST, KLN, Hong Kong, Special Administrative Region of the People’s Republic of China. Our telephone number is + (852) 9625-0097. We maintain a website at www.ncnmedia.com that links to our electronic SEC filings and contains information about our subsidiaries which is not a part of this report. All the above documents are available free of charge on our website as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.

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Our Services

We secured advertising rights of the advertising panels including lightboxes and mega size billboards and we will sell the airtime to our customers. During the fiscal year ended December 31, ~~2022~~2023 and ~~2021~~2022, our advertising revenue was $~~106~~446,~~498~~019 and $~~nil~~106,498, respectively.

Our Suppliers

In some of our past media projects, we are responsible for installing advertising panels and billboards. We design the shape of our advertising panels and billboards according to the terms approved in the relevant PRC governmental documents. We identify suppliers of component parts used in our advertising panels and contract assembly of our advertising panels to third-party contract assemblers who assemble our advertising panels according to our specification. We select component suppliers based on price and quality. During the fiscal years ended December 31, ~~2022~~2023 and ~~2021~~2022, we did not install any advertising panels and billboards. We ~~secured~~had ~~advertising~~around ~~rights~~40 ~~contracts~~advertising ~~were~~panels ~~signed~~suppliers in ~~2022~~2023 ~~with~~and ~~around~~we ~~160~~paid ~~advertising~~operating ~~panels~~rights fee to our suppliers.

Our Customers

Our customers include international and domestic brand name customers. During the fiscal year ended December 31, ~~2022~~2023, we had ~~five~~30 customers.

Sales and Marketing

No sales and marketing expense has been incurred for the fiscal years ~~2022~~2023 and ~~2021~~2022.

Our Intellectual Property

As of April 1329, ~~2023~~2024, we do not have any registered trademarks, copyrights, licenses or patent rights.

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Our Research and Development

No material costs have been incurred on research and development activities for the fiscal years ~~2022~~2023 and ~~2021~~2022. We do not expect to incur significant research and development costs in the coming future.

Employees

As of December 31, ~~2022~~2023, the Company and its subsidiaries ~~and variable interest entities~~ had ~~eight~~twelve employees at our office located at Hong Kong and PRC, ~~all~~eleven of which are full-time employees and one is part-time employee.

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We believe that we maintain a satisfactory working relationship with our employees and we have not experienced any significant labor disputes or work stoppage or any difficulty in recruiting staff for our operations.

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

Government Regulation

Regulations of People’s Republic of China

Regulations Relating to Foreign Investment Negative List of Industries for Foreign Investment

Investment activities in the PRC by foreign investors are principally governed by the Guidance Catalogue of Industries for Foreign Investment, or the Guidance Catalog, which was promulgated and is amended from time to time by the Ministry of Commerce, or MOFCOM, and the National Development and Reform Commission, or NDRC. The Guidance Catalog lays out the basic framework for foreign investment in the PRC, classifying businesses into three categories with regard to foreign investment: “encouraged,” “restricted” and “prohibited.” Industries not listed in the catalog are generally deemed as falling into a fourth category “permitted” unless specifically restricted by other PRC laws. In addition, in December 2021 the MOFCOM and the National Development and Reform Commission promulgated the Special Management Measures (Negative List) for the Access of Foreign Investment, or the 2021 Negative List, became effective on January 1, 2022, and industries not listed in the Negative List shall be administered under the principle of equal treatment to domestic and foreign investment. In the meantime, relevant competent government departments will formulate a catalogue of industries for which foreign investments are encouraged according to the needs for national economic and social development, to list the specific industries, fields and regions in which foreign investors are encouraged and guided to invest. The Encouraged Industry Catalogue for Foreign Investment (2020 version), or the 2020 Encouraged Industry Catalogue, was promulgated by the NDRC and MOFCOM and took effect on January 27, 2021. Industries not listed in these two categories are generally deemed “permitted” for foreign investment unless specifically restricted by other PRC laws.

To comply with PRC laws and regulations, we rely on equity investment with our WFOE subsidiaries to operate our business in the PRC. Each WFOE is identified on the organization chart included in the subsection of Corporate Structure in this Report. PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business. As of the date of this Report, the Company is able to comply with this regulation without significant effect on our consolidated operations because of our WFOE structure. If the Company is not able to comply with these regulations with its WFOE structure or otherwise, then the Company would likely have significant restrictions on its operations in the PRC which would significantly limit our ability to conduct our business in the PRC and/or distribute net earnings to our consolidated group and to our shareholders.

Foreign Investment Law

On March 15, 2019, the National People’s Congress approved the Foreign Investment Law, which became effective on January 1, 2020 and replaced three existing laws on foreign investments in the PRC, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. Furthermore, the Implementing Regulations of the Foreign Investment Law of the PRC, or the Implementing Regulations of FIL, was promulgated on December 26, 2019 and became effective on January 1, 2020. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic invested enterprises in the PRC. The Foreign Investment Law established the basic framework for the access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition.

According to the Foreign Investment Law and the Implement the Implementing Regulations of FIL, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within the PRC, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within the PRC; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within the PRC; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within the PRC; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.

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The Foreign Investment Law provides that foreign invested entities operating in foreign restricted or prohibited industries will require market entry clearance and other approvals from relevant PRC governmental authorities. The current industry entry clearance requirements governing investment activities in the PRC by foreign investors are set out in 2019 Negative List. It is unclear that 2019 Negative List will be updated upon the effectiveness of Foreign Investment Law.

Furthermore, the Foreign Investment Law 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 implementing of the Foreign Investment Law.

In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among other things, that local governments shall abide by their commitments to the foreign investors; foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; mandatory technology transfer is prohibited; and the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors within the PRC, may be freely remitted inward and outward in RMB or a foreign currency. Also, foreign investors or the foreign investment enterprise should be subject to legal liabilities for failing to report investment information in accordance with the requirements.

Regulations Relating to Cyber Security and Data Security

Cyber Security Law

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

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

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Data Security Law

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

The Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law, which were issued by the General Office of the State Council and another authority in July 2021, require to speed up the revision of legislation on strengthening the confidentiality and archives coordination between regulators related to overseas issuance and listing of securities, and improvement to the legislation on data security, cross-border data flow, and management of confidential information. On December 28, 2021, the Cyberspace Administration of China and other related authorities released the Measures for Cybersecurity Review, or the Cybersecurity Review Measures, which came into effect on February 15, 2022 and replaced the original Measures for Cybersecurity Review promulgated on April 13, 2020. The Cybersecurity Review Measures provides that, among others, an application for cyber security review shall be made by an issuer who is an internet platform operator before such issuer’s securities may be listed in a foreign country if the issuer possesses personal information of more than one million users, and that the relevant governmental authorities in the PRC may initiate cybersecurity review if such governmental authorities determine that an operator’s cyber products or services or data processing affect or may affect national security.

On November 14, 2021, the Cyberspace Administration of China promulgated the Network Data Security Administration Regulations (Draft for Comments) (the “Draft Data Security Regulations”), which propose to provide more detailed guidelines on the current rules on various aspects of data processing, including the processors’ announcement of data processing rules, obtaining consents and separate consents, security of important data and cross-border transfer of data, and further obligations of platform operators. Specifically, the Draft Data Security Regulations propose to provide that data processors conducting the following activities shall apply for cybersecurity review: (i) merger, reorganization or spin-off of internet platform operators that possess a large number of data resources related to national security, economic development and public interests that affects or may affect national security; (ii) listing abroad of data processors processing the personal information of more than one million users; (iii) listing in Hong Kong of data processors that affects or may affect national security; and (iv) other data processing activities that affect or may affect national security. The Draft Data Security Regulations also requires data processors processing over one million users’ personal information to comply with rules on processors of important data, including but not limited to carry out the data security assessment annually and file the report with competent authorities.

Regulations on Environmental Protection and Work Safety

Regulations on Environmental Protection

Pursuant to the Environmental Protection Law of the PRC promulgated by the Standing Committee of the National People’s Congress (“SCNPC”) on December 26, 1989, amended on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will discharge pollutants during the course of its operations or other activities must implement effective environmental protection safeguards and procedures to control and properly treat waste gas, waste water, waste residue, dust, malodorous gases, radioactive substances, noise vibrations, electromagnetic radiation and other hazards produced during such activities. The preparation of relevant development and utilization plans and the construction of the projects having impact on environment shall be subject to environmental impact assessment in accordance with the law. Furthermore, the enterprises and business operators on which the management system for the pollutants discharge permit and registration is implemented shall discharge pollutants according to their respective pollutants discharge permits or registrations and shall not discharge pollutants without obtaining a pollutants discharge permit or registration.

Advertising Services

Business Licenses for Advertising Companies

The principal regulations governing the advertising businesses in China include:

The Advertising Law (1994);

Regulations on Control of Advertisement (1987); and

The Implementing Rules for the Advertising Administrative Regulations (2004).

These regulations stipulate that companies that engage in advertising activities must obtain from the SAIC or its local branches a business license which specifically includes operating an advertising business within its business scope. Companies conducting advertising activities without such a license may be subject to penalties, including fines, confiscation of advertising income and orders to cease advertising operations. The business license of an advertising company is valid for the duration of its existence, unless the license is suspended or revoked due to a violation of any relevant law or regulation.

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We do not expect to encounter any difficulties in maintaining our business licenses. Our PRC advertising operating companies hold business license from the local branches of the SAIC as required by the existing PRC regulations.

Regulations on Intellectual Property Rights

The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names.

Copyright. Copyright in the PRC, including copyrighted software, is principally protected under the Copyright Law of the PRC promulgated in February 2010 which took effect in April 2010 (the “Copyright Law”) which has been amended by SCNPC on November 11, 2020 and became effective on June 1, 2021, and related rules and regulations. Under the Copyright Law, the term of protection for copyrighted software of legal persons is 50 years and ends on December 31 of the 50th year from the date of first publishing of the software.

Patent. The Patent Law of the PRC promulgated in December 2008, which became effective in October 2009 and recently has been amended by SCNPC on October 17, 2020 and became effective on June 1, 2021, provides for patentable inventions, utility models and designs. An invention or utility model for which patents may be granted shall have novelty, creativity and practical applicability. The State Intellectual Property Office under the State Council is responsible for examining and approving patent applications. The protection period is 20 years for inventions and 10 years for utility models and designs, all of which commence from the date of application of patent rights under current Patent Law of the PRC. The protection period has been slightly amended in recent amendment which became effective on June 1, 2021. The terms of protection for invention and utility patents will still be 20 years and 10 years, respectively, in general. The term of protection for a design patent will be extended from 10 years to 15 years. In addition, for invention patents, in case it is only granted after 4 years or more from its filing date or 3 years or more after a request for substantive examination date, the applicant can request for an extension of protection term for any unreasonable delay.

Trademark. The Trademark Law of the PRC promulgated in August 2013 which took effect in May 2014 (the “Trademark Law”) and it was last amended on April 23, 2019 and the amendments became effective on November 11, 2019. Its implementation rules protect registered trademarks. The Trademark Office of National Intellectual Property Administration, PRC, formerly the PRC Trademark Office of the State Administration of Market Regulation is responsible for the registration and administration of trademarks throughout the PRC. The Trademark Law has adopted a “first-to-file” principle with respect to trademark registration. The validity period of registered trademarks is 10 years from the date of approval of trademark application and may be renewed for another 10 years provided relevant application procedures have been completed within 12 months before the end of the validity period.

Domain Name. Domain names are protected under the Administrative Measures for the Internet Domain Names of the PRC promulgated by the Ministry of Industry and Information Technology of the PRC effective on December 20, 2004 and the Administrative Measures for Internet Domain Names promulgated by Ministry of Industry and Information Technology(“MIIT”), effective on November 1, 2017 (the “Domain Name Measures”). MIIT is the major regulatory body responsible for the administration of the PRC internet domain names. The Domain Names Measures has adopted a “first-to-file” principle with respect to the registration of domain names.

Advertising Content

PRC advertising laws and regulations set forth certain content requirements for advertisements in China, which include prohibitions on, among other things, misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. Advertisements for anesthetic, psychotropic, toxic or radioactive drugs are prohibited. It is prohibited to disseminate tobacco advertisements via broadcast or print media. It is also prohibited to display tobacco advertisements in any waiting lounge, theater, cinema, conference hall, stadium or other public area. There are also specific restrictions and requirements regarding advertisements that relate to matters such as patented products or processes, pharmaceuticals, medical instruments, veterinary pharmaceuticals, agrochemicals, foodstuffs, alcohol and cosmetics. In addition, all advertisements relating to pharmaceuticals, medical instruments, agrochemicals and veterinary pharmaceuticals advertised through radio, film, television, newspaper, magazine and other forms of media, together with any other advertisements which are subject to censorship by administrative authorities according to relevant laws and administrative regulations, must be submitted to the relevant administrative authorities for content approval prior to dissemination.

Advertisers, advertising operators and advertising distributors are required by PRC advertising laws and regulations to ensure that the content of the advertisements they prepare or distribute are true and in full compliance with applicable laws. In providing advertising services, advertising operators and advertising distributors must review the prescribed supporting documents provided by advertisers for advertisements and verify that the content of the advertisements comply with applicable PRC laws and regulations. In addition, prior to distributing advertisements for certain commodities, which are subject to government censorship and approval, advertising distributors and advertisers are obligated to ensure that such censorship has been performed and approval has been obtained. Violation of these regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the SAIC or its local branches may revoke violators’ licenses or permits for advertising business operations. Furthermore, advertisers, advertising operators or advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties in the course of their advertising business. We have implemented procedures to ensure the content of our advertisement are properly reviewed and the advertisement would only be published upon the receipt of content approval from the relevant administrative authorities. However, we provide no assurance that all the content of the advertisement are true and in full compliance with applicable laws.

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Out-of-home Advertising

The Advertising Law stipulates that the exhibition and display of out-of-home advertisements must not:

utilize traffic safety facilities and traffic signs;

impede the use of public facilities, traffic safety facilities and traffic signs;

obstruct commercial and public activities or create an eyesore in urban areas;

be placed in restrictive areas near government offices, cultural landmarks or historical or scenic sites; and

be placed in areas prohibited by the local governments from having out-of-home advertisements.

In addition to the Advertising Law, the SAIC promulgated the Out-of-home Advertising Registration Administrative Regulations on December 8, 1995, as amended on December 3, 1998, and May 22, 2006, which governs the out-of-home advertising industry in China.

Out-of-home advertisements in China must be registered with the local SAIC before dissemination. The advertising distributors are required to submit a registration application form and other supporting documents for registration. After review and examination, if an application complies with the requirements, the local SAIC will issue an Out-of-home Advertising Registration Certificate for such advertisement. Many municipal cities of China have respectively promulgated their own local regulations on the administration of out-of-home advertisements. Those municipal regulations set forth specific requirements on the out-of-home advertisements, such as the allowed places of dissemination and size requirements of the out-of-home advertisement facilities.

~~Foreign~~Regulations ~~Currency~~relating to Foreign Exchange

~~The~~General ~~principal~~Administration regulation governing foreign currency exchange in China is the Rules on Foreign Exchange Control (1996), as amended. Under these rules, Renminbi is freely convertible for trade and service-related foreign exchange transactions, but not for direct investment, loan or investment outside China without the prior approval of ~~the State Administration for~~ Foreign Exchange ~~of the PRC or other relevant authorities is obtained.~~

4Under the PRC Foreign Currency Administration Rules promulgated on January 29, 1996 and most recently amended on August 5, 2008 and various regulations issued by the State Administration of Foreign Exchange of the PRC, or the SAFE and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends. The conversion of Renminbi into other currencies and remittance of the converted foreign currency outside the PRC for of capital account items, such as direct equity investments, loans and repatriation of investment, requires the prior approval from the SAFE or its local office.

Payments for transactions that take place within the PRC must be made in Renminbi. Unless otherwise approved, PRC companies may not repatriate foreign currency payments received from abroad or retain the same abroad. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks under the current account items subject to a cap set by the SAFE or its local office. Foreign exchange proceeds under the current accounts may be either retained or sold to a financial institution engaged in settlement and sale of foreign exchange pursuant to relevant SAFE rules and regulations. For foreign exchange proceeds under the capital accounts, approval from the SAFE is generally required for the retention or sale of such proceeds to a financial institution engaged in settlement and sale of foreign exchange.

Pursuant to the Circular of the SAFE on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment, or the SAFE Circular 59, promulgated by SAFE on November 19, 2012, which became effective on December 17, 2012 and subsequently amended from time to time, approval of SAFE is not required for opening a foreign exchange account and depositing foreign exchange into the accounts relating to the direct investments. The SAFE Circular 59 also simplified foreign exchange-related registration required for the foreign investors to acquire the equity interests of Chinese companies and further improve the administration on foreign exchange settlement for foreign-invested enterprises.

The Circular on Further Simplifying and Improving the Foreign Currency Management Policy on Direct Investment, or the SAFE Circular 13, effective from June 1, 2015, cancels the administrative approvals of foreign exchange registration of direct domestic investment and direct overseas investment and simplifies the procedure of foreign exchange-related registration. Pursuant to the SAFE Circular 13, the investors shall register with banks for direct domestic investment and direct overseas investment.

The Circular on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or the SAFE Circular 19, which was promulgated by the SAFE on March 30, 2015 and became effective on June 1, 2015, provides that a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account). Pursuant to the SAFE Circular 19, for the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange capital on a discretionary basis; a foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the scope of business; where an ordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise must first go through domestic re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange administration or the bank at the place where it is registered.

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~~Pursuant~~The toCircular ~~the Rules~~ on ~~Foreign~~Reforming ~~Exchange~~and ~~Control,~~Regulating Policies ~~foreign~~on ~~investment~~the ~~enterprises~~Control inover ~~China~~Foreign ~~may~~Exchange ~~purchase~~Settlement ~~foreign~~of ~~currency~~Capital ~~without~~Accounts, or the ~~approval~~SAFE ofCircular ~~the~~16, ~~State~~which ~~Administration~~was ~~for~~promulgated ~~Foreign~~by ~~Exchange of~~ the ~~PRC~~SAFE ~~for trade~~ and ~~service-related~~became effective ~~foreign~~on ~~exchange~~June 9, ~~transactions~~2016, byprovides ~~providing~~that ~~commercial~~enterprises ~~documents~~registered ~~evidencing~~in ~~these~~the ~~transactions. They~~PRC may also ~~exchange~~convert ~~Renminbi~~their ~~into~~ foreign ~~currencies~~debts ~~(subject~~from toforeign ~~a cap approved by the State Administration for Foreign Exchange of~~currency ~~the~~into ~~PRC)~~Renminbi toon ~~satisfy~~self-discretionary ~~foreign exchange liabilities or to pay dividends~~basis. ~~However,~~The ~~the~~SAFE ~~relevant~~Circular ~~PRC~~16 ~~government~~also ~~authorities~~provides ~~may~~an ~~limit~~integrated orstandard ~~eliminate the~~for ~~ability~~conversion of foreign ~~investment~~exchange under ~~enterprises~~capital toaccount ~~purchase~~items ~~and~~(including ~~retain~~but ~~foreign~~not ~~currencies~~limited into ~~the~~foreign ~~future.~~currency Incapital ~~addition,~~and foreign ~~exchange~~debts) ~~transactions for~~on ~~direct~~self-discretionary ~~investment~~basis, ~~loan~~which applies ~~and investment outside China are still subject~~ to ~~limitations~~all ~~and~~enterprises ~~require~~registered ~~approvals~~in ~~from~~ the ~~State Administration for Foreign Exchange of the~~ PRC.

~~Dividend~~In ~~Distributions~~January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, or Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profits from domestic entities to offshore entities, including (i) banks must check whether the transaction is genuine by reviewing board resolutions regarding profit distribution, original copies of tax filing records and audited financial statements, and (ii) domestic entities must retain income to account for previous years’ losses before remitting any profits. Moreover, pursuant to Circular 3, domestic entities must explain in detail the sources of capital and how the capital will be used, and provide board resolutions, contracts and other proof as a part of the registration procedure for outbound investment.

~~The~~On ~~principal~~October 23, ~~regulations~~2019, ~~governing~~SAFE ~~distribution~~issued Circular of ~~dividends~~the State Administration of ~~wholly~~Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or the Circular 28, which took effect on the same day. Circular 28 allows non-investment foreign-~~owned~~invested ~~companies~~enterprises ~~include:~~to use their capital funds to make equity investments in China, provided that such investments do not violate the effective special entry management measures for foreign investment (negative list) and the target investment projects are genuine and in compliance with laws. Since Circular 28 was issued only recently, its interpretation and implementation in practice are still subject to substantial uncertainties.

lPursuant to the ~~Foreign~~SAFE ~~Investment~~Circular ~~Enterprise~~13 ~~Law~~and ~~(1986)~~other laws and regulations relating to foreign exchange, aswhen ~~amended;~~setting up a new foreign invested enterprise, the foreign invested enterprise shall register with the bank located at its registered place after obtaining the business license, and if there is any change in capital or other changes relating to the basic information of the foreign-invested enterprise, including without limitation any increase in its registered capital or total investment, the foreign invested enterprise must register such changes with the bank located at its registered place after obtaining approval from or completing the filing with competent authorities. Pursuant to the relevant foreign exchange laws and regulations, the above-mentioned foreign exchange registration with the banks will typically take less than four weeks upon the acceptance of the registration application.

lAccording to the Foreign Investment Law, Measures for Reporting of Information on Foreign Investment, promulgated by MOFCOM, and State Administration for Market Regulation, or the SAMR on December 30, 2019 and became effective on January 1, 2020, the Administrative Rules on ~~under~~the Company Registration, which was promulgated by the ~~Foreign~~State ~~Investment~~Council on June 24, 1994, became effective on July 1, 1994 and latest amended on February 6, 2016, and other laws and regulations governing the foreign invested enterprises and company registrations, the establishment of a foreign invested enterprise and any capital increase and other major changes in a foreign invested enterprise shall be registered with the SAMR, or its local counterparts, and investment information shall be submitted to the competent commerce authorities through the enterprise registration system and the National Enterprise ~~Law~~Credit ~~(2001)~~Information Publicity System, if such foreign invested enterprise does not involve special access administrative measures prescribed by the PRC government.

~~Under~~Based ~~these~~on ~~regulations~~the forgoing, ~~foreign~~if ~~investment~~we ~~enterprises in~~intend ~~China~~to ~~may~~provide funding ~~pay~~to ~~dividends~~our ~~only~~wholly ~~out~~foreign ofowned ~~their~~subsidiaries ~~accumulated~~through ~~profits,~~a ifcapital ~~any,~~injection ~~determined~~at inor ~~accordance~~after ~~with~~their ~~PRC~~establishment, ~~accounting~~we ~~standards~~must ~~and~~register ~~regulations.~~the establishment Inthereof ~~addition,~~and ~~wholly~~any ~~foreign~~follow-~~owned~~on ~~enterprises~~capital increase in ~~China~~our ~~are~~wholly ~~required~~foreign toowned ~~set~~subsidiaries ~~aside~~with atthe ~~least~~SAMR ~~10%~~or ofits ~~their~~local ~~after-tax profits each year~~counterparts, ifsubmit such ~~any,~~information tovia ~~fund~~the ~~certain~~enterprise ~~reserve~~registration ~~funds,~~system ~~until~~and ~~such~~the ~~reserve~~National ~~funds~~Enterprise ~~have~~Credit ~~reached~~Information ~~50%~~Publicity ofSystem ~~the~~and ~~enterprise’s~~register ~~registered~~such ~~capital. These reserves~~with ~~are~~the ~~restricted~~local ~~and~~banks ~~not~~for ~~distributable~~the asforeign ~~cash~~exchange ~~dividends~~related matters.

WeOffshore have not received any dividends or fees from our PRC subsidiaries or affiliated Chinese entities in the past three years. As all our PRC subsidiaries are currently still operating at a net loss, we are unable to estimate the time to receive dividends or other fees.Investment

~~Enterprise~~Under ~~Income~~the ~~Tax~~Circular ~~Law~~of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or the SAFE Circular 37, issued by the SAFE and effective on July 4, 2014, PRC residents are required to register with the local SAFE branch prior to contributing assets or equity interests in an offshore special purpose vehicle, or SPV, which is defined as offshore enterprises directly established or indirectly controlled by PRC residents for investment and financing purposes, with the enterprise assets or interests they hold in China or overseas. The term “control” means obtain the operation rights, right to proceeds or decision-making power of a SPV through acquisition, trust, holding shares on behalf of others, voting rights, repurchase, convertible bonds or other means. An amendment to registration or subsequent filing with the local SAFE branch by such PRC resident is also required if there is any change in basic information of the offshore company or any material change with respect to the capital of the offshore company. At the same time, the SAFE has issued the Operation Guidance for the Issues Concerning Foreign Exchange Administration over Round-trip Investment regarding the procedures for SAFE registration under the SAFE Circular 37, which became effective on July 4, 2014 as an attachment of Circular 37.

~~The~~Under ~~Enterprise~~the ~~Income~~relevant ~~Tax Law~~rules, orfailure ~~EIT~~to ~~Law,~~comply ~~was~~with ~~promulgated by~~ the ~~PRC’s~~registration ~~National~~procedures ~~People’s~~set ~~Congress~~forth ~~on March 16, 2007 to introduce a new uniform taxation regime~~ in the ~~PRC. Both~~SAFE ~~resident~~Circular ~~and~~37 ~~non-resident~~may ~~enterprises~~result ~~deriving~~in ~~income~~bans ~~from~~on the ~~PRC~~foreign ~~were~~exchange ~~subject~~activities toof the ~~EIT~~relevant ~~Law from January 1~~onshore company, ~~2008.~~including ~~It applies a single income tax rate to all enterprises in~~ the ~~PRC.~~payment ~~Under~~of ~~this~~dividends ~~EIT Law, enterprises that qualify as “new~~ and ~~high~~other ~~technology~~distributions ~~enterprises” (“high-tech companies”) are entitled~~ to aits ~~preferential~~offshore ~~tax~~parent ~~rate~~or ofaffiliates, ~~15%~~ and inmay ~~other~~also ~~very~~subject ~~limited situation entities may be~~relevant ~~subject~~PRC residents to apenalties ~~EIT~~under ~~rate~~PRC offoreign ~~20%,~~exchange ~~but~~administration ~~the general EIT rate is 25%~~regulations.

We believe that each of our PRC operating entities were resident enterprises and subject to the enterprise income tax rate of 25% for their global income. We do not believe that any of our off-shore entities are resident enterprises as our off-shore entities didn’t provide any services in the PRC and their management and controls are all located outside China; permanent establishment does not exist and hence they would not fall into the resident enterprise category. However, we cannot provide assurance that all our offshore operating entities are not “resident enterprises” as there are substantial uncertainties regarding the interpretation and implementation of current PRC tax rule and regulation.16

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Regulations on Dividend Distribution

The principal laws and regulations regulating the dividend distribution of dividends by foreign-invested enterprises in the PRC include the PRC Company Law, as amended in 1999, 2004, 2005, 2013 and 2018, and Foreign Investment Law and the Implement the Implementing Regulations of FIL which replaced the Wholly Foreign-owned Enterprise Law promulgated in 1986 and amended in 2000 and 2016 and its implementation regulations promulgated in 1990 and subsequently amended in 2001 and 2014, the PRC Equity Joint Venture Law promulgated in 1979 and subsequently amended in 1990, 2001 and 2016 and its implementation regulations promulgated in 1983 and subsequently amended in 1986, 1987, 2001, 2011 and 2014, and the PRC Cooperative Joint Venture Law promulgated in 1988 and amended in 2000, 2016 and 2017 and its implementation regulations promulgated in 1995 and amended in 2014 and 2017. Under the current regulatory regime in the PRC, foreign-invested enterprises in the PRC may pay dividends only out of their retained earnings, if any, determined in accordance with PRC accounting standards and regulations. A PRC company is required to set aside as statutory reserve funds of at least 10% of its after-tax profit, until the cumulative amount of such reserve funds reaches 50% of its registered capital unless laws regarding foreign investment provide otherwise. A PRC company shall not 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.

Regulations Relating to M&A Rule and Overseas Listing in the PRC

On August 8, 2006, six PRC governmental and regulatory agencies, including MOFCOM and CSRC, promulgated the Rules on Acquisition of Domestic Enterprises by Foreign Investors, or the M&A Rules, governing the mergers and acquisitions of domestic enterprises by foreign investors that became effective on September 8, 2006 and was revised on June 22, 2009. The M&A Rules, among other things, require that if an overseas company established or controlled by PRC companies or individuals, or PRC Citizens, intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC Citizens, such acquisition must be submitted to MOFCOM for approval. The M&A Rules also requires that an offshore SPV that is controlled directly or indirectly by the PRC companies or individuals and that has been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, shall obtain the approval of CSRC prior to overseas listing and trading of such SPV’s securities on an overseas stock exchange.

Regulations Relating to Taxes

Income Tax

The PRC Enterprise Income Tax Law, or the EIT Law, imposes a uniform enterprise income tax rate of 25% on all PRC resident enterprises, including foreign-invested enterprises, unless they qualify for certain exceptions. The enterprise income tax is calculated based on the PRC resident enterprise’s global income as determined under PRC tax laws and accounting standards. If a non-resident enterprise sets up an organization or establishment in the PRC, it will be subject to enterprise income tax for the income derived from such organization or establishment in the PRC and for the income derived from outside the PRC but with an actual connection with such organization or establishment in the PRC. The EIT Law and its implementation rules permit certain “high and new technology enterprises strongly supported by the state” that independently own core intellectual property and meet statutory criteria, to enjoy a reduced 15% enterprise income tax rate. In January 2016, the SAT, the Ministry of Science and Technology and the MOF jointly issued the Administrative Rules for the Certification of High and New Technology Enterprises specifying the criteria and procedures for the certification of High and New Technology Enterprises.

On April 22, 2009, the SAT issued the Circular of the State Administration of Taxation on Issues Relating to Identification of PRC-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance With the De Facto Standards of Organizational Management, or the SAT Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT’s general position on how the “de facto management body” text should be applied in determining the tax resident status of all offshore enterprises. According to the SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. Further to SAT Circular 82, on July 27, 2011, the SAT issued the Announcement of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Income Tax on PRC-controlled Resident Enterprises Incorporated Overseas (Trial Implementation), or the SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details for determination of resident status and administration on post-determination matters.

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Value-added Tax

The Provisional Regulations of the PRC on Value-added Tax, the VAT Regulation, were promulgated by the State Council on December 13, 1993 and came into effect on January 1, 1994 which were subsequently amended from time to time. The Detailed Rules for the Implementation of the Provisional Regulations of the PRC on Value-added Tax (Revised in 2011) was promulgated by the MOF on December 25, 1993 and subsequently amended on December 15, 2008 and October 28, 2011, or collectively, the VAT Law. On November 19, 2017, the State Council promulgated the Decisions on Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the Provisional Regulations of the PRC on Value-added Tax, or the Order 691. On April 4, 2018, MOF and SAT jointly promulgated the Circular on Adjustment of Value-Added Tax Rates, or Circular 32. According to the VAT Law, the Order 691 and the Circular 32, all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of the PRC are the taxpayers of VAT. The VAT tax rates generally applicable are simplified as 16%, 10%, 6% and 0%, and the VAT tax rate applicable to the small-scale taxpayers is 3%.

Chinese Premier Li Keqiang on March 5, 2019 announced that the VAT of 16% and 10% that apply to the supply of certain goods and services would be reduced to 13% and 9%, respectively. These measures will leave three rates in place: 13%; 9%; and 6%, effective from April 1, 2019.

Dividend Withholding Tax

As we believe the Company is a non-resident for PRC tax purpose, dividends paid to it out of profits earned by PRC subsidiaries would be subject to 10% withholding tax, if no tax treaty is applicable. In addition, under the current tax treaty between the PRC and Hong Kong, if the foreign investor is incorporated in Hong Kong and qualifies as the beneficial owner, the applicable withholding tax rate may be reduced to 5%, if the investor holds at least 25% in the foreign-invested enterprise; or 10%, if the investor holds less than 25% in the foreign-invested enterprise.

Regulations of Hong Kong

Hong Kong Laws and Regulations relating to Employment

Pursuant to Employment Ordinance (Chapter 57 of the Laws of Hong Kong) (“EO”), which came into full effect in Hong Kong on September 27, 1968, all employees covered by the EO are entitled to basic protection under the EO including but not limited to payment of wages, restrictions on wages deductions and the granting of statutory holidays.

Pursuant to Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) (“MPFSO”), which came into full effect in Hong Kong on December 1, 2000, every employer must take all practicable steps to ensure that the employee becomes a member of a Mandatory Provident Fund (MPF) scheme. An employer who fails to comply with such a requirement may face a fine and imprisonment. The MPFSO provides that an employer who is employing a relevant employee must, for each contribution period, from the employer’s own funds, contribute to the relevant MPF scheme the amount determined in accordance with the MPFSO.

Pursuant to Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) (“ECO”), which came into full effect in Hong Kong on December 1, 1953, all employers are required to take out insurance policies to cover their liabilities under the ECO and at common law for injuries at work in respect of all of their employees. An employer failing to do so may be liable to a fine and imprisonment.

Pursuant to Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong) (“MWO”), which came into full effect in Hong Kong on May 1, 2011, an employee is entitled to be paid wages no less than the statutory minimum wage rate during the wage period. With effect from May 1, 2019, the statutory minimum hourly wage rate is HK$37.5. Failure to comply with MWO constitutes an offence under EO.

Environmental Matters

The Company's operations are subject to various environmental regulations. We believe that we are in substantial compliance with applicable laws, rules and regulations relating to the protection of the environment and that our compliance will have no material effect on our capital expenditures, earnings or competitive position.

ITEM 1A.

RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item. If an adverse outcome of any of the following risks actually occurs, our business, financial condition or operating results could be materially and adversely affected. In evaluating our business, shareholders should consider carefully the following factors in addition to the other information presented herein.

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Risks Related to Our Business

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic. Many businesses and social activities in the PRC, Hong Kong, and other countries and regions have been severely disrupted. Such disruption and the potential slowdown of the world’s economy could have a material adverse effect on our results of operations and financial condition. Although some countries, including the U.S., have during 2022 moved from lock downs and other health related mandates that significantly disrupt businesses, many countries, including the PRC have responded to variants of the COVID-19 virus with a range of options including lock downs. We cannot provide assurance that our operations, particularly our operations in the PRC, will not be subject to significant business disruptions and suspension of operations due to government measures that respond to COVID-19, it variants other public health emergencies.

We have a limited operating history in a competitive and rapidly evolving industry; it may be difficult to evaluate our prospects, and we may not be able to effectively manage our growth.

We restarted our operations in August 2022 through NCN Ningbo and we have a limited operating history in the advertising industry, which is competitive and rapidly evolving. We may have limited insight into trends that may develop and affect our business, and we may make errors in predicting and reacting to industry trends and evolving needs of our customers.

In addition, we may not be able to effectively manage our growth. Our business expansion may increase the complexity of our operations and place a significant strain on our managerial, operational, financial and human resources. Our current and planned personnel, systems, procedures and controls may not be adequate to support our future operations. If we are not able to manage our growth effectively, our business and prospects may be materially and adversely affected.

We have a history of operating losses. These raise substantial doubt about our ability to continue as a going concern. We have been dependent on sales of our equity securities and debt financing to meet our cash requirements. If adequate capital is not available to us, we may need to sell assets or seek to undertake a restructuring of our obligations with our creditors. We cannot give assurances that we would be able to accomplish either of these measures on commercially reasonable terms, if at all. In any such case, we may not be able to continue as a going concern.

We may not be able to successfully implement our growth strategy on a timely basis or at all.

Our future success depends, in large part, on our ability to implement our expansion in China. Our ability to implement this growth strategy depends, among other things, on our ability to maintain relationship with residual building management companies. We may not be able to successfully implement our growth strategy and may need to change our strategy from time to time. If we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful, our business, financial condition and results of operations may be materially adversely affected.

We have to compete with other advertising companies in the out-of-home advertising market. We compete for advertising clients primarily in terms of network size and coverage, locations of our lightboxes, LED panels and billboards, pricing, and range of services that we can offer. We also face competition from advertisers in other forms of media such as out-of-home television advertising network in commercial buildings, hotels, restaurants, supermarkets and convenience chain stores. We expect that the competition will be more severe in the near future. The relatively low fixed costs and the practice of non-exclusive arrangement with advertising clients would provide a very low barrier for new entrants in this market segment. If we are unable to increase the placement of our out-of-home advertising market, we may be unable to expand our client base to sell advertising time slots on our network or increase the rates we charge for time slots. As a consequence of this, our operating margins and profitability may be reduced, and may result in a loss of market share. Since we are a new entrant to this market segment, we have less competitive advantages than the existing competitors in terms of experience, expertise, and marketing force. We cannot assure that we will be able to compete against new or existing competitors to generate satisfactory profit.

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Our future success depends in part on the contributions of our management team and key technical and sales personnel and our ability to attract and retain qualified new personnel. In particular, our success depends on the employment of our sales, marketing and other key personnel. Because of significant competition in our industry for qualified managerial, technical and sales personnel, we cannot assure you that we will be able to retain our key senior managerial, technical and sales personnel or that we will be able to attract, integrate and retain other such personnel that we may require in the future. If we are unable to retain our existing personnel, or attract, train, integrate or motivate additional qualified personnel, our growth may be restricted. The loss of any of these key employees could slow our programming, distribution and sales efforts or have an adverse effect on how our business is perceived by advertisers, venue providers and investors, and our management may have to divert their attention from our business to recruiting replacements for such key personnel.

Our business operations depend on the continued services of our senior management, particularly the executive officers named in this report. While we have the ability to provide different incentives to our management, we cannot assure you that we can continue to retain their services. If one or more of our key executives were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, our future growth may be constrained, our business may be severely disrupted and our financial condition and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have entered into confidentiality and non-competition agreements with our management, there is no assurance that any member of our management team will not join our competitors or form a competing business. If any dispute arises between our current or former officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements in China or we may be unable to enforce them at all.

All of our operations currently are conducted in China. There are a number of risks inherent in doing business in China, including the following: unfavorable political or economic factors; fluctuations in foreign currency exchange rates; potentially adverse tax consequences; unexpected legal or regulatory changes; lack of sufficient protection for intellectual property rights; difficulties in recruiting and retaining personnel, and managing international operations; and less developed infrastructure. Furthermore, changes in the political, economic and social conditions in China from which these risks are derived could make it more difficult to provide products to our customers. Our inability to manage these risks successfully could adversely affect our business and could significantly limit or completely hinder our ability to offer our ordinary shares to investors and cause the value of such securities to significantly decline or be worthless.

We rely on the maintenance of business relationships with our clients.

Our sales team maintains contacts with our existing clients and keeps our clients informed of developments at our Company. Notwithstanding our efforts in marketing and promotion, there is no assurance that we can maintain business relationships with our clients in the future. In the event that we are unable to retain these clients, or expand our client base, our business, results of operations, profitability and liquidity may be adversely affected.

We have limited business insurance coverage for our PRC subsidiaries. In the event that adequate insurance is not available or our insurance is not deemed to cover a claim, we could face liability.

We carry insurance of various types, including general liability and professional liability insurance in amounts management considers adequate and customary for the jurisdiction in which we operate. Insurance companies in China offer limited business insurance products because the insurance industry in China is still at an early stage of development, and some of our insurance policies may limit or prohibit insurance coverage for punitive or certain other types of damages, or liability arising from gross negligence. If we incur increased losses related to employee acts or omissions, or system failure, or if we are unable to obtain adequate insurance coverage at reasonable rates, or if we are unable to receive reimbursements from insurance carriers, our financial condition and results of operations could be materially and adversely affected.

Our subsidiaries are required to comply with relevant rules and regulations in China, failure to do so could have a material adverse effect on us.

We are required to comply with applicable environmental regulations, health quality standards, and production safety standards in relation to our operations and production processes. In order to comply with the rules and regulations of the relevant public health authorities and quality and technical supervision authorities, we are subject to regular and random inspections. Failure to pass such inspections and comply with regulatory requirements could result in termination of the manufacture and sale of our products, forfeiture of related revenues, revocation of business licenses, or potential criminal liability, which would have a material adverse effect on our reputation and our business, financial condition, results of operations and prospects.

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We cannot be certain that our advertising content, entertainment content or other aspects of our media business do not or will not infringe upon patents, copyrights or other intellectual property rights held by third parties. Although we are not aware of any such claims, we may become subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business. If we are found to have violated the intellectual property rights of others, we may be enjoined from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives. In addition, we may incur substantial expenses in defending against these third party infringement claims, regardless of their merit. Successful infringement or licensing claims against us may result in substantial monetary liabilities, which may materially and adversely disrupt our business.

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

We are subject to the Foreign Corrupt Practice Act, or the FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations, agreements with third parties and we make sales in China. Our activities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents or distributors of our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

Risks related to our Common Stock

Our common stock started trading on the OTC Market, or OTC, under the symbol “NWCN”. The trading market in our common stock has been substantially less liquid than the average trading market for companies quoted on the OTC Market. Limited trading volume will subject our shares of common stock to greater price volatility and may make it difficult for you to sell your shares of common stock at a price that is attractive to you.

The market price of our common stock is volatile, leading to the possibility of its value being depressed at a time when you want to sell your holdings.

The market price of our common stock is volatile, and this volatility may continue. Numerous factors, many of which are beyond our control, may cause the market price of our common stock to fluctuate significantly. These factors include:

our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors;

changes in financial estimates by us or by any securities analysts who might cover our stock;

speculation about our business in the press or the investment community;

significant developments relating to our relationships with our customers or suppliers;

stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in the advertising industry;

customer demand for our products;

investor perceptions of our industry in general and our company in particular;

the operating and stock performance of comparable companies;

general economic conditions and trends;

major catastrophic events;

announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;

changes in accounting standards, policies, guidance, interpretation or principles; and

loss of external funding sources.

A decline in the price of our shares of common stock could affect our ability to raise further working capital and adversely impact our operations.

A prolonged decline in the price of our shares of common stock could result in a reduction in the liquidity of our shares of common stock and a reduction in our ability to raise capital. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop our business and continue our current operations. If the stock price declines, there can be no assurance that we can raise additional capital or generate funds from operations sufficient to meet our obligations.

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If we issue additional shares, this may result in dilution to our existing stockholders.

Our Certificate of Incorporation authorizes the issuance of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock. Our board of directors has the authority to issue additional shares up to the authorized capital stated in the Certificate of Incorporation. Our board of directors may choose to issue shares to acquire one or more businesses or to provide additional financing in the future. The issuance of shares may result in a reduction of the book value or market price of the outstanding shares of our common stock. If we issue additional shares, there may be a reduction in the proportionate ownership and voting power of all other stockholders. Further, any issuance may result in a change of control of the Company.

Our authorized preferred stock constitutes what is commonly referred to as “blank check” preferred stock. This type of preferred stock allows the board of directors to designate the preferred stock into a series and determine separately for each series any one or more relative rights and preferences. The board of directors may issue shares of any series without further stockholder approval. Preferred stock authorized in series allows our board of directors to hinder or discourage an attempt to gain control by a merger, tender offer at a control premium price, or proxy contest. Consequently, the preferred stock could entrench our management. In addition, the market price of our common stock could be affected by the existence of the preferred stock.

Stockholders should have no expectation of any dividends.

The holders of our common stock are entitled to receive dividends, when, as and if declared by the board of directors out of funds of the Company legally available for the payment of dividends. To date, we have not declared nor paid any cash dividends. The board of directors does not intend to declare any dividends in the near future, but instead intends to retain all earnings, if any, to finance the development and expansion of our business and operations. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.

We are a holding company and may rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay for the holding company expenses or pay dividends to holders of our common stocks.

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

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

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

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

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by the PRC subsidiaries or the WFOE, to its immediate holding company. As of the date of this report, the WFOE currently does not have plan to declare and pay dividends and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. HK subsidiary intends to apply for the tax resident certificate when the WFOE plans to declare and pay dividends. When the WFOE plans to declare and pay dividends and when we intend to apply for the tax resident certificate from the relevant Hong Kong tax authority, we plan to inform the investors through SEC filings, such as a current report on Form 8-K, prior to such actions.

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Risks Related to Doing Business in China

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

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

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

While the Chinese economy has experienced significant growth over the past four decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. Since 2012, China’s economic growth has slowed down. Any prolonged slowdown in the Chinese economy may reduce the demand for our products and materially and adversely affect our business and results of operations.

The PRC legal system is based on written statutes, and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties. The enforcement of laws and that rules and regulations in China can change quickly with little advance notice and the risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China- based issuers, could result in a material change in our operations and/or the value of our ordinary shares.

We cannot rule out the possibility that the PRC government will institute a licensing regime or pre-approval requirement covering our industry at some point in the future. If such a licensing regime or approval requirement were introduced, we cannot assure you that we would be able to obtain any newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability to continue our operations.

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

The Chinese government exerts substantial influence over the manner in which its subsidiaries and VIEs must conduct their business activities.

The Chinese government exerts substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The ability of its subsidiaries and the VIEs to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts to ensure its compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest itself of any interest we then hold in Chinese properties.

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As such, the business operations of the Company, its subsidiaries, and the VIEs may be subject to various government and regulatory interference in the provinces in which these entities operate. The Company, its subsidiaries, and the VIEs could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In the event that the Company, its subsidiaries and the VIEs are not able to substantially comply with any existing or newly adopted laws and regulations, its business operations may be materially adversely affected and the value of the Company’s common stock shares may significantly decrease.

Furthermore, the PRC government may strengthen oversight and control over offerings and/or listings that are conducted overseas and/or foreign investment in China-based issuers. Such actions taken by the PRC government authorities may intervene or influence operations of the subsidiaries and VIEs at any time, which are beyond their control. Therefore, any such action may adversely affect the operations of the Company and result in material change in the Company’s operation and/or the value of the Company’ s securities. In addition, the PRC government has recently indicated an intent to exert more oversight over offerings that are conducted overseas and/or foreign investment in China-based issuers. Any such action could significantly limit or completely hinder the Company’s ability to offer or continue to offer securities to you and cause the value of such securities to significantly decline or be worthless.

Foreign ownership of a specific business area, such as value-added telecommunications services and education services, is restricted or prohibited by the laws of the PRC. Primarily for this reason, some foreign-invested companies do not directly engage in the restricted or prohibited business, but instead have established a WFOE which would enter into a series of contracts with the company with native shareholders (“Operation Company”) that are intended to provide the company with control over the operation of, and the right to receive the net profits realized by, the Operation Company. These contracts are customarily identified as “VIE Agreements”, as they are designed to cause the operating company to be treated under U.S. generally accepted accounting principles as a “variable interest entity”, whose profits and losses can be consolidated with those of its contractual counterpart.

One significant risk of this structure is that the PRC government has never expressly acknowledged the VIE structure as a way to legally navigate the PRC’s investment restrictions. The PRC government could determine, at any time and without notice, that the underlying contractual arrangements on which the contractual control of the Operation Company is based violate PRC law. However, since we do not have any VIE structure, this risk would not adversely affect our current operations unless we later determine to employ a VIE structure.

Once a company use the VIE structure, it might rely on contractual arrangements to exercise control over the company with native shareholders (“Operation Company”), which may not be as effective as direct ownership in providing operational control.

Once a company uses the VIE structure, it might rely on contractual arrangements to exercise control over the Operation Company, which may not be as effective as direct ownership in providing operational control. A company may rely on contractual arrangements with the Operation Company to conduct its operation in the PRC. These contractual arrangements, however, may not be as effective as direct ownership in providing the WFOE control over the Operation Company. For example, the Operation Company might breach its contractual arrangements, among other things, failing to conduct the operations of the Operation Company in an acceptable manner or taking other actions that are detrimental to the WFOE and other parties of the VIE agreement.

If a company had direct ownership of the Operation Company, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of the Operation Company, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the VIE structure, it relies on the performance by the Operation Company of their obligations under the contracts to exercise control over the Operation Company. If any dispute relating to these contracts remains unresolved, it will have to enforce its rights under these contracts through the operations of PRC law and arbitration, litigation and other legal proceedings and therefore, will be subject to uncertainties in the PRC legal system. However, since we do not have any VIE structure, the abovementioned risk would not adversely affect our current operation unless we later determine to employ a VIE structure.

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

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

We believe none of our entities outside of the PRC is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that we or any of our subsidiaries outside of the PRC is a PRC resident enterprise for PRC enterprise income tax purposes, then we or such subsidiary could be subject to PRC tax at a rate of 25% on its world- wide income, which could materially reduce our net income. In addition, we could also be subject to PRC enterprise income tax reporting obligations. Furthermore, if the PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, gains realized on the sale or other disposition of our ordinary shares may be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders of our Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in our common stock.

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

We are a holding company, and we rely on dividends and other distributions on equity paid by our subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

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

Any limitation on the ability of our PRC subsidiary to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

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

Under PRC laws and regulations, we are permitted to utilize the proceeds from offerings to fund our PRC subsidiaries by making loans to or additional capital contributions to our PRC subsidiaries, subject to applicable government registration and approval requirements.

Any loans to our PRC subsidiaries, which are treated as foreign-invested enterprises under PRC laws, are subject to PRC regulations and foreign exchange loan registrations. For example, loans by us to our PRC subsidiaries to finance its activities cannot exceed statutory limits and must be registered with the local counterpart of the State Administration of Foreign Exchange, or SAFE. The statutory limit for the total amount of foreign debts of a foreign-invested company is the difference between the amount of total investment as approved by China’s Ministry of Commerce (“MOFCOM”) or its local counterpart and the amount of registered capital of such foreign-invested company.

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We may also decide to finance our PRC subsidiaries by means of capital contributions. These capital contributions must be filed with the MOFCOM or its local counterpart. In addition, SAFE issued a circular in September 2008, 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. SAFE Circular 142 provides that 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 unless otherwise provided by law, may not be used for equity investments within the PRC. Although on July 4, 2014, SAFE issued the Circular of the SAFE on Relevant Issues Concerning the Pilot Reform in Certain Areas of the Administrative Method of the Conversion of Foreign Exchange Funds by Foreign-invested Enterprises, or SAFE Circular 36, which launched a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises in certain designated areas from August 4, 2014 and some of the restrictions under SAFE Circular 142 will not apply to the settlement of the foreign exchange capitals of the foreign-invested enterprises established within the designate areas and such enterprises mainly engaging in investment are allowed to use its RMB capital converted from foreign exchange capitals to make equity investment, our PRC subsidiaries are not established within the designated areas. On March 30, 2015, SAFE promulgated Circular 19, to expand the reform nationwide. Circular 19 came into force and replaced both Circular 142 and Circular 36 on June 1, 2015. Circular 19 allows foreign-invested enterprises to make equity investments by using RMB funds converted from foreign exchange capital. However, Circular 19 continues to prohibit foreign-invested enterprises from, among other things, using RMB fund converted from its foreign exchange capitals for expenditure beyond its business scope, providing entrusted loans or repaying loans between non-financial enterprises. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of a foreign-invested company. The use of such RMB capital may not be altered without SAFE’s approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used. Violations of these Circulars could result in severe monetary or other penalties. These circulars may significantly limit our ability to use RMB converted from the net proceeds of offerings to fund the establishment of new entities in China by our PRC subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiaries, or to establish variable interest entities in the PRC.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we expect to receive from offerings to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

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

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

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

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

Substantially all of our revenues and PRC subsidiaries expenditures are denominated and presented in RMB, the amounts for the fiscal year ended December 31, 2023 are presented in U.S. dollars for convenience purpose. As a result, fluctuations in the exchange rate between the U.S. dollar and RMB does not have much impact on our operations. However, the fluctuation may affect our financials in the terms of our U.S. dollar assets and the proceeds from offerings. Should RMB appreciate against other currencies, any future financings, which are to be converted from US dollar or other currencies into RMB, would be reduced and might accordingly hinder our business development due to the lessened amount of funds raised. On the other hand, in the event of the devaluation of RMB, the dividend payments of our Company, which are to be paid in US dollars after the conversion of the distributable profit denominated in RMB, would be reduced.

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

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

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

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. Under our current corporate structure, our Company in the Delaware may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment registrations by the beneficial owners of our Company who are PRC residents. But approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders.

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

Our PRC subsidiaries are required under PRC laws and regulations to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of its employees up to a maximum amount specified by the local government from time to time at locations where operate its businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. As of the date of this report, we believe that our PRC subsidiaries have made employee benefit payments in material aspects. If the PRC subsidiaries fail to make adequate payments in the future, it may be required by the social security premium collection agency to make or supplement contributions within a stipulated period, and shall be subject to a late payment fine computed from the due date at the rate of 0.05% per day; where payment is not made within the stipulated period, the relevant administrative authorities shall impose a fine ranging from one to three times the amount of the amount in arrears. If our PRC subsidiaries are subject to fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

Non-compliance with labor-related laws and regulations of the PRC may have an adverse impact on our financial condition and results of operation.

Our PRC subsidiaries have been subject to stricter regulatory requirements in terms of entering into labor contracts with its employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of its employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January 2008 and was amended in December 2012 and became effective on July 1, 2013, and its implementing rules that became effective in September 2008, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. In the event that the subsidiaries decide to terminate some of its employees or otherwise change its employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations. We believe our subsidiaries current practice complies with the Labor Contract Law and its amendments. However, the relevant governmental authorities may take a different view and impose fines on us.

As the interpretation and implementation of labor-related laws and regulations are still evolving, our employment practices could violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If the subsidiaries are deemed to have violated relevant labor laws and regulations, the subsidiaries could be required to provide additional compensation to its employees and our business, financial condition and results of operations could be materially and adversely affected.

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In February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. Our employees who are PRC citizens or who have resided in the PRC for a continuous period of not less than one year and who have been granted options or other awards are subject to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiary’s ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.

To the extent cash or assets of our business, or of our PRC or Hong Kong subsidiaries, is in the PRC or Hong Kong, such cash or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong, due to interventions in or the imposition of restrictions and limitations by the PRC government to the transfer of cash or assets.

The transfer of funds and assets among HK and PRC subsidiary is subject to restrictions. The PRC government imposes controls on the conversion of the RMB into foreign currencies and the remittance of currencies out of the PRC. In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises, unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the non-PRC-resident enterprises are tax resident.

As of the date of this report, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future.

PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and operations. The business restricted or prohibited by the Negative List conducted through the VIE and its subsidiaries are subject to foreign investment restrictions set forth in the Special Management Measures (Negative List) for the Access of Foreign Investment issued by the MOFCOM, and the National Development and Reform Commission, or the NDRC, effective January 2022.

On March 15, 2019, the National People’s Congress of the PRC promulgated the Foreign Investment Law, or the Foreign Investment Law (2019), which became effective on January 1, 2020 and replaced the Sino- Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-Owned Enterprise Law to become the legal foundation for foreign investment in the PRC. Since the Foreign Investment Law (2019) is relatively new. Uncertainties still exist in relation to its interpretation and implementation. For instance, under the Foreign Investment Law (2019), “foreign investment” refers to the investment activities directly or indirectly conducted by foreign individuals, enterprises or other entities in China. Although it does not explicitly classify contractual arrangements as a form of foreign investment, there is no assurance that foreign investment via contractual arrangements would not be interpreted as a type of indirect foreign investment activity in the future. In addition, the definition of foreign investment contains a catchall provision which includes investments made by foreign investors through means stipulated in laws, administrative regulations or provisions of the PRC State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions promulgated by the PRC State Council to provide for contractual arrangements as a form of foreign investment. In any of these cases, it is uncertain whether VIE arrangements will be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations. If further actions must be taken under future laws, administrative regulations or provisions of the PRC State Council, a VIE structure may face substantial uncertainties as to whether it can complete such actions. Failure to do so could materially and adversely affect the VIE structure and its operations. However, since we do not have any VIE as operating company now, the abovementioned risk would not adversely affect our current operation unless we later determine to employ a VIE structure.

The contractual arrangements the WFOE has entered into with an Operation Company may be subject to scrutiny by the PRC tax authorities. A finding that the WFOE owes additional taxes could negatively affect the financial condition of the WFOE.

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. A VIE structure could face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements in relation to the Operation Company were not entered into on an arms-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and therefore adjust the income of the Operation Company 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 the Operation Company for PRC tax purposes, which could, in turn, increase its tax liabilities without reducing the PRC tax expenses of the WFOE in the VIE structure. The financial position of a company with VIE structure could be materially and adversely affected if the tax liabilities of the Operation Company increase or if they are required to pay late payment fees and other penalties. To reinforce, since we do not have VIE conduct business currently, the abovementioned risk would not adversely affect our current operation unless we later determine to employ a VIE structure.

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Regulatory bodies of the United States may be limited in their ability to conduct investigations or inspections of our operations in China.

From time to time, we may receive requests from certain US agencies, including the Securities and Exchange Commission, to investigate or inspect our operations, or to otherwise provide information. There can be no assurance that we or our subsidiaries, including those in the PRC or entities that provide services to us or with whom we associate, will be able to fully comply with such requests. Furthermore, an on-site inspection of our facilities in the PRC by any of these regulators may be limited or entirely prohibited by PRC law or policies. Such inspections, though permitted by our Company and our affiliates, are subject to certain PRC governmental approvals, and may therefore be impossible to facilitate. According to Article 177 of the PRC Securities Law which became effective in March 2020, the securities regulatory authority of the State Council may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region, to implement cross-border supervision and administration, and no overseas securities regulator is allowed to directly conduct an investigation or evidence collection activities within the territory of the PRC. Accordingly, without the consent of the competent PRC securities regulators and relevant authorities, no organization or individual may provide the documents and materials relating to securities business activities to overseas parties.

The Holding Foreign Companies Accountable Act, or HFCAA and the related regulations might pose regulatory risks to and impose restrictions on us because of our operations in mainland China.

The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. In accordance with the HFCAA, trading in securities of any registrant on a national securities exchange or in the over-the-counter trading market in the United States may be prohibited if the PCAOB determines that it cannot inspect or fully investigate the registrant’s auditor for three consecutive years beginning in 2021, and, as a result, an exchange may determine to delist the securities of such registrant. On June 22, 2021, the U.S. Senate passed the AHFCAA, which was signed into law on December 29, 2022 , amending the HFCAA and requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period before our securities may be prohibited from trading or delisted if our auditor is unable to meet the PCAOB inspection requirement.

On November 5, 2021, the SEC adopted the PCAOB rule to implement HFCAA, which provides a framework for the PCAOB to determine whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, the PCAOB issued its determinations (the “Determination”) that they are unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong. The Determination includes lists of public accounting firms headquartered in mainland China and Hong Kong that the PCAOB is unable to inspect or investigate completely.

On August 26, 2022, the PCAOB announced that it had signed the Protocol with CSRC and MOF of the People's Republic of China, governing inspections and investigations of audit firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC.

On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control, including positions taken by authorities of the PRC. The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond. The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong. Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, the PCAOB will make determinations under the HFCAA as and when appropriate.

The enactment of the HFCAA and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could cause investors uncertainty for affected issuers and the market price of our ordinary shares could be adversely affected, and we could be delisted if our auditor is unable to meet the PCAOB inspection requirement.

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The lack of access to PCAOB inspections prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China and Hong Kong. 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 and Hong Kong makes it more difficult to evaluate the effectiveness of these accounting firm’s audit procedures and quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections.

Our auditor, Gries & Associates, LLC, an independent registered public accounting firm that is headquartered in the United States, 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 inspections to assess its compliance with the applicable professional standards. Our auditor has been inspected by the PCAOB on a regular basis and it is not included in the PCAOB Determinations. However, we cannot assure you whether OTC Market or 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, or sufficiency of resources, geographic reach, or experience as it relates to our audit. If it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction or any other reasons, the lack of inspection could cause the trading in our securities to be prohibited under the Holding Foreign Companies Accountable Act, and as a result OTC Market may delist our securities. If our securities are unable to be listed on another securities exchange, such a delisting would substantially impair your ability to sell or purchase our securities when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our ordinary shares. Further, new laws and regulations or changes in laws and regulations in both the United States and China could affect our ability to list our common stock on OTC market, which could materially impair the market for and market price for our securities.

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

The PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in particular, equity interests in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing SAT Circular 59 and Circular 698, which became effective in January 2008, and Circular 698 was abolished and void as of December 1, 2017.

Under Circular 698, where a non-resident enterprise conducts an “indirect transfer” by transferring the equity interests of a PRC “resident enterprise” indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up to 10%. Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.

In February 2015, the SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly different from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.

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

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

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Any change of regulations and rules by Chinese government including potential additional requirements on cybersecurity review, personal information protection, moving technology in and out of the PRC, or outbound data transfer may intervene or influence our operations in China at any time and any additional control over offerings conducted overseas and/or foreign investment in issuers with Chinese operations could result in a material change in our business operations and/or the value of our ordinary shares and could also significantly limit or completely hinder our ability to offer our ordinary shares to investors and cause the value of such securities to significantly decline or be worthless.

Our operation in China may be intervened or influenced by the new regulations and policies by Chinese government. For example, between July 2 and July 6, 2021, the CAC announced cybersecurity investigations of the business operations of certain U.S.-listed Chinese companies. On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued “The Opinions on Severely Cracking Down on Illegal Securities Activities According to Law” (the “Opinions”). The Opinions emphasized the needs to strengthen the administration over illegal securities activities and the supervision over overseas listings by Chinese companies. According to the Opinions, Measures, including promoting the construction of relevant regulatory systems, will be taken to control the risks and manage the incidents from overseas listed Chinese companies.

On December 24, 2021, China Securities Regulatory Commission, or the CSRC, announced Provisions of State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Public Comments) (the “Administration Provisions”) and Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (Draft for Public Comments) (the “Measures”) which were open for public comment until January 23, 2022, pursuant to which, any direct or indirect offshore listing of PRC domestic enterprises shall be filed with the CSRC. The Measures provide that the determination as to whether a domestic company is indirectly offering and listing securities on an overseas market shall be made on a substance over form basis, and if the issuer meets the following conditions, the offering and listing shall be determined as an indirect overseas offering and listing by a Chinese domestic company: (i) the revenue, profit, total assets or net assets of the Chinese domestic entity is more than 50% of the related financials in the issuer’s audited consolidated financial statements for the most recent fiscal year; (ii) the senior managers in charge of business operation and management of the issuer are mostly Chinese citizens or with regular domicile in China, the main locations of its business operations are in China or main business activities are conducted in China. It is not clear when the Administration Provisions and the Measures will take effect and if they will take effect as currently drafted.

On December 28, 2021, Cybersecurity Review Measures published by the CAC, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of State Security, Ministry of Finance, Ministry of Commerce, People’s Bank of China, State Administration of Radio and Television, China Securities Regulatory Commission, State Secrecy Administration and State Cryptography Administration, effective on February 15, 2022, which provides that, Critical Information Infrastructure Operators (“CIIOs”) that intend to purchase internet products and services and Data Processing Operators (“DPOs”) engaging in data processing activities that affect or may affect national security shall be subject to the cybersecurity review by the Cybersecurity Review Office. In addition, CIIOs and DPOs that possess personal data of at least one (1) million users must apply for a review by the Cybersecurity Review Office, if they plan to conduct listings in foreign countries. On November 14, 2021, CAC published the Administration Measures for Cyber Data Security (Draft for Public Comments), or the “Cyber Data Security Measure (Draft)”. Cyber Data Security Measure (Draft) provides that data processors shall apply for Cybersecurity Review for certain events, such as the merger, restructuring, division of an internet platform operator that holds a large amount of data relating to national security, economic development or public interests which affects or may affect the national security; overseas listing of a data processor that processes personal data for more than one million individuals; Hong Kong listing of a data processor that affects or may affect national security; other data processing activities that affect or may affect the national security. We are not an CIIO as defined in the Review Measures, but we are probably deemed to be a DPO engaging in data processing activities. Currently, we do not believe we are obligated to apply for a cybersecurity review pursuant to the Cybersecurity Review Measures and Cyber Data Security Measure (Draft), as (i) we do not process personal data for more than one million individuals under Cyber Data Security Measure (Draft), and (ii) as of the date of this this prospectus, we have not received any notice from applicable PRC governmental authorities that the VIE may have carried out activities that affect or may affect national security. Furthermore, based on our business patterns and development plans, the number of individuals whose personal data is held by us is unlikely to reach the threshold of one million within the upcoming two years, and the personal data held by us is unlikely to affect national security. The existing PRC law and regulations does not explicitly require DPOs that have the personal information of more than one million users after listing to apply for cybersecurity review. If in the future we reach the threshold of one million, or any competent government authorities deem that our data processing activities may affect national security, we may be subject to the cybersecurity review. Although we believe we would be approved by the CAC through the cybersecurity review, failure to pass such cybersecurity review and/or to comply with the data privacy and data security requirements raised during such cybersecurity review could subject us to penalties, damage its reputation and brand, and harm its business and results of operations. There may also be risks that we may not be able to continue our operations, which may lead to uncertainties of future financing by foreign investment or remaining listed and traded on an U.S. stock exchange.

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On July 7, 2022, the CAC promulgated the Measures for Security Assessment for Outbound Data Transfer, which became effective on September 1, 2022. The Measures apply to the security assessment of Important Data and personal information collected and generated during operation within the territory of the People’s Republic of China and transferred abroad by a data handler. Specifically, the Measures for Security Assessment for Outbound Data Transfer to provide that where a data handler transfers data abroad under any of the following circumstances, it shall, through the local Cyberspace Administration at the provincial level, apply to the CAC for security assessment for the outbound data transfer: (1) a data handler who transfers Important Data abroad; (2) a critical information infrastructure operator, or a data handler processing the personal information of more than one million individuals, who, in either case, transfers personal information abroad; (3) a data handler who has, since January 1 of the previous year cumulatively transferred abroad the personal information of more than 100,000 individuals, or the sensitive personal information of more than 10,000 individuals, or (4) other circumstances where the security assessment for the outbound data transfer is required by the CAC.

As of the date of this report, we have not transferred any user information to places outside of the PRC. We do not believe we will be subject to the Measures for Security Assessment for Outbound Data Transfer, considering (i) we do not anticipate reaching the one million thresholds to trigger the assessment by the CAC and (ii) we do not anticipate to transfer any user information outside of the PRC after the offering. In the circumstances we may be subject to such assessment, we believe we would obtain approval from the CAC. However, failure to pass such assessment and/or to comply with the data privacy and data security requirements raised during such assessment could subject us to penalties, damage its reputation and brand, and harm its business and the results of operations.

The PRC legal system is based in part on government policies, and new laws and regulations may be enacted from time to time, some of which may have a retroactive effect. Furthermore, substantial uncertainties exist regarding the interpretation and implementation of current and any future PRC laws and regulations. It is not certain whether any future regulations will impose restrictions on the business that we are currently engaging in China. As of the date of this prospectus, we have not received any notice from any authorities identifying us as a CIIO, DPO or requiring us to undertake a cybersecurity review or an outbound data transfer review by the CAC.

Uncertainties regarding the enforcement of laws and the fact that rules and regulations in China can change quickly with little advance notice, along with the risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could result in a material change in our operations, financial performance and/or the value of our ordinary shares or impair our ability to raise money.

If we become subject to additional scrutiny, criticism and negative publicity involving U.S.-listed China-based companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, securities offerings and our reputation and could result in a loss of your investment in our ordinary shares, especially if such matter cannot be addressed and resolved favorably.

Recently, U.S. public companies that have substantial operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in some cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S.-listed China-based companies has decreased in value and, in some cases, has become virtually worthless. Some of these companies have been subject to shareholder lawsuits and SEC enforcement actions and have conducted internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us, our business and securities offerings. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation may be a major distraction to our management. If such allegations are not proven to be groundless, our business operations will be severely hindered and your investment in our ordinary shares could be rendered worthless.

The Chinese legal system embodies uncertainties which could negatively affect our listing on OTC Market and limit the legal protections available to you and us.

The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.

In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation since then has 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 China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection the Company enjoys. These uncertainties may affect the Company’ judgment on the relevance of legal requirements and the Company’s ability to enforce its contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from the Company.

Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect. As a result, the Company may not be aware of its violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.

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New laws and regulations may be enacted from time to time and substantial uncertainties exist regarding the interpretation and implementation of current and any future PRC laws and regulations applicable to the business of the Company. In particular, the PRC government may continue to promulgate new laws, regulations, rules and guidelines governing new economy companies with respect to a wide range of issues, such as intellectual property, unfair competition and antitrust, privacy and data protection, and other matters. Compliance with these laws, regulations, rules, guidelines, and implementations may be costly, and any incompliance or associated inquiries, investigations, and other governmental actions may divert significant management time and attention and the Company’ financial resources, bring negative publicity, subject to the Company to liabilities or administrative penalties, or materially and adversely affect the Company’s business, financial condition, results of operations and the value of the Company’s common stock.

Risks Related to Doing Business in Hong Kong

The Hong Kong legal system and political environment embodies uncertainties which could limit the legal protections available to you and us.

As one of the conditions for the handover of the sovereignty of Hong Kong to China, China had to accept some conditions such as Hong Kong’s Basic Law before its return. The Basic Law ensured Hong Kong will retain its own currency (the Hong Kong Dollar), legal system, parliamentary system and people’s rights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom to function in a high degree of autonomy. The Special Administrative Region of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English common law system.

However, if the PRC reneges on its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s common law legal system and may in turn bring about uncertainty in, for example, listing our common stocks on OTC Market.

This also could materially and adversely affect our business and operation. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our customers.

Devaluation of the Hong Kong dollar could affect our financial conditions and results of operations.

Since 1983, Hong Kong dollars have been pegged to the US dollars at the rate of approximately HK$7.80 to US$1.00. We cannot assure you that this policy will not be changed in the future. If the pegging system collapses and Hong Kong dollars suffer devaluation, the Hong Kong dollar cost of our expenditures denominated in foreign currency may increase. This would in turn adversely affect the operations and profitability of our business.

It will be difficult to acquire jurisdiction and enforce liabilities against us, our officers, directors and assets based in Hong Kong.

Almost all of our assets are located in Hong Kong and China and our officers and directors currently reside outside of the United States and are in Hong Kong. There are currently no treaties or other arrangements providing for reciprocal enforcement of foreign judgments between Hong Kong and the United States. In a common law action for enforcement of a foreign judgment in Hong Kong, the enforcement is subject to various conditions, including but not limited to, that the foreign judgment is a final judgment conclusive upon the merits of the claim, the judgment is for a liquidated amount in a civil matter and not in respect of taxes, fines, penalties, or similar charges, the proceedings in which the judgment was obtained were not contrary to natural justice, and the enforcement of the judgment is not contrary to public policy of Hong Kong. China does not have any treaties or other form of reciprocity with the United States or the Cayman Islands that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it may be difficult or not possible for United States investors to enforce their legal rights, to effect service of process upon us, our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of us, our directors and officers under federal securities laws.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

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ITEM 1C.

CYBERSECURITY

The Company recognizes the critical importance of cybersecurity in safeguarding sensitive information, maintaining operational resilience, and protecting its customers and stakeholders' interests. A cybersecurity policy should be designed to establish a comprehensive framework for identifying, assessing, mitigating, and responding to cybersecurity risks across the organization.

At such time as the Company possesses sufficient resources, it will establish a cybersecurity policy appropriate for our business which implements protocols to evaluate, recognize, and address significant risks, including those posed by cybersecurity threats. As part of this strategy, we expect to incorporate standard traffic monitoring tools, educate our personnel to identify and report abnormal activities, and partner with reputable service providers capable of upholding security standards equivalent to or exceeding our own.

We will seek to integrate these measures into our broader operational risk management framework aimed at minimizing exposure to unnecessary risks across our operations. We may work with outside consultants and third-party service providers to implement industry-standard strategies aimed at identifying and mitigating potential threats or vulnerabilities within our systems. Additionally, we expect that our policy strategy will include a comprehensive cyber crisis response plan to manage high severity security incidents, ensuring efficient coordination across the organization.

Cybersecurity threats have not significantly impacted our operations, and we do not anticipate such risks materially affecting our business, strategy, financial condition, or results of operations. However, given the escalating sophistication of cyber threats, the preventive measures we adopt may not always suffice. Despite well-designed controls, we acknowledge the inability to foresee all security breaches, including those stemming from third-party misuse of artificial intelligence (“AI”) technologies, and the potential challenges in implementing timely preventive measures.

Our Chief Executive Officer will oversee our information security programs, including cybersecurity initiatives, and is integrated into the cybersecurity the incident response process that we adopt. Our board of directors will oversee cybersecurity risk management activities, supported by Company management and external consultants.

ITEM 2.

PROPERTIES

We maintain our head office in Hong Kong at Unit 705B, 7th Floor, New East Ocean Centre, 9 Science Museum Road, TST, KLN, Hong Kong. We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our business.

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ITEM 3.

LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are not a party to or otherwise involved in any pending legal proceedings.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for Our Common Stock

Since August 1, 2006, our common stock has been quoted on the Over-the-Counter Bulletin Board, or OTCBB, maintained by the Financial Industry Regulatory Authority (“FINRA”), under the symbol “NWCN.” From February 2011 to February 2012, our common stock, along with the securities of over 600 other issuers, was transferred from the OTCQB automated quotation system to the OTC Pink, which is part of the OTC Market Group's quotation system, due to the quotation inactivity by our market makers. On January 21,2022, the Company announced that had has received approval from OTC Markets Group for its securities to be designated as trading on the OTCQB Venture Market Exchange as of January 21 ,2022, under the OTCQB ticker symbol OTCQB: NWCN. From July 2022 to January 2023, our common stock was transferred to the OTC Expert Market and started in January 2023, our common stock resumed quotation on the OTC PINK.

On September 16, 2011, we filed a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State to effect a 1-for-5 reverse stock split of our outstanding common stock and a reduction of our authorized shares of common stock from 2,000,000,000 to 400,000,000. The CUSIP number for our common stock has been changed to 64125G209 accordingly. On September 21, 2011, FINRA approved the reverse split of our common stock and it commenced trading on a post-split basis on September 22, 2011.

On August 11, 2015, we filed a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State to effect a 1-for-15 reverse stock split of our outstanding common stock and a reduction of our authorized shares of common stock from 400,000,000 to 26,666,667. The new CUSIP number for the Company’s common stock is 64125G 308 accordingly. On August 10, 2015, the Financial Industry Regulatory Authority (FINRA) approved the reverse split and it commenced trading on a post-split basis on August 11, 2015.

On December 20, 2023, the Board of Directors and Majority of stockholders of the Company approved to amend the Company's Certificate of Incorporation, as amended, to increase the total number of authorized shares of Preferred Stock from 5,000,000 to 10,000,000. On February 1, 2024, we filed a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State to increase the total number of authorized shares of Preferred Stock from 5,000,000 to 10,000,000 and the increase had approved by Delaware secretary of state on February 8, 2024.

The following table sets forth, for the periods indicated, the high and low closing prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

	Closing Prices (1)
	High	Low
FISCAL YEAR ENDED DECEMBER 31, 2023:
Fourth Quarter	$0.85	$0.65
Third Quarter	$2.00	$0.75
Second Quarter	$0.10	$0.03
First Quarter	$0.04	$0.04
FISCAL YEAR ENDED DECEMBER 31, 2022:
Fourth Quarter	$0.55	$0.55
Third Quarter	$1.55	$0.55
Second Quarter	$1.69	$0.72
First Quarter	$1.69	$0.67
FISCAL YEAR ENDED DECEMBER 31, 2021:
Fourth Quarter	$2.60	$1.58
Third Quarter	$3.30	$0.20
Second Quarter	$0.75	$0.15
First Quarter	$1.72	$0.68

(1)

The above tables set forth the range of high and low closing prices per share of our common stock as reported by www.otcmarket.com for the periods indicated.

~~Approximate Number of Holders of Our Common Stock~~35

As of April 13, 2023, the Company had approximately 200 stockholders of record and 21,355,899 shares of common stock were issued and outstanding. Because some of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

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Approximate Number of Holders of Our Common Stock

As of April 29, 2024, the Company had approximately 200 stockholders of record and 22,088,792 shares of common stock were issued and outstanding. Because some of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

In December 2012, we changed our registrar and transfer agent for our common stock from Globex Transfer, LLC. to Pacific Stock Transfer Company. Their address is 6725 Via Austi Pkwy, Suite 300 Las Vegas, NV, USA and their telephone number and facsimile are +1 (702) 361-3033 and +1 (702) 433-1979, respectively.

Dividend Policy

The Company has not declared any dividends since incorporation and does not anticipate doing so in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

Our subsidiaries in the PRC may pay dividends to us through our Hong Kong subsidiaries, NCN Group (Global) Limited. Current PRC regulations only allow our subsidiaries to pay dividends to us out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Also in accordance with its articles of association, each of our subsidiaries in the PRC is required to allocate to its enterprise development reserve at least 10% of its respective after-tax profits determined in accordance with the PRC accounting standards and regulations. Each of our subsidiaries in the PRC may stop allocations to its general reserve if such reserve has reached 50% of its registered capital. Allocations to the reserve can only be used for making up losses and other specified purposes and may not be paid to us in forms of loans, advances, or cash dividends. Dividends paid by our PRC subsidiaries to NCN Group (Global) Limited, our Hong Kong subsidiaries, will not be subject to Hong Kong capital gains or other income tax under current Hong Kong laws and regulations because they will not be deemed to be assessable income derived from or arising in Hong Kong.

We have not received any dividends or any other fees, including consulting fees, from our PRC subsidiaries or our affiliated Chinese entities in the past three years as all of our PRC operating companies, including our PRC subsidiaries and variable interest entities, are currently operating at an accumulated deficit and the above dividend restriction prevent us from receiving any dividends in the short -term until they turn into accumulated profit. As such, we could only receive funds from them through the repayment of intercompany loans by our PRC subsidiaries or charging them service fees through the provision of management services. If our PRC operating entities continue to operate at a net loss, we will need to raise funds through the issuance of equity and debt securities to satisfy future payment requirements, and there is no assurance that we will be successful in raising such funds.

Our board of directors has discretion on whether to pay dividends unless the distribution would render us unable to repay our debts as they become due. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. For instance, the terms of the outstanding promissory notes issued contain restrictions on the payment of dividends. The dividend restrictions provide that the Company or any of its subsidiaries shall not declare or pay dividends or other distributions in respect of the equity securities of such entity other than dividends or distributions of cash which amounts during any 12-month period that exceed ten percent (10%) of the consolidated net income of the Company based on the Company’s most recent audited financial statements disclosed in the Company’s annual report on Form 10-K (or equivalent form) filed with the U.S. Securities and Exchange Commission.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, “Securities Authorized for Issuance Under Equity Compensation Plans”.

Recent Sales of Unregistered Securities

During the past two years, we did not offer or sell any unregistered securities that were not previously disclosed in a quarterly report on Form 10-Q or in a current report on Form 8-K.

Purchases of Our Equity Securities

No repurchases of our common stock were made during our fiscal year ended December 31, ~~2022~~2023.

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ITEM 6.

RESERVED

Smaller reporting companies are not required to provide the information required by this item.

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ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto and the other financial information appearing elsewhere in this annual report. In addition to historical information, the following discussion contains certain forward-looking information. See “Special Note Regarding Forward-Looking Statements” above for certain information concerning those forward looking statements. Our consolidated financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP. References in this Report to a particular “fiscal” year are to our fiscal year ended on December 31.

Overview of Our Business

Our mission is to become a leader in advertising media and actively serve brand customers. Our service is to provide our brand customers with integrated intelligent marketing solutions based on big data. We are committed to actively developing a new core retail channel “Community Channel" in the Chinese advertising field and strive to continue to develop this core to the whole of China in the future of each large and small community that makes us a leader in the core of the advertising industry.

Total advertising revenue for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 was $~~106~~446,~~498~~019 and $~~nil~~106,498, respectively. Our net loss profit was $~~925~~1,~~278~~906,353 and $1925,~~215,636~~278 for the years ended ~~December~~ December 31, ~~2022~~2023 and ~~2021~~2022 respectively. The Company will continually explore new media projects in order to provide a wider range of media and advertising services.

COVID-19 Pandemic

In December 2019, an outbreak of COVID-19 was identified in China and was subsequently recognized as a global pandemic by the World Health Organization (“WHO”) on March 11, 2020. Since that time, COVID-19 has spread around the world and throughout the United States, including in the regions and countries in which we operate. Federal, state and local governments in the U.S and around the world have imposed restrictions on travel and business operations and are advising or requiring individuals to limit or eliminate time outside of their homes. Temporary closures of businesses have also been ordered in certain jurisdictions, and other businesses have temporarily closed voluntarily. These actions expanded significantly in March and April of 2020 throughout the U.S. Consequently, the COVID-19 outbreak has severely restricted the level of economic activity in the U.S. and around the world.

The outbreak has resulted in authorities implementing numerous measures to try to contain the virus, such as quarantines and shelter in place orders. These measures may remain in place for a significant period of time and adversely affect our business, operations and financial condition as well as the business, operations and financial conditions of our business partners. The spread of the virus has also caused us to modify our business practices (including employee work locations and cancellation of physical participation in meetings) in ways that may be detrimental to our business (including working remotely and its attendant cybersecurity risks). We may take further actions as may be required by government authorities or that we determine are in the best interests of our employees. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.

There has been no material adverse impact on the Company’s 2021 results of operations to date. The effect of COVID-19 and related events, those not yet known or knowable, could have a negative effect on the stock price, business prospects, financial condition, and results of operations of the Company, including as a result of quarantines, market volatility, market downturns and business closures.

For the reasons discussed above, the Company cannot reasonably estimate with any degree of certainty the future impact COVID-19 may have on the Company’s results of operations, financial position, and liquidity. Notwithstanding any actions by national, state, and local governments to mitigate the impact of COVID-19 or by the Company to address the adverse impacts of COVID-19, there can be no assurance that any of the foregoing activities will be successful in mitigating or preventing significant adverse effects on the Company.

Recent Developments

~~Our~~Recent ~~Business~~Regulatory ~~in Chengdu and Tianjin~~Developments

~~The~~PRC ~~Company~~Regulatory actively developing its advertising network and explored new media project in Chengdu and Tianjin, China. The Company has established two newly subsidiaries, NCN (Chengdu) Culture Media Co., Ltd, (“NCN Chengdu”) and NCN (Tianjin) Culture Co., Ltd (“NCN Tianjin”), a wholly foreign-owned enterprise in Chengdu and Tianjin, China. The Company owns 100% of the established subsidiary companies. In January 2023, NCN Chengdu and Tianjin started its operation and acquired rights to operate advertising panels in Chengdu and Tianjin. On January 1, 2023, NCN Chengdu and NCN Tianjin entered into employment contracts which the employees agreed to bring in the advertising rights in Chengdu and Tianjin to the Company.Permissions

9Currently, the Chinese government may intervene or influence our operations in China or any securities offering at any time, which could result in a material change in our operations and our common stock could decline in value or become worthless. The PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. We do not use a VIE Structure and believe that our subsidiaries are not directly subject to these regulatory actions or statements, as we have not implemented any monopolistic behavior and our business does not involve the collection of user data or implicate cybersecurity. As of the date of this report, no relevant laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission, or the CSRC, or any other PRC governmental authorities for the offering, nor has our Delaware holding company, any of our PRC subsidiaries received any inquiry, notice, warning or sanctions regarding the offering from the CSRC or any other PRC governmental authorities.

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~~Our~~However, ~~Business~~since these statements and regulatory actions by the PRC government are newly published and official guidance and related implementation rules have not been issued, it is highly uncertain when legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange. The Standing Committee of the National People’s Congress, or the SCNPC, or other PRC regulatory authorities may in ~~Ningbo~~the future promulgate laws, regulations or implementing rules that require our company or any of our subsidiaries to obtain regulatory approval from Chinese authorities before the offering. However, any change in foreign investment regulations, and other policies in China or related enforcement actions by China government could result in a material change in our operations and the value of our common stock and could significantly limit or completely hinder our ability to offer our ordinary shares to investors or cause the value of our common stock to significantly decline or be worthless.

~~The~~On ~~Company~~December ~~explored~~28, ~~new~~2021, ~~media~~the ~~project~~CAC inand ~~Ningbo,~~several other ~~China~~administrations ~~and~~jointly ~~decided~~issued tothe ~~restart~~revised ~~its~~Measures ~~business~~for ~~and~~Cybersecurity ~~expects~~Review, ~~that~~or the Revised Review Measures, which will ~~improve~~become effective and replace the ~~Company’s~~existing ~~future~~Measures ~~financial~~for ~~performance.~~Cybersecurity InReview ~~April~~on February 15, 2022. According to the Revised Review Measures, if an “online ~~the~~platform ~~Company~~operator” ~~has~~that ~~established~~is in possession of personal data of more than one million users intends to list in a ~~newly~~foreign ~~subsidiary~~country, ~~NCN~~it must ~~(Ningbo)~~apply ~~Culture~~for ~~Media~~a Cocybersecurity review., ~~Ltd~~Based ~~(“NCN~~on ~~Ningbo”)~~a set of Q&A published on the official website of the State Cipher Code Administration in connection with the issuance of the Revised Review Measures, an official of the said administration indicated that an online platform operator should apply for a ~~wholly~~cybersecurity ~~foreign~~review prior to the submission of its listing application with non-~~owned~~ PRC securities regulators. ~~enterprise~~After inthe ~~Ningbo~~receipt of all required application materials, ~~China~~the authorities must determine, within ten business days thereafter, whether a cybersecurity review will be initiated. ~~The~~If ~~Company~~a ~~owns~~review ~~100%~~is ofinitiated and the ~~established~~authorities ~~subsidiary~~conclude ~~company~~after such review that the listing will affect national security, ~~NCN~~the ~~Ningbo~~listing of the relevant applicant will be prohibited. InGiven ~~August~~the ~~2022,~~recency ~~NCN~~of ~~Ningbo~~the ~~started its~~issuance ~~operation~~of the Revised Review Measures and ~~acquired~~their ~~rights~~pending toeffectiveness, ~~operate~~there ~~advertising~~is ~~panels~~a ingeneral ~~Ningbo,~~lack ~~China~~of guidance and ~~sell~~substantial ~~advertising~~uncertainties ~~airtime~~exist with respect to ~~our~~their interpretation ~~customers~~and ~~directly~~implementation. On ~~February~~For 1example, ~~2023,~~it is unclear whether the ~~Company~~requirement ~~agreed~~of cybersecurity review applies to ~~issue~~follow-on ~~606,881~~offerings by ~~restricted~~an ~~shares~~“online platform operator” that is in possession of personal data of more than one million users where the ~~Company’s~~offshore ~~common~~holding ~~stock~~company toof ~~the~~such ~~employee,~~operator ~~Chen~~is ~~Zhu.~~already listed overseas On ~~October~~November 114, ~~2022~~2021, ~~NCN~~the ~~Ningbo entered~~CAC ~~into~~released anthe ~~employment~~Regulations ~~contract~~on ~~with~~Network ~~Chen~~Data ~~Zhu~~Security Management (~~“the employee”)~~draft ~~under~~for public comments), which ~~the~~provide ~~employee~~that ~~agreed~~if a data processor that processes personal data of more than one million users intends to ~~bring~~list in ~~the~~a ~~advertising~~foreign ~~rights~~country, init ~~Ningbo~~must toapply for a cybersecurity review. Pending the ~~Company~~finalization, adoption, enforcement and interpretation of these new measures and regulations, we cannot rule out the ~~Company~~possibility ~~will~~that ~~reward him~~the ~~for~~measures ~~606~~and regulations may be enacted,~~881~~ ~~shares~~interpreted or implemented in ways that will negatively affect us. The Company believes the new data security of China do not apply to the Company’s or ~~common~~its ~~stock~~subsidiaries. ~~Pursuant~~However, toany ~~the~~change ~~terms~~in offoreign ~~employment~~investment ~~contract~~regulations, ifand ~~the~~other ~~employee~~policies ~~can~~in ~~achieve~~China or related enforcement actions ~~the~~by ~~annual~~China ~~sales~~government ~~and~~could ~~profit~~result ~~before~~in ~~tax~~a ~~goal~~material change in ~~2023~~our operations and ~~2024,~~ the ~~Company~~value ~~will~~of ~~issue~~our ~~bonus~~ordinary shares ofand ~~303,441~~could ~~and~~significantly ~~303,441~~limit or ~~restricted~~completely hinder our ability to offer our ordinary shares of to investors or cause the ~~Company’s~~value of our common stock to ~~the~~significantly ~~employee,~~decline or ~~respectively~~be worthless.

~~Issuance~~Although ofwe ~~Convertible~~are operating in an industry that ~~Promissory~~limits ~~Note~~foreign investment according to applicable laws which allows not more than 50% equity interests held by foreign investors, we believe that we are currently not required to obtain any approvals from Chinese government to offer our common stock to foreign investors and list our common stock on OTC Market, however, if we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change in China that require us to obtain such approval, it could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of our securities to significantly decline.

Exercise of conversion option

Private Placement

On May 3, 2021, the Company entered into Common Stock Agreement with the New investor that the Company will sell an aggregate of 200,000 shares of the Company's common stock to the New investor. Pursuant to the terms of a Common Stock Agreement between the Company and the New investor, the purchase price paid by the New investor for the shares were $3 per share for an aggregate sum of $600,000.

Authorized capital

Results of Operations

Comparison of Years Ended December 31, ~~2022~~2023 and ~~2021~~2022.

Revenues. Our revenues consist primarily of income from out-of-home advertising panels. We recognize revenue in the period when advertisements are either aired or published. Revenues for the year ended December 31, ~~2022~~2023 was $~~106~~446,~~498~~019, as compared to $~~nil~~106,498 for the prior year, the increase ~~was~~ was attributed to the start of business in Ningbo, China in August 2022 and Chengdu in January 2023.

Cost of Revenues. Cost of revenues primarily consists of fees to obtain rights to operate advertising panels. Cost of revenues for the year ended December 31, ~~2022~~2023 was $82436,~~898~~668 as compared to $~~nil~~82,898 for the prior year, the increase was attributed to the start of business in Ningbo, China in August 2022 and Tianjin and Chengdu in January 2023.

Gross Profit. Our gross profit for the year ended December 31, ~~2022~~2023 was $239,~~600~~351 compared to $~~nil~~23,600 for ~~2021~~2022.

General and ~~Administrative~~ Administrative Expenses. General and administrative expenses primarily consist of compensation related expenses (including salaries paid to executive and employees, rental expenses, depreciation, fees for professional services, travel expenses and miscellaneous office expenses. General and administrative expenses for the year ended December 31, ~~2022~~2023 increased by 3120.955% to $~~631~~728,~~938~~292 compared to $~~479~~604,~~018~~123 for the year ended December 31, ~~2021~~2022. The increase in general and administrative expenses was mainly due to the increase in ~~franchise tax,~~ salary, audit fee and office expenses such as rent due to start of business in PRC.

1038

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~~Stock Based Compensation~~Amortization ~~for~~of ~~services~~intangible assets – ~~Stock~~Amortization ~~Based~~of ~~Compensation~~intangible ~~for~~assets ~~services~~ for the year ended December 31, ~~2022~~2023 was $24382,~~000~~995, compared to $~~217~~27,~~475~~ 815 for the ~~year~~corresponding ~~ended~~prior ~~December 31, 2021~~year. The ~~decrease~~increase was mainly due to noattributed ~~stock~~to ~~granted~~the tostart ~~directors~~of business in Ningbo, China in August 2022 and Tianjin and Chengdu in January 2023.

~~Gain~~Loss on ~~from~~written ~~Write-~~off of ~~Long~~ ~~Aged~~intangible ~~Payables~~ assets – ~~Gain~~Loss ~~from~~on ~~write-~~written off of ~~long-aged~~intangible ~~payables~~assets for ~~the~~ year ended December 31, ~~2022~~2023 was $~~nil~~449,473, compared to $~~708~~nil for the ~~year~~corresponding ~~ended~~prior ~~December 31, 2021~~year. WeThe ~~believe~~increase ~~the~~was ~~obligation~~mainly ~~for~~due ~~future~~to ~~settlement~~early ~~for~~termination ~~such~~of ~~long-aged~~advertising ~~payables is remote and~~contracts ~~therefore~~in ~~wrote~~Tianjin ~~them~~in ~~off~~May 2023.

~~Government~~Stock ~~Grant~~Based Compensation for services – ~~Government Grant~~Stock Based Compensation for services for the year ended December 31, ~~2022~~2023 was $344,~~286~~650, compared to $~~nil~~ 24,000 for the year ended December 31, ~~2021~~2022. ~~Government~~The ~~grants~~increase was mainly ~~represent~~ ~~amounts~~due ~~granted~~to bystock ~~Hong~~granted ~~Kong~~to ~~government~~consultants ~~for~~in ~~subsidize the salary~~2023.

~~Interest~~ Government ~~and~~Grant – Government ~~Other~~Grant ~~Debt-Related Expenses.~~for ~~Interest~~the ~~and~~year ~~other~~ended ~~debt-related~~December ~~expenses~~31, 2023 was $3,690, compared to $3,286 for the year ended December 31, 2022. For ~~decreased~~year toended ~~$296~~December 31,~~230~~ or2022, government grants mainly represent amounts granted by ~~43.02%,~~Hong ~~compared to~~Kong ~~$519,851~~government for subsidize the salary. For year ended December 31, ~~2021.~~2023, ~~The~~government ~~decrease~~grants ~~was~~mainly ~~due~~represent ~~from~~amounts ~~the~~granted ~~conversion~~by ofPRC ~~short term~~government ~~loan~~for tosubsidize ~~convertible~~the ~~note~~operation of subsidiaries.

~~Income~~Interest ~~Taxes.~~and ~~The~~Other ~~Company~~Debt-Related ~~derives~~Expenses. ~~all~~Interest ofand ~~its~~other ~~income~~debt-related inexpenses for the ~~PRC~~year ~~and~~ended isDecember ~~subject~~31, to2023 ~~income~~increased ~~tax~~to in$314,117 ~~the~~or ~~PRC~~by 6.04%, Nocompared to ~~income~~$296,230 ~~tax was recorded~~ for the ~~years~~year ended December 31, 2022. ~~and~~The ~~2021~~increase aswas ~~the~~due ~~Company~~from ~~and~~the ~~all~~increase ofin ~~its~~proceeds from ~~subsidiaries~~short-term ~~and~~loans ~~variable interest entities operated at a tax loss~~ in ~~fiscal 2022 and 2021~~2023.

~~Net~~Income ~~Loss~~Taxes. The Company ~~incurred~~derives aall ~~net loss~~ of ~~$925,278~~its ~~for~~income in the ~~year~~PRC ~~ended~~and ~~December~~is ~~31,~~subject ~~2022~~to ~~and~~income ~~$1,215,636~~tax ~~for~~in the ~~year~~PRC. ~~ended~~No ~~December~~income ~~31,~~tax ~~2021,~~was arecorded ~~decrease~~for ofthe years ended December 31~~.48%.~~, ~~The~~2023 ~~decrease~~and in2022 ~~net~~as ~~loss~~the ~~was~~Company ~~primarily~~and ~~due~~all toof ~~decrease~~its insubsidiaries ~~interest~~and ~~expenses~~variable ~~which~~interest ~~was~~entities ~~due from~~operated ~~the~~at ~~conversion~~a oftax ~~short~~loss ~~term~~in ~~loan~~fiscal to2023 ~~convertible note~~and 2022.

Net Loss. The Company incurred a net loss of $1,906,353 for the year ended December 31, 2023 and $925,278 for the year ended December 31, 2022, an increase of 106.03%. The increase in net loss was primarily due to an increase in amortization of intangible assets and loss on written off of intangible assets in 2023.

Transfer of Cash To and From Our Subsidiaries

The Company is incorporated in State of Delaware as a holding company with no actual operations and it currently conducts its business through its subsidiaries in China and our corporate headquarter is in Hong Kong. There has been no cash flows and transfers of other assets between the holding company and its subsidiaries other than that as of December 31, 2023, NCN Group Limited (BVI) and NCN Group Management Limited, a wholly owned subsidiaries of the Company have paid approximately $100,728 and $16,299 for corporate expenses on behalf of the holding company respectively and not as the dividend payment or distribution. None of our subsidiaries has made any dividend payment or distribution to our holding company as of the date of this report and they have no plans to make any distribution or dividend payment to the holding company in the near future. Neither the Company nor any of its subsidiaries has made any dividends or distributions to U.S. investors as of the date of this report.

Cash may be transferred within our consolidated group in the following manner:

we may transfer funds to our subsidiaries by way of capital contributions or loans, through intermediate holding companies or otherwise;

we may provide loans to our subsidiaries and vice versa; and

our subsidiaries may make dividends or other distributions to us, through intermediate holding companies or otherwise.

We have made the following aggregate cash intercompany payments and transfers from January 1, 2023 to December 31, 2023.

DATE

DISTRIBUTOR

RECIPIENT

AMOUNT

DISCRIPTION

2/13/2023

NCN Group Management

HK to

Chenxing (Beijing)

PRC

US$1,473

Loan to subsidiary

2/13/2023

NCN Group Management

HK to

NCN (Beijing)

PRC

US$347

Loan to subsidiary

2/13/2023

NCN Group Management

HK to

NCN (Nanjing)

PRC

US$347

Loan to subsidiary

2/13/2023

NCN Group Management

HK to

Ruibo (Shenzhen)

PRC

US$383

Loan to subsidiary

3/1/2023

NCN Group

BVI to

NCN Global

US$36,506

Loan to subsidiary

3/1/2023

NCN Global

HK to

NCN (Ningbo)

PRC

US$14,602

Loan to subsidiary

3/1/2023

NCN Global

HK to

NCN (Chengdu)

PRC

US$21,903

Loan to subsidiary

5/31/2023

NCN Group Management

HK to

Ruibo (Shenzhen)

PRC

US$615

Loan to subsidiary

8/3/2023

NCN Group

BVI to

NCN Group Management

US$8,974

Loan to subsidiary

11/3/2023

NCN Group Management

HK to

Chenxing (Beijing)

PRC

US$890

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

Chenxing (Beijing)

PRC

US$1,815

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

NCN (Beijing)

PRC

US$277

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

NCN (Nanjing)

PRC

US$123

Loan to subsidiary

11/21/2023

NCN Group Management

HK to

Ruibo (Shenzhen)

PRC

US$277

Loan to subsidiary

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The PRC government may continue to strengthen Its capital controls and our PRC subsidiaries’ dividends and other distributions may be subject to tighten scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. There are no other material restrictions on foreign currency restrictions with respect to our ability to transfer payments among our subsidiaries to the holding company and by holding company as a distribution to the holders of the Company. Other than discussed above, we don’t have any cash management policies that dictate the amount of such funding among our subsidiaries.

Liquidity and Capital Resources

Cash Flows

As of December 31, ~~2022~~2023, current assets were $~~103~~186,~~216~~112 and current liabilities were $35,~~972~~057,~~398~~512. Cash as of December 31, ~~2022~~2023 was $205,~~351~~334 compared to $2120,~~677~~351 as of December 31, ~~2021~~2022, a decrease of $115,~~326~~017. This was mainly attributable to the increase in payments for expenses during the year ended December 31, ~~2022~~2023.

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The following table sets forth a summary of our cash flows for the Years Ended December 31:

	2022			2021
	2023			2022
Net cash used in operating activities	$	(~~198~~298,~~403~~765	)	$	(~~441~~198,~~146~~403	)
Net cash used in investing activities		~~(1,078~~-	)		(21,~~422~~078	)
Net cash provided by financing activities		~~197~~278,~~161~~413			~~459~~197,~~077~~161
Effect of exchange rate changes on cash		~~994~~5,335			~~201~~994
Net (decrease) / increase in cash		(115,~~326~~017	)		15(1,~~710~~326	)
Cash at the beginning of year		2120,~~677~~351			521,~~967~~677
Cash at the end of year	$	205,~~351~~334		$	2120,~~677~~351

Operating Activities

Net cash used in operating activities for the year ended December 31, ~~2022~~2023 was $~~198~~298,~~403~~765, as compared with $~~441~~198,~~146~~403 for the year ended December 31, ~~2021~~2022, aan ~~reduction~~addition of $~~242~~100,~~743~~362. The ~~decrease~~increase in net cash used in operating activities was mainly attributable to the increase of payment to administrative service providers and ~~utilization~~payment ofto ~~prior~~our ~~year’s~~advertising ~~prepayment~~rights suppliers.

Investing Activities

Net cash used in investing activities for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 was $~~1,078~~nil and $21,~~422~~078, respectively, for the purchases of computers.

Financing Activities

Net cash provided by financing activities was $~~197~~278,~~161~~413 for the year ended December 31, ~~2022~~2023, as compared with $~~459~~197,~~077~~161 for the year ended December 31, ~~2021~~2022. The ~~decrease~~increase was mainly due to the ~~decrease in proceeds from private placement financing our operations and offset by~~ increase in proceeds from short-term loans.

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Short-term Loans

As of December 31, ~~2022 and 2021~~2023, the Company ~~recorded~~ recorded an aggregated amount of $1,~~165~~443,~~372~~785 ~~and $2,973,211~~ of short-term loans~~, respectively~~. Those loans were borrowed from a shareholder ~~and~~ ~~an unrelated individual. Except for the loan of $128,205 from an unrelated individual that are unsecured, bearing yearly interest of 1%~~ and ~~are repayable on demand,~~ the ~~remaining~~ loans are unsecured, bear a monthly interest of 1.5% and are repayable on demand. However, according to the agreement, the Company shall have the option to shorten or extend the life of those short-term loans if the need arises and the Company has agreed with the lender to extend the short-term loans on the due date. ~~On January 18, 2022, the Company issued convertible notes of US$2,500,000 which is for setting off against the short-term loans and interest payable.~~ As of the date of this report, the balance of $1,~~165~~443,~~372~~785 have not yet been repaid.

Capital Expenditures

The Company acquired of assets $~~1,078~~nil and $21,~~422~~078 during the year ended December 31, ~~2022~~2023 and ~~2021~~2022 respectively.

Contractual Obligations and Commercial Commitments

The following table presents certain payments due under contractual obligations with minimum firm commitments as of December 31, ~~2022~~2023:

	Payments due by period
	Total		Due in ~~2023~~2024		Due in ~~2024 –~~ 2025		Due in 2026-2027		Thereafter
Debt Obligations (a)	$	645,000	$	-	$	645,000	$	-	$	-
Debt Obligations (a)	$	2,500,000	$	-	$	-	$	2,500,000		-
Short Term Loan (b)	$	1,165,372	$	1,165,372	$	-	$	-	$	-
Short-Term Loan (b)	$	1,443,785	$	1,443,785	$	-	$	-	$	-

(a) Debt Obligations. We issued an aggregate of $645,000 in 1% Convertible Promissory Notes in January 2020 and such 1% Convertible Promissory Notes matured in January 2025 and we issued an aggregate of $2,500,000 in 1% Convertible Promissory Notes in January 2022 and such 1% Convertible Promissory Notes matured in January 2027. For details, please refer to Note 1112 of the consolidated financial statements.

(b) Short -Term Loan Those loans were borrowed from a shareholder ~~and an unrelated individual. Except for loan of $128~~,~~205~~ ~~from an unrelated individual that are unsecured, bearing yearly interest of 1% and are repayable on demand,~~ the ~~remaining~~ loans are unsecured, bear a monthly interest of 1.5% and are repayable on demand. However, according to the agreement, the Company shall have the option to shorten or extend the life of those short-term loans if the need arises and the Company has agreed with the lender to extend the short-term loans on the due date. ~~On January 18, 2022, the Company issued convertible notes of US$2,500,000 which is for setting off against the short-term loans and interest payable.~~ As of the date of this report, the balance of $1,~~165~~443,~~372~~785 have not yet been repaid.

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Going Concern

Our cash flow projections indicate that our current assets and projected revenues from our existing project will not be sufficient to fund operations over the next twelve months. This raises substantial doubt about our ability to continue as a going concern. We intend to rely on debt securities as well as on our notes’ holders’ exercise of their conversion option to convert our notes to our common stock, in order to fund our operations. However, it may be difficult for us to raise funds in the current economic environment. If adequate capital is not available to us, we may need to sell assets, seek to undertake a restructuring of our obligations with our creditors, or even cease our operations. We cannot give assurance that our notes’ holder will exercise their conversion option before the note is due. In any such case, we may not be able to continue as a going concern.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.

Critical Accounting Policies

The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including but not limited to those related to income taxes and impairment of long-lived assets. We base our estimates on historical experience and on various other assumptions and factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Based on our ongoing review, we plan to adjust to our judgments and estimates where facts and circumstances dictate. Actual results could differ from our estimates.

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We believe the following critical accounting policies are important to the portrayal of our financial condition and results and require our management's most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain.

~~(A) Basis of Presentation and Preparation~~Revenue

~~These~~The ~~consolidated~~Company ~~financial~~follows ~~statements~~FASB ASC 606, Revenue from Contracts with Customers in accounting for its revenues. The core principle of the revenue standard is that a company ~~Company~~should ~~have~~recognize ~~been~~revenue ~~prepared~~to indepict ~~conformity~~the ~~with~~transfer ~~generally~~of ~~accepted~~promised ~~accounting~~goods ~~principles~~or services to customers in an amount that reflects the ~~United~~consideration to ~~States~~which ofthe ~~America~~company ~~(“GAAP”)~~expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

~~(B)~~Step ~~Principles~~1: ofIdentify ~~Consolidation~~the contract with the customer

~~The~~Step ~~consolidated~~2: ~~financial~~Identify ~~statements include~~ the ~~financial~~performance ~~statements of Network CN Inc., its subsidiaries and variable interest entities for which it is the primary beneficiary.~~obligations ~~These variable interest entities are those~~ in ~~which~~ the Company, through contractual arrangements, bears the risks and enjoys the rewards normally associated with ownership of the entities. Upon making this determination, the Company is deemed to be the primary beneficiary of these entities, which are then required to be consolidated for financial reporting purpose. All significant intercompany transactions and balances have been eliminated upon consolidation.contract

~~(C)~~Step ~~Use~~3: ofDetermine ~~Estimates~~the transaction price

~~The~~Step ~~Company's~~4: ~~consolidated~~Allocate ~~financial statements requires management to make estimates and assumptions that affect~~ the ~~reported~~transaction ~~amounts~~price ~~of assets and liabilities at the date of the consolidated~~to ~~financial statements and reported amounts of revenue and expense during~~ the ~~reporting~~performance ~~period.~~obligations ~~Estimates~~in are used when accounting for certain items such as accounting for income tax valuation allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the ~~circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.~~contract

~~(D)~~Step ~~Cash~~5: Recognize the allocated revenue when the company satisfies a performance obligation

~~Cash~~The ~~includes~~Company ~~cash~~derives ~~on hand, cash accounts, and~~substantially ~~interest-bearing~~all ~~savings~~of ~~accounts~~its ~~placed~~revenue ~~with~~from ~~banks~~advertising ~~and financial institutions~~services. ~~For~~Revenue ~~the~~is ~~purposes~~recognized ofwhen the ~~statements~~performance ofobligation ~~cash~~is ~~flow,~~satisfied ~~the~~over ~~Company considers all highly liquid investments with original maturities of three months or less at the~~ time ofas ~~purchase~~services are ~~to be cash equivalents~~rendered. ~~There~~ ~~were~~Revenue nois ~~cash~~recorded ~~equivalents~~net ~~balance as~~ of ~~December 31, 2022 and December 31, 2021~~VAT.

~~(E) Equipment, Net~~Leases

~~Equipment~~The isCompany ~~stated~~follows atFASB ASU ~~cost~~2016-02, ~~less~~“Leases” ~~accumulated~~(Topic ~~depreciation~~ 842) and ~~impairment~~ ~~losses,~~measures ifthe ~~any.~~lease ~~Depreciation~~liability isbased ~~provided~~ on athe ~~straight-line~~present ~~basis,~~value ~~less~~of ~~estimated~~the ~~residual~~lease ~~values~~payments ~~over~~discounted by the ~~assets’~~relevant ~~estimated useful~~borrowing ~~lives. The~~rate ~~estimated~~and ~~useful~~reduces ~~lives~~the ~~are~~carrying asvalue ~~follows:~~of the lease liability for lease payments made.

~~Office~~The ~~equipment~~Company 3accounts for -all 5significant ~~years~~leases as either operating or finance leases. At lease inception, if the lease meets any of the following five criteria, the Company will classify it as a finance lease: (i) the lease transfers ownership of the underlying asset to the Company by the end of the lease term, (ii) the lease grants the Company an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (iii) the lease term is for the major part of the remaining economic life of the underlying asset, (iv) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all (90% or more) of the fair value of the underlying asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. Otherwise, the lease will be treated as an operating lease.

~~When~~For ~~equipment~~leases iswith ~~retired~~a ~~or otherwise disposed~~term of 12 months or less, the ~~related~~Company ~~cost,~~is ~~accumulated~~permitted ~~depreciation~~to and ~~provision~~did ~~for~~make ~~impairment~~an ~~loss,~~accounting ifpolicy ~~any,~~election ~~are~~by ~~removed~~class ~~from~~of ~~the~~underlying ~~respective~~assets ~~accounts,~~not ~~and~~to recognize ~~any~~lease ~~gain~~assets orand ~~loss~~lease isliabilities. ~~reflected~~During in the ~~consolidated~~years ~~statements~~ended ofDecember ~~operations~~31, 2023 and ~~comprehensive~~2022, ~~loss.~~the ~~Repairs~~Company ~~and~~recognized ~~maintenance~~lease ~~costs~~expense onfor ~~equipment~~such leases ~~are~~on ~~expensed~~a asstraight-line ~~incurred~~basis over the lease term.

~~(F) Impairment of Long-Lived Assets~~42

Long-lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected to be generated from the asset’s use and eventual disposition. An impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset calculated using a undiscounted cash flow analysis. There was no impairment of long-lived assets for the years ended December 31, 2021 and 2020.

(G) Intangible Assets

Intangible assets mainly acquired through purchased intangible assets. Purchased intangible assets are initially recognized and measured at cost. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortized over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

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~~Identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight~~Share-~~line~~Based ~~method as follows:~~Payments

~~Advertising~~Under ~~rights~~the ~~fee~~fair ~~contracts~~value recognition 3provision, ~~years~~stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period. We make certain assumptions in order to value and expense our various share-based payment awards.

~~(H)~~Income ~~Accounts Receivable Net of Allowance for Expected Credit Losses~~Taxes

~~Accounts~~The ~~receivable~~Company ~~primarily~~utilizes ~~represents~~judgement ~~revenue recognized that was not invoiced at the balance sheet date~~ and isestimates ~~primarily billed and collected~~ in ~~the following month. Trade accounts~~ ~~receivable~~assessing ~~are carried at~~ the ~~original~~need ~~invoiced amount less an estimated allowance~~ for ~~expected credit losses based on~~ the ~~probability of~~valuation ~~future collection. Management determines the adequacy of the~~ allowance ~~based~~related ~~on historical loss patterns, the number of days that customer invoices are past due, reasonable and supportable forecasts of future economic conditions~~ to ~~inform~~deferred ~~adjustments~~tax ~~over historical loss data~~assets, ~~and~~ anincluding ~~evaluation~~net ofoperating ~~the potential risk of~~ loss ~~associated with specific accounts~~carry-forwards. ~~When~~In ~~management~~the ~~becomes aware of circumstances that~~event ~~may~~the ~~further~~Company ~~decrease~~were ~~the~~to ~~likelihood~~determine ofthat ~~collection,~~ it ~~records~~would anot ~~specific~~be ~~allowance~~able ~~against amounts due, which reduces the receivable~~ to ~~the~~ ~~amount~~realize ~~that~~all ~~management~~or ~~reasonably~~part ~~believes~~of ~~will~~its benet ~~collected.~~deferred ~~The~~tax ~~Company~~assets, ~~records~~an ~~changes~~adjustment ~~in the estimate~~ to the ~~allowance for expected~~deferred ~~credit~~tax ~~losses~~assets ~~through~~would ~~provision~~be ~~for~~charged ~~expected~~to ~~credit~~income ~~losses~~in ~~and reverses~~ the ~~allowance~~period ~~after~~such ~~the~~determination ~~potential~~was ~~for recovery is considered remote~~made.

(I) Leases

The Company adopted Accounting Standards Codification (ASC) Topic 842, Leases (ASC 842) effective as of January 1, 2019. Under ASC 842, the Company determines if an arrangement is or contains a lease at contract inception.

Operating lease right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the commencement date of the lease. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less any lease incentive received. The Company uses its incremental borrowing rate in determining the present value of lease payments based on the information available at the date of lease commencement. The incremental borrowing rate reflects the rate of interest that a lessee would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease expense for an operating lease is recognized on a straight-line basis over the lease term.

The Company elected to not separate non-lease components from the associated lease components and to not recognize right-of-use assets and lease liabilities for leases with a term of twelve months or less.

(J) Convertible Promissory Notes and Warrants

New 1% Convertible Promissory Notes, due in 2025

On January 14, 2020, the Company issued 1% unsecured senior convertible promissory notes to an individual with the principal amount of $645,000. The 1% convertible promissory notes bore interest at 1% per annum, payable semi-annually in arrears, matured on January 13, 2025, and were convertible at any time into shares of the Company’s common stock at a fixed conversion price of $1.00 per share, subject to customary anti-dilution adjustments.

The Company determined the 1% convertible promissory notes to be conventional convertible instruments under ASC Topic 815, Derivatives and Hedging. Its embedded conversion option qualified for equity classification. The 1% convertible promissory notes did not have any embedded conversion option which shall be bifurcated and separately accounted for as a derivative under ASC 815, nor did they contain a cash conversion feature. The Company accounted for the Notes in accordance with ASC 470, as a single debt instrument. No beneficial conversion feature (the “BCF”) was recognized as the set conversion price for the Notes was greater than the fair value of the Company’s share price at date of issuance.

New 1% Convertible Promissory Notes, due in 2027

On January 18, 2022, the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of two million five hundred thousand US Dollars ($2,500,000). On the same date, the Company signed the with 1% Senior Unsecured Convertible Note Agreement under which the Company may sell and issue to the Subscriber up to an aggregate maximum amount of $2,500,000 in principal amount of Convertible Notes prior to January 19, 2027. The Convertible Promissory Notes issued to the Investor are convertible at the holder’s option into shares of Company common stock at $1.25 per share.

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The Company evaluates the conversion feature to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This discount is amortized over the period from the date of issuance to the date the notes is due using the effective interest method. If the notes payable are retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion.

(K) Revenue Recognition

In accordance with ASC 606, Revenue From Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of the standard, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard also includes criteria for the capitalization and amortization of certain contract acquisition and fulfillment costs.

The Company recognize revenue when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration we expect to be entitled to receive in exchange for such services. To achieve this core principle, we apply the following five steps:

1) Identify the contract(s) with a customer - A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to those goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. The contract term for contracts that provide a right to terminate a contract for convenience without significant penalty will reflect the term that each party has enforceable rights under the contract (the period through the earliest termination date). If the termination right is only provided to the customer, the unsatisfied performance obligations will be evaluated as customer options as discussed below.

2) Identify the performance obligations in the contract - Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both (i) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available from third parties or from us, and (ii) are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. If these criteria are not met the promised goods or services are accounted for as a combined performance obligation. Certain of our contracts (under which we deliver multiple promised services) require us to perform integration activities where we bear risk with respect to integration activities. Therefore, we must apply judgment to determine whether as a result of those integration activities and risks, the promised services are distinct on the context of the contract.

We typically do not include options that would result in a material right. If options to purchase additional services or options to renew are included in customer contracts, we evaluate the option in order to determine if our arrangement include promises that may represent a material right and needs to be accounted for as a performance obligation in the contract with the customer.

3) Determine the transaction price - The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. Our contract prices may include fixed amounts, variable amounts or a combination of both fixed and variable amounts. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. When determining if variable consideration should be constrained, management considers whether there are factors outside our control that could result in a significant reversal of revenue. In making these assessments, we consider the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required.

4) Allocate the transaction price to the performance obligations in the contract - If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (SSP) basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. For most performance obligations, we determine standalone selling price based on the price at which the performance obligation is sold separately. Although uncommon, if the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

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5) Recognize revenue when (or as) we satisfy a performance obligation: we satisfy performance obligations either over time or at a point-in-time as discussed in further detail below. Revenue is recognized when the related performance obligation is satisfied by transferring control of a promised good or service to a customer.

(L) Stock-based Compensation

The Company complies with ASC Topic 718, Compensation – Stock Compensation, using a modified prospective application transition method, which establishes accounting for stock-based awards in exchange for employee services. Under this application, the Company is required to record stock-based compensation expense for all awards granted. It requires that stock-based compensation cost is measured at grant date, based on the fair value of the award, and recognized as expense over the requisite services period.

The Company follows ASC topic 505-50, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock issued to consultants and other non-employees. In accordance with ACS Topic 505-50, the stock issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the stock, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to expense over the period during which services are rendered.

(M) Income Taxes

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced.

The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company's measurement of its expected tax benefits is recognized in its consolidated financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense.

(N) Comprehensive Income (Loss)

The Company follows ASC Topic 220, Comprehensive Income, for the reporting and display of its comprehensive income (loss) and related components in the consolidated financial statements and thereby reports a measure of all changes in equity of an enterprise that results from transactions and economic events other than transactions with the shareholders. Items of comprehensive income (loss) are reported in both the consolidated statements of operations and comprehensive income and the consolidated statement of stockholders’ deficit.

Accumulated other comprehensive income as presented on the consolidated balance sheets consisted of the accumulative foreign currency translation adjustment at period end.

(O) Earnings (Loss) Per Common Share

Basic earnings (loss) per common share are computed in accordance with ASC Topic 260, Earning per Share, by dividing the net income (loss) attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares including the dilutive effect of common share equivalents then outstanding.

The diluted net profit/(loss) per common share is the same as the basic net profit/(loss) per share for the years ended December 31, 2021 and 2020 as all potential common shares including stock options and warrants are anti-dilutive and are therefore excluded from the computation of diluted net profit/(loss) per share.

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(P) Foreign Currency Translation

The assets and liabilities of the Company’s subsidiaries and variable interest entity denominated in currencies other than U.S. dollars are translated into U.S. dollars using the applicable exchange rates at the balance sheet date. For consolidated statements of operations and comprehensive loss’ items, amounts denominated in currencies other than U.S. dollars were translated into U.S. dollars using the average exchange rate during the period. Equity accounts were translated at their historical exchange rates. Net gains and losses resulting from translation of foreign currency on consolidated financial statements are included in the statements of stockholders’ equity as accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are reflected in the unaudited consolidated statements of operations and comprehensive income.

(Q) Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurements and Disclosure, defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

It establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It establishes three levels of inputs that may be used to measure fair value:

Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying value of the Company’s financial instruments, which consist of cash, prepaid expenses and other current assets, accounts payable, accrued expenses and other payables, and convertible promissory notes approximates fair value due to the short-term maturities.

The carrying value of the Company’s financial instruments related to warrants associated with convertible promissory notes is stated at a value being equal to the allocated proceeds of convertible promissory notes based on the relative fair value of notes and warrants. In the measurement of the fair value of these instruments, the Black-Scholes option pricing model is utilized, which is consistent with the Company’s historical valuation techniques. These derived fair value estimates are significantly affected by the assumptions used. As the allocated value of the financial instruments related to warrants associated with convertible promissory notes is recorded in additional paid-in capital, the financial instruments related to warrants were not required to mark to market as of each subsequent reporting period. The carrying value of the Company’s financial instruments related to options is measuring its fair value using the Black-Scholes option pricing model, which is consistent with the Company’s historical valuation techniques. The fair value of option is recorded as dividend.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the recently issued accounting standards will not have a material impact on the Company's financial position or results of operations upon adoption.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The follow discussion about our market risk disclosures involves forward-looking statements. Actual results could differ from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments for speculative or trading purposes.

Interest Rate Sensitivity

We have no significant interest-bearing assets and our convertible promissory notes and short-term loans are fixed rate securities. Our current exposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits in banks and the fair value of our invested securities. Although we do not believe that interest rate has had a material impact on our financial position or results of operations to date, increase in interest rates in the future could increase interest cost on our new debt and could adversely impact our ability to refinance existing debt and limit our acquisition and development activities.

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Foreign Currency Exchange Risk

While our reporting currency is the U.S. dollar, our consolidated revenues and consolidated costs and expenses are substantially denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between U.S. dollars and RMB. If the RMB depreciates against the U.S. dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. If the RMB appreciates against the U.S. dollar, any new RMB-denominated investments or expenditures will be more costly to us. Assets and liabilities are translated at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates while 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. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency 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 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.

Inflation Risk

Inflationary factors such as increases in the costs to acquire advertising rights and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact 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 margin and selling, general and administrative expenses as a percentage of revenues if the selling prices of our services do not increase with these increased costs.

Liquidity risk

We are exposed to liquidity risk, which is the risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other financial institutions to obtain short-term funding to meet the liquidity shortage.

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ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Financial Statements

The consolidated financial statements required by this item begin on page F-1 hereof.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act, is recorded, processed, summarized, and reported during the year and that such information is accumulated and communicated to our management, including our Chief Executive Officer, Earnest Leung, and our Chief Financial Officer, Shirley Cheng, as appropriate to allow timely decisions regarding required disclosure. Our internal control over financial reporting is designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of financial reporting and published consolidated financial statements.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as of December 31, ~~2022~~2023, in accordance with Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Based on and as a result of this evaluation, our Chief Executive Officer and our Chief Financial Officer have determined that as of the end of the period covered by this annual report, our disclosure controls and procedures were not effective as a result of the material weaknesses in its internal control over financial reporting that existed as of such date as discussed below.

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Management’s Annual Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, effectiveness of internal control over financial reporting may vary over time.

A material weakness is a deficiency, or a combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the Company’s consolidated financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or combination of control deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with government.

Our management, with the participation and under the supervision of our Chief Executive Officer, Earnest Leung and our Chief Financial Officer, Shirley Cheng, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control- Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, Dr. Leung and Ms. Cheng determined that our internal control over financial reporting was not effective as of December 31, 2023. ~~2022~~Our management identified a material weakness in our internal control over financial reporting, which are indicative of many small companies with small staff that 1) insufficient segregation of duties and effective risk assessment and 2) lack of accounting staff with sufficient US GAAP experience.

Remediation of Material Weakness

We will try our best effort to fulfill our staff shortage. However, current talent availability in market is tough and we need more efforts to compete for staff in the open market.

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Changes in Internal Control Over Financial Reporting.

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

There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.

Attestation report of the registered public accounting firm

Smaller reporting companies are not required to provide the information required by this item.

Changes in Internal Control Over Financial Reporting.

Other than the policies and procedures we implemented to remediate the material weaknesses discussed above, there has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

Not applicable

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS

Not applicable

1945

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PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth the names, ages and positions held with respect to each Director and Executive Officer of the Company as of the date of this Annual Report.

Name	Age	Position	Director Since
Earnest Leung	6567	Chief Executive Officer and Chairperson of the Board	2009
Shirley Cheng	4445	Chief Financial Officer, Corporate Secretary and Director	2015
Frederick Wong*	55	Director	2022
Frederick Wong	56	Director	2022

*On December 31, 2021, the Company’s Board of appointed Mr. Frederick Wong as independent director of the Company’s Board. Mr. Frederick Wong’s appointment will become effective on January 1, 2022.

Earnest Leung has served as the Company’s director since May 11, 2009, and as Chief Executive Officer and Chairperson of the Board of the Company since July 15, 2009. Dr. Leung has over 30 years’ experience in the investment banking industry. Since November 2004, he has worked as a financial advisor and consultant in Hong Kong and currently serves as a director of Keywin Holdings Limited, an investment company owned and controlled by Dr. Leung. From June 2009 to August 2011, he also served as a director and chief executive officer of China Boon Holdings Limited, which is listed on Hong Kong Main Board engaging in the distribution of consumer electronic products and home appliances as well as trading of scrap metals and leather and extending its business to cemetery business in 2009. Prior to that, Dr. Leung served, from September 1994 to October 2004, as Senior Director and Head of Investment, Asia for American Express Bank. Dr. Leung also held various senior investment positions with BNP International Financial Services (HK) Limited, New Zealand Insurance and Bank of America Trust. Dr. Leung holds an honorary doctor degree from International American University. Dr. Leung was appointed as a director because of his extensive knowledge of capital markets through his various senior positions in financial institutions and because of his in-depth business management experience.

Shirley Cheng has served as the Company’s Interim Chief Financial Officer and Corporate Secretary, since April 1, 2012. She has served as the Finance Manager of NCN Group Management Limited, the Company’s subsidiary, since March 2008. Prior to that, Ms. Cheng served from 2004 to 2008 as an auditor with PricewaterhouseCoopers, an international firm of certified public accountants. Ms. Cheng holds a Bachelor’s Degree in Business Administration with a major in Accountancy from the Hong Kong Baptist University and is an associate member of the Hong Kong Institute of Certified Public Accountants.

Frederick Wong was appointed as our independent director since January 1, 2022. Mr. Wong has almost 30 years’ experience in accounting, internal control, financial control and capital markets. He currently serves as chief financial officer of Intelligent Living Application Group Inc. (Stock Code: ILAG.Nasdaq)’s ~~Chief~~since ~~Financial~~June ~~Officer~~1, 2020. HeMr. ~~has~~Wong ~~served~~also currently serves as ~~compliance~~an ~~offer~~independent ~~for~~non-executive ~~China~~director ~~Finance~~for ~~Investment~~Prime ~~Holdings~~Intelligence Solutions Group Limited (Stock Code: ~~0875~~8379.HK) ~~from~~since ~~November~~June 117, ~~2018~~2022 toand ~~May~~Top 31Standard Corporation (Stock Code: 8510.HK) since January 24, 2020. Previously, Mr. Wong has ~~also~~ served as aan ~~member~~independent ofnon-executive ~~the~~director ~~board of directors~~ for On Real International Holdings Limited (~~now~~formerly known as ~~Cocoon~~Shanyu Group Holdings Company Limited) (Stock Code: ~~8510~~8245.HK) ~~since~~from March 31, 2016 to April 22, 2022 and ~~Top~~for ~~Standard~~Cocoon Holdings Limited (formerly known ~~Corp~~as Huge China Holdings Limited) (Stock Code: 428.HK) from May 2015 to June 2018. He has served as compliance officer for China Finance Investment Holdings Limited (Stock Code: ~~8245~~0875.HK) ~~since~~from ~~January~~November 241, 2018 to May 31, 2020. From September 2017 to August 2018, Mr. Wong was the chief financial officer of O Media Limited, a Macau media company in gaming. He was a director of Network CN, Inc. ~~(Stock Code: NWCN) in U.S.A. between~~ September 2015 and July 2017, and the authorised representative and company secretary of China Oil Gangran Energy Group Holdings Limited (Stock Code: 8132.HK) from December 2015 to November 2016 and continued acting as the authorised representative until January 2017. Mr. Wong is a CPA of Hong Kong, CPA of Canada, CPA of Australia and fellow member of Hong Kong Institute of Taxation. Mr. Wong received a Bachelor of Business Administration from the Chinese University of Hong Kong in 1989, a Bachelor orof Business from the University of Southern Queensland, Australia, in 1992 and studied EMBA courses offered by the Troy University (formerly known as Troy State University), Alabama, U.S. from 1999 to 2000.

Identification of Certain Significant Employees

We have no employees who are not executive officers, but who are expected to make a significant contribution to our business.

Family Relationships

There are no family relationships between any directors or officers of the Company.

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Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

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been convicted in a criminal proceeding or is a named subject to a pending criminal (excluding traffic violations and other minor offenses);

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; or

been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission statements of ownership and changes in ownership. The same persons are required to furnish us with copies of all Section 16(a) forms they file. We believe that, during fiscal ~~2022~~2023, all of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities complied with the applicable filing requirements.

In making these statements, we have relied upon examination of the copies of all Section 16(a) forms provided to us and the written representations of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities.

Code of Business Conduct and Ethics

A Code of Business Conduct and Ethics is a written standard designed to deter wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements, (c) compliance with applicable laws, rules and regulations, (d) prompt reporting of violations of the code to an appropriate person and (e) accountability for adherence to the Code. We are not currently subject to any law, rule or regulation requiring that we adopt a Code of Business Conduct and Ethics. However, we have adopted a code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Such code of business conduct and ethics is filed herewith as Exhibit 14.1 and is also available on our corporate website at www.ncnmedia.com.

Board Leadership Structure

Our Board leadership structure is currently composed of combined Chairperson of the Board of Directors and Chief Executive Officer, Chief Financial Officer and the other members of our Board of Directors are non-executive members. The Board has three outstanding committees: (1) Audit Committee; (2) Remuneration Committee and (3) Nomination Committee. All these committees are composed of non-executive directors only.

Our Board of Directors has also determined a lead independent director is not necessary and has not appointed one at this time. In making these determinations, the Board of Directors considered the relative size of the Company, the size of the Board of Directors and the fact that all the other members of the Board of Directors are non-executive directors. The Board of Directors believes that Dr. Earnest Leung serves as both Chairperson of the board and Chief Executive Officer is in the best interest of the Company and its stockholders. Dr. Leung is the director most familiar with the PRC environment and our business, possess in-depth diverse business management experience, and is most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. The current combined position of Chairperson and Chief Executive Officer promotes a unified direction and leadership for the Board and gives a single, clear focus for the chain of command for our organization, strategy and business plans. The Board of Directors also believes that our overall corporate governance policies and practices adequately address any governance concerns raised by the dual chairperson and chief executive officer role.

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Corporate Governance

Our board of directors currently has three standing committees which perform various duties on behalf of and report to the board of directors: (i) audit committee, (ii) remuneration committee and (iii) nominating committee. From time to time, the board of directors may establish other committees. Each of the three standing committees is comprised entirely of independent directors as follows:

Name of Director	Audit	Nominating	Remuneration
Frederick Wong	C	C	C

________

C = Chairperson

M = Member

The Board of Directors has adopted a written charter for each of these committees, copies of which can be found on our website at www.ncnmedia.com.

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Audit Committee

Our board of directors established an Audit Committee in September 2007. Our Audit Committee currently consists of one member: Mr. Frederick Wong. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire. Mr. Frederick Wong serves as the chairperson of the Audit Committee.

The Audit Committee oversees our accounting, financial reporting and audit processes; appoints, determines the compensation of, and oversees, the independent auditors; pre-approves audit and non-audit services provided by the independent auditors; reviews the results and scope of audit and other services provided by the independent auditors; reviews the accounting principles and practices and procedures used in preparing our consolidated financial statements; and reviews our internal controls.

The Audit Committee works closely with management and our independent auditors. The Audit Committee also meets with our independent auditors without members of management present on regularly basis to review the results of their work. The Audit Committee also meets with our independent auditors to approve the annual scope and fees for the audit services to be performed.

Remuneration Committee

Our board of directors established a Remuneration Committee in September 2007. Our Remuneration Committee consists of one member: Mr. Frederick Wong.

The Remuneration Committee (i) oversees and makes general recommendations to the Board of Directors regarding our compensation and benefits policies; (ii) oversees, evaluates and approves cash and stock compensation plans, policies and programs for our executive officers; and (iii) oversees and sets compensation for the Board of Directors. Our Chief Executive Officer may not be present at any meeting of our compensation committee during which his compensation is deliberated.

All the compensation packages for executive officers and directors including both employee directors and non-employee directors are recommended and proposed by the Remuneration Committee. In determining compensation for executive officers other than the Chief Executive Officer, the Remuneration Committee considers, among other things, the recommendations of the Chief Executive Officer. However, the full Board of Directors determines all such compensation packages.

The Remuneration Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a sub-committee of the Remuneration Committee consisting of one or more members of the Committee. The Remuneration Committee has no current intention to delegate any of its authority to any subcommittee. Also, the Remuneration Committee did not engage any compensation consultants in determining or recommending the amount or form of executive and director compensation in the past.

Nominating Committee

Our board of directors established a Nominating Committee in September 2007. Our Nominating Committee currently consists of one member: Mr. Frederick Wong.

The Nominating Committee (i) considers and periodically reports on matters relating to the identification, selection and qualification of the Board of Directors and candidates nominated to the Board of Directors and its committees; (ii) develops and recommends governance principles applicable to the Company; and (iii) oversees the evaluation of the Board of Directors and management from a corporate governance perspective.

Although our bylaws do not contain provisions which specifically address the process by which a stockholder may nominate an individual to stand for election to the Board of Directors at our annual meeting of stockholders, the Nominating Committee will consider director candidates recommended by stockholders. In evaluating candidates submitted by stockholders, the Nominating Committee will consider (in addition to the criteria applicable to all director candidates described below) the needs of the Board and the qualifications of the candidate, and may also take into consideration the number of shares held by the recommending stockholder and the length of time that such shares have been held. In general, to have a candidate considered by the Nominating Committee, a stockholder must submit the recommendation in writing and must include the following information:

The name of the stockholder and evidence of the person’s ownership of Company stock, including the number of shares owned and the length of time of ownership; and

The name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a director of the Company and the person’s consent to be named as a director if selected by the Nominating Committee and nominated by the Board.

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The stockholder recommendation and information described above must be sent to the Corporate Secretary at Network CN Inc., Unit 705B, 7th Floor, New East Ocean Centre, 9 Science Museum Road, TST, KLN, Hong Kong. For a candidate to be considered for nomination by the Nominating Committee at an annual meeting, a stockholder recommendation must be received not less than 120 days prior to the anniversary date of the Company’s most recent annual meeting of stockholders.

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The Nominating Committee does not have any formal criteria for director nominees; however, it believes that director nominees should have certain minimum qualifications, including the highest personal and professional integrity and values, an inquiring and independent mind, practical wisdom and mature judgment. In evaluating director nominees, the Nominating Committee also considers an individual’s skills, character, leadership experience, business experience and acumen, familiarity with relevant industry issues, national and international experience, and other relevant criteria that may contribute to our success. This evaluation is performed in light of the skill set and other characteristics that would most complement those of the current directors, including the diversity, maturity, skills and experience of the board as a whole, with the objective of recommending a group of persons that can best implement our business plan, develop our business and represent shareholder interests.

As described above, the Nominating Committee will consider candidates recommended by shareholders. It will also receive suggestions of candidates from current Board members, the Company’s executive officers or other sources, which may be either unsolicited or in response to requests from the Nominating Committee.

After a person has been identified by the Nominating Committee as a potential candidate, the Nominating Committee may collect and review publicly available information regarding the person to assess whether the person should be considered further. The Nominating Committee members may contact the person if the person should be considered further. Generally, the Nominating Committee may request information from the candidate, review the person’s accomplishments and qualifications and may conduct one or more interviews with the candidate and members of the committee or other Board members. In certain instances, Nominating Committee members or other Board members may contact one or more references provided by the candidate or may contact other members of the business community or other persons that may have first-hand knowledge of the candidate’s accomplishments. The Nominating Committee’s evaluation process does not vary based on whether or not a candidate is recommended by a shareholder, although, as stated above, in the case of such a candidate the Board may take into consideration the number of shares held by the recommending shareholder and the length of time that such shares have been held.

Board Oversight of Risk

Our Board of Directors recognizes that, although risk management is a primary responsibility of the Company’s management, the Board plays a critical role in oversight of risk. The Board, in order to more specifically carry out this responsibility, has assigned certain task focusing on reviewing different areas including strategic, operational, financial and reporting, compensation, compliance, corporate governance and other risks to the relevant Board Committees as summarized above. Each Committee then reports to the full Board ensuring the Board’s full involvement in carrying out its responsibility for risk management.

ITEM 11.

EXECUTIVE COMPENSATION

Persons Covered

As of December 31, ~~2022~~2023, there were only two Executive Officers including Chief Executive Officer and Chief Financial Officer in the Company. The Company’s Chief Executive Officer and Chief Financial Officer during fiscal year ~~2022~~2023 and the Company’s executive officer as of December 31, ~~2022~~2023, or the Named Executive Officers are set forth below:

Name	Position
Earnest Leung	Chief Executive Officer and Chairperson of the Board
Shirley Cheng	Chief Financial Officer and Corporate Secretary

________

Compensation Discussion and Analysis

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Overview

The Company’s executive compensation program is generally designed to align the interests of executives with the interests of shareholders and to reward executives for achieving the Company’s objectives. The executive compensation program is also designed to attract and retain the services of qualified executives.

All the compensation packages for executive officers are recommended and proposed by the Remuneration Committee. In determining compensation for executive officers, the Remuneration Committee considers the officers’ current compensation, the level of executive compensation packages for similarly situated companies, changes in cost of living, our financial condition, our operating results and individual performance. However, the full Board of Directors determines all such compensation packages.

Executive compensation generally consists of base salary, bonuses and long-term incentive equity compensation such as stock grants or additional options to purchase shares of the Company’s common stock as well as various health and welfare benefits. The Board has determined that both the base salary and long-term incentive equity compensation should be the principal component of executive compensation. The Board has not adopted a formal bonus plan, and all bonuses are discretionary.

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Elements of Compensation

The executive compensation for (i) the Company’s Chief Executive Officer and Chief Financial Officer and (ii) the Company’s compensated executive officer who were serving as executive officers (collectively “Named Executive Officers”) for fiscal year ~~2022~~2023 primarily consisted of base salary, long term incentive equity compensation, income tax reimbursement, and other compensation and benefit programs generally available to other employees,

Base Salary. The Board establishes base salaries for the Company’s Named Executive Officers based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies in the Company’s peer group for similar positions. Generally, the Board believes that executive base salaries should be targeted near the median of the range of salaries for executives in similar positions and with similar responsibilities at comparable companies in line with our compensation philosophy.

Base salaries are reviewed annually and may be adjusted to realign salaries with market levels after taking into account individual responsibilities, performance and experience.

Bonuses. Bonuses are intended to compensate the Named Executive Officers for achieving the Company’s financial performance and other objectives established by the Board each year. The Board currently does not adopt a formal bonus plan and all bonuses are discretionary.

Long-Term Incentive Equity Compensation. The Board believes that stock-based awards promote the long-term growth and profitability of the Company by providing executive officers with incentives to improve shareholder value and contribute to the success of the Company and by enabling the Company to attract, retain and reward the best available persons for executive officer positions. The Named Executive Officers were eligible to receive certain number of shares of common stock of the Company. The Company cannot currently determine the number or type of additional awards that may be granted to eligible participants under the long-term incentive equity compensation plan in the future. Such determination will be made from time to time by the Remuneration Committee (or Board).

Income Tax Reimbursement. Dr. Earnest Leung were fully reimbursed by the Company for their Hong Kong personal income taxes resulting from their employment under the employment agreement dated July 15, 2009.

Change-In-Control and Termination Arrangements. The employment agreements with current Named Executives may be terminated by giving the other party three-month advanced notice, except Ms. Shirley Cheng may be terminated with one-month advance notice. Other than as disclosed above, the Company does not have change-in-control arrangements with any of its current Named Executives, and the Company is not obligated to pay severance or other enhanced benefits to executive officers, unless otherwise stated in Hong Kong Employment Ordinance, upon termination of their employment.

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Summary Compensation Table

The following table sets forth information concerning all compensation awarded to, earned by or paid during fiscal years ~~2022~~2023 and ~~2021~~2022, to the Named Executive Officers:

Name and Principal Position	Year	(1) Salary ($)	(2) Bonus ($)	(3) Stock Awards ($)	Options Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	(4) All Other Compensation ($)		Total ($)
Earnest Leung, Chief Executive Officer and Director	~~2022~~2023	-	-	-	-	-	-	-		-
	2021	-	-	-	-	-	-	-		-
	2022	-	-	-	-	-	-	-		-
Shirley Cheng Chief Financial Officer and Corporate Secretary	2022	53,846	-	-	-	-	-		2,308		56,154
Shirley Cheng, Chief Financial Officer and Corporate Secretary	2023	87,179	-	-	-	-	-		2,308		89,487
	2021	13,462	-	-	-	-	-		577		14,039
	2022	53,846	-	-	-	-	-		2,308		56,154

______

(1)	The Company withheld 12 months’ salary totaled HK$720,000 (approximately $92,308) to Dr. Earnest Leung during the fiscal years ended December 31, 2022 and 2021 respectively. As of December 31, 2022 and 2021, the accrued salary to Dr. Leung was $1,009,828 and $917,520, respectively.
(2)	No bonus was paid to the Named Executive Officers in fiscal 2022 and 2021.
(3)	As required by SEC rules, amounts in the column “Stock Awards” present the aggregate grant date fair value of awards made each year computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™ 718 Compensation—Stock Compensation (“FASB ASC 718”). The grant date fair value of each of the executives’ award is measured based on the closing price of our common stock on the date of grant. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period. The SEC’s disclosure rules previously required that we present stock award information based on the amount recognized during the corresponding year for financial statement reporting purposes with respect to these awards. However, the recent changes in the SEC’s disclosure rules require that we now present stock award amounts using the grant date fair value of the awards granted during the corresponding year.

(1)

The Company withheld 12 months’ salary totaled HK$720,000 (approximately $92,308) to Dr. Earnest Leung during the fiscal years ended December 31, 2023 and 2022 respectively. As of December 31, 2023 and 2022, the accrued salary to Dr. Leung was $1,102,136 and $1,009,828, respectively. As of December 31, 2023 and 2022, the accrued salary to Ms. Cheng was $88,846 and $25,769, respectively.

~~The aggregate number of stock awards vested to each of the Named Executive Officers for his/her service rendered in each fiscal period was summarized as follows:~~50

Named Executive Officer	2022	2021
Earnest Leung	-	-
Shirley Cheng	-	-

As of December 31, 2022, all the above stocks were issued to each of Named Executive Officers.

(4) All other compensation only represents the followings: (a) A monthly contribution paid by the Company into a mandatory provident fund for the benefit of each of the Named Executive Officers; (b) Monthly cash allowance of HK$40,000 (approximately $5,128) paid to Dr. Earnest Leung. The Company withheld 12 months’ totaled HK$480,000 cash allowance payment for Dr. Leung during the fiscal years ended December 31, 2022 and 2021; As of December 31, 2022 and 2021, the accrued cash allowance to Dr. Leung was $556,619 and $495,083 respectively; and (c) Income tax reimbursement paid to Dr. Earnest Leung during each fiscal year. As of December 31, 2022, the accrued income tax reimbursement to Dr. Leung and Ms. Cheng was $180,644 and $nil respectively. There is no item that is not a perquisite or personal benefit (such as tax reimbursements and contributions to the mandatory provident fund) whose value exceeds $10,000 for each Named Executives.

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(2)

No bonus was paid to the Named Executive Officers in fiscal 2023 and 2022.

(3)

As required by SEC rules, amounts in the column “Stock Awards” present the aggregate grant date fair value of awards made each year computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™ 718 Compensation—Stock Compensation (“FASB ASC 718”). The grant date fair value of each of the executives’ award is measured based on the closing price of our common stock on the date of grant.

These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period. The SEC’s disclosure rules previously required that we present stock award information based on the amount recognized during the corresponding year for financial statement reporting purposes with respect to these awards. However, the recent changes in the SEC’s disclosure rules require that we now present stock award amounts using the grant date fair value of the awards granted during the corresponding year.

The aggregate number of stock awards vested to each of the Named Executive Officers for his/her service rendered in each fiscal period was summarized as follows:

Named Executive Officer	2023	2022
Earnest Leung	-	-
Shirley Cheng	-	-

As of December 31, 2023, all the above stocks were issued to each of Named Executive Officers.

(4)

All other compensation only represents the followings:

(a) A monthly contribution paid by the Company into a mandatory provident fund for the benefit of each of the Named Executive Officers;

(b) Monthly cash allowance of HK$40,000 (approximately $5,128) paid to Dr. Earnest Leung. The Company withheld 12 months’ totaled HK$480,000 cash allowance payment for Dr. Leung during the fiscal years ended December 31, 2023 and 2022. As of December 31, 2023 and 2022, the accrued cash allowance to Dr. Leung was $618,157 and $556,619 respectively; and

(c) Income tax reimbursement paid to Dr. Earnest Leung during each fiscal year. As of December 31, 2023, the accrued income tax reimbursement to Dr. Leung and Ms. Cheng was $180,644 and $nil respectively.

There is no item that is not a perquisite or personal benefit (such as tax reimbursements and contributions to the mandatory provident fund) whose value exceeds $10,000 for each Named Executives.

Employment Contracts

On July 15, 2009, the Company entered into an executive employment agreement with Dr. Earnest Leung in connection with their services to the Company as our Chief Executive Officer. Under the terms of the agreements, each of Dr. Leung will receive a monthly salary of HK$60,000 (approximately $7,692) and monthly cash allowance of HK$40,000 (approximately $5,128) and we have agreed to grant Dr. Leung 6 million shares for their first two years of service to the Company. We will fully reimburse them for their Hong Kong personal income taxes resulting from their employment under the agreements. Each of the executives has also agreed to customary non-competition and confidentiality provisions and the agreements may be terminated by the Company at any time without notice or payment, in the event that any of the executives engage in misconduct or dereliction of duty.

On October 15, 2021, the Company entered into a new executive employment agreement with Ms. Cheng in connection with their services to the Company as our Chief Financial Officer. Under the terms of the ~~agreements~~agreement, Ms. Cheng will receive a monthly salary of HK$35,000 (approximately $4,487). On March 1, 2023, there was a salary increment and Ms. Cheng will receive a monthly salary of HK$70,000 (approximately $8,974). On October 1, 2023, the Company entered into a new executive employment agreement with Ms. Cheng in connection with their services to the Company as our Chief Financial Officer. Under the terms of the agreements, Ms. Cheng will receive a monthly salary of HK$40,000 (approximately $5,128). The employment may be terminated by the Company at any time without notice or payment, in the event that any of the executives engage in misconduct or dereliction of duty.

Retirement Benefits

Currently, we do not provide any employees, including our named executive officers any company sponsored retirement benefits other than a state pension scheme in which all of our employees in China participate.

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Grants of Plan-Based Awards

The following table sets forth information regarding grants of awards to the Named Executive Officers during the year ended December 31, ~~2022~~2023:

Name

Grant Date

All Other

Stock

Awards:

Number of

Shares of

Stock

or Units (#)

All Other

Option

Awards:

Number

of Securities

Underlying

Options (#)

(1)

Exercise or

Base Price

Option

Awards

($/share)

Grant Date

Fair Value

of Stock

and

Options

Awards

Closing

Price on

Grant

Date

($/share)

Earnest Leung

Shirley Cheng

No stock awards were granted to the Company’s Named Executive Officers during fiscal year ~~2022~~2023.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the equity awards outstanding at December 31, ~~2022~~2023 for each of the named executive officers.

Option Awards

Stock Awards

Name

Number of

Securities

Underlying

Unexercised

Options (#)

Exercisable

Number of

Securities

Underlying

Unexercised

Options (#)

Unexercisable

Option Exercise

Price ($)

Option

Expiration

Date

Number of

Shares or

Units of

Stock That

Have Not

Vested (#)

Market Value

of Shares or

Units of Stock

That Have

Not Vested

($)

Earnest Leung

Shirley Cheng

Potential Payments upon Termination or Change-in Control

The employment agreements with current Named Executives may be terminated by giving the other party three-month advanced notice, except Ms. Shirley Cheng may be terminated with one-month advance notice. Other than as disclosed above, the Company does not have change-in-control arrangements with any of its current Named Executives, and the Company is not obligated to pay severance or other enhanced benefits to executive officers, unless otherwise stated in Hong Kong Employment Ordinance, upon termination of their employment. Accordingly, there is no potential payments payable to our current Named Executive Officers upon termination or change-in control.

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Director Compensation

Overview

Cash compensation On February 2015, the Remuneration Committee proposed the monthly cash compensation for each director decreased to $1,000 from July 2014 to Jun 30, 2015, which was approved by the Board. On August 28, 2015, the Remuneration Committee proposed the monthly cash compensation for each director remain unchanged, which was approved by the Board.

Long-Term Incentive Equity Compensation. The Board believes that stock-based awards promote the long-term growth and profitability of the Company by providing directors with incentives to improve shareholder value and contribute to the success of the Company. Our Board determined the number of stock to be granted to directors for their service by considering the aggregate fair value as at the grant date of the past stock awards given to non-employee director and the Company’s performance. On December 30, 2021, Earnest Leung, Shirley Cheng and Wong Wing Kong were granted an award of 52,172 shares, 50,000 shares and 15,000 shares at a fair value of $83,475, $80,000 and $24,000 respectively at the date of grant and vested on same date, for their service for fiscal 2021. The shares granted were not yet issued.

For the year ended December 31, ~~2022~~2023, both the employee directors and non-employee directors were entitled to a monthly cash compensation of $1,000. The Company withheld 12 monthly cash compensation during the fiscal year ended December 31, ~~2022~~2023.

~~The following table provides information about the compensation earned by directors who served during fiscal year 2022:~~52

Name of director(3)	Fees Earned or Paid(1) in Cash ($)		Stock Awards(2) ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings($)		All Other Compensation ($)		Total ($)
Earnest Leung		-		-		-		-		-		-		-
Shirley Cheng		-		-		-		-		-		-		-
Frederick Wong *		12,820		24,000		-		-		-		-		36,820

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*OnThe ~~December~~following ~~31,~~table ~~2021,~~provides ~~the~~information ~~Company’s~~about ~~Board of appointed Mr. Frederick Wong as independent director of~~ the ~~Company’s~~compensation ~~Board.~~earned ~~Mr.~~by ~~Frederick~~directors ~~Wong’s~~who ~~appointment~~served ~~will become~~during ~~effective~~fiscal onyear ~~January 1, 2022.~~2023:

Name of director(3)

Fees Earned

or Paid(1)

in Cash

($)

Stock

Awards(2)

($)

Option

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Change in

Pension Value

and Nonqualified

Deferred

Compensation

Earnings($)

All Other

Compensation

($)

Total

($)

Earnest Leung

Shirley Cheng

Frederick Wong

______

(1) For the service periods from January 2022 to December 2022, both the employee directors and non-employee directors were entitled to a monthly cash compensation of $1,000. The Company withheld 12 monthly cash compensation during the fiscal year ended December 31, 2022. Total of HK$100,000 ($12,820) was paid to Frederick Wong for the director’s fee from the service period from 2015 to 2016.

(1)	For the service periods from January 2023 to December 2023, both the employee directors and non-employee directors were entitled to a monthly cash compensation of $1,000. The Company withheld 12 monthly cash compensation during the fiscal year ended December 31, 2023 and 2022. Total of HK$100,000 ($12,820) was paid to Frederick Wong for the director’s fee for the service period from 2015 to 2016 for the year ended December 31, 2022 and total of HK$15,000 ($1,923) was paid to Frederick Wong for the director’s fee for the service period of 2016 for the year ended December 31, 2023.

(2)	As required by SEC rules, amounts in the column “Stock Awards” present the aggregate grant date fair value of awards made each year computed in accordance with ASC Topic 718. The grant date fair value of each of the directors’ award is measured based on the closing price of our common stock on the date of grant. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period.

(2) As required by SEC rules, amounts in the column “Stock Awards” present the aggregate grant date fair value of awards made each year computed in accordance with ASC Topic 718. The grant date fair value of each of the directors’ award is measured based on the closing price of our common stock on the date of grant. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period.

Remuneration Committee Interlocks and Insider Participation

The current member of the Remuneration Committee is non-executive director, and all past members were independent directors at all times during their service on such Committee. None of the past or present members of our Remuneration Committee are present or past employees or officers of ours or any of our subsidiaries. No member of the Remuneration Committee has had any relationship with us requiring disclosure under Item 404 of Regulation S-K under the Securities Exchange Act of 1934, as amended. None of our executive officers has served on the Board or Remuneration Committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served on our Board or Remuneration Committee.

Limitation of Liability and Indemnification of Officers and Directors

Our bylaws provide for the indemnification of our present and prior directors and officers or any person who may have served at our request as a director or officer of another corporation in which we own shares of capital stock or of which we are a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any actions, suits or proceedings in which they, or any of them, are made parties, or a party, by reason of being or having been director(s) or officer(s) of us or of such other corporation, in the absence of negligence or misconduct in the performance of their duties. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.

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Insofar as indemnification by us for liabilities arising under the Securities Exchange Act of 1934, as amended, may be permitted to our directors, officers and controlling persons pursuant to provisions of the Articles of Incorporation and Bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

At the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of ours in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding which may result in a claim for such indemnification.

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ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31,~~2022~~2023 with respect to compensation plans, under which securities are authorized for issuance, aggregated as to (i) compensation plans previously approved by security holders, and (ii) compensation plans not previously approved by security holders.

Equity Compensation Plan Information

Plan Category	Number Of Securities To Be Issued Upon Exercise Of Outstanding Options, Warrants And Rights (A)		Weighted Average Exercise Price Of Outstanding Options, Warrants And Rights (B)		Number Of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (A)) (C)
Equity compensation plans approved by security holders		-		-		10,281,503	(1)
Total		-		-		10,281,503

(1) We reserved 40,000 shares for issuance under our 2004 Stock Incentive Plan, of which 13,333 shares are still available for issuance as of December 31, ~~2022~~2023. We reserved 2,680,000 shares for issuance under our Amended and Restated 2007 Equity Incentive Plan of which 268,170 are still available for issuance as of December 31, ~~2022~~2023. We reserved 10,000,000 shares for issuance under our Amended and Restated 2023 Equity Incentive Plan of which 10,000,000 are still available for issuance as of December 31, 2023. See below subsection - " Equity Incentive Plans" for more information about the plan.

Option Grants in the Last Fiscal Year

None.

Equity Incentive Plan

In April 2004, our Board of Directors and holders of a majority of our then outstanding common stock authorized and approved the 2004 Stock Incentive Plan, or the 2004 Plan. Under the 2004 Plan, we reserved 40,000 shares of our common stock for issuance upon exercise of incentive and non-qualified stock options, stock bonuses and rights to purchase awarded from time-to-time, to our officers, directors, employees and consultants. As of December 31, 2016, 26,667 shares have been issued under the plan and 13,333 shares remain available for issuance. No options, warrants or other rights to acquire shares of our common stock have been granted or are outstanding under the plan. A registration statement on Form S-8 was filed with the SEC with respect to 26,667 shares of common stock issuable under the plan on April 22, 2004 (SEC File No. 333-114644).

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In March 2007, our Board of Directors authorized and approved the 2007 Stock Option/Stock Issuance Plan, or the 2007 Plan. The purpose of the plan is to promote the best interests of the Company and its stockholders by providing a means of non-cash remuneration to selected participants who contribute to the operating progress and earning power of the Company. The plan also provides incentives to employees and directors by offering them an opportunity to acquire a proprietary interest in the Company. Under the 2007 Plan, we reserved 100,000 shares of our common stock for issuance upon exercise of incentive and non-qualified stock options, stock bonuses and rights to purchase awarded from time to time, to our officers, directors, employees and consultants. A registration statement on Form S-8 was filed with the SEC on April 6, 2007 (SEC File No. 333-141943) with respect to 100,000 shares of common stock issuable under the 2007 Plan as well as options to purchase 3,000 shares of common stock issued to the Company’s legal counsel in February 2006. Such options were not issued under the 2004 Plan or the 2007 Plan. The Company’s stockholders approved the 2007 Plan in November 2007.

In July 2009, the Board of Directors approved the issuance of 493,267 shares in excess of the number of shares of common stock available for issuance under the 2007 Plan, and in accordance with the 2007 Plan, the Company is required to seek stockholder approval within twelve months after the date of such excess grant. The Board of Directors has no immediate plans to issue additional shares under the 2007 Plan, however, the Board of Directors believes that increasing the maximum number of shares of common stock that may be issued under the 2007 Plan will be instrumental for us to continue to attract and retain outstanding employees. Accordingly, on June 2, 2010, the Board of Directors approved the amendment and restatement of the 2007 Equity Incentive Plan (the “First Amendment of 2007 Plan”), with the only change being to increase the maximum number of shares of common stock of the Company, par value $0.001 per share that may be issued and sold under the 2007 Plan from 100,000 to 1,426,667 and submitted it for stockholder’s approval. A registration statement on Form S-8 was filed with the SEC on July 30, 2010 (SEC File No. 333-168417) with respect to the First Amendment of 2007 Plan.

On July 30, 2012, the Board of Directors approved the second amendment and restatement of the 2007 Equity Incentive Plan (the “Second Amendment of 2007 Plan”), with the only change being to increase the maximum number of shares of common stock of the Company, par value $0.001 per share that may be issued and sold under the 2007 Plan from 1,426,667 to 2,093,333, and submitted it for stockholder’s approval. The Board of Directors believes that such arrangements will be instrumental for the Company to be able to continue to attract and retain outstanding employees. A registration statement on Form S-8 was filed with the SEC on October 12, 2012 (SEC File No. 333-184398) with respect to the Second Amendment of 2007 Plan.

On October 31, 2012, the Board of Directors approved the third amendment and restatement of the 2007 Equity Incentive Plan (the “Third Amendment of 2007 Plan”), with the only change being to increase the maximum number of shares of common stock of the Company, par value $0.001 per share that may be issued and sold under the 2007 Plan from 2,093,333 to 2,680,000, and submitted it for stockholder’s approval. The Board of Directors believes that such arrangements will be instrumental for us to be able to continue to attract and retain outstanding employees. A registration statement on Form S-8 was filed with the SEC on January 16, 2014 (SEC File No. 333-193381) with respect to the Third Amendment of 2007 Plan.54

AsTable of December 31, 2022, 2,411,830 shares have been issued under the plan and 268,170 shares remain available for issuance. Except for the shares granted to directors, no options, warrants or other rights to acquire shares of our common stock have been granted or are outstanding under the plan.Contents

On ~~January~~October 2031, ~~2023~~2012, ~~our~~the Board of Directors ~~authorized and~~ approved the ~~2023~~third ~~Stock~~amendment ~~Option/Stock~~and ~~Issuance~~restatement ~~Plan, or the 2023 Plan. The purpose~~ of the ~~plan~~2007 isEquity toIncentive ~~promote~~Plan (the ~~best~~“Third ~~interests~~Amendment of ~~the~~ ~~Company~~2007 ~~and~~Plan”), ~~its~~with ~~stockholders~~the byonly change ~~providing~~being ~~a means of non-cash remuneration~~ to ~~selected~~increase ~~participants~~the ~~who~~maximum ~~contribute~~number toof ~~the~~shares ~~operating progress~~of ~~and~~common ~~earning~~stock ~~power~~ of the Company., ~~The~~par ~~plan~~value ~~also~~$0.001 ~~provides~~per ~~incentives~~share tothat ~~employees~~may ~~and~~be ~~directors~~issued ~~by offering them an opportunity~~and tosold ~~acquire~~under ~~a proprietary interest in~~ the ~~Company.~~2007 ~~Under~~Plan ~~the~~from ~~2023 Plan~~2,093,333 weto ~~reserved 20~~2,~~000~~680,000 ~~shares~~and ofsubmitted ~~our~~it ~~common~~for ~~stock~~stockholder’s ~~for~~approval. ~~issuance upon~~The ~~exercise~~Board of ~~incentive~~Directors ~~and~~believes that ~~non-qualified~~such ~~stock~~arrangements ~~options,~~will ~~stock~~be ~~bonuses~~instrumental ~~and~~for ~~rights~~us to ~~purchase~~be ~~awarded~~able ~~from time~~ to ~~time,~~continue to ~~our~~attract ~~officers, directors,~~and ~~employees~~retain ~~and~~outstanding ~~consultants~~employees. OnA ~~March~~registration statement ~~22,~~on ~~2023,~~Form ~~our~~S-8 ~~Board~~was offiled ~~Directors~~with ~~and~~the ~~majority~~SEC ofon ~~shareholders~~January ~~approved~~16, to2014 ~~amend~~(SEC ~~the~~File ~~2023 Equity~~No. ~~Incentive~~333-193381) ~~Plan~~with respect to ~~decrease~~ the ~~maximum~~Third ~~number~~Amendment of ~~shares of common stock of the Company that may be issued and sold from 20,000,000~~2007 ~~to 10,000,000~~Plan.

As of December 31, 2023, 2,411,830 shares have been issued under the plan and 268,170 shares remain available for issuance. Except for the shares granted to directors, no options, warrants or other rights to acquire shares of our common stock have been granted or are outstanding under the plan.

On January 20, 2023, our Board of Directors authorized and approved the 2023 Stock Option/Stock Issuance Plan, or the 2023 Plan. The purpose of the plan is to promote the best interests of the Company and its stockholders by providing a means of non-cash remuneration to selected participants who contribute to the operating progress and earning power of the Company. The plan also provides incentives to employees and directors by offering them an opportunity to acquire a proprietary interest in the Company. Under the 2023 Plan, we reserved 20,000,000 shares of our common stock for issuance upon exercise of incentive and non-qualified stock options, stock bonuses and rights to purchase awarded from time to time, to our officers, directors, employees and consultants. On March 22, 2023, our Board of Directors and majority of shareholders approved to amend the 2023 Equity Incentive Plan to decrease the maximum number of shares of common stock of the Company that may be issued and sold from 20,000,000 to 10,000,000. A registration statement on Form S-8 was filed with the SEC on January 18, 2024 (SEC File No. 333-276563) with respect to the 2023 Equity Incentive Plan.

Both of the Plans are administered by our Board of Directors. Under each plan, the Board determines which of our employees, officers, directors and consultants are granted awards, as well as the material terms of each award, including whether options are to be incentive stock options or non-qualified stock options.

Subject to the provisions of the Plans, and the Internal Revenue Code with respect to incentive stock options, the Board determines who shall receive awards, the number of shares of common stock that may be purchased, the time and manner of exercise of options and exercise prices. At its discretion, the Board also determines the form of consideration to be received upon exercise and may permit the exercise price of options granted under the plans to be paid in whole or in part with previously acquired shares and/or the surrender of options. The term of options granted under the plans may not exceed ten years, or five years for an incentive stock option granted to an optionee owning more than 10% of our voting stock. The exercise price for incentive stock options may not be less than 100% of the fair market value of our common stock at the time the option is granted. However, incentive stock options granted to a 10% holder of our voting stock may not be exercisable at less than 110% of the fair market value of our common stock at the date of the grant. The exercise price for non-qualified options will be determined by the board.

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Security Ownership of Certain Beneficial Owners and Management

The following tables set forth information as of April 1329, ~~2023~~2024, regarding the beneficial ownership of our common stock (a) by each stockholder who is known by the Company to own beneficially in excess of 5% of our outstanding common stock; (b) by each of the Company’s officers and directors; (c) and by the Company’s officers and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of common stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of stock. Unless otherwise identified, the address of the directors and officers of the Company listed above is Unit 705B, 7th Floor, New East Ocean Centre, 9 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong

Title of Class	Name and Address of Beneficial Owner	Office, If Any	Amount & Nature of Beneficial Ownership (1)	Percent of Class (2)
Common Stock	Earnest Leung	CEO and Director	13,749,017	6454.3880
Common Stock	Shirley Cheng	CFO and director	-	-
Common Stock	Frederick Wong	Director	-	-
All Officers and Directors as a group			13,749,017
Common Stock	Keywin Holdings Limited (3) Office A, 18/F., Lucky Plaza, Nos. 315-321 Lockhart Road, Wanchai, Hong Kong	5% Security Holder	44,707 (3)	0.2118
Common Stock	Sino Portfolio International Ltd(4) P.O. Box 1239, Offshore Incorporations Centre, Victoria, Seychelles	5% Security Holder	1,835,753	87.6032
Common Stock	Wong Yuk Chor	5% Security Holder	1,344,~~478~~378	65.3036
Total Shares Owned by Persons Named above			16,973,855

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(1) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

(2) A ~~total~~ total of 2125,~~355~~088,~~899~~592 shares of our common stock outstanding are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of April ~~13,~~ ~~2023~~29, 2024. For each beneficial owner above, any options exercisable within 60 days have been included in the denominator.

(3) Dr. Earnest Leung, ~~its sole director, and~~ Ms. Pui Chu Tang, ~~its~~(Dr. ~~shareholder~~Leung’s spouse) and Mr. Ting Cheung Leung (Dr. Leung’s ~~spouse~~son) are directors, and Mr. Ting Cheung Leung, its shareholder, have voting and dispositive control over the shares held by Keywin Holdings Limited.

(4) Ms. Angela Chan, its sole director, and Mrs. Chen Yang Foo Oi, its shareholder, have voting and dispositive control over the shares held by Sino Portfolio International Ltd.

Changes in Control

There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

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ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Related Party Transactions

Except as set forth below, during our last two fiscal years, we have not entered into any material transactions or series of transactions that would be considered material in which any director or executive officer or beneficial owner of 5% or more of any class of our capital stock, or any immediate family member of any of the preceding persons, had a direct or indirect material interest:

InAs ~~April~~of ~~2009~~December 31, in2023 ~~connection~~and ~~with~~2022, ~~debt~~the ~~restructuring,~~Company ~~Statezone~~recorded ~~Ltd.~~an ofaggregated ~~which~~amount ~~Dr.~~of ~~Earnest Leung~~$1,443,785 ~~the~~and ~~Company’s~~$1,037,167 ~~Chief~~of ~~Executive~~short-term ~~Officer~~loans ~~and~~from a ~~Director~~shareholder ~~(being~~that ~~appointed~~the onloans ~~July~~are 15unsecured, ~~2009~~bear a monthly interest of 1.5% and ~~May~~repayable ~~11,~~on ~~2009~~demand, respectively). ~~was~~However, ~~the~~according ~~sole~~to ~~director~~the agreements, ~~provided~~the ~~agency~~Company shall have the option to shorten or extend the life of those short-term loans if the need arises and ~~financial~~the ~~advisory~~Company ~~services~~has agreed with the shareholder to extend the short-term ~~Company~~loans on the due date. ~~Accordingly~~As of December 31, 2023 and 2022, the Company ~~paid~~recorded an ~~aggregate~~interest ~~service~~payable ~~fee~~recorded in accounts payable, accrued expenses and other payables of $~~350~~374,~~000~~324 and $167,468, respectively. The interest expenses of ~~which~~the short-term loans for the years ended December 31, 2023 and 2022 amounted to $~~250~~206,~~000~~855 ~~has~~and ~~been~~$192,247, ~~recorded~~respectively. asOn ~~issuance~~January 18, ~~costs~~2022, ~~for~~the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% ~~Convertible~~Senior ~~Promissory~~Unsecured Convertible ~~Notes~~Note ~~and~~Agreement ~~$100,000~~from ~~has~~the ~~been~~Company ~~recorded~~for asan ~~prepaid~~agreement ~~expenses~~purchase ~~and~~price ~~other~~of ~~current~~two ~~assets,~~million ~~net~~five ~~since~~hundred ~~April~~thousand ~~2009.~~US ~~Such~~Dollars ($~~100~~2,500,000). isThe ~~refundable unless~~issuance ~~the~~of ~~Keywin~~convertible ~~Option~~note is ~~exercised~~for ~~and~~setting ~~completed.~~off Onagainst ~~October~~the ~~28,~~Company’s ~~2021,~~obligation ~~Keywin~~to ~~exercised~~repay ~~its~~part ~~option~~of the short-term loan $2,005,000 and interest payable $~~100~~495,000, there was ~~recorded~~no incash ~~general~~proceeds ~~and administrative~~from ~~expenses~~the ~~during~~issuance of convertible notes. As of the ~~year~~date ~~ended~~of ~~December~~this 31report, ~~2021~~the loan and interest payable balance have not yet been repaid.

OnThe ~~July 1, 2009, the~~ Company ~~and Keywin, of which~~ ~~the~~recorded ~~Company’s~~rental ~~chief~~expense executive officer and director is the director and his spouse is the sole shareholder, entered into an Amendment, pursuant to which the Company agreed to extend the exercise period for the Keywin Option under the Note Exchange and Option Agreement between the Company and Keywin, to purchase an aggregate of ~~1,637,522 shares of our common stock for an aggregate purchase price of~~ $27,~~000,000, from~~692 and ~~a three-month period ended on July 1, 2009, to a six-month period ended October 1, 2009. The exercise period~~ $nil for the year ~~Keywin option was subsequently further extended to a nine-month period~~ ended ~~January~~December 131, ~~2010, pursuant~~ 2023 to ~~the~~Habitat ~~Second~~Investment ~~Amendment.~~Holdings ~~On January 1~~Limited, ~~2010,~~ of ~~the Company and Keywin entered into the third Amendment, pursuant to~~ which the Company’s ~~agreed~~chief toexecutive ~~further~~officer ~~extend the exercise period to an eighteen-month period ended on October 1, 2010,~~ and ~~provide~~convertible ~~the~~note ~~Company~~holder ~~with~~are ~~the~~Habitat ~~right~~Investment toHoldings ~~unilaterally terminate the exercise period upon 30 days~~Limited’s ~~written notice. On September 30, 2010, the exercise price was extended at various times from September 1, 2010 to~~director ~~December 31, 2017~~ and ~~the Keywin Option was further extended to a hundred and twenty-nine-month period ending on January 1, 2020 and the exercise price changed to $0~~shareholder.~~99.~~ On December 3113, ~~2019~~2023, the ~~latest exercise period for the Keywin Option was further extended to a hundred and fifty-three-month period ending on January 1, 2022. On June 1, 2021, the~~ Company ~~and Keywin, of which the Company~~’s chief executive officer ~~and~~resigned ~~director~~as ~~is the~~ director ~~and his spouse is the sole shareholder, entered into an Amendment, pursuant to which the Company agreed Keywin to purchase an aggregate~~ of ~~11,764,756~~Habitat ~~shares~~Investment ~~of the Company’s common stock for an aggregate purchase price of $2,000,000.~~Holdings The fair value of the purchase option was determined utilizing Black-Scholes option pricing model on the date before the modification and after modification, accordingly, the Company recorded $nil and $3,544,430 as dividend for the year ended December 31, 2022 and 2021, respectivelyLimited.

OnThe ~~October~~summary ~~28,~~of ~~2021,~~amount ~~Keywin~~due ~~exercised its option~~ to ~~purchase~~related anparties ~~aggregate of 11,764,756 shares of the Company’s common stock for an aggregate purchase price of $2,000,000 which~~included ~~for~~in ~~setting off against~~ the ~~Company’s~~accounts ~~obligation to repay part of the short term loan interest~~ payable, ~~there~~accrued ~~was~~expenses noand ~~cash~~other ~~proceeds from~~payables as the ~~exercise of Keywin option.~~following:

	2023		2022
Salaries payables to Earnest Leung	$	1,720,296	$	1,566,449
Salaries payables to Shirley Cheng		88,846		25,769
Total	$	1,809,142	$	1,592,218

On January 18, 2022, the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of two million five hundred thousand US Dollars ($2,500,000). The issuance of convertible note is for setting off against the Company’s obligation to repay part of the short-term loan $2,005,000 and interest payable $495,000, there was no cash proceeds from the issuance of convertible notes. As of the date of this report, the loan and interest payable balance have not yet been repaid.

	2023		2022
Director’s fee payables to Earnest Leung	$	182,000	$	170,000
Director’s fee payables to Shirley Cheng		106,500		94,500
Director’s fee payables to Frederick Wong		32,257		22,180
Total	$	320,757	$	286,680

In addition to the transactions and balances detailed elsewhere in these financial statements, the Company had the following salary transactions with related parties.

	2023		2022
Salaries to Earnest Leung	$	153,846	$	153,846
Salaries to Shirley Cheng	$	87,179	$	53,846

Related Party Transaction Policy

Our Company has adopted a written Related Party Transaction Policy, or the Policy, for the purpose of describing the procedures used to identify, review, approve and disclose, if necessary, any transaction in which (i) the Company is a participant and (ii) a related person has or will have a direct or indirect material interest.

Once a related party transaction in which the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year has been identified, the Audit Committee must review the transaction for approval or ratification. In determining whether to approve or ratify a related party transaction, the Audit Committee shall consider all relevant facts and circumstances, including the following factors:

the benefits to the Company of the transaction;

the nature of the related party’s interest in the transaction;

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whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the Company and its stockholders;

the potential impact of the transaction on a director’s independence; and

any other matters the Audit Committee deems appropriate.

No director may participate in any discussion, approval or ratification of a transaction in which he or she is a related person.

Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

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ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

GreenGrowth CPAs and Gries & Associates, LLC is our Principal Independent Registered Public Accountants engaged to audit our financial statements for the fiscal years ended December 31, ~~2022~~2023 and ~~2021~~2022, respectively. The following table shows the fees that we paid or accrued for the audit and other services provided by GreenGrowth CPAs and Gries & Associates, LLC , for the fiscal years ended December 31, ~~2022~~2023 and ~~2021~~2022.

Fee Category	~~2022~~2023		~~2021~~2022
Audit Fees	$	2730,~~000~~427	$	1527,000
Audit-Related Fees	$	--	$	--
Tax Fees	$	--	$	--
All Other Fees	$	--	$	--

Audit Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for the audit of our annual consolidated financial statements, review of consolidated financial statements included in our quarterly reports and services that are normally provided by the independent registered public accounting firms in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees

This category consists of fees for assurance and related services by our principal independent registered public accountant that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported above under “Audit Fees”. The services for the fees disclosed under this category include consultations concerning financial accounting and reporting standards.

Tax Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for tax compliance, tax advice, and tax planning.

All Other Fees

This category consists of fees for services provided by our principal independent registered public accountant other than the services described above.

Policy on Pre-Approval of Audit Services

The Audit Committee pre-approves all services, including both audit and non-audit services, provided by our independent registered public accounting firm. All audit services (including statutory audit engagements as required under local country laws) must be accepted by the Audit Committee before the audit commences.

Each year, management and the independent registered public accounting firm will jointly submit a pre-approval request, which will list each known and/or anticipated audit and non-audit service for the upcoming calendar year and which will include associated budgeted fees. The Audit Committee will review the requests and approve a list of annual pre-approved non-audit services.

All services provided by GreenGrowth CPAs and Gries & Associates, LLC during the fiscal years ended December 31, ~~2022~~2023 and ~~2021~~2022 were pre-approved by the Audit Committee.

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PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) The following consolidated financial statements are filed as a part of this Form 10-K:

(i) Reports of Independent Registered Public Accounting Firms (ii) Consolidated Balance Sheets as of December 31, ~~2022~~2023 and ~~2021~~2022 (iii) Consolidated Statements of Operations and Comprehensive Income/(Loss) for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 (iv) Consolidated Statement of Stockholders’ Equity for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 (v) Consolidated Statements of Cash Flows for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 (vi) Notes to Consolidated Financial Statements

(b) The following Exhibits are filed as part of this Annual Report on Form 10-K:

EXHIBIT INDEX

Exhibit No.	Exhibit Description
3.1	Amended And Restated Certificate Of Incorporation
3.2	Amended and Restated By-Laws, adopted on January 10, 2006
3.3	Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on July 27, 2009
3.4	Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on September 16, 2011
3.5	Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on September 16, 2011
3.6	Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on October 11, 2021
3.7	Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on February 7, 2024
4.1	Form of Registrant’s Common Stock Certificate
4.2	Form of Registrant’s Common Stock Certificate
4.3	TEDA Travel Group, Inc. 2004 Stock Incentive Plan, effective on April 16, 2004
4.4	Network CN Inc. Third Amended and Restated 2007 Equity Incentive Plan
4.5	Network CN Inc, 2023 Equity Incentive Plan
10.1	Note Exchange and Option Agreement, dated April 2, 2009, between the Company and Keywin Holdings Limited.
10.2	Employment Agreement, dated July 15, 2009, between the Company and Earnest Leung.
10.3	Amendment No. 1 to Note Exchange and Option Agreement, dated July 1, 2009, between Keywin Holdings Limited and the Company.
10.4	Amendment No. 2 to Note Exchange and Option Agreement dated September 30, 2009, between Keywin Holding Limited and the Company.
10.5	Amendment No. 3 to Note Exchange and Option Agreement, dated January 1, 2010, between Keywin Holding Limited and the Company
10.6	Amendment No. 4 to Note Exchange and Option Agreement, dated September 30, 2010, between Keywin Holding Limited and the Company
10.7	Amendment No. 5 to Note Exchange and Option Agreement, dated June 1, 2011, between Keywin Holding Limited and the Company
10.8	Amendment No. 6 to Note Exchange and Option Agreement, dated December 30, 2011, between Keywin Holding Limited and the Company
10.9	Amendment No. 7 to Note Exchange and Option Agreement, dated June 28, 2012, between Keywin Holding Limited and the Company
10.10	Amendment No.8 to Note Exchange and Option Agreement, dated December 28, 2012, between Keywin Holding Limited and the Company
10.11	Amendment No.9 to Note Exchange and Option Agreement, dated December 31, 2013, between Keywin Holding Limited and the Company
10.12	Amendment No.10 to Note Exchange and Option Agreement, dated December 12, 2014, between Keywin Holding Limited and the Company
10.13	Amendment No.11 to Note Exchange and Option Agreement, dated December 31, 2015, between Keywin Holdings Limited and the Company
10.14	Amendment No.12 to Note Exchange and Option Agreement, dated December 28, 2017, between Keywin Holdings Limited and the Company
10.15	Amendment No.13 to Note Exchange and Option Agreement, dated December 31, 2019, between Keywin Holdings Limited and the Company
10.16	Amendment No.14 to Note Exchange and Option Agreement, dated June 1, 2021, between Keywin Holdings Limited and the Company
10.17	Consultancy Agreement in connection with debt restructuring dated December 1, 2008, between NCN Group Ltd and Statezone Limited

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10.14	Amendment No.12 to Note Exchange and Option Agreement, dated December 28, 2017, between Keywin Holdings Limited and the Company
10.15	Amendment No.13 to Note Exchange and Option Agreement, dated December 31, 2019, between Keywin Holdings Limited and the Company
10.16	Amendment No.14 to Note Exchange and Option Agreement, dated June 1, 2021, between Keywin Holdings Limited and the Company
10.17	Consultancy Agreement in connection with debt restructuring dated December 1, 2008, between NCN Group Ltd and Statezone Limited
14.1	Code of Business Conduct and Ethics for Network CN Inc. as approved and amended by the Board of Directors as of September 1, 2007 and September 29, 2008 respectively
21.1	Subsidiaries of the registrant.*
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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* Filed herewith.

ITEM 16.

FORM 10-K SUMMARY

None.

SIGNATURES

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

	NETWORK CN INC
	By:	/s/ Earnest Leung
	Earnest Leung
	Chief Executive Officer
	(Principal Executive Officer)
Date: April 13, 2023
Date: May 1, 2024

	By:	/s/ Shirley Cheng
	Shirley Cheng
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
Date: April 13, 2023
Date: May 1, 2024

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Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Earnest Leung and ~~Jennifer~~Shirley FuCheng, his or her attorneys-in-fact, each with ~~the~~ the power of substitution, for him or her in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Name	Title	Date
/s/ Earnest Leung	Chief Executive Officer and Director	~~April~~May 131, ~~2023~~2024
Earnest Leung	(Principal Executive Officer)
/s/ Shirley Cheng	Chief Financial Officer and Director	~~April~~May 131, ~~2023~~2024
Shirley Cheng	(Principal Financial and Accounting Officer)
/s/ Frederick Wong	Director	~~April~~May 131, ~~2023~~2024
Frederick Wong

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EXHIBIT INDEX

Exhibit No.	Exhibit Description
3.1	Amended And Restated Certificate Of Incorporation
3.2	Amended and Restated By-Laws, adopted on January 10, 2006
3.3	Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on July 27, 2009
3.4	Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on September 16, 2011
3.5	Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on September 16, 2011
3.6	Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on October 11, 2021
3.7	Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on February 7, 2024
4.1	Form of Registrant’s Common Stock Certificate
4.2	Form of Registrant’s Common Stock Certificate
4.3	TEDA Travel Group, Inc. 2004 Stock Incentive Plan, effective on April 16, 2004
4.4	Network CN Inc. Third Amended and Restated 2007 Equity Incentive Plan
4.5	Network CN Inc. 2023 Equity Incentive Plan
10.1	Note Exchange and Option Agreement, dated April 2, 2009, between the Company and Keywin Holdings Limited.
10.2	Employment Agreement, dated July 15, 2009, between the Company and Earnest Leung.
10.3	Amendment No. 1 to Note Exchange and Option Agreement, dated July 1, 2009, between Keywin Holdings Limited and the Company.
10.4	Amendment No. 2 to Note Exchange and Option Agreement dated September 30, 2009, between Keywin Holding Limited and the Company.
10.5	Amendment No. 3 to Note Exchange and Option Agreement, dated January 1, 2010, between Keywin Holding Limited and the Company
10.6	Amendment No. 4 to Note Exchange and Option Agreement, dated September 30, 2010, between Keywin Holding Limited and the Company
10.7	Amendment No. 5 to Note Exchange and Option Agreement, dated June 1, 2011, between Keywin Holding Limited and the Company
10.8	Amendment No. 6 to Note Exchange and Option Agreement, dated December 30, 2011, between Keywin Holding Limited and the Company
10.9	Amendment No. 7 to Note Exchange and Option Agreement, dated June 28, 2012, between Keywin Holding Limited and the Company
10.10	Amendment No.8 to Note Exchange and Option Agreement, dated December 28, 2012, between Keywin Holding Limited and the Company
10.11	Amendment No.9 to Note Exchange and Option Agreement, dated December 31, 2013, between Keywin Holding Limited and the Company
10.12	Amendment No.10 to Note Exchange and Option Agreement, dated December 12, 2014, between Keywin Holding Limited and the Company
10.13	Amendment No.11 to Note Exchange and Option Agreement, dated December 31, 2015, between Keywin Holdings Limited and the Company
10.14	Amendment No.12 to Note Exchange and Option Agreement, dated December 28, 2017, between Keywin Holdings Limited and the Company
10.15	Amendment No.13 to Note Exchange and Option Agreement, dated December 31, 2019, between Keywin Holdings Limited and the Company
10.16	Amendment No.14 to Note Exchange and Option Agreement, dated June 1, 2021, between Keywin Holdings Limited and the Company
10.17	Consultancy Agreement in connection with debt restructuring dated December 1, 2008, between NCN Group Ltd and Statezone Limited
14.1	Code of Business Conduct and Ethics for Network CN Inc. as approved and amended by the Board of Directors as of September 1, 2007 and September 29, 2008 respectively
21.1	Subsidiaries of the registrant.*
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

3662

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101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

______

* Filed herewith.

3763

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NETWORK CN INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Contents	Page	~~Page~~
Report of Independent Registered Public Accounting Firms (PCAOB ID 6778)	F-2	~~F-2~~
Consolidated Balance Sheets as of December 31, 2022 and 2021		F-4
Consolidated Balance Sheets as of December 31, 2023 and 2022	F-6
Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022 and 2021		F-5
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022	F-7
Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2022 and 2021		F-6
Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2023 and 2022	F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021		F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022	F-9
Notes to Consolidated Financial Statements	F-11	~~F-8~~

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors, Audit Committee members and shareholders
of Network CN, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Network CN, Inc. (the Company) as of December 31, 2023, and the related statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses since inception and has not achieved profitable operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-2

Table of Contents

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the 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. We determined that there were no critical audit matters.

April 30, 2024

We have served as the Company’s auditor since 2023.

Los Angeles, California

PCAOB ID Number 6580

F-3

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Gries & Associates, LLC

Certified Public Accountants

501 S. Cherry Street Suite 1100

Denver, Colorado 80246

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Network CN Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Network CN Inc. (the “Company”) as of December 31and 2022 and 2021, respectively, and the related consolidated statements of operations, statement of stockholders’ deficit, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, respectively, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these 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 entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Going Concern Uncertainty

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 1 to the financial statements, the Company has a net loss of $925,278 for the year ended December 31, 2022 and has a stockholders deficit of $6,337,754 as of December 31, 2022. These factors create an uncertainty as to the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

blaze@griesandassociates.com

501 S. Cherry Street, Suite 1100, Denver, Colorado 80246

(O)720-464-2875 (M)773-255-5631 (F)720-222-5846

F-24

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Gries & Associates, LLC

Certified Public Accountants

501 S. Cherry Street Suite 1100

Denver, Colorado 80246

Emphasis of Matters-Risks and Uncertainties

The Company is not able to predict the ultimate impact that COVID -19 will have on its business. However, if the current economic conditions continue, the pandemic could have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company plans to operate.

/s/ Gries & Associates, LLC

We have served as the Company’s auditor since 2022.

Denver, CO

April 13, 2023

PCAOB #6778

Denver, CO

blaze@griesandassociates.com

501 S. Cherry Street, Suite 1100, Denver, Colorado 80246

(O)720-464-2875 (M)773-255-5631 (F)720-222-5846

F-35

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NETWORK CN INC.

CONSOLIDATED BALANCE SHEETS

FOR THE YEARS ENDED DECEMBER 31, ~~2022~~2023 AND ~~2021~~2022

	Note(s)	~~2022~~	2023			~~2021~~	2022
ASSETS
Current Assets
Cash		$	~~20,351~~$	5,334		$	~~21,677~~$	20,351
Accounts receivables	4		~~74,783~~	176,671			-	74,783
Prepaid expenses and other current assets, net	5		~~8,081~~	2,101			~~19,828~~	8,081
Total Current Assets			103,215				41,505
Other Assets	6			2,006				-
Equipment, Net	6		2,427				2,632
Total Current Assets				186,112				103,215
Intangible Assets	7		305,970				-
Equipment, Net	7			1,055				2,427
Right-of-use assets	8		72,407				75,521
Intangible Assets	8			609,760				305,970
TOTAL ASSETS		$	484,019			$	119,658
Right-of-use assets	9			38,456				72,407
LIABILITIES AND STOCKHOLDERS’ DEFICIT
TOTAL ASSETS			$	835,383			$	484,019
Current Liabilities
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Accounts payable, accrued expenses and other payables	9	$	2,771,345			$	2,597,181
Current Liabilities
Lease liabilities	12		35,681				44,960
Accounts payable, accrued expenses and other payables	10		$	1,102,679			$	724,979
Short term loan	10		1,165,372				2,973,211
Accrued expenses and other payables - related parties	10			2,504,223				2,046,366
Total Current Liabilities			3,972,398				5,615,352
Lease liabilities	13			6,825				35,681
Non-Current Liabilities
Short-term loans with a related party	11			1,443,785				1,037,167
Noncurrent portion of lease liabilities	12		31,890				30,561
Short-term loans	11			-				128,205
1% convertible promissory note due 2025, net	11		645,000				645,000
Total Current Liabilities				5,057,512				3,972,398
1% convertible promissory note due 2027, net	11		2,172,485				-
Non-Current Liabilities
Total Non- Current Liabilities			2,849,375				675,561
Non-current portion of lease liabilities	13			-				31,890
TOTAL LIABILITIES			6,821,773				6,290,913
1% convertible promissory note due 2025, net	12			645,000				645,000
COMMITMENTS AND CONTINGENCIES	13		-				-
1% convertible promissory note due 2027, net	12			2,247,062				2,172,485
STOCKHOLDERS’ DEFICIT
Total Non- Current Liabilities				2,892,062				2,849,375
Preferred stock, $0.001 par value, 5,000,000 shares authorized None issued and outstanding			-				-
TOTAL LIABILITIES				7,949,574				6,821,773
Common stock, $0.001 par value, 100,000,000,000 shares authorized. Shares issued and outstanding: 20,749,018 as of December 31, 2022 and 2021, respectively			20,749				20,749
STOCKHOLDERS’ DEFICIT
Additional paid-in capital			131,317,155				130,559,370
Preferred stock, $0.001 par value, 10,000,000 shares authorized None issued and outstanding				-				-
Accumulated deficit			(139,381,092	)			(138,455,814	)
Common stock, $0.001 par value, 100,000,000 shares authorized Shares issued and outstanding: 22,487,859 and 20,749,018 as of December 31, 2023 and 2022, respectively				22,488				20,749
Accumulated other comprehensive income			1,705,434				1,704,440
Additional paid-in capital				132,451,674				131,317,155
TOTAL STOCKHOLDERS’ DEFICIT	14		(6,337,754	)			(6,171,255	)
Accumulated deficit				(141,287,445	)			(139,381,092	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	484,019			$	119,658
Accumulated other comprehensive income				1,699,092				1,705,434
TOTAL STOCKHOLDERS’ DEFICIT	15			(7,114,191	)			(6,337,754	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT			$	835,383			$	484,019

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

F-46

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NETWORK CN INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31, ~~2022~~2023 AND ~~2021~~2022

	Note(s)	~~2022~~	2023			~~2021~~	2022
REVENUES
Advertising services		$	~~106,498~~$	446,019		$	-$	106,498
COST OF REVENUES
Cost of advertising services			~~(82,898~~	)(436,668	)		-	(82,898	)
GROSS PROFIT			~~23,600~~	9,351			-	23,600
OPERATING EXPENSES
General and administrative			~~(631,938~~	)(728,292	)		~~(479,018~~	)(604,123	)
Stock based compensation for services			(24,000	)			(217,475	)
Amortization of intangible assets				(382,995	)			(27,815	)
Total Operating Expenses			(655,938	)			(696,493	)
Stock based compensation for services				(44,650	)			(24,000	)
LOSS FROM OPERATIONS			(632,338	)			(696,493	)
Total Operating Expenses				(1,155,937	)			(655,938	)
OTHER INCOME
LOSS FROM OPERATIONS				(1,146,586	)			(632,338	)
Gain from write-off of long aged payables	16		-				708
OTHER INCOME/(EXPENSES)
Interest income			4	133			-	4
Government grant			~~3,286~~	3,690			-	3,286
Total Other Income			3,290				708
Loss on written off of intangible assets				(449,473	)			-
INTEREST AND OTHER DEBT-RELATED EXPENSES
Total Other Income/(Expenses)				(445,650	)			3,290
Amortization of convertible promissory note			(72,485	)			-
INTEREST AND OTHER DEBT-RELATED EXPENSES
Interest expense	10 & 11		(223,745	)			(519,851	)
Amortization of debt discount				(74,577	)			(72,485	)
Total Interest and Other Debt-Related Expenses			(296,230	)			(519,851	)
Interest expense	11 & 12			(239,540	)			(223,745	)
NET LOSS BEFORE INCOME TAXES			(925,278	)			(1,215,636	)
Total Interest and Other Debt-Related Expenses				(314,117	)			(296,230	)
Income taxes	18		-				-
NET LOSS BEFORE INCOME TAXES				(1,906,353	)			(925,278	)
NET LOSS			(925,278	)			(1,215,636	)
Income taxes	18			-				-
NET LOSS			~~(925,278~~	)(1,906,353	)		~~(1,215,636~~	)(925,278	)
OTHER COMPREHENSIVE GAIN
OTHER COMPREHENSIVE (LOSS)/GAIN
Foreign currency translation gain			994				201
Foreign currency translation (loss)/gain				(6,342	)			994
Total other comprehensive gain			994				201
Total other comprehensive (loss)/gain				(6,342	)			994
COMPREHENSIVE LOSS		$	~~(924,284~~$	)(1,912,695	)	$	~~(1,215,435~~$	)(924,284	)
NET LOSSPER COMMON SHARE – BASIC AND DILUTED	17	$	(0.04	)		$	(0.11	)
NET LOSS PER COMMON SHARE – BASIC AND DILUTED	17		$	(0.09	)		$	(0.04	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC AND DILUTED	17		~~21,017,190~~	22,347,843			~~11,023,767~~	21,017,190

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

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NETWORK CN INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, ~~2022~~2023 AND ~~2021~~2022

	Common Stock						Additional Paid-In			Accumulated			Accumulated Other Comprehensive
	Share			Amount			Capital			Deficit			Income			Total
Balance as of January 1, 2021		8,774,263		$	8,773		$	124,209,441		$	(133,695,748	)	$	1,704,239		$	(7,773,295	)
Balance as of January 1, 2022		20,749,018		$	20,749		$	130,559,370		$	(138,455,814	)	$	1,704,440		$	(6,171,255	)
Shares issued for stock granted to consultant for services		10,000			10			29,990			-			-			30,000
Stock-based compensation for stock granted to directors for services		-			-			187,474			-			-			187,474
Shares issued for share option conversion		11,764,755			11,765			1,988,235			-			-			2,000,000
Shares issued for private placement		200,000			200			599,800			-			-			600,000
Translation adjustment		-			1			-			-			201			202
Dividend								3,544,430			(3,544,430	)		-			-
Net loss for the year		-			-			-			(1,215,636	)		-			(1,215,636	)
Balance as of December 31, 2021		20,749,018		$	20,749		$	130,559,370		$	(138,455,814	)	$	1,704,440		$	(6,171,255	)
Stock-based compensation for stock granted to directors for services		-			-			24,000			-			-			24,000
Beneficial conversion feature associated with convertible notes		-			-			400,000			-			-			400,000
Stock-based compensation for stock granted for intangible assets		-			-			333,785			-			-			333,785
Translation adjustment		-			-			-			-			994			994
Net loss for the year		-			-			-			(925,278	)		-			(925,278	)
Balance as of December 31, 2022		20,749,018		$	20,749		$	131,317,155		$	(139,381,092	)	$	1,705,434		$	(6,337,754	)
Shares issued for intangible assets		2,672,805			2,673			(2,673	)		-			-			-
Shares cancelled for intangible assets		(933,964	)		(934	)		934			-			-			-
Stock-based compensation for stock granted for intangible assets		-			-			1,136,258			-			-			1,136,258
Translation adjustment		-			-			-			-			(6,342	)		(6,342	)
Net loss for the year		-			-			-			(1,906,353	)		-			(1,906,353	)
Balance as of December 31, 2023		22,487,859		$	22,488		$	132,451,674		$	(141,287,445	)	$	1,699,092		$	(7,114,191	)

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

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NETWORK CN INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, ~~2022~~2023 AND ~~2021~~2022

	2022			2021
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(~~925~~1,~~278~~906,353	)	$	(1925,~~215,636~~278	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		79,236			15,145
Depreciation of equipment		1,372			1,282
Amortization of convertible promissory notes		72,485			-
Amortization expense of right-of-use assets		163,795			50,139
Stock-based compensation for services		24,000			217,475
Amortization of intangible assets		382,995			27,815
Gain from write-off of long aged payables		-			(708	)
Amortization of debt account		74,577			72,485
Interest expense		239,540			223,745
Loss on write off of intangible assets		449,473			-
Stock-based compensation for services		44,650			24,000
Changes in operating assets and liabilities:
Accounts receivables		(74101,~~783~~888	)		-(74,783	)
Prepaid expenses and other current assets, net		11,747			80,172
Other assets		(2,006	)		-
Accounts payable, accrued expenses and other payables		669,164			477,162
Prepaid expenses and other current assets, net		5,980			11,747
Operating lease liabilities		(54202,~~974~~267	)		(1454,~~756~~974	)
Net cash used in operating activities		(198,403	)		(441,146	)
Accounts payable, accrued expenses and other payables		551,367			445,419
Net cash used in operating activities		(298,765	)		(198,403	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		~~(1,078~~-	)		(21,~~422~~078	)
Net cash used in investing activities		~~(1,078~~-	)		(21,~~422~~078	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from private placement		-			459,077
Proceeds from short-term loans - related party		406,618			197,161
Proceeds from short-term loans		197,161			-
Repayment of short-term loan		(128,205	)		-
Net cash provided by financing activities		~~197~~278,~~161~~413			~~459~~197,~~077~~161
EFFECT OF EXCHANGE RATE CHANGES ON CASH		~~994~~5,335			~~201~~994
NET (DECREASE)/INCREASE IN CASH		(1,326	)		15,710
NET DECREASE IN CASH		(15,017	)		(1,326	)
CASH, BEGINNING OF YEAR		2120,~~677~~351			521,~~967~~677
CASH, END OF YEAR	$	205,~~351~~334		$	2120,~~677~~351
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Income taxes	$	-		$	-
Interest		-			-
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Exercise of conversion option (Note 1)	$	-		$	2,000,000
Settlement of short-term loans by conversion to convertible note (Note 1)	$	-		$	2,005,000
Settlement of interest payable by private placement (Note 2)	$	-		$	140,923
Settlement of short-term loans interest payable by conversion to convertible note (Note 1)	$	-		$	495,000
Dividend (Note 3)	$	-		$	3,544,430
Stock-based compensation for stock granted for intangible assets (Note 2 & 3)	$	1,136,258		$	333,785
Settlement of short term loan by conversion to convertible note (Note 4)	$	2,005,000		$	-
Stock-based compensation for services (Note 4)	$	44,650		$	24,000
Settlement of short term loan interest payable by conversion to convertible note (Note 4)	$	495,000		$	-

Note:

(Note 1): On January ~~October 28~~18, ~~2021~~2022, ~~Keywin~~the ~~exercised~~Company ~~its~~entered ~~option~~into a Subscription Agreement under which the Subscriber agreed to purchase anthe ~~aggregate~~1% ofSenior ~~11,764,756~~Unsecured Convertible ~~shares~~Note ofAgreement from the Company’ ~~common stock~~ for an ~~aggregate~~agreement purchase price of two million five hundred thousand US Dollars ($2,~~000~~500,000). The ~~which~~issuance of convertible note is for setting off against the Company’s obligation to repay part of the short -term loan $2,005,000 and interest payable $495,000, there was no cash proceeds from the ~~exercise~~issuance of ~~Keywin~~convertible ~~option~~notes.

(2) On May 3, 2021, the Company entered into Common Stock Agreement with the investor that the Company will sell an aggregate of 200,000 shares of the Company’s common stock to the New investor at $3. The Company received $459,077 cash proceeds from the investor and $140,923 was settled for the interest payable of shortF-~~term loans.~~9

~~(3)~~Table ~~The fair value~~ of the purchase option of Keywin option was determined utilizing Black-Scholes option pricing model on the date before the modification and after modification, accordingly, the Company recorded $nil and $3,544,430 as dividend for the year ended December 31, 2022 and 2021, respectively.Contents

~~(4)~~Note On2: ~~January~~Intangible ~~18,~~Assets ~~2022,~~of are acquired advertising rights fee contracts and the Company ~~entered~~measured ~~into~~the aintangible ~~Subscription~~assets ~~Agreement~~acquired ~~under~~based ~~which~~on the ~~Subscriber~~fair ~~agreed~~value of tothe ~~purchase~~consideration ~~the~~given. 1%The ~~Senior~~Company ~~Unsecured~~granted ~~Convertible~~in ~~Note~~aggregate ~~Agreement~~2,065,924 ~~from~~shares of the Company’s common stock for anthe ~~agreement~~acquisition of ~~purchase~~advertising ~~price~~rights fee contracts. In connection with this stock grant, the Company measured the Company’s shares at fair value of ~~two~~$0.55 ~~million~~per ~~five~~share ~~hundred~~and ~~thousand~~recognized USthe ~~Dollars~~amount (of $21,~~500~~136,~~000).~~258 ~~The~~as ~~issuance~~the cost of ~~convertible~~intangible ~~note~~assets. isOn ~~for~~April ~~setting~~25, ~~off~~2023, ~~against~~ the Company’s ~~obligation~~agreed to issue ~~repay~~2,065,924 ~~part~~restricted shares of the ~~short-term~~Company’s ~~loan~~common ~~$2,005,000~~stock ~~and~~to ~~interest~~the ~~payable~~employees ~~$495,000,~~for ~~there~~the ~~was~~intangible noassets. ~~cash~~In ~~proceeds~~August, 2023, ~~from~~933,964 ~~the~~shares ~~issuance~~issued offor ~~convertible~~intangible ~~notes~~assets were cancelled.

Note 3: In 2022, intangible Assets of Ningbo are acquired advertising rights fee contracts and the Company measured the intangible assets acquired based on the fair value of the consideration given. The Company granted 606,881 shares of the Company’s common stock for the acquisition of advertising rights fee contracts. In connection with this stock grant, the Company measured the Company’s shares at fair value of $0.55 per share and recognized the amount of $333,785 as the cost of intangible assets. On February 1, 2023, the Company agreed to issue 606,881 restricted shares of the Company’s common stock to the employee for the intangible assets.

Note 4: On December 30, 2021, the Board of Director granted an aggregate of 132,172 shares of common stock to the directors of the Company for their services rendered during the year 2021 and 2022. Each director was granted shares of the Company’s common stock and vested in 2021: Earnest Leung, 52,172 shares; Wong Wing Kong, 15,000 shares; and Shirley Cheng, 50,000 shares and Frederick Wong granted 15,000 shares and vested in 2022. In connection with these stock grants and in accordance with ASC Topic 718, the Company recognized $nil and $24,000 of non-cash stock-based compensation on the consolidated statements of operations for the year ended December 31, 2023 and 2022, respectively.

In October 2023, the Company granted 427,350 shares of common stock to a consultant for services rendered. The value of stock grant recognized for the year ended December 31,2023 was $42,735 as non-cash stock-based compensation and the Company issued shares to the consultant in January 2024.

In December 2023, the Company granted 50,000 shares of common stock to a consultant for services rendered. The value of stock grant recognized for the year ended December 31, 2023 was $1,915 non-cash stock-based compensation and the Company issued shares to the consultant in January 2024.

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

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NETWORK CN INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, ~~2022~~2023 AND ~~2021~~2022

NOTE 1

ORGANIZATION AND PRINCIPAL ACTIVITIES

Network CN Inc. was originally incorporated on September 10, 1993 in Delaware with headquarters in the Hong Kong Special Administrative Region of the People’s Republic of China (“PRC” or “China”). Since August 2006, Network CN Inc., has been principally engaged in the provision of out-of-home advertising in China through the operation of a network of roadside light emitting diode digital video panels, mega-size LED digital video billboards and light boxes in major cities.

Details of the Company’s principal subsidiaries ~~and variable interest entities~~ as of December 31, ~~2022~~2023 are described in Note 3 – Subsidiaries ~~and Variable Interest Entities~~.

COVID-19 Pandemic

Recent development

Going Concern

The Company has net cash used in operating activities of $298,765 and $198,403 for the years ended December 31, 2023 and 2022 respectively. As of December 31, 2023 and 2022, the Company has stockholders’ deficit of $7,114,191 and $6,337,754, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s plans regarding those concerns are addressed in the following paragraph. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In response to current financial conditions, the Company has actively explored new prominent media projects in order to provide a wider range of media and advertising services and improve our financial performance. If the project can start to operate, the Company expects that the project will improve the Company’s future financial performance. The Company expects that the new project can generate positive cashflow.

The existing cash and cash equivalents together with highly liquid current assets are insufficient to fund the Company’s operations for the next twelve months. The Company will need to rely upon some combination of cash generated from the Company’s operations, or proceeds from the issuance of the Company’s equity and debt securities as well as the exercise of the conversion option by the Company’s note holders to convert the notes to the Company’s common stock, in order to maintain the Company’s operations. Based on the Company’s best estimates, the Company believes that there are sufficient financial resources to meet the cash requirements for the coming twelve months and the consolidated financial statements have been prepared on a going concern basis. However, there can be no assurance the Company will be able to continue as a going concern. These uncertainties may result in adverse effects on continuation of the Company as a going concern. The accompany consolidated financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.

Termination of commercial agreements

Our Business in Chengdu and Tianjin

The Company actively developing its advertising network and explored new media project in Chengdu and Tianjin, China. The Company has established two newly subsidiaries, NCN (Chengdu) Culture Media Co., Ltd, (“NCN Chengdu”) and NCN (Tianjin) Culture Co., Ltd (“NCN Tianjin”), a wholly foreign-owned enterprise in Chengdu and Tianjin, China. The Company owns 100% of the established subsidiary companies. In January 2023, NCN Chengdu and Tianjin started its operation and acquired rights to operate advertising panels in Chengdu and Tianjin. On April 25, 2023, the Company agreed to issue 933,964 and 1,131,960 restricted shares of the Company’s common stock to the employee, Qi Hao and Yang Wu Qiang, respectively. On January 1, 2023, NCN Chengdu and Tianjin entered into an employment contract with Qi Hao and Yang Wu Qiang (“the employees”) under which the employees agreed to bring in the advertising rights in Chengdu and Tianjin to the Company and the Company will reward him for 933,964 and 1,131,960 shares of the Company’s common stock. On May 16, 2023, Mr. Qi Hao resigned and the Company early terminated the advertising rights fee contracts in Tianjin and 933,964 shares issued were cancelled.

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Our Business in Ningbo

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Issuance of Convertible Promissory Note

On January 18, 2022, the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of two million five hundred thousand US Dollars ($2,500,000). On the same date, the Company signed the with 1% Senior Unsecured Convertible Note Agreement under which the Company may sell and issue to the Subscriber up to an aggregate maximum amount of $2,500,000 in principal amount of Convertible Notes prior to January 19, 2027. The Convertible Promissory Notes issued to the Investor are convertible at the holder’s option into shares of Company common stock at $1.25 per share.

~~Exercise~~Authorized ~~of conversion option~~capital

On October 28, 2021, Keywin Holdings Limited (“Keywin”) exercised its option to purchase an aggregate of 11,764,756 shares of the Company’ common stock for an aggregate purchase price of $2,000,000 which for setting off against the Company’s obligation to repay part of the short term loan interest payable, there was no cash proceeds from the exercise of Keywin option.

Private Placement

On May 3, 2021, the Company entered into Common Stock Agreement with the foreign investor (the “New investor”) that the Company will sell an aggregate of 200,000 shares of the Company's common stock to the New investor. Pursuant to the terms of a Common Stock Agreement between the Company and the New investor, the purchase price paid by the New investor for the shares were $3 per share for an aggregate sum of six hundred thousand U.S. dollars. The Company received $459,077 cash proceeds from the investor and $140,923 was settled for the interest payable of short-term loans.

Increase of authorized capital

~~Going~~On ~~Concern~~December 20, 2023, the Board of Directors and Majority of stockholders of the Company approved to amend the Company's Certificate of Incorporation, as amended, to increase the total number of authorized shares of Preferred Stock from 5,000,000 to 10,000,000. On February 7, 2024, we filed a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State to increase the total number of authorized shares of Preferred Stock from 5,000,000 to 10,000,000 and the increase had approved by Delaware secretary of state on February 8, 2024.

The Company has net cash used in operating activities of $198,403 and $441,146 for the years ended December 31, 2022 and 2021 respectively. As of December 31, 2022 and 2021, the Company has stockholders’ deficit of $6,337,754 and $6,171,255, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s plans regarding those concerns are addressed in the following paragraph. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.F-12

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NOTE 2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) Basis of Presentation and Preparation

These consolidated financial statements of the Company have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”).

(B) Principles of Consolidation

The consolidated financial statements include the financial statements of Network CN Inc., its subsidiaries and variable interest entities for which it is the primary beneficiary. These variable interest entities are those in which the Company, through contractual arrangements, bears the risks and enjoys the rewards normally associated with ownership of the entities. Upon making this determination, the Company is deemed to be the primary beneficiary of these entities, which are then required to be consolidated for financial reporting purpose. All significant intercompany transactions and balances have been eliminated upon consolidation.

(C) Use of Estimates

The Company’s consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as accounting for income tax valuation allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.

(D) Cash

Cash includes cash on hand, cash accounts, and interest-bearing savings accounts placed with banks and financial institutions. For the purposes of the statements of cash flow, the ~~Company~~ Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents balance as of December 31, ~~2022~~2023 and December 31, ~~2021~~2022.

(E) Equipment, Net

Equipment is stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is provided on a straight-line basis, less estimated residual values over the assets’ estimated useful lives. The estimated useful lives are as follows:

Office equipment

3 - 5 years

When equipment is retired or otherwise disposed of, the related cost, accumulated depreciation and provision for impairment loss, if any, are removed from the respective accounts, and any gain or loss is reflected in the consolidated statements of operations and comprehensive loss. Repairs and maintenance costs on equipment are expensed as incurred.

(F) Impairment of Long-Lived Assets

Long-lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. An ~~impairment~~ impairment loss is recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected to be generated from the asset’s use and eventual disposition. An impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset calculated using a undiscounted cash flow analysis. There was no impairment of long-lived assets for the years ended December 31, ~~2021~~2023 and ~~2020~~2022.

(G) Intangible Assets

Identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method as follows:

Advertising rights fee contracts

3 years

(H) Accounts Receivable Net of Allowance for Expected Credit Losses

Accounts receivable primarily represents revenue recognized that was not invoiced at the balance sheet date and is primarily billed and collected in the following month. Trade accounts receivable are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection. Management determines the adequacy of the allowance based on historical loss patterns, the number of days that customer invoices are past due, reasonable and supportable forecasts of future economic conditions to inform adjustments over historical loss data, and an evaluation of the potential risk of loss associated with specific accounts. When management becomes aware of circumstances that may further decrease the likelihood of collection, it records a specific allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. The Company records changes in the estimate to the allowance for expected credit losses through provision for expected credit losses and reverses the allowance after the potential for recovery is considered remote.

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(I) Leases

(J) Convertible Promissory Notes and Warrants

~~New~~ 1% Convertible Promissory Notes, due in 2025

~~New~~ 1% Convertible Promissory Notes, due in 2027

On January 18, 2022, the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of two million five hundred thousand US Dollars ($2,500,000). On the same date, the Company signed the with 1% Senior Unsecured Convertible Note Agreement under which the Company may sell and issue to the Subscriber up to an aggregate maximum amount of $2,500,000 in principal amount of Convertible Notes prior to January 19, 2027. The Convertible Promissory Notes issued to the Investor are convertible at the holder’s option into shares of Company common stock at $1.25 per share.

(K) Revenue Recognition

In accordance with ASC 606, Revenue From Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of the standard, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard also includes criteria for the capitalization and amortization of certain contract acquisition and fulfillment costs.

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The Company ~~recognize~~recognizes revenue when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration we expect to be entitled to receive in exchange for such services. To achieve this core principle, we apply the following five steps:

5) Recognize revenue when (or as) we satisfy a a performance obligation: we satisfy performance obligations either over time or at a point-in-time as discussed in further detail below. Revenue is recognized when the related performance obligation is satisfied by transferring control of a promised good or service to a customer. The Company recognizes revenue when the performance obligation is satisfied over time as services are rendered.

(L) Stock-based Compensation

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(M) Income Taxes

The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its consolidated financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense.

(N) Comprehensive Income (Loss)

Accumulated other comprehensive income as presented on the consolidated balance sheets consisted of the accumulative foreign currency translation adjustment at period end.

(QO) Earnings (Loss) Per Common Share

The diluted net profit/(loss) per common share is the same as the basic net profit/(loss) per share for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 as all potential common shares including stock options and warrants are anti-dilutive and are therefore excluded from the computation of diluted net profit/(loss) per share.

(P) Foreign Currency Translation

(RQ) Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurements and Disclosure, defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.

Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

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Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

(QR) Recent Accounting Pronouncements

In ~~August~~March ~~2020~~2022, the ~~FASB issued~~Financial ~~ASU~~Accounting ~~2020-06,~~Standards Board ~~Debt~~(“FASB”) —issued ~~Debt~~ASU ~~with~~No ~~Conversion and Other Options (Subtopic 470~~2022-~~20)~~02, ~~and~~“Financial ~~Derivatives and Hedging~~Instruments—~~Contracts in~~Credit ~~Entity’s~~Losses ~~Own Equity~~ (~~Subtopic~~Topic ~~815-40~~326): ~~Accounting~~Troubled ~~for~~Debt ~~Convertible Instruments~~ Restructurings and ~~Contracts~~Vintage inDisclosures” ~~an Entity’s Own Equity~~ (“ASU ~~2020~~ 2022-0602”). ASU ~~2020~~2022-0602 ~~simplifies~~eliminates the accounting guidance for ~~convertible~~troubled debt restructurings by ~~eliminating~~creditors ~~the~~while ~~beneficial~~enhancing ~~conversion~~disclosure ~~and~~requirements ~~cash~~for ~~conversion accounting~~certain ~~models.~~loan ~~Upon~~refinancing ~~adoption~~and ofrestructurings ~~ASU~~by ~~2020-06,~~creditors ~~convertible~~made ~~debt proceeds, unless issued with a substantial premium or an embedded conversion feature that is not clearly and closely related~~ to ~~the~~borrowers ~~host contract, will no longer be allocated between debt and equity components.~~experiencing ~~This modification will reduce the issue discount and result in less non-cash interest expense in~~ financial ~~statements~~difficulty. ~~ASU~~In ~~2020-06~~addition, ~~also updates~~ the ~~earnings~~amendments ~~per~~require ~~share~~disclosure ~~calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. For contracts in an entity’s own equity, the type~~ of ~~contracts~~current ~~primarily~~period ~~affected~~gross ~~by ASU 2020~~write-06offs ~~are freestanding and embedded features that are accounted~~ for asfinancing ~~derivatives~~receivables ~~under~~and net ~~the~~investment ~~current~~in ~~guidance~~leases ~~due to a failure to meet the settlement assessment~~ by ~~removing~~year ~~the~~of ~~requirements~~origination toin ~~(i) consider whether~~ the ~~contract~~vintage ~~would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights~~disclosures. ASU ~~2020~~2022-0602 is effective for fiscal years beginning after December 15, ~~2023.~~ ~~Early adoption is permitted~~2022, ~~but~~including nointerim ~~earlier~~periods ~~than~~within those fiscal years. ~~beginning~~Except ~~after~~for ~~December~~expanded ~~15,~~disclosures ~~2020,~~to ~~and~~its ~~only~~vintage ifdisclosures, ~~adopted~~ASU 2022-02 asdid ofnot ~~the~~have ~~beginning of~~a ~~such~~material ~~fiscal~~effect ~~year.~~on ~~The~~the Company’s iscurrent ~~currently~~financial ~~evaluating~~position, ~~the~~results ~~impact~~ of ~~the~~operations ~~new~~or ~~guidance on its consolidated~~ financial statements.

~~NOTE~~In 3October ~~SUBSIDIARIES~~2023, ~~AND~~the ~~VARIABLE~~FASB ~~INTEREST~~issued ~~ENTITIES~~ASU No 2023-06, “ Disclosure Agreements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 will align the disclosure and presentation requirements in the FASB Accounting Standards Codification with the SEC’s regulations. The amendments in ASU 2023-06 will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. As the Company is currently subject to these SEC requirements, ASU 2023-06 is not expected to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

~~Details~~In ofNovember 2023, the ~~Company~~FASB issued ASU No 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 expands disclosures about a public entity’s ~~principal~~reportable ~~consolidated~~segments and requires more enhanced information about a reportable segment’s ~~subsidiaries~~expenses, interim segment profit or loss, and ~~variable~~how ~~interest~~a ~~entities~~public asentity’s ofchief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 3115, ~~2022~~2023, ~~were~~including asinterim ~~follows:~~periods within those fiscal years. Early adoption is permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2023-07 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

Schedule of subsidiaries and variable interest entities
Name	Place of Incorporation	Ownership/Control interest attributable to the Company	Principal activities
NCN Group Limited	BVI	100%	Investment holding
NCN Media Services Limited	BVI	100%	Investment holding
Cityhorizon Limited	Hong Kong	100%	Investment holding
NCN Group Management Limited	Hong Kong	100%	Provision of administrative and management services
Crown Eagle Investment Limited	Hong Kong	100%	Investment holding
Crown Winner International Limited	Hong Kong	100%	Investment holding
NCN Group (Global) Limited	Hong Kong	100%	Investment holding
ChenXing (Beijing) Advertising Co., Ltd	PRC	100%	Investment holding
Ruibo (Shenzhen) Advertising Co., Ltd	PRC	100%	Investment holding
NCN (Ningbo) Culture Media Co., Ltd	PRC	100%	Provision of advertising services
NCN (Nanjing) Culture Co., Ltd	PRC	100%	Provision of advertising services
NCN (Beijing) Advertising Co., Ltd.	PRC	100%	Provision of advertising services
NCN (Tianjin) Culture Co., Ltd	PRC	100%	Provision of advertising services
NCN Huamin Management Consultancy (Beijing) Company Limited (2)	PRC	100%	Not applicable
Huizhong Lianhe Media Technology Co., Ltd. (2)	PRC	100%	Not applicable
Beijing Huizhong Bona Media Advertising Co., Ltd.(2)	PRC	100% (1)	Not applicable
Xingpin Shanghai Advertising Limited(3)	PRC	100% (1)	Dormant
Chuanghua Shanghai Advertising Limited (3)	PRC	100%	Dormant
Jiahe Shanghai Advertising Limited (2)	PRC	100%	Not applicable

In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 should be applied prospectively; however, retrospective application is permitted. The Company does not expect ASU 2023-09 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

~~Remarks:~~(S) Reclassifications

1)Certain ~~Variable~~reclassifications ~~interest~~have ~~entity~~been ~~which~~made to the prior ~~Company~~year ~~exerted~~financial ~~100%~~information ~~control~~to ~~through~~conform ato ~~set~~the ofpresentation ~~commercial~~used ~~arrangements~~in the financial statements for the year ended December 31, 2023.

~~2) The subsidiary/variable interest entity ’s business license has been revoked.~~F-17

3) The subsidiary/variable interest entity was classified as abnormal operation business.

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NOTE 3

SUBSIDIARIES

Details of the Company’s principal consolidated subsidiaries as of December 31, 2023 were as follows:


Name	Place of Incorporation	Ownership/Control interest attributable to the Company	Principal activities
NCN Group Limited	BVI	100%	Investment holding
NCN Media Services Limited	BVI	100%	Investment holding
Cityhorizon Limited (2)	Hong Kong	100%	Not applicable
NCN Group Management Limited	Hong Kong	100%	Provision of administrative and management services
Crown Eagle Investment Limited	Hong Kong	100%	Investment holding
NCN Group (Global) Limited	Hong Kong	100%	Investment holding
ChenXing (Beijing) Advertising Co., Ltd	PRC	100%	Investment holding
Ruibo (Shenzhen) Advertising Co., Ltd	PRC	100%	Investment holding
NCN (Ningbo) Culture Media Co., Ltd	PRC	100%	Provision of advertising services
NCN (Nanjing) Culture Co., Ltd	PRC	100%	Provision of advertising services
NCN (Beijing) Advertising Co., Ltd.	PRC	100%	Provision of advertising services
NCN (Tianjin) Culture Co., Ltd	PRC	100%	Provision of advertising services
NCN Huamin Management Consultancy (Beijing) Company Limited (1)	PRC	100%	Not applicable
Huizhong Lianhe Media Technology Co., Ltd. (1)	PRC	100%	Not applicable

Remarks:

The subsidiaries’ business license has been revoked.

The Company has been deregistered on January 26, 2024.

NOTE 4

ACCOUNTS RECEIVABLES, NET

Accounts receivables, net as of December 31, ~~2022~~ 2023 and December 31, ~~2021~~2022 were as follows:

Schedule of Accounts receivables, net	2022		2021
Accounts receivables, net
Accounts receivable	$	74,783	$	-
	2023		2022
Accounts receivable	$	176,671	$	74,783
Less: allowance for doubtful debts		-		-
Total	$	74176,~~783~~671	$	-74,783

For the years ended December 31, ~~2022~~2023 and ~~2021~~2022, the Company recorded no allowance for doubtful debt for accounts receivable.

NOTE 5

PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET

Prepaid expenses and other current assets, net as of December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

Schedule of prepaid expenses and other current assets	~~2022~~		~~2021~~
Prepaid expenses	$	8,081	$	4,443
	2023		2022
Rental and other deposits		-		15,385
Prepaid expenses	$	2,101	$	8,081
Total	$	8,081	$	19,828
Rental and other deposits		-		-
Total	$	2,101	$	8,081

NOTE 6 ~~EQUIPMENT,~~OTHER ~~NET~~ASSETS

~~Equipment,~~The ~~net~~Company ashas of$2,006 ~~December~~other ~~31,~~assets ~~2022~~held ~~and~~for ~~2021 consisted~~sales as of ~~the~~December ~~following:~~31, 2023.

Schedule of equipment, net	2022			2021
Office equipment	$	4,117		$	3,039
Less: accumulated depreciation		(1,690	)		(407	)
Total	$	2,427		$	2,632

For the years ended December 31, 2023 and 2022, no provision for slow moving other assets was charged to expenses.

~~Depreciation for the years ended December 31, 2022 and 2021 amounted to $1,282 and $408 respectively.~~F-18

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NOTE 7

EQUIPMENT, NET

Equipment, net as of December 31, 2023 and 2022 consisted of the following:

Schedule of equipment, net
	2023			2022
Office equipment	$	4,117		$	4,117
Less: accumulated depreciation		(3,062	)		(1,690	)
Total	$	1,055		$	2,427

Depreciation for the years ended December 31, 2023 and 2022 amounted to $1,372 and $1,690 respectively.

Pledge of Equipment

No equipment has been pledged by the Company.

NOTE 78 INTANGIBLE ASSETS, NET

Intangible Assets, net as of December 31, ~~2022~~2023 and ~~2021~~2022 consisted of the following:

Schedule of intangible assets	~~2022~~			~~2021~~
Cost	$	333,785		$	-
	As of December 31, 2023											As of December 31, 2022
Less: accumulated amortization		(27,815	)		-
	Ningbo (Note 1)			Tianjin (Note 2)		Chengdu (Note 3)			Total			Total
Total	$	305,970		$	-
Cost	$	333,785		$	-	$	622,578		$	956,363		$	333,785
Less: accumulated amortization		(139,077	)		-		(207,526	)		(346,603	)		(27,815	)
Total	$	194,708		$	-	$	415,052		$	609,760		$	305,970

~~Intangible~~1) In 2022, intangible Assets of Ningbo are acquired advertising rights fee contracts and the Company measured the intangible assets acquired based on the fair value of the consideration given. The Company granted 606,881 shares of the Company’s common stock for the acquisition of advertising rights fee contracts. In connection with this stock grant, the Company measured the Company’s shares at fair value of $0.55 per share and recognized the amount of $333,785 as the cost of intangible assets.

Intangible Assets of Tianjin are acquired advertising rights fee contracts and the Company measured the intangible assets acquired based on the fair value of the consideration given. The Company granted 933,964 shares of the Company’s common stock for the acquisition of advertising rights fee contracts. In connection with this stock grant, the Company measured the Company’s shares at fair value of $0.55 per share and recognized the amount of $513,680 as the cost of intangible assets. On May 16, 2023, the Company early terminated the advertising rights fee contracts in Tianjin and 933,964 shares issued will be cancelled, the intangible asset was written off and loss on written off of intangible assets of $449,473 was recorded.

Intangible Assets of Chengdu are acquired advertising rights fee contracts and the Company measured the intangible assets acquired based on the fair value of the consideration given. The Company granted 1,131,960 shares of the Company’s common stock for the acquisition of advertising rights fee contracts. In connection with this stock grant, the Company measured the Company’s shares at fair value of $0.55 per share and recognized the amount of $622,578 as the cost of intangible assets.

The Company recorded amortization expenses for the years ended December 31, 2023 and 2022, amounted to $382,995 and $27,815 respectively. The Company recorded loss on written off of intangible asset for year ended December 31, 2023 amounted to $449,473.

Impairment test on other intangible assets

As of December 31, ~~2022~~2023, the management measured impairment by comparing the carrying amount of the intangible assets to the undiscounted future cash flows that the intangible assets are expected to result from the use of the assets. The sum of the expected future undiscounted cash flows exceeded the carrying amount of the intangible assets. As a result, no impairment loss was recognized for these assets for the year ended December 31, ~~2022~~2023.

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Amortization expenses for the years ended December 31, 2022 and 2021, amounted to $27,815 and $nil respectively.

The estimated amortization is as follows:

Schedule of estimated amortization			~~Estimated amortization expense~~
Twelve Months Ending December 31,
		Estimated amortization expense
2023			$	111,262
Twelve Months Ending December 31,
2024	$	318,789		~~111,262~~
2025		290,971		~~83,446~~
2026		-		-
Thereafter				-
2027		-
Total			$	305,970
Thereafter		-
Total	$	609,760

~~NOTE 8 RIGHT~~F-~~OF-USE ASSETS, NET~~19

Right-of-Use, net as of December 31, 2022 and 2021 consisted of the following:

Schedule of right-of-use assets, net	2022			2021
Cost	$	80,870		$	90,277
Less: accumulated depreciation		(8,463	)		(14,755	)
Total	$	72,407		$	75,522

Depreciation for the years ended December 31, 2022 and 2021 amounted to $50,139 and $14,755 respectively.

The Company has several operating advertising rights agreements with lease terms ranging from 2 to 3 years. As of December 31, 2022 and 2021, the Company recognized $79,213 and $90,277 right-of-use assets, respectively. For the year ended December 31, 2022, derecognition of right-of-use assets, net of $34,348 upon the lease termination of Hong Kong office.

NOTE 9 ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER PAYABLES

Accounts payable, accrued expenses and other payables as of December 31, 2022 and 2021 consisted of the following:

Schedule of accounts payable, accrued expenses and other payables	2022		2021
Accounts payable	$	76,601	$	-
Accrued staff benefits and related fees		2,153,063		1,943,544
Accrued professional fees		93,171		61,057
Accrued interest expenses		214,094		472,773
Franchise tax payable		92,300
Other accrued expenses		41,625		19,316
Other payables		100,491		100,491
Total	$	2,771,345	$	2,597,181

NOTE 10 SHORT-TERM LOANS

As of December 31, 2022 and 2021, the Company recorded an aggregated amount of $1,165,372 and $2,973,211 of short-term loans, respectively. Those loans were borrowed from a shareholder and an unrelated individual. Except for loan of $128,205 from an unrelated individual that are unsecured, bearing yearly interest of 1% and are repayable on demand, the remaining loans are unsecured, bear a monthly interest of 1.5% and are repayable on demand. However, according to the agreement, the Company shall have the option to shorten or extend the life of those short-term loans if the need arises and the Company has agreed with the lender to extend the short-term loans on the due date. On January 18, 2022, the Company issued convertible notes of US$2,500,000 which is for setting off against the short-term loans and interest payable. As of the date of this report, the balance of $1,165,372 have not yet been repaid.

The interest expenses of the short-term loans for the years ended December 31, 2022 and 2021 amounted to $193,528 and $513,383, respectively.

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NOTE 119 ~~CONVERTIBLE~~RIGHT-OF-USE ~~PROMISSORY~~ASSETS, ~~NOTES AND WARRANTS~~NET

~~Issuance~~ Right-of-Use, ~~New~~net 1%as ~~Convertible~~of ~~Promissory~~December ~~Notes~~31, ~~due~~2023 ~~2025~~and 2022 inconsisted ~~2020~~of the following:

Schedule of estimated amortization
	2023			2022
Cost	$	96,436		$	80,870
Less: accumulated depreciation		(57,980	)		(8,463	)
Total	$	38,456		$	72,407

Depreciation for the years ended December 31, 2023 and 2022 amounted to $152,422 and $50,139 respectively.

The Company has several operating advertising rights agreements with lease terms ranging from 2 to 3 years. As of December 31, 2023 and 2022, the Company recognized $512,530 and $79,213 right-of-use assets, respectively. For the years ended December 31, 2023 and 2022, the Company recorded derecognition of right-of-use assets, net of $371,009 and $34,348 upon the lease termination.

NOTE 10

ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER PAYABLES

Accounts payable, accrued expenses and other payables as of December 31, 2023 and 2022 consisted of the following:


	2023		2022
Accounts payable	$	279,910	$	76,601
Payment in advance		1,447		-
Accrued staff benefits and related fees		2,519,680		2,153,063
Accrued professional fees		128,929		93,171
Accrued interest expenses		448,662		214,094
Franchise tax payable		-		92,300
Other accrued expenses		127,783		41,625
Other payables		100,491		100,491
Total	$	3,606,902	$	2,771,345

NOTE 11

SHORT-TERM LOANS

As of December 31, 2023 and 2022, the Company recorded an aggregated amount of $1,443,785 of short-term loans. Those loans were borrowed from a shareholder and the loans are unsecured, bear a monthly interest of 1.5% and are repayable on demand. However, according to the agreement, the Company shall have the option to shorten or extend the life of those short-term loans if the need arises and the Company has agreed with the lender to extend the short-term loans on the due date. As of the date of this report, the balance of $1,443,785 have not yet been repaid.

As of December 31, 2022, the Company recorded an aggregated amount of $1,165,372 of short-term loans. Those loans were borrowed from a shareholder and an unrelated individual. Except for loan of $128,205 from an unrelated individual that are unsecured, bearing yearly interest of 1% and are repayable on demand, the remaining loans are unsecured, bear a monthly interest of 1.5% and are repayable on demand. On January 18, 2022, the Company issued convertible notes of US$2,500,000 which is for setting off against the short-term loans and interest payable. In 2023, the Company repaid the loan of $128,205 to the unrelated individual.

The interest expenses of the short-term loans for the years ended December 31, 2023 and 2022 amounted to $ 208,090 and $193,528, respectively.

NOTE 12

CONVERTIBLE PROMISSORY NOTES AND WARRANTS

Issuance of 1% Convertible Promissory Notes, due 2025 in 2020

On January 14, 2020, the Company entered into a Subscription Agreement with Tsang Wai Yee Terri (“the Subscriber”) under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of six hundred and forty-five thousand US Dollars ($645,000). On the same date, the Company signed the 1% Senior Unsecured Convertible Note Agreement under which the Company may sell and issue to the Subscriber up to an aggregate maximum amount of $645,000 in principal amount of Convertible Notes prior to January 13, 2025. The Convertible Promissory Notes issued to the Investor are convertible at the holder’s option into shares of Company common stock at $1.00 per share.

Issuance of ~~New~~ 1% Convertible Promissory Notes, due 2027 in 2022

On January 18, 2022, the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of two million five hundred thousand US Dollars ($2,500,000). On the same date, the Company signed the with 1% Senior Unsecured Convertible Note Agreement under which the Company may sell and issue to the Subscriber up to an aggregate maximum amount of $2,500,000 in principal amount of Convertible Notes prior to January 19, 2027. The Convertible Promissory Notes issued to the Investor are convertible at the holder’s option into shares of Company common stock at $1.25 per share.

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The following table details the accounting treatment of the convertible promissory notes:

Schedule of convertible promissory notes	~~New 1% Convertible Promissory Notes, due in 2025~~		~~New 1% Convertible Promissory Notes, due in 2027~~			~~Total~~
Net carrying value of convertible promissory notes as of December 31, 2021	$	645,000	$	-		$	645,000
	1% Convertible Promissory Notes, due in 2025		1% Convertible Promissory Notes, due in 2027			Total
Net carrying value of convertible promissory notes as of December 31, 2022	$	645,000	$	-		$	645,000
Proceeds of new 1% convertible promissory notes		-		2,500,000			2,500,000
Less: Allocated intrinsic value of beneficial conversion feature (Note a)		-		(400,000	)		(400,000	)
Add: Accumulated amortization of debt discount		-		72147,~~485~~062			72147,~~485~~062
Net carrying value of convertible promissory notes as of December 31, 2022	$	645,000	$	2,172,485		$	2,817,485
Net carrying value of convertible promissory notes as of December 31, 2023	$	645,000	$	2,247,062		$	2,892,062

Note: (a) At the time of issuance, the Company evaluated the intrinsic value of the beneficial conversion feature (“BCF”) associated with the conversion feature of the convertible promissory note. The BCF was recorded into additional paid-in capital. Additionally, the convertible promissory note was considered to have an embedded BCF because the effective conversion price was less than the fair value of the Company’s common stock on notes issuance date. The value of the BCF was recorded as a discount on the convertible promissory note. Hence, in connection with the issuance of the convertible promissory note, the Company recorded a total debt discount of $400,000 that will be amortized over the term of the Note using effective interest rate method.

(a)

At the time of issuance, the Company evaluated the intrinsic value of the beneficial conversion feature (“BCF”) associated with the conversion feature of the convertible promissory note. The BCF was recorded into additional paid-in capital. Additionally, the convertible promissory note was considered to have an embedded BCF because the effective conversion price was less than the fair value of the Company’s common stock on notes issuance date. The value of the BCF was recorded as a discount on the convertible promissory note. Hence, in connection with the issuance of the convertible promissory note, the Company recorded a total debt discount of $400,000 that will be amortized over the term of the Note using effective interest rate method.

Amortization of debt discount

The amortization of debt discount for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

Schedule of amortization of debt discount	~~2022~~		~~2021~~
New 1% convertible promissory notes, due in 2025	$	-	$	-
	2023		2022
New 1% convertible promissory notes, due in 2027		72,485		-
1% convertible promissory notes, due in 2025	$	-	$	-
Total	$	72,485	$	-
1% convertible promissory notes, due in 2027		74,577		72,485
Total	$	74,577	$	72,485

Interest Expense

The ~~interest~~ interest expenses for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

Schedule of interest expenses	~~2022~~		~~2021~~
New 1% convertible promissory notes, due in 2025	$	6,450	$	6,468
	2023		2022
New 1% convertible promissory notes, due in 2027		23,767		-
1% convertible promissory notes, due in 2025	$	6,450	$	6,450
Total	$	30,217	$	6,468
1% convertible promissory notes, due in 2027		25,000		23,767
Total	$	31,450	$	30,217

NOTE 1213 LEASE LIABILITIES

OnIn ~~September~~2022 ~~27, 2021, the Company entered into a lease agreement for office in Hong Kong with a two-year term, commencing on September 27, 2021~~ and ~~expiring~~ ~~on September 26,~~ 2023 ~~which was early terminated in 2022. In 2022~~, the Company entered into agreements to acquire rights to operate the advertising panels with lease term from 15 to 36 months.

FAs of December 31, 2023, future minimum commitments under the Company’s non-17cancelable operating lease, in accordance with ASC 842, are as follows:


Fiscal years ending December 31,	Operating leases
2024	$	5,259
2025		1,736
2026		-
2027		-
Thereafter		-
Total undiscounted cash flows		6,995
Less: imputed interest		(170	)
Present value of lease liabilities	$	6,825

As of December 31, 2023 and 2022, the remaining weighted-average lease term were 1.39 and 1.71 years and the weighted-average incremental borrowing rate used to determine the operating lease liabilities were 3.66% and 4.60%, respectively.

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~~The~~Supplementary ~~operating~~cash flow information related to lease ~~expense~~where the Company was the lessee for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 ~~were~~was as follows:

Schedule of operating lease expense	2022		2021
Schedule of supplementary cash flow information	2023		2022
Operating lease cost – straight line	$	52,578	$	15,385
Operating cash outflows from operating lease	$	202,267	$	54,974

AsNOTE of14 ~~December 31,~~COMMITMENTS ~~2022, future~~AND ~~minimum commitments under the Company’s non-cancelable operating lease, in accordance with ASC 842, are as follows:~~CONTINGENCIES

Schedule of future minimum operating lease payments
Fiscal years ending December 31,	Operating leases
2023	$	37,108
2024		24,198
2025		8,050
2026		-
Thereafter		-
Total undiscounted cash flows		69,356
Less: imputed interest		(1,785	)
Present value of lease liabilities	$	67,571

As of December 31, 2022 and 2021, the remaining weighted-average lease term were 1.71 and 1.74 years and the weighted-average incremental borrowing rate used to determine the operating lease liabilities were 4.60% and 2.33%, respectively.

Supplementary cash flow information related to lease where the Company was the lessee for the years ended December 31, 2022 and 2021 was as follows:

Schedule of supplementary cash flow information
	2022		2021
Operating cash outflows from operating lease	$	52,578	$	15,385
NON-CASH OPERATING ACTIVITIES
Right-of-use assets obtained in exchange for new operating lease liabilities		79,213		90,277

NOTE 13 COMMITMENTS AND CONTINGENCIES

Contingencies

The Company accounts for loss contingencies in accordance with ASC Topic 450 and other related guidelines. As of December 31, ~~2022~~2023 and ~~2021~~2022, the Company’s management is of the opinion that there are no commitments and contingencies to account for.

NOTE 1415 STOCKHOLDERS’ DEFICIT

(A) Stock, Options and Warrants Issued for Services

On December ~~October 28~~30, 2021, ~~Keywin~~ ~~exercised~~the ~~its~~Board ~~option~~of toDirector ~~purchase~~granted an aggregate of 11132,~~764,755~~172 shares of common stock to the directors of the Company for their services rendered during the year 2021 and 2022. Each director was granted shares of the Company’s common stock ~~for~~and vested anin ~~aggregate~~2021: ~~purchase~~Earnest Leung, 52,172 shares; Wong Wing Kong, 15,000 shares; and Shirley Cheng, 50,000 shares and Frederick Wong ~~price~~granted of15,000 shares and vested in 2022. In connection with these stock grants and in accordance with ASC Topic 718, the Company recognized $2nil 0 and $24,000 of non-cash stock-based compensation on the consolidated statements of operations for the year ended December 31,~~000~~ 2023 and 2022, respectively.

On November 30, 2021, the Company completed private placement of 200,000 shares of restricted common stock at $3 per share. The transaction took place with an investor and generated gross proceeds of $600,000 for the year ended December 31, 2021. In March 2018, the Company entered into an escrow agent services agreement with an escrow agent. Pursuant to the agreement, the Company agreed to pay 5% of escrow funds from invest as compensation, the escrow agent was granted 10,000 shares for his services rendered and the Company issued 10,000 shares to the consultant. In connection with this stock grants and in accordance with ASC Topic 718, the Company recognized $30,000 of non-cash stock-based compensation included in general and administrative expenses on the consolidated statements of operation for the year ended December 31, 2021.

On December 30, 2021, the Board of Director granted an aggregate of 132,172 shares of common stock to the directors of the Company for their services rendered during the year 2021 and 2022. Each director was granted shares of the Company’s common stock and vested in 2021: Earnest Leung, 52,172 shares; Wong Wing Kong, 15,000 shares; and Shirley Cheng, 50,000 shares and Frederick Wong granted 15,000 shares and vested in 2022. In connection with these stock grants and in accordance with ASC Topic 718, the Company recognized $24,000 and $187,475 of non-cash stock-based compensation included in general and administrative expenses on the consolidated statements of operations for the year ended December 31, 2022 and 2021, respectively.

On October 1, 2022, NCN (Ningbo) Culture Media Co., Ltd, a wholly foreign-owned enterprise in Ningbo, China of the Company entered into an employment contract with Chen Zhu (“the employee”) under which the employee agreed to bring in the advertising rights in Ningbo to the Company and the Company will reward him for 606,881 shares of the Company’s common stock. On February 1, 2023, the Company agreed to issue 606,881 restricted shares of the Company’s common stock to the employee, Chen Zhu. Pursuant to the terms of employment contract, if the employee can achieve the annual sales and profit before tax goal in 2023 and 2024, the Company will issue bonus shares of 303,441 and 303,441 restricted shares of the Company’s common stock to the employee, respectively.

~~F-18~~In January 2023, NCN Chengdu and Tianjin started its operation and acquired rights to operate advertising panels in Chengdu and Tianjin. On April 25, 2023, the Company agreed to issue 933,964 and 1,131,960 restricted shares of the Company’s common stock to the employee, Qi Hao and Yang Wu Qiang, respectively. On January 1, 2023, NCN Chengdu and Tianjin entered into an employment contract with Qi Hao and Yang Wu Qiang (“the employees”) under which the employees agreed to bring in the advertising rights in Chengdu and Tianjin to the Company and the Company will reward him for 933,964 and 1,131,960 shares of the Company’s common stock.

~~Table~~In August 2023, the Company cancelled 933,964 restricted shares of ~~Contents~~the Company’s common stock to the employee, Qi Hao.

In October 2023, the Company granted 427,350 shares of common stock to a consultant for services rendered. The value of stock grant recognized for the years ended December 31,2023 was $42,735 as non-cash stock-based compensation and the Company issued shares to the consultant in January 2024.

In December 2023, the Company granted 50,000 shares of common stock to a consultant for services rendered. The value of stock grant recognized for the years ended December 31, 2023 was $1,915 non-cash stock-based compensation and the Company issued shares to the consultant in January 2024.

(B) Restriction on payment of dividends

The Company has not declared any dividends since incorporation. For instance, the terms of the outstanding promissory notes issued contain restrictions on the payment of dividends. The dividend restrictions provide that the Company or any of its subsidiaries shall not declare or pay dividends or other distributions in respect of the equity securities of such entity other than dividends or distributions of cash which amounts during any 12-month period that exceed ten percent (10%) of the consolidated net income of the Company based on the Company’s most recent audited consolidated financial statements disclosed in the Company’s annual report on Form 10-K (or equivalent form) filed with the U.S. Securities and Exchange Commission.

NOTE 1516 RELATED PARTY TRANSACTIONS

Except as set forth below, during the years ended December 31, ~~2022~~2023 and ~~2021~~2022, the Company did not enter into any material transactions or series of transactions that would be considered material in which any officer, director or beneficial owner of 5% or more of any class of the Company’s capital stock, or any immediate family member of any of the preceding persons, had a direct or indirect material interest.

InAs ~~April~~of ~~2009~~December 31, in2023 ~~connection~~and 2022, the Company ~~with~~recorded ~~debt~~an ~~restructuring~~aggregated amount of $1,443,785 ~~Statezone~~and ~~Ltd.~~$1,037,167 of ~~which~~short-term ~~Dr.~~loans ~~Earnest~~from ~~Leung,~~a ~~the~~shareholder ~~Company’s~~that ~~Chief~~the ~~Executive~~loans ~~Officer~~are ~~and~~unsecured, bear a monthly ~~Director~~interest ~~(being appointed~~of 1.5% and repayable on ~~July~~demand, 15respectively. However, ~~2009~~according ~~and~~to ~~May~~the 11agreements, ~~2009,~~the ~~respectively)~~Company ~~was~~shall have the ~~sole~~option to ~~director,~~shorten ~~provided~~or ~~agency~~extend the life of those short-term loans if the need arises and ~~financial~~the ~~advisory~~Company ~~services~~has agreed with the shareholder to extend the ~~Company~~short-term loans on the due date. ~~Accordingly~~As of December 31, 2023 and 2022, the Company ~~paid~~recorded an ~~aggregate~~interest ~~service~~payable ~~fee~~recorded ofin ~~$350~~accounts payable,~~000,~~ accrued expenses and other payables of ~~which~~$0374,324 and $~~250~~167,~~000~~468, ~~has~~respectively. ~~been~~The ~~recorded~~interest asexpenses of ~~issuance~~the ~~costs~~short-term loans for 1% ~~Convertible~~the ~~Promissory~~years ~~Notes~~ended ~~and~~December ~~$100~~31,~~000~~ ~~has~~2023 ~~been~~and ~~recorded~~2022 asamounted ~~prepaid~~to ~~expenses~~$206,855 and ~~other~~$192,247, ~~current~~respectively. ~~assets~~On January 18, 2022, ~~net~~the ~~since~~Company ~~April~~entered ~~2009.~~into ~~Such~~a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of two million five hundred thousand US Dollars ($~~100~~2,500,000). isThe ~~refundable~~issuance of ~~unless~~convertible ~~the~~note ~~Keywin~~is ~~Option~~for issetting ~~exercised~~off ~~and~~against ~~completed.~~the OnCompany’s ~~October~~obligation ~~28,~~to ~~2021,~~repay ~~Keywin~~part ~~exercised~~of ~~its~~the ~~option~~short-term ~~and~~loan $~~100~~2,005,000 and interest payable $495,000, there was ~~recorded~~no incash ~~general~~proceeds ~~and~~from ~~administrative~~the ~~expenses~~issuance ~~during~~of convertible notes. As of the ~~year~~date ~~ended~~of ~~December~~this 31report, ~~2021~~the loan and interest payable balance have not yet been repaid.

OnThe ~~July 1, 2009, the~~ Company ~~and Keywin, of which~~ ~~the~~recorded ~~Company’s~~rental ~~chief~~expense executive officer and director is the director and his spouse is the sole shareholder, entered into an Amendment, pursuant to which the Company agreed to extend the exercise period for the Keywin Option under the Note Exchange and Option Agreement between the Company and Keywin, to purchase an aggregate of ~~1,637,522 shares of our common stock for an aggregate purchase price of~~ $27,~~000,000, from~~692 and ~~a three-month period ended on July 1, 2009, to a six-month period ended October 1, 2009. The exercise period~~ $nil for the year ~~Keywin option was subsequently further extended to a nine-month period~~ ended ~~January~~December 131, ~~2010, pursuant~~ 2023 to ~~the~~Habitat ~~Second~~Investment ~~Amendment.~~Holdings ~~On January 1~~Limited, ~~2010,~~ of ~~the Company and Keywin entered into the third Amendment, pursuant to~~ which the Company’s ~~agreed~~chief toexecutive ~~further~~officer ~~extend the exercise period to an eighteen-month period ended on October 1, 2010,~~ and ~~provide~~convertible ~~the~~note ~~Company~~holder ~~with~~are ~~the~~Habitat ~~right~~Investment toHoldings ~~unilaterally terminate the exercise period upon 30 days~~Limited’s ~~written notice. On September 30, 2010, the exercise price was extended at various times from September 1, 2010 to~~director ~~December 31, 2017~~ and ~~the Keywin Option was further extended to a hundred and twenty-nine-month period ending on January 1, 2020 and the exercise price changed to $0~~shareholder.~~99.~~ On December 3113, ~~2019~~2023, the ~~latest exercise period for the Keywin Option was further extended to a hundred and fifty-three-month period ending on January 1, 2022. On June 1, 2021, the~~ Company ~~and Keywin, of which the Company~~’s chief executive officer ~~and~~resigned ~~director~~as ~~is the~~ director ~~and his spouse is the sole shareholder, entered into an Amendment, pursuant to which the Company agreed Keywin to purchase an aggregate~~ of ~~11,764,756~~Habitat ~~shares~~Investment ~~of the Company’s common stock for an aggregate purchase~~Holdings ~~price of $2,000,000~~Limited. The fair value of the purchase option was determined utilizing Black-Scholes option pricing model on the date before the modification and after modification, accordingly, the Company recorded $nil and $3,544,430 as dividend for the year ended December 31, 2022 and 2021, respectively.

On October 28, 2021, Keywin exercised its option to purchase an aggregate of 11,764,755 shares of the Company’s common stock for an aggregate purchase price of $2,000,000 which for setting off against the Company’s obligation to repay part of the short term loan interest payable, there was no cash proceeds from the exercise of Keywin option.F-22

As of December 31, 2022 and 2021, the Company recorded an aggregated amount of $1,037,167 and $2,845,006 of short-term loans from a shareholder that the loans are unsecured, bear a monthly interest of 1.5% and repayable on demand, respectively. However, according to the agreements, the Company shall have the option to shorten or extend the life of those short-term loans if the need arises and the Company has agreed with the shareholder to extend the short-term loans on the due date. As of December 31, 2022 and 2021, the Company recorded an interest payable recorded in accounts payable, accrued expenses and other payables of $167,468 and $470,315 , respectively. The interest expenses of the short-term loans for the years ended December 31, 2022 and 2021 amounted to $192,247 and $512,101, respectively. On January 18, 2022, the Company entered into a Subscription Agreement under which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note Agreement from the Company for an agreement purchase price of two million five hundred thousand US Dollars ($2,500,000). The issuance of convertible note is for setting off against the Company’s obligation to repay part of the short-term loan $2,005,000 and interest payable $495,000, there was no cash proceeds from the issuance of convertible notes. As of the date of this report, the loan and interest payable balance have not yet been repaid.

F-19

Table of Contents

~~NOTE~~The 16summary ~~GAIN~~of ~~FROM~~amount ~~WRITE-OFF~~due OFto ~~LONG-AGED~~related ~~PAYABLES~~parties included in the accounts payable, accrued expenses and other payables as the following:

The Company considered the payment of the outstanding payables have not been claimed due to loss of contact and it is in the best interests of Company to write off the long-aged payables. The Company has resolved that they are of the opinion that the obligation for future settlement of accrued long-aged payables are remote, therefore the related accruals have been written off $nil and $708 were written off for the year ended December 31, 2022 and 2021, respectively.

Schedule of related party transactions
	2023		2022
Salaries payables to Earnest Leung	$	1,720,296	$	1,566,449
Salaries payables to Shirley Cheng		88,846		25,769
Total	$	1,809,142	$	1,592,218

	2023		2022
Director’s fee payables to Earnest Leung	$	182,000	$	170,000
Director’s fee payables to Shirley Cheng		106,500		94,500
Director’s fee payables to Frederick Wong		32,257		22,180
Total	$	320,757	$	286,680

In addition to the transactions and balances detailed elsewhere in these financial statements, the Company had the following salary transactions with related parties.

Schedule of salary transactions
	2023		2022
Salaries to Earnest Leung	$	153,846	$	153,846
Salaries to Shirley Cheng	$	87,179	$	53,846

NOTE 17

NET LOSS PER COMMON SHARE

Net loss per share information for the years ~~ended~~ ended December 31, ~~2022~~2023 and ~~2021~~2022 was as follows:

Schedule of net (loss) profit per common share	~~2022~~			~~2021~~
	2023			2022
Numerator:
Net loss attributable to NCN common stockholders	$	(~~925~~1,~~278~~906,353	)	$	(1925,~~215,636~~278	)
Denominator:
Weighted average number of shares outstanding, basic*		2122,~~017~~347,~~190~~843			1121,~~023~~017,~~767~~190
Effect of dilutive securities
Options and warrants		-			-
Weighted average number of shares outstanding, diluted		2122,~~017~~347,~~190~~843			1121,~~023~~017,~~767~~190
Net (loss) profit per common share – basic and diluted	$	(0.0409	)	$	(0.1104	)

* Including 268,172 ~~and 253,172~~ shares that were granted and vested but not yet issued for the years ended December 31, ~~2022~~2023 and ~~2021~~2022, respectively.

The diluted net (loss) profit per common share is the same as the basic net (loss) profit per common share for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 as the ordinary shares issuable under stock options and warrants outstanding are anti-dilutive and are therefore excluded from the computation of diluted net (loss) profit per common share.

NOTE 18

INCOME TAXES

Income is subject to taxation in various countries in which the Company and its subsidiaries operate or are incorporated. The (loss) profit before income taxes by geographical locations for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 were summarized as follows:

Schedule of (income) loss before income taxes by geographical locations	~~2022~~			~~2021~~
United States	$	(361,094	)	$	(469,314	)
	2023			2022
Foreign		(564,184	)		(746,322	)
United States	$	(1,017,029	)	$	(361,094	)
	$	(925,278	)	$	(1,215,636	)
Foreign		(889,324	)		(564,184	)
	$	(1,906,353	)	$	(925,278	)

The provision for income taxes consisted for ~~the~~ the years ended December 31, ~~2022~~2023 and ~~2021~~2022 was as follows:

Schedule of provision for income taxes	~~2022~~			~~2021~~
(Loss) Profit before income taxes	$	(925,278	)	$	(1,215,636	)
	2023			2022
(Loss) Profit before income taxes	$	(1,906,353	)	$	(925,278	)
Statutory income tax rate		21	%		21	%
Income tax credit computed at statutory income rate		(~~194~~400,~~308~~334	)		(~~255~~194,~~284~~308	)
Reconciling items:
Non-deductible expenses		~~117~~184,~~723~~840			~~156~~117,~~211~~723
Share-based payments		59,~~040~~377			455,~~670~~040
Tax effect of tax exempt entity		~~755~~1,917			~~516~~755
Valuation allowance on deferred tax assets		70204,~~790~~200			5270,~~886~~790
Income tax	$	-		$	-

Other than the United States, the Company is subject to taxation in Hong Kong and PRC. Under Hong Kong tax laws, deferred tax assets are recognized for tax loss carried forward to the extent that the realization of the related tax benefit through future taxable profits is probable. These tax losses do not expire under current Hong Kong tax legislation. Under PRC tax laws, tax losses may be carried forward for 5 years and no carry-back is allowed. At December 31, ~~2022~~2023 the Company does not have available tax losses in the Hong Kong and PRC to utilize for future taxable profits.

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020. There are several different provisions with the CARES Act that impact income taxes for corporations. The Company has evaluated the tax implications and believes these provisions did not have a material impact to the financial statements.

F-2023

Table of Contents

At December 31, 2023, the Company had an unused net operating loss carryforward of approximately $17,959,386 for income tax purposes. This net operating loss carryforward may result in future income tax benefits of approximately $3,771,472, which will expire on various from 2024 through 2037 as follows:

Schedule of operating loss carryforward
2024 to 2028	$	2,279,147
2029 to 2033		892,375
2034 to 2037		217,937
Indefinitely		382,013
	$	3,771,472

At December 31, 2022, the Company had an unused net operating loss carryforward of approximately $17,011,007 for income tax purposes. This net operating loss carryforward may result in future income tax benefits of approximately $3,567,272, which will expire on various from 2024 through 2037 as follows:

Schedule of operating loss carryforward
2024 to 2028	$	2,279,147
2029 to 2033		892,375
2034 to 2037		217,937
Indefinitely		177,813
	$	3,567,272

At December 31, 2021, the Company had an unused net operating loss carryforward of approximately $16,649,913 for income tax purposes. This net operating loss carryforward may result in future income tax benefits of approximately $3,496,482, which will expire on various from 2024 through 2037 as follows:

2024 to 2028	$	2,332,033
2029 to 2033		892,375
2034 to 2037		217,937
Indefinitely		54,137
	$	3,496,482

The realization of net operating loss carryforward is uncertain at this time, a valuation allowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax liabilities and assets of December 31, ~~2022~~2023 and ~~2021~~2022 are as follows:

Schedule of deferred tax liabilities and deferred tax assets	~~2022~~			~~2021~~
	2023			2022
Deferred tax liabilities	$	-		$	-
Deferred tax assets:
Effect of net operating loss carried forward		3,~~567~~771,~~272~~472			3,~~496~~567,~~482~~272
Less: valuation allowance		(3,~~567~~771,~~272~~472	)		(3,~~496~~567,~~482~~272	)
Net deferred tax assets	$	-		$	-

Movement of valuation allowance:

Schedule of movement of valuation allowance	~~2022~~		~~2021~~
At the beginning of the year	$	3,496,482	$	3,443,596
	2023		2022
Current year addition (reduction)		70,790		52,886
At the beginning of the year	$	3,567,272	$	3,496,482
At the end of the year	$	3,567,272	$	3,496,482
Current year addition (reduction)		204,200		70,790
At the end of the year	$	3,771,472	$	3,567,272

NOTE 19

CONCENTRATION OF RISK

Credit risk

Financial instruments that potentially ~~subject~~ subject the Group to significant concentrations of credit risk consist primarily of cash. As of December 31, ~~2022~~2023 and ~~2021~~2022, cash balance of $1,~~571~~050 and $211,~~677~~571 was maintained at financial institutions in Hong Kong and approximately HK$500,000 were insured by the Hong Kong Deposit Protection Board. As of December 31, 2023 and 2022, cash balance of $4,284 and $18,780 were deposited with financial institutions ~~located~~ located in the PRC. These balances are not covered by insurance. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

Customer risk

Details of the customer accounting for 10% or more of total revenues are as follows:

Schedule of concentration of risk
	2022			2021
	2023			2022
Customer A	$	~~100~~27,~~013~~513	946%	$	-100,013	94%
Customer B	$	146,236	33%	$	-	-
Customer C	$	67,702	15%	$	-	-
Customer D	$	57,398	13%	$	-	-

~~Details of the customer which accounted for 10% or more of accounts receivable are as follows:~~F-24

		2022						2021
Customer A		$	69,339			93%		$	-

F-21

Table of Contents

Details of the customer which accounted for 10% or more of accounts receivable are as follows:

	2023			2022
Customer A	$	12,391	36%	$	69,339	93%
Customer B	$	156,309	88%	$	-	-

Supplier risk

Details of the suppliers accounting for 10% or more of cost of advertising are as follows:

	2022			2021
	2023			2022
Supplier A	$	43188,~~899~~844	5336%	$	-43,899	53%
Supplier B	$	76,192	14%	$		-

Details of the suppliers accounting for 10% or more of account payable are as follows:

	2022			2021
	2023			2022
Supplier A	$	40183,~~242~~799	5342%	$	-42,242	53%
Supplier B	$	42,873	16%	$	-	-

NOTE 20

SUBSEQUENT EVENTS

On ~~February~~March 121, ~~2023~~2024, the Company agreed to issue ~~606~~2,~~881~~123,383 restricted shares of the Company’s common stock to the employee, ~~Chen~~Li ~~Zhu~~Jie. On ~~October~~January 12, ~~2022~~2024, NCN ~~Ningbo~~ Beijing entered into an employment contract with ~~Chen~~Li ~~Zhu~~Jie (“the employee”) under which the employee agreed to bring in the advertising rights in ~~Ningbo~~Beijing to the Company and the Company will reward him for ~~606~~2,~~881~~123,383 shares of the Company’s ~~common~~ common stock. Pursuant to the terms of employment contract, if the employee can achieve the annual sales and profit before tax goal in ~~2023~~ ~~and~~ 2024 and 2025, the Company will issue bonus shares of ~~303~~1,~~441~~061,691 and ~~303,441~~ restricted shares of the Company’s common stock to the employee, respectively.

~~On March 22, 2023, the Board of Directors and Majority of stockholders of the Company approved to decrease the total number of authorized shares of Common Stock from 100,000,000,000 to 100,000,000.~~F-25

F-22

Filing Compare · NETWORK CN INC