20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended December 31, 2023

OR

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

For the transition period from _________ to _____________.

OR

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

Date of event requiring this shell company report:

Commission file number: 001-39977

Baosheng Media Group Holdings Limited

(Exact name of Registrant as Specified in its Charter)

Cayman Islands

(Jurisdiction of Incorporation or Organization)

East Floor 5

Building No. 8, Xishanhui

Shijingshan District, Beijing 100041

People’s Republic of China+86- 010-82088021

(Address of Principal Executive Offices)

Shasha Mi, Chief Executive Officer

East Floor 5

Building No. 8, Xishanhui

Shijingshan District, Beijing 100041

People’s Republic of China+86-010-82088021

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, par value $0.0096 per share	BAOS	The Nasdaq Stock Market LLC

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

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

An aggregate of 1,534,487 ordinary shares, par value $0.0016 per share (“Ordinary Shares”), as of December 31, 2023.

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐  No ☒

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Emerging growth company	☒

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accountant 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 which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ☐  Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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. Yes ☐ No ☒

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). Yes ☐ No ☒

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

TABLE OF CONTENTS

INTRODUCTION		3
FORWARD-LOOKING INFORMATION		6
PART I		7
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	7
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	7
ITEM 3.	KEY INFORMATION	7
ITEM 4.	INFORMATION ON THE COMPANY	44
ITEM 4A.	UNRESOLVED STAFF COMMENTS	91
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	91
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	107
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	114
ITEM 8.	FINANCIAL INFORMATION	116
ITEM 9.	THE OFFER AND LISTING	119
ITEM 10.	ADDITIONAL INFORMATION	119
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	134
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	135
PART II		136
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	136
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	136
ITEM 15.	CONTROLS AND PROCEDURES	137
ITEM 16.	[RESERVED]	138
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	138
ITEM 16B.	CODE OF ETHICS	138
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	138
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	139
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	139

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ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	139
ITEM 16G.	CORPORATE GOVERNANCE	139
ITEM 16H.	MINE SAFETY DISCLOSURE	139
ITEM 16I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	139
ITEM 16J.	INSIDER TRADING POLICIES	140
ITEM 16K.	CYBERSECURITY	140
PART III		141
ITEM 17.	FINANCIAL STATEMENTS	141
ITEM 18.	FINANCIAL STATEMENTS	141
ITEM 19.	EXHIBITS	141

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INTRODUCTION

“We,” “us,” “our,” or the “Company” are to Baosheng Media Group Holdings Limited, a Cayman Islands exempted company with limited liability, and its subsidiaries, as the case may be. Unless the context otherwise requires, in this annual report on Form 20-F references to:

Conventions that apply to this annual report

● “An Rui Tai BVI” are to AnRuiTai Investment Limited, a BVI business company incorporated in the BVI with limited liability in November 2018, owned as to 90% by Ms. Wenxiu Zhong and 10% by Mr. Sheng Gong;

● “Beijing Baosheng” or “WFOE” are to Beijing Baosheng Technology Company Limited, a limited liability company established in the PRC and a direct wholly-owned subsidiary of Baosheng Hong Kong;

● “Baosheng BVI” are to Baosheng Media Group Limited, a BVI (as defined below) business company incorporated with limited liability under the laws of the BVI;

● “Baosheng Group” are to Baosheng Media Group Holdings Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands;

● “Baosheng Hong Kong” are to Baosheng Group’s wholly owned subsidiary, Baosheng Media Group (Hong Kong) Holdings Limited, a Hong Kong company with limited liability;

● “Baosheng Network” are to Beijing Baosheng Network Technology Co., Ltd., a limited liability company established in the PRC and a direct wholly-owned subsidiary of Baosheng Hong Kong;

● “Baosheng Technology” are to Baosheng Technology (Horgos) Company Limited, a limited liability company established in the PRC and a direct wholly-owned subsidiary of Beijing Baosheng (as defined below);

● “Beijing Xunhuo” are to Beijing Xunhuo E-commerce Co., Ltd., a limited liability company established in the PRC and a direct wholly-owned subsidiary of Baosheng Network;

● “BVI” are to the British Virgin Islands;

● “China” or the “PRC” are to the People’s Republic of China, excluding Taiwan for the purposes of this annual report only;

● “Deng Guan BVI” are to Deng Guan Investment Limited, a BVI business company incorporated in the BVI with limited liability in November 2019 and is wholly owned by Mr. Hui Yu;

● “EJAM BVI” are to EJAM New Media Holdings Limited, a BVI business company incorporated in the BVI with limited liability in November 2019 and is a direct wholly owned subsidiary of EJAM International (as defined below);

● “Etone Investment” are to Etone Investment Development Limited, a BVI business company incorporated in the BVI with limited liability in May 2016 and is wholly owned by Mr. Baotian Guo;

● “Everlasting Innovation” are to Everlasting Innovation Development Limited, a business company incorporated in the BVI with limited liability in July 2018 and is wholly owned by Mr. Kei Ming Wang;

● “Horgos Baosheng” are to Horgos Baosheng Advertising Company Limited, a limited liability company established in the PRC and a direct wholly-owned subsidiary of Beijing Baosheng;

● “Kashi Baosheng” are to Kashi Baosheng Information Technology Company Limited, a limited liability company established in the PRC and a direct wholly-owned subsidiary of Beijing Baosheng;

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● “PBCY Investment” are to PBCY Investment Limited, a business company incorporated in the BVI with limited liability in November 2018, and is owned as to 86.35% by Pubang Landscape (as defined below) through Pubang Hong Kong (as defined below) and 13.65% by Mr. Chan through CYY Holdings;

● “shares,” “Shares,” or “Ordinary Shares” are to the ordinary shares of the Company, par value US$0.0096 per share;

● “Warrants” are to the warrants we issued to the Selling shareholders in a private placement closed on March 18, 2021. One Warrant includes the right to purchase 5/192 Ordinary Share at an exercise price of $107.712 per Ordinary Share. However, no fractional shares will be issued upon the exercise of the Warrants; and

● “we,” “us,” or the “Company” are to one or more of Baosheng Group, and its subsidiaries, as the case may be.

Glossary of Technical Terms

● “ad inventory” are to the space available to advertisers on digital platforms in the online marketing industry;

● “ad” are to an advertisement;

● “audiences” are to the recipients of information (including advertisements);

● “authorized agency status” are to the qualification to serve as a designated agency for the media in identifying and procuring advertisers to purchase ad inventory from the media, facilitating the transaction process, and assisting ad deployment. See “Item 4. Information on the Company — B. Business Overview” in this annual report for more information on our authorized agency status with media.

● “feed” are to an internet service in which updates from electronic information sources are presented in a continuous stream;

· “in-feed ad” are to a form of ads that are typically placed in article and content feeds and mimic the surrounding site design and aesthetics so that the articles or content feeds are mixed with the in-feed ads providing the audience an uninterrupted content flow;

● “mobile app ad” are to a form of ads which are served on apps in various formats such as display ads and video ads, and for the purpose of this annual report excluding in-feed ads;

● “mobile app” are to a computer program or software application designed to run on a mobile device such as phone, tablet, or watch;

● “social media marketing” are to the use of social media platforms and websites to promote a product or service;

● “ad currency unit” are to a kind of virtual currency that needs to be purchased from relevant media for use in acquiring their ad inventory;

● “CPA” are to cost per acquisition, an online advertising pricing model where the advertiser pays for a specified acquisition;

● “CPC” are to cost per click, an online advertising pricing model where an advertiser pays a media (typically a search engine, website owner, or a network of websites) when the ad is clicked;

● “CPM” are to cost per mille, an online advertising pricing model where an advertiser pays for one thousand views or clicks of an advertisement;

● “CPT” are to cost per time, an online advertising pricing model where an advertiser pays for an advertisement to be placed for a set amount of time;

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● “DMP” are to data management platform, a technology platform used for collecting and managing data, mainly for digital marketing purposes;

● “DSP” are to demand-side platform, a system that allows buyers of digital advertising inventory to manage multiple ad exchange and data exchange accounts through one interface;

● “gross billing” are to the actual dollar amount of advertising spend of advertisers, net of any rebates and discounts given to those advertisers;

● “gross media costs” are to the costs paid to media for acquisition of ad inventory without being offset by rebates received from media;

● “media costs” are to the costs for acquisition of ad inventory or other advertising services from media and other advertising service providers as offset by rebates we receive from the relevant media and advertising service providers (if any);

● “performance-based advertising” are to a form of advertising in which the purchaser pays only when there are measurable results (e.g., number of purchases, downloads, and registrations);

● “SEM” are to search engine marketing, a form of online marketing that involves the promotion of websites by increasing their visibility in search engine results pages and search-related products and services; and

● “SSP” are to supply-side platform, a technology platform to enable media owners to manage their ad inventory, fill it with ads, and receive income.

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FORWARD-LOOKING INFORMATION

This annual report contains statements that constitute forward-looking statements. Many of the forward- looking statements contained in this annual report can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others.

Forward-looking statements appear in a number of places in this annual report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to, those identified under the section entitled “Item 3. Key Information—D. Risk Factors” in this annual report. These risks and uncertainties include factors relating to:

● assumptions about our future financial and operating results, including revenues, income, expenditures, cash balances and other financial items;

● our ability to execute our growth, and expansion, including our ability to meet our goals;

● current and future economic and political conditions;

● our ability to compete in the highly-competitive advertising service industry;

● our capital requirements and our ability to raise any additional financing which we may require;

● our ability to attract clients and further enhance our brand recognition;

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

● trends and competition in the advertising service industry;

● the future development of the COVID-19 pandemic; and

● other assumptions described in this annual report underlying or relating to any forward-looking statements.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should read thoroughly this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from, or worse than, what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This annual report contains certain data and information that we obtained from various government and private publications. Statistical data in these publications also include projections based on a number of assumptions. The insurance industry may not grow at the rate projected by market data, or at all. Failure of this market to grow at the projected rate may have a material and adverse effect on our business and the market price of the Ordinary Shares. In addition, the rapidly evolving nature of this industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this annual report and the documents that we refer to in this annual report and exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect.

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PART I

Item 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

Item 2.OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

Item 3.KEY INFORMATION

A.[Reserved]

B.Capitalization and Indebtedness

Not applicable.

C.Reasons for the Offer and Use of Proceeds

Not applicable.

D.Risk Factors

Summary of Risk Factors

Investing in our Ordinary Shares involves significant risks. You should carefully consider all of the information in this annual report before making an investment in our Ordinary Shares. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully in the section titled “Item 3. Key Information—D. Risk Factors” in this annual report.

Risks Related to our Business and Industry

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

● Cutbacks on advertising budgets by advertisers, changes in rebate and incentive policies by the media, failure to maintain and grow our advertiser base and secure emerging media resources could all materially and adversely affect our business and financial condition.

● If we fail to maintain our relationships with our business stakeholders, mainly advertisers and media, our business, results of operations, financial condition and business prospects could be materially and adversely affected.

● Failure to appropriately evaluate the credit profile of our advertisers or effectively manage our credit risk associated with credit terms granted to our advertisers and/or delay in settlement of accounts receivable from our advertisers could materially and adversely impact our operating cash flow and may result in significant provisions and impairments on our accounts receivable which in turn would have a material adverse impact on our business operations, results of operation, financial condition and our business pursuits and prospects.

● As we continue to strive for business growth, we may continue to experience net cash outflow from operating activities, and we cannot assure you that we can maintain sufficient net cash inflows from operating activities.

● Our limited operating history in a rapidly evolving industry makes it difficult to accurately forecast our future operating results and evaluate our business prospects.

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● Certain customers contributed to a significant percentage of our total revenue during the fiscal years 2023, 2022, and 2021, and losing one or more of them could result in a material adverse impact on our financial performance and business prospects.

● We are in the highly competitive online advertising service industry and we may not be able to compete successfully against existing or new competitors, which could reduce our market share and adversely affect our competitive position and financial performance.

● If we fail to improve our services to keep up with the rapidly changing demands, preferences, advertising trends or technologies in the online advertising industry, our revenues and growth could be adversely affected.

● Limitations on the availability of data and our ability to analyze such data could significantly restrict our optimization capability and cause us to lose advertisers, which may harm our business and results of operations.

● The regulatory environment of the online advertising industry is rapidly evolving. If we fail to obtain and maintain the requisite licenses and approvals as applicable to our businesses in China from time to time, our business, financial condition and results of operations may be materially and adversely affected.

● The ongoing effects of COVID-19 in China may have a material adverse effect on our business.

Risks Related to Doing Business in China

● Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of the PRC, which could reduce the demand for our products and materially and adversely affect our competitive position.

● Uncertainties regarding interpretation and enforcement of the laws, rules and regulations in China may impose adverse impact on our business, operations and profitability.

● We may be adversely affected by the complexity, uncertainties and changes in the regulation of internet-related businesses and companies in China.

● Regulation and censorship of information disseminated through the Internet in China may adversely affect our business in China, and we may be liable for content disseminated by us through the Internet.

● Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon our ability to operate profitably in the PRC.

● The Chinese government exerts substantial influence over the manner in which we must conduct our business, and 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, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless.

● Recent greater oversight by the Cyberspace Administration of China, or the CAC, over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.

● The Opinions on Severely Cracking Down on Illegal Securities Activities According to Law recently issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council may subject us to additional compliance requirement in the future.

● Labor Contract Law and other labor-related laws in the PRC may adversely affect our business and our results of operations.

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● Failure to obtain or maintain any preferential tax treatments, or the discontinuation, reduction or delay of any preferential tax treatments available to us in China could adversely affect our results of operations and financial condition.

● Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

● PRC regulation of loans to PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using proceeds from our future financing activities to make loans to our PRC operating subsidiaries, which might adversely affect our liquidity and our ability to fund and expand our business.

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

● We may rely on dividends paid by our subsidiaries for our cash needs, 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 business.

● Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident Shareholders to personal liability, may limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, may limit the ability of our PRC subsidiaries to distribute profits to us or may otherwise materially and adversely affect us.

● You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our Ordinary Shares.

● We may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain other PRC regulations.

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

● You may have difficulty effecting service of legal process, enforcing judgments or bringing actions against us and our management.

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

● Our Ordinary Shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of trading of our Ordinary Shares, or the treat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections.

● We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

● Because our business is conducted in RMB and the price of our Ordinary Shares is quoted in the U.S. dollar, changes in the exchange rate between RMB and the U.S. dollar may affect the value of your investments.

Risks Related to Our Ordinary Shares

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

● Our share price has recently declined substantially, and our Ordinary Shares could be delisted from the Nasdaq or trading could be suspended.

● We cannot assure you that we will declare and distribute any dividends in the future.

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● For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

● If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.

● As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, which may limit the information publicly available to our shareholders.

● As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq Stock Market corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards.

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

Risks Related to Our Business and Industry

Cutbacks on advertising budgets by advertisers, changes in rebate and incentive policies by the media, failure to maintain and grow our advertiser base and secure emerging media resources could all materially and adversely affect our business and financial condition.

We derive our revenue (i) from rebates and incentives offered by media (or their authorized agencies) for procuring advertisers to place advertisements with them, which are usually calculated with reference to the advertising spend of our advertisers and are closely correlated to our gross billing from advertisers, netting of rebates to advertisers (if any); and (ii) from net fees from advertisers, which are essentially the fees we charge our advertisers (i.e. gross billing), net of the media costs and other costs of procuring advertising services we incurred on their behalf. Accordingly, our revenue base and our profitability are very much driven by our gross billing with our advertisers, and the relevant media’s rebate policies which determine, among other things, the rates of rebates we receive from media (or their authorized agencies).

The willingness of advertisers to spend their online advertising budget through us is critical to our business and our ability to generate grossing billing. Our advertisers’ demand for advertising services can be influenced by a variety of factors including:

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

(ii) Industry-related factors: such as the trends, preferences and habits of audiences towards online media and their receptiveness towards online advertising as well as the development of emerging and varying forms of online media and contents.

(iii) Advertiser-specific factors: an advertiser’s specific development strategies, business performance, financial condition and sales and marketing plans.

A change in any of the above factors may result in significant cutbacks on advertising budgets by our advertisers, which would not only result in a reduction of our revenue but would also weaken our negotiating position with media on rebate policies and negatively impact our ability to earn advertising spend-driven rebates and incentives from media. As a result, our business, results of operations and financial condition could be materially and adversely affected.

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Besides, media (or their authorized agencies) may change the rebate and incentive policies offered to us based on the prevailing economic outlook, competitive landscape of the online advertising market, and their own business strategy and operational targets. For instance, a media may reduce the rate of rebates offered to us due to changes in its business strategies, resource reallocation, increased popularity and demand for their media resources, or may adjust their incentive programs or their benchmarks and measuring parameters for incentive offerings based on their changing marketing and target audience strategies. If media impose rebate and incentive policies that are less favorable to us, our revenue, results of operations and financial condition may be adversely affected.

On the other hand, we may offer rebates to our advertisers. The level of rebates we offer to our advertisers is determined case by case with reference to the rebates and incentives we are entitled to receive from the relevant media (or its authorized agency), an advertiser’s committed total spend, our business relationships with such advertiser and the competitive landscape in the online advertising industry. If it emerges that an increase in the rate of rebate to our advertisers is necessary for us to remain competitive or align with the emerging competitive environment, our revenue and profitability may reduce. As a result, our results of operations and financial condition could be materially and adversely affected.

Our ability to maintain our advertiser base and attract new advertisers is, to a significant extent, associated with our ability to secure popular and emerging media resources sought after by our advertisers. We believe our authorized agency status with media and the large number of media we work with have helped us attract advertisers and contributed to our revenue and advertiser base. However, there is no assurance that we will be able to maintain such authorized agency status in the future, or that these media will remain popular among our advertisers in the future. The online advertising industry is dynamic. New media and innovative advertising formats are constantly introduced into the market, while existing media may lose market visibility and audience base. If the media with which we have authorized agency status lose their audience popularity or market visibility, or are no longer preferred by our advertisers, or if we fail to secure authorized agency status with new media of emerging popularity or preferred by our advertisers, we may lose our advertiser base and their advertising spend through us. In such event, our business, results of operations, financial condition and future prospects could be materially and adversely affected.

If we fail to maintain our relationships with our business stakeholders, mainly advertisers and media, our business, results of operations, financial condition and business prospects could be materially and adversely affected.

We regard our business value as revolving around our ability to serve the needs of two major business stakeholders: advertisers and media. Further, our main sources of revenue are (i) rebates and incentives from media (or their authorized agencies); and (ii) the net fees we earn from advertisers. Hence, our success depends on our ability to, among other things, develop and maintain relationships with our existing advertisers and media partners and attract new ones.

Relationship with our advertisers

Our advertiser base is comprised of direct advertisers, as well as third-party advertising agencies which place advertisements for their advertiser clients through us. The number of advertisers we served decreased from 410 in 2021 to 228 in 2022 and increased to 285 in 2023.

We would usually enter into framework agreements with advertisers who intend to acquire ad inventory through us over a period of time (usually a year or shorter). If we are asked to run a specific advertising campaign for a short period (usually for our social media marketing services), we may enter into one-off agreements with the advertisers. Our contracts with our advertisers generally do not include exclusive obligations to use our services, and our advertisers are generally free to place their ads through other advertising agencies or work with multiple advertising agencies on a specific advertising campaign.

If our relationships with our advertisers deteriorate for any reason (for instance, our advertiser is dissatisfied with the effectiveness of the advertising campaigns run through us), or our advertisers switch to other advertiser because they are offer better terms (such as more competitive rebates and discounts), or if our advertisers reduce their advertising budget to be spent through us, they may reduce or cease using our advertising services.

Hence, we cannot assure you that our advertisers will continue to use our services or that we will be able to replace, in a timely or effective manner, departing advertisers with potential new advertisers. If we fail to retain our existing advertiser base or increase their advertising spend through us, or to provide effective advertising services or pricing structures to attract new advertisers, the demand for our advertising services will not grow and may even decrease, which could materially and adversely affect our revenue and profitability.

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Relationship with our media

We have established and maintained relationships with a wide range of media, which offer our advertisers a diverse choices ad formats, including search ads, in-feed ads, mobile app ads and social media ads. Our future growth will depend on our ability to maintain our relationships with existing media partners as well as building partnerships with new media.

In particular, we act as authorized agency for some popular online media, such as Super Huichuan (超级汇川), and Today’s Headline (今日头条), to help them procure advertisers to buy their ad inventory and facilitate ad deployment on their advertising channels. As media’s authorized agency, our relationships with the media are mainly governed by agency agreements which provide for, among other things, credit periods and the rebate polices offered to us. These agency agreements typically have a term of one year and are subject to renewal upon expiry. The commercial terms under the agency agreements are subject to renegotiation when they are renewed. Besides, media usually retain the right to terminate the authorized agency relationship based on business needs at their discretion.

Hence, there is no assurance that we can maintain stable business relationships with any media or their authorized agencies. Further, there is no guarantee that the media will continue to rely on authorized agencies to acquire and serve advertisers. Besides, our relationships with our media could be adversely affected if we cannot meet the target minimum advertising spend stipulated in the relevant agency agreements.

If any media ends its cooperative relationship with us or terminates our authorized agency status or imposes commercial terms which are less favorable to us, or we fail to secure partnerships with new media partners, we may lose access to the relevant advertising channels, sustain advertiser deflection, and suffer revenue drop. As a result, our business, results of operations, financial condition and prospects might be materially and adversely affected.

Also, our business depends on our media to deliver their advertising services on their platforms (such as search engines, mobile apps and social media platforms), which in turn rely on the performance, reliability and stability of the internet infrastructure and telecommunications systems. Since we rely on the performance of our media to deliver ads for our advertisers, any interruption or failure of their information technology and communications systems may undermine the delivery of our advertising services and cause us to lose advertisers. All in all, any interruption or failure of the internet infrastructure and telecommunications systems could impair our ability to effectively deliver ads and provide our services, and could cause us to lose advertisers, and our business, financial condition and results of operations would be adversely affected.

In addition, we depend on the accuracy and genuineness of advertising performance data and other data provided by media in evaluating the effectiveness of our advertisers’ advertising campaigns and calculating the amount of rebates or incentives that we are entitled to receive from our media. If the advertising performance data or other data provided by media is inaccurate or fraudulent, it may undermine our optimization efforts to achieve better performance for our advertisers’ ads. This could also result in disputes with our advertisers and media, harm to our reputation and loss of our advertisers and media, and adversely affect our business, results of operations and financial condition.

Failure to appropriately evaluate the credit profile of our advertisers or effectively manage our credit risk associated with credit terms granted to our advertisers and/or delay in settlement of accounts receivable from our advertisers could materially and adversely impact our operating cash flow and may result in significant provisions and impairments on our accounts receivable which in turn would have a material adverse impact on our business operations, results of operation, financial condition and our business pursuits and prospects.

Our gross accounts receivable decreased from $62.8 million as of December 31, 2021 to $49.8 million as of December 31, 2022, and decreased further to $39.5 million as of December 31, 2023. As of December 31, 2023, 2022 and 2021, accounts receivable outstanding for over six months were $38.2 million, $26.7 million and $39.8 million, representing approximately 96.7%, 38.2%, and 63.4% of our gross accounts receivable, respectively. As of December 31, 2023, 2022 and 2021, we made bad debt allowance of $13.4 million, $17.7 million and $6.4 million against our gross outstanding accounts receivable, respectively.

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The increase in the accounts receivable aging over the fiscal year as of December 31, 2023 was mainly because of increase in aged balance of accounts receivable. We attributed our decrease in our growth accounts receivable during the fiscal year ended December 31, 2022 to writing off accounts receivable as a result of remote collection. We attributed our growth of our gross accounts receivable during the fiscal year ended December 31, 2021 to delayed payment from our customers as they were affected by the outbreak of COVID-19.See also “— Risks Related to Our Business and Industry — If our advertisers delay in settlement of our accounts receivable or if we are unable to issue invoices to our advertisers on a timely basis, our business, financial condition and results of operations may be materially and adversely affected.”

Regardless, given our “agency-based” business model and that we earn our revenue on a net basis but have accounts receivable from advertisers based on our gross billing, we are particularly sensitive and susceptible to credit risk. Our gross accounts receivable as of December 31, 2023, 2022 and 2021 represented 211.0%, 93.5% and 101.7% of our gross billing, respectively, with gross accounts receivable outstanding over six months represented 204.1%, 60.5% and 71.8% of our gross billing for the fiscal years 2023, 2022 and 2021, respectively. While we have implemented policies and measures with the aim of improving our management of credit risk and have expanded our efforts in the collection of overdue or long outstanding accounts receivable, there is no assurance that our substantial accounts receivable position with respect to our reported revenue (on a net basis) will not persist in the future given the nature of our business. Any deterioration of credit profile of our advertisers or any failure or delay in their settlement of our accounts receivable could put tremendous pressure on our operating cash flow and may result in material and adverse impact on our business operations, results of operations and financial condition.

As we continue to strive for business growth, we may continue to experience net cash outflow from operating activities, and we cannot assure you that we can maintain sufficient net cash inflows from operating activities.

We reported net cash provided by operating activities of $2.3 million for fiscal year 2023, net cash used in operating activities of $1.6 million for the fiscal year 2022 and net cash provided by operating activities of $31.2 million for fiscal year 2021. During the fiscal years ended December 31, 2023, 2022 and 2021, certain media we procured for our advertisers required prepayment or offer relatively short credit periods to us. While we have used reasonable endeavor to align credit terms granted to us in connection with a particular media when we offered credit terms to advertisers using the relevant media, in cases where we engaged in cross-selling of ad inventories or services of different media to our existing advertisers, we usually aligned the credit terms we offer to such advertisers to the most favorable terms offered to us among the media used. Moreover, we may offer more competitive terms to selected advertisers of established business relationship with us or of significant size, with significant market impact or strategic value, while their choices of media may not offer comparable credit terms to us or at all. In addition, during the fiscal years ended December 31, 2023, 2022 and 2021, we were required by certain media (or their authorized agencies) to place deposits as performance security, among other things of a similar nature, and we may elect to pay deposit associated with committed advertising spend on behalf of selected advertisers as required by certain media before running their advertising campaigns. We consider the above practices to be generally in line with industry practice and competitive landscape, and we expect these practices to continue in the foreseeable future.

All the above have contributed to a temporal mismatch in our operating cash flow, as such impact is generally positively correlated with our business volume. As we further expand our business, our requirement for business running capital and other payments (such as capital expenditures) will increase. Our operations may not generate sufficient cash flows to meet our operating and capital requirements in the future. Historically we have utilized peer-to-peer and third-party short-term borrowings to supplement our operating cash flow shortage from time to time. See “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Cash Flows —Financing Activities.” We cannot assure you that going forward we will be able to reverse back to a net operating cash inflow position or generate sufficient cash inflow from our operations or obtain adequate debt or equity financing at reasonable costs, or at all, to meet such requirements. If we fail to successfully manage our working capital or acquire adequate funding to finance our expansion, our ability to pay our media and employees and otherwise fund our operations and expansion could be impaired, and our business, financial condition and results of operations may be materially and adversely affected.

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Our limited operating history in a rapidly evolving industry makes it difficult to accurately forecast our future operating results and evaluate our business prospects.

We substantially commenced developing our online advertising service business since the arrival of Ms. Wenxiu Zhong, our founder, in 2015. We expect we will continue to expand as we seek to expand our advertiser and media bases and explore new market opportunities. However, due to our limited operating history, our historical growth rate may not be indicative of our future performance. Our future performance may be more susceptible to certain risks than a company with a longer operating history in a different industry. Many of the factors discussed below could adversely affect our business and prospects and future performance, including:

● our ability to maintain, expand and further develop our relationships with advertisers to meet their increasing demands;

● our ability to maintain our first-tier agency relationships with our key media and further develop agency relationships with popular media of different and emerging media formats;

● our ability to introduce and manage the development of new services;

● the continued growth and development of the online advertising industry;

● our ability to keep up with the technological developments or new business models of the rapidly evolving online advertising industry;

● our ability to attract and retain qualified and skilled employees;

● our ability to effectively manage our growth; and

● our ability to compete effectively with our competitors in the online advertising industry.

We may not be successful in addressing the risks and uncertainties listed above, among others, which may materially and adversely affect our business, results of operations, financial condition and future prospects.

Certain customers contributed to a significant percentage of our total revenue during the fiscal years 2023, 2022 and 2021, and losing one or more of them could result in a material adverse impact on our financial performance and business prospects.

In 2023, our top five customers were Xiamen Toutiao Information Technology Co., Ltd., Guangzhou Juyao Information Technology Co., Ltd., Jiangxi Toujing Network Technology Co., Ltd., Tianjin Hengchuang Xintai Technology Co., Ltd., and Beijing Dajia Internet Information Technology Co., Ltd., representing 47.7%, 12.2%, 6.4%, 4.9% and 3.5% of our total revenue, respectively.

In 2022, our top five customers were Hubei Toutiao Technology Co., Ltd., Hangzhou Qubian Network Technology Co., Ltd., Guangzhou Juyao Information Technology Co., Ltd., Shanghai Mingkan Advertising Co., Ltd. and Beijing Yiling Shengshi Cultural Media Co., Ltd., representing 36.8%, 13.3%, 10.7%, 5.1% and 4.7% of our total revenue, respectively.

In 2021, our top five customers were Beijing Sogou Technology Development Co., Ltd, Hubei Toutiao Technology Co., Ltd., Guangzhou Juyao Information Technology Co., Ltd., Horgos Zhijiantiancheng Technology Co., Ltd., and Hangzhou Qubian Network Technology Co., Ltd., representing 41.8%, 28.1%, 16.5%, 7.6% and 2.0% of our total revenue, respectively.

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Sogou, for which we were an authorized agency from 2016 to March 2021, had been our top customer during the fiscal year 2021, accounting for 41.8% of our revenue. Our top five customers during the fiscal years 2023, 2022 and 2021 include search engine operators, short-video platform operators, and advertising agencies who place ads for their advertiser clients through us. The identities of our customers vary depending on the type of revenue and the nature of the business transaction, comprising both advertisers and media (or their authorized agencies). See “Item 4. Information on the Company — B. Business Overview — Customers.” For the fiscal year ended December 31, 2023, two customers, both of which are publishers, accounted for more than 10% of our total revenue, representing approximately 47.7% and 12.2% of our total revenue, respectively. For the year ended December 31, 2022, three customers, who are all publishers, accounted for more than 10% of our total revenue, representing approximately 36.8%, 13.3% and 10.7% of the total revenue, respectively. For the year ended December 31, 2021, three customers, who are all publishers, accounted for more than 10% of our total revenue, representing approximately 41.8%, 28.1% and 16.5% of the total revenue, respectively.

We typically enter into agency agreements (in case of media for which we are authorized agency) and framework agreements with these top customers with a term of one year or shorter, which are subject to renewal after expiry. Any failure to renew these agreements or any termination of such agreements may have a material adverse impact on our results of operations.

There are a number of factors, including our performance, which could cause the loss of, or decrease in the volume of business from, a customer. We cannot assure you that we will continue to maintain the business cooperation with these customers at the same level, or at all. The loss of business from one or more of these significant customers, or any downward adjustment of the rates of rebates and incentives paid by media (or their authorized agencies), could materially and adversely affect our revenue and profit. Furthermore, if any significant advertiser or media terminates its relationship with us, we cannot assure you that we will be able to secure an alternative arrangement with comparable advertiser or media in a timely manner, or at all.

We are in the highly competitive online advertising service industry and we may not be able to compete successfully against existing or new competitors, which could reduce our market share and adversely affect our competitive position and financial performance.

There are numerous companies that specialize in the provision of online advertising services in China. We compete primarily with our competitors and potential competitors for access to quality ad inventory, agency relationships with popular media, and advertiser base. The online advertising industry in China is rapidly evolving. Competition can be increasingly intensive and is expected to increase significantly in the future. Increased competition may result in price reductions for advertising services, decrease in the rates of rebates and incentives offered by media to their authorized agencies, reduced margins and loss of our market share. We compete with other competitors in China primarily on the following bases:

● brand recognition;

● quality of services;

● effectiveness of sales and marketing efforts;

● creativity in design and contents of ads;

● optimization capability;

● pricing, rebate and discount policies;

● strategic relationships; and

● hiring and retention of talented staff.

Our existing competitors may in the future achieve greater market acceptance and recognition, secure authorized agency status with increasing number of popular media, and gain a greater market share. It is also possible that potential competitors may emerge and acquire a significant market share. If existing or potential competitors develop or offer services that provide significant performance, price, creative, optimization or other advantages over those offered by us, our business, results of operations and financial condition would be negatively affected.

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Our existing and potential competitors may enjoy competitive advantages over us, such as longer operating history, greater brand recognition, larger advertiser base, greater access to ad inventory, and significantly greater financial, technical and marketing resources.

We also compete with traditional forms of media, such as newspapers, magazines, radio and television broadcast, for advertisers and advertising revenues.

If we fail to compete successfully, we could lose out in procuring advertisers, securing agency relationships with media and acquiring access to ad inventory, which could result in adverse impact to our business, results of operations and prospects. We also cannot assure you that our strategies will remain competitive or that they will continue to be successful in the future. Increasing competition could result in pricing pressure and loss of our market share, either of which could have a material adverse effect on our financial condition and results of operations.

If we fail to improve our services to keep up with the rapidly changing demands, preferences, advertising trends or technologies in the online advertising industry, our revenues and growth could be adversely affected.

We consider the online advertising industry to be dynamic, as we face constant changes in audiences’ interests, preferences and receptiveness over different ad formats, evolution of the needs of advertisers in response to shifts in their business needs and marketing strategies, as well as innovations in the means on online advertising. On the other hand, information technology and “big-data” are increasingly being utilized in online advertising, as evidenced by the emergence of “data-driven” and programmatic advertising services. Our success therefore depends not only on our ability to offer proper choices of media, deliver effective optimization services, providing creative advertising ideas, but also to adapt to rapidly changing online trends and technologies to enhance the quality of existing services and to develop and introduce new services to address advertisers’ changing demands. We may experience difficulties that could delay or prevent the successful development, introduction or marketing of our new services. Any new service or enhancement will need to meet the requirements of our existing advertiser base and potential advertisers and may not achieve significant market acceptance. If we fail to keep pace with changing trends and technologies, continue to offer effective optimization services and creative advertising ideas to the satisfaction of our advertisers, or to introduce successful and well-accepted services for our existing advertiser base and potential advertisers, we could lose our advertisers and our revenue and growth could be adversely affected.

Limitations on the availability of data and our ability to analyze such data could significantly restrict our optimization capability and cause us to lose advertisers, which may harm our business and results of operations.

Our capability to plan and optimize advertising campaigns are partly dependent on the availability of data generated by the media concerned based on the ad interaction behavior between such media and their end users. Our access to such data from media is limited by the relevant media’s data policies. Typically, we can only access data that are made available by the media to us or their authorized agencies on their back-end platforms. In addition, there is no assurance that the government will not adopt legislation that prohibits or limits collection of data on the Internet and the use of such data, or that third parties will not bring lawsuits against the media or us relating to internet privacy and data collection. As of the date of this annual report, our business operations are in material compliance with the relevant laws and regulations on data protection and privacy, including the Cyber Security Law of the People’s Republic of China (《中华人民共和国网络安全法》), which was enacted by the Standing Committee of the National People’s Congress on November 7, 2016 and became effective on June 1, 2017. Due to the recent development of laws and regulations on data protection and privacy and evolving interpretation of competent authorities, media and online advertising service providers will be subject to more stringent requirements on data sharing with third parties, which may limit our ability to obtain data from them. Therefore, we cannot assure you that we will be in full compliance with all applicable laws and regulations on data protection and privacy in the future. See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations relating to Information Security and Privacy Protection.”

If any of the above happens, we may be unable to provide effective services and may lose our advertisers, and our business, financial condition and results of operations would be adversely affected. Lawsuits or administrative inquiries relating to internet privacy and data collection could also be costly and divert management resources, and the outcome of such lawsuits or inquiries may be uncertain and may harm our business.

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The regulatory environment of the online advertising industry is rapidly evolving. If we fail to obtain and maintain the requisite licenses and approvals as applicable to our businesses in China from time to time, our business, financial condition and results of operations may be materially and adversely affected.

As confirmed by our PRC counsel, Beijing Dacheng Law Offices, LLP (“Beijing Dacheng”), each of our PRC subsidiaries currently holds a valid business license, and we and our subsidiaries are not required to obtain any other licenses, permits or approvals from the regulatory authorities in China for our business undertakings. However, the licensing requirements within the online advertising industry, particularly in China, are constantly evolving and subject to the interpretation of the competent authorities, and we may be subject to more stringent regulatory requirements due to changes in the political or economic policies in the relevant jurisdictions or the changes in the interpretation of the scope of internet culture business. We cannot assure you that we will be able to satisfy such regulatory requirements and we may be unable to retain, obtain or renew relevant licenses, permits or approvals in the future, and as a result, our business operations may be materially and adversely affected.

If our advertisers delay in settlement of our accounts receivable or if we are unable to issue invoices to our advertisers on a timely basis, our business, financial condition and results of operations may be materially and adversely affected.

As of December 31, 2023, 2022 and 2021, our gross accounts receivable amounted to $39.5 million, $49.8 million and $62.8 million, respectively. Our gross accounts receivable turnover days were 558 days, 369 days and 442 days in the fiscal years 2023, 2022 and 2021, respectively.

Our business operations and cash flow are subject to the risk of delay in payment from our advertisers. Our advertisers’ settlement day will generally be affected by their internal policies. Our efforts in strengthening our accounts receivable collection and management may be in vain, and we cannot assure you that we will be able to fully recover the outstanding amounts due from our advertisers, if at all, or that our advertisers will settle the amounts in a timely manner. As a result, our business, financial condition and results of operations may be materially and adversely affected.

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

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

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

Moreover, regulatory penalties or punishments against our business stakeholders (i.e., advertisers and media), even without resulting in any legal or regulatory implications upon us, may nonetheless cause business interruptions or even suspension of these business stakeholders of ours, and may result in abrupt changes in their business emphasis, such as changes in advertising and/or ad inventory offering strategies, any of which could disrupt our usual course of business with them and result in material negative impact on our business operations, results of operation and financial condition.

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We are subject to, and may expend significant resources in defending against, government actions and civil claims in connection with false, fraudulent, misleading or otherwise illegal marketing content for which we provide agency services.

Under the Advertising Law of the PRC (《中华人民共和国广告法》) (the “Advertising Law”), where an advertising operator provides advertising design, production or agency services with respect to an advertisement when it knows or should have known that the advertisement is false, fraudulent, misleading or otherwise illegal, the competent PRC authority may confiscate the advertising operator’s advertising revenue from such services, impose penalties, order it to cease dissemination of such false, fraudulent, misleading or otherwise illegal advertisement or correct such advertisement, or suspend or revoke its business licenses under certain serious circumstances.

Under the Advertising Law, “advertising operators” include any natural person, legal person or other organization that provides advertising design, production or agency services to advertisers for their advertising activities. Since our service involve provision of agency services to advertisers, including helping them identify, engage and convert audiences, and create content catering to their potential audience across different media, we are deemed as an “advertising operator” under the PRC Advertising Law. Therefore, we are required to examine advertising content for which we provide advertising services for compliance with applicable laws, notwithstanding the fact that the advertising content may have been previously published, and that the advertisers also bear liabilities for the content in their advertisements.

In addition, for advertising content relating to certain types of products and services, such as pharmaceuticals and medical procedures, we are expected to confirm that the advertisers have obtained requisite government approvals, including operating qualifications, proof of quality inspection for the advertised products, government pre-approval of the content of the advertisements and filings with the local authorities.

Although we have established internal policies to review the advertising contents before they are distributed to ensure compliance with applicable laws, we cannot ensure that each advertisement for which we provide advertising services complies with all PRC laws and regulations relevant to advertising activities, that supporting documentation provided by our advertisers is authentic or complete, or that we are able to identify and rectify all non-compliances in a timely manner.

Moreover, civil claims may be filed against us for fraud, defamation, subversion, negligence, copyright or trademark infringement or other violations due to the nature and content of the information for which we provide agency services. For example, we generally represent and warrant in our contracts with media as to the truthfulness of the advertising content that we place on these media, and agree to indemnify the media for any losses resulting from false, fraudulent, misleading or otherwise illegal advertising content that we place on these media. In the event we are subject to government actions or civil claims in connection with false, fraudulent, misleading or otherwise illegal marketing content for which we provide agency services, our reputation, business and results of operations may be materially and adversely affected.

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

Our information technology may be subject to cyber-attacks, viruses, malicious software, break-ins, theft, computer hacking, phishing, employee error or malfeasance or other security breaches. Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automatic hacks. Experienced computer programmer and hackers may be able to penetrate our security controls and misappropriate or compromise sensitive proprietary or confidential information, create system disruptions or cause shutdowns. They also may be able to develop and deploy malicious software programs that attack our systems or otherwise exploit any security vulnerabilities. Our systems and the data stored on those systems also may be vulnerable to security incidents or security attacks, acts of vandalism or theft, coordinated attacks by activist entities, misplaced or lost data, human errors, or other similar events that could negatively affect our systems and the data stored on or transmitted by those systems, including the data of our advertisers or our media clients. Further, third parties such as our media, could also be subject to similar risks of security breaches, which are out of our control. If any of our media experiences cyber-attacks and fail to publish advertisements as a result, we may be liable to our advertisers.

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

Any negative publicity about us, our services and our management may materially and adversely affect our reputation and business.

We may from time to time receive negative publicity about us, our management or our business. Certain of such negative publicity may be the result of malicious harassment or unfair competition acts by third parties. We may even be subject to government or regulatory investigation (including but not limited to those relating to advertising materials which are alleged to be illegal) as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to defend ourselves against such third-party conduct, and we may not be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Harm to our reputation and confidence of advertisers and media can also arise for other reasons, including misconduct of our employees or any third-party business partners whom we conduct business with. Our reputation may be materially and adversely affected as a result of any negative publicity, which in turn may cause us to lose market share, advertising customers, industry partners, and other business partnerships.

If we fail to manage our growth or execute our strategies and future plans effectively, we may not be able to take advantage of market opportunities or meet the demands of our advertisers.

We expect our business to grow in terms of the scale and diversity of operations in the long run, along with steady development in terms of advertiser base and media relationships. Any such growth and development will increase the complexity of our operations and may cause strain on our managerial, operational and financial resources. We must continue to hire, train and effectively manage new employees. If our new hires perform poorly or if we are unsuccessful in hiring, training, managing and integrating new employees, our business, financial condition and results of operations may be materially harmed. Our expansion will also require us to maintain the consistency of our service offerings to ensure that our market reputation does not suffer as a result of any deviations, whether actual or perceived, in the quality of our services.

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

● we face challenges in ensuring the productivity of a large employee base and recruiting, training and retaining highly skilled personnel, including areas of sales and marketing, advertising concepts, optimization skills, media management and information technology for our growing operations;

● we face challenges in responding to evolving industry standards and government regulation that impact our business and the online advertising industry in general, particularly in the areas of content dissemination;

● we may have limited experience for certain new service offerings, and our expansion into these new service offerings may not achieve broad acceptance among advertisers;

● the technological or operational challenges may arise from the new services;

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

● the successful execution of our strategies may depend upon factors beyond our control, such as general market conditions, economic and political development in China and globally.

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

We may not be able to obtain the additional capital we need in a timely manner or on acceptable terms, or at all.

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

Seasonal fluctuations in advertising activities could have a material impact on our revenues, cash flow and operating results.

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

If we fail to attract, recruit or retain our key personnel including our executive officers, senior management and key employees, our ongoing operations and growth could be affected.

Our success depends to a large extent on the efforts of our key personnel including our executive officers, senior management and other key employees who have valuable experience, knowledge and connection in the online advertising industry. There is no assurance that these key personnel will not voluntarily terminate their employment with us. The loss of any of our key personnel could be detrimental to our ongoing operations. Our success will also depend on our ability to attract and retain qualified personnel in order to manage our existing operations as well as our future growth. We may not be able to successfully attract, recruit or retain key personnel and this could adversely impact our growth. Moreover, we rely on our sales and marketing team to source new advertisers for our business growth. We have six (6) sales and marketing personnel in total as of the date of this annual report, who are responsible for pitching and soliciting advertisers to place ads with our media. If we are unable to attract, retain and motivate our sales and marketing personnel, our business may be adversely affected.

Unauthorized use of our intellectual property by third parties and expenses incurred in protecting our intellectual property rights may adversely affect our business, reputation and competitive edge.

We regard our software copyrights, trademarks, domain names and similar intellectual property as important to our success, and we rely on a combination of intellectual property laws and contractual arrangements, including confidentiality and non-compete agreements with our employees and others to protect our proprietary rights. For details, please refer to “Item 4. Information on the Company — B. Business Overview — Intellectual property.”

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

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

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

Third parties may claim that we infringe their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services.

We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual property rights held by third parties. We may be from time to time in the future subject to legal proceedings and claims relating to the intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights, know-how or other intellectual property rights that are infringed by our products, services or other aspects of our business without our awareness. Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in various jurisdictions.

If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits. Additionally, the application and interpretation of intellectual property right laws and the procedures and standards for granting trademarks, patents, copyrights, know-how or other intellectual property rights are evolving and may be uncertain, and we cannot assure you that courts or regulatory authorities would agree with our analysis.

If we were found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our business and financial performance may be materially and adversely affected.

We may not have sufficient insurance coverage to cover our potential liability or losses and as a result, our business, financial condition, results of operations and prospects may be materially and adversely affected should any such liability or losses arise.

We face various risks in connection with our business and may lack adequate insurance coverage or have no relevant insurance coverage. Further, insurance companies in China offer limited business insurance products to online advertising service providers and do not currently offer as extensive an array of insurance products as insurance companies in other more developed economies. We currently do not have any business liability or disruption insurance to cover our operations. We have determined that the costs of insuring against these risks and the difficulties associated with acquiring such insurances on commercially reasonable terms render these coverage categories of insurance impractical for our business and purposes. Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our business and results of operations.

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Legal claims, government investigations or other regulatory enforcement actions could subject us to civil and criminal penalties.

We operate in the online advertising industry in China with constantly evolving legal and regulatory frameworks. Our operations are subject to various laws and regulations, including but not limited to those related to advertising, employee benefits (such as social insurance and housing funds), taxation, and the use of properties. Consequently, we are subject to risks of legal claims, government investigations or other regulatory enforcement actions. Although we have implemented policies and procedures designed to ensure compliance with existing laws and regulations, there can be no assurance that our employees or agents will not violate our policies and procedures. Moreover, a failure to maintain effective control processes could lead to violations, unintentional or otherwise, of laws and regulations. Legal claims, government investigations or regulatory enforcement actions arising out of our failure or alleged failure to comply with applicable laws and regulations could subject us to civil and criminal penalties that could materially and adversely affect our product sales, reputation, financial condition and operating results. In addition, the costs and other effects of defending potential and pending litigation and administrative actions against us may be difficult to determine and could adversely affect our financial condition and operating results.

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

We have identified “material weaknesses” and other control deficiencies including significant deficiencies in our internal control over financial reporting. As defined in the standards established by the Public Company Accounting Oversight Board of the United States, or PCAOB, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

One material weakness that has been identified related to our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of the generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review our consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements. The other material weakness that has been identified related to our lack of comprehensive accounting policies and procedures manual in accordance with U.S. GAAP. We plan to implement a number of measures to address the material weaknesses, including but not limited to, engaging experienced accounting staff to assist us in establishing appropriate policies and procedures in accordance with U.S. GAAP.

Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other control deficiencies in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional deficiencies may have been identified.

We have become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act, or Section 404, requires that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

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We face risks related to natural disasters and health epidemics.

Our business could be materially and adversely affected by natural disasters, health epidemics or other public safety concerns. Natural disasters may give rise to server interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to operate our platform and provide services. In recent years, there have been outbreaks in China and globally, such as the COVID-19, H1N1 flu, avian flu and other epidemics. Our business could also be adversely affected if our employees are affected by health epidemics. In addition, our results of operations could be adversely affected to the extent that any health epidemic harms the national economy in general. Our headquarters is located in Beijing, where most of our management and employees currently reside. Consequently, if any natural disasters, health epidemics or other public safety concerns were to affect Beijing or other cities in our other offices are located, our operation may experience material disruptions, which may materially and adversely affect our business, financial condition and results of operations.

The ongoing effects of COVID-19 in China may have a material adverse effect on our business.

Our business has been materially and adversely affected by health epidemics such as the COVID-19 pandemic in China. The COVID-19 pandemic materially disrupted our business and operations, slowed down Chinese overall economy, curtailed our consumers’ spending, interrupted our sources of supply, and made it difficult to adequately staff our operations.

As a result of the COVID-19 pandemic, we and some of our business partners implemented temporary measures and adjustments of work schemes to allow employees to work from home and collaborate remotely. During the outbreaks of the pandemic, we took measures to reduce the impact of the COVID-19 pandemic, including, but not limited to, upgrading our telecommuting system, monitoring employees’ health on a daily basis and optimizing technology system to support potential growth in user traffic. For the years ended December 31, 2023 and 2022, our business operations were continuously affected by the COVID-19 pandemic. Our gross billing decreased to $18.7 million for the year ended December 31, 2023 from $54.6 million for the year December 31, 2022. Additionally, our revenues on a net basis for the fiscal year ended December 31, 2023 decreased by approximately $1.7 million, or 72.4%, as compared with the fiscal year ended December 31, 2022.

Risks Related to Doing Business in China

Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of the PRC, which could reduce the demand for our products and materially and adversely affect our competitive position.

All of our business operations are conducted in China though our subsidiaries. Accordingly, our business, results of operations, financial condition and prospects are subject to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRC government continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB and foreign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growth in the past 40 years. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRC government’s policies limits the growth of our industry or otherwise negatively affects our business, our growth rate or strategy, our results of operations could be adversely affected as a result.

Uncertainties regarding interpretation and enforcement of the laws, rules and regulations in China may impose adverse impact on our business, operations and profitability.

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

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

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

We may be adversely affected by the complexity, uncertainties and changes in the regulation of internet-related businesses and companies in China.

The PRC government extensively regulates the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainty. As a result, in certain circumstances some actions or omissions may be deemed to be violations of applicable laws and regulations. Risks and uncertainties relating to regulation in China of the internet-related business include, but are not limited to, the following:

● There are uncertainties relating to the regulation of the internet-related business in China, including evolving licensing practices. This means that some of our permits, licenses or operations in China may be subject to challenge, or we may fail to obtain permits or licenses that may be deemed necessary for our operations, or we may not be able to obtain or renew certain permits or licenses. If we fail to maintain any of these required licenses or permits, we may be subject to various penalties, including fines and discontinuation of or restriction on our operations in China. Any such disruption in our business operations in China may have a material and adverse effect on our results of operations in China.

● New laws and regulations may be promulgated in China to regulate internet activities, including digital marketing. If these new laws and regulations are promulgated, additional licenses and/or cost of compliance may be required for our operations. If our operations are not in compliance with these new laws and regulations after they become effective, or if we fail to obtain any licenses required under these new laws and regulations, we could be subject to penalties or restrictions on our operations in China.

According to our PRC Counsel, Beijing Dacheng, our PRC subsidiaries are not required to obtain any other industry-specific qualification, license or permit, including an Internet Content Provider license, or ICP license, for carrying out our online advertising service business in China. Given that the interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, internet-related businesses in China, including our business in China, there is no assurance that we have obtained all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain any new licenses required under any new laws or regulations. There is also no assurance that the PRC government will not classify our business as one requiring an ICP license or other licenses in the future. If new regulations in China classify our business as one requiring an ICP license or other licenses, we may be prevented from operating in China if we are unable to obtain the required licenses. If the change in classification of our business were to be retroactively applied, we might be subject to sanctions, including payment of taxes and fines. Any change in the PRC laws and regulations may therefore significantly disrupt our operations in China and materially and adversely affect our business, results of operations and financial conditions in China.

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Regulation and censorship of information disseminated through the Internet in China may adversely affect our business in China, and we may be liable for content disseminated by us through the Internet.

The PRC government has enacted laws and regulations governing internet access and the distribution of products, services, news, information, audio-video programs and other content through the Internet. The PRC government has prohibited the dissemination of information through the Internet that it deems to be in violation of PRC laws and regulations. If any internet content disseminated by us is deemed by the PRC government to violate any content restrictions, we would not be able to continue to disseminate such content and could become subject to penalties, including confiscation of income, fines, suspension of business and revocation of licenses, which could materially and adversely affect our business, financial conditions and results of operations in China. We may also be subject to potential liability for any unlawful actions of our clients or for content we disseminate that is regarded as inappropriate.

We have implemented measures to ensure that our ad content does not violate these laws and regulations. After we receive the ad content from our advertisers, it will be subject to a compliance review by our experienced employees. If we determine that the ad content does not violate any applicable laws and regulations, we will share such ad content with the relevant media for their internal review. If we determine that the ad content may be in violation of applicable laws or regulations, we will provide suggested edits to the ad content and send it back to the advertiser for revision. After both we and the media have determined that the ad content is in full compliance with applicable laws and regulations on information dissemination, we will confirm with the advertiser on its opinion with respect to the compliance prior to the deployment of the ad. Despite our efforts, we cannot assure you that we will be in full compliance with all applicable regulations on information dissemination. In addition, we have no control over and are not informed of the specific review standards applied by the advertisers or the media, and it may be difficult to determine the type of content that may result in liability to us. If we are found to be liable, we may be subject to penalties, fines, suspension of licenses, or revocation of licenses, which could materially and adversely affect our business, financial conditions and results of operations.

Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon our ability to operate profitably in the PRC.

We currently conduct all of our operations, and all of our revenue is generated in the PRC. Accordingly, economic, political, and legal developments in the PRC will significantly affect our business, financial condition, results of operations, and prospects. Policies, regulations, rules, and the enforcement of laws of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to operate profitably in the PRC may be adversely affected by changes in policies, regulations, rules, and the enforcement of laws by the PRC government, which changes may be quick with little advance notice.

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The Chinese government exerts substantial influence over the manner in which we must conduct our business, and 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, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless.

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership and may intervene with or control our operations as the government deems appropriate to further regulatory, political and societal goals. The PRC government has recently published new policies that significantly affected certain industries, such as the cryptocurrency industry and the education industry. Even though as of the date of this annual report, we have not been affected by any newly published policies concerning our industry or our business operations that have limited or may limit our business operations to a significant degree, to the extent that the PRC government publishes any policies in the future that concern and affect the advertising industry that our subsidiaries operate in, the ability of our PRC subsidiaries to continue operating their business or serving their customers in China may be severely restricted. We cannot assure you that government authorities in China will not introduce any enhanced regulation over the industry our PRC subsidiaries operate in that may lead to our inability to operate in China at all. Additionally, our ability to operate in China may also be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties. In any of these events, our PRC subsidiaries’ ability to continue their operations may be significantly impacted, and the value of our Ordinary Shares may significantly decline or become worthless.

Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies like us. Recent statements made by the Chinese government have indicated an intent to increase the government’s oversight and control over offerings of companies with significant operations in the PRC that are to be conducted in foreign markets, as well as foreign investment in China-based issuers. On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), (《境内企业境外发行证券和上市管理试行办法》) and five supporting guidelines (collectively, the “Overseas Listings Rules”), which took effect on March 31, 2023. On the same date of the issuance of the Overseas Listings Rules, the CSRC circulated No.1 to No.5 Supporting Guidance Rules, the Notes on the Overseas Listings Rules, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of CSRC, or collectively, the Guidance Rules and Notice.

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The Overseas Listing Rules aim to lay out the filing regulation arrangement for both direct and indirect overseas listing and clarify the determination criteria for indirect overseas listing in overseas markers. Where an enterprise whose principal business activities are conducted in the PRC seeks to issue and list its shares in the name of an overseas enterprise based on equity, assets, income, or other similar rights and interests of the relevant domestic enterprise in the PRC, such activities are deemed an indirect overseas issuance and listing. According to the Overseas Listings Rules, after the submission of relevant application for initial public offerings or listings in overseas markets, or after the completion of subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed, or after the submission of relevant application for subsequent securities offerings and listings of an issuer in other overseas markets than where it has offered and listed, all China-based companies shall file the required filing materials with the CSRC within three working days. In addition, overseas offerings and listings will be prohibited for such China-based companies when any of the following applies: (i) where such securities offerings and listings are explicitly prohibited by the PRC laws and regulations; (ii) where the intended securities offerings and listings may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with laws; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller. The Trial Measures further stipulate that a fine between RMB1 million (approximately $157,255) and RMB10 million (approximately $1,572,550) may be imposed if an applicant fails to fulfill the filing requirements with the CSRC or conducts an overseas offering or listing in violation of the Overseas Listings Rules.

Under the Overseas Listings Rules and the Guidance Rules and Notice, domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submissions of initial public offerings or listing applications. The companies that have already been listed on overseas stock exchanges or have obtained the approval from overseas supervision administrations or stock exchanges for their offerings and listings and will complete their overseas offering and listing prior to September 30, 2023 are not required to make immediate filings for its listing yet but need to make filings for subsequent offerings in accordance with the Overseas Listings Rules. The companies that have already submitted an application for an initial public offering to overseas supervision administrations prior to the effective date of the Overseas Listings Rules but have not yet obtained the approval from overseas supervision administrations or stock exchanges for the offering and listing may arrange for the filing within a reasonable time period and should complete the filing procedure before such companies’ overseas issuance and listing.

As of the date of this annual report, we have not received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with respect to our listing or subsequent offerings. However, if we decide to conduct offerings in the future, we will be required to complete filings under the Overseas Listings Rules with the CSRC. As the Overseas Listings Rules were newly published and there exists uncertainty with respect to the filing requirements and its implementation, if we are required to submit to the CRSC and complete the filing procedure of our subsequent overseas public offerings, we cannot be sure that we will be able to complete such filings in a timely manner. Any failure or perceived failure by us to comply with such filing requirements under the Overseas Listings Rules may result in forced corrections, warnings and fines against us and could materially hinder our ability to offer or continue to offer our securities.

Notwithstanding the above, our PRC counsel has further advised us that uncertainties still exist as to whether we, our subsidiaries, or any of its subsidiaries are required to obtain permissions from the CAC, the CSRC, or any other governmental agency that is required to approve our operations and/or consequent offerings. We have been closely monitoring the development in the regulatory landscape in the PRC, particularly regarding the requirement of approvals, including on a retrospective basis, from the CAC, the CSRC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed on us. In the event that we, our subsidiaries, or any of its subsidiaries are subject to the compliance requirements, we cannot assure you that any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure of our Company, our subsidiaries, or any of its subsidiaries to fully comply with new regulatory requirements may subject us to regulatory actions, such as fines, relevant businesses or operations suspension for rectification, revocation of relevant business permits or operational license, or other sanctions, which may significantly limit or completely hinder our ability to offer or continue to offer our securities cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our securities to significantly decline in value or become worthless.

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

On July 7, 2022, the CAC published the Measures for the Security Assessment of Outbound Data Transfer (《数据出境安全评估办法》), which took effect 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. According to the Measures, if a data processor transfers data abroad under any of the following circumstances, it shall file to the State Cyberspace Administration for security assessment via the Province Cyberspace Administration: (i) a data handler who transfers important data to abroad; (ii) a critical information infrastructure operator, or a data handler processing the personal information of more than 1 million individuals transfers personal information to abroad; (iii) since January 1 of the previous year, a data handler cumulatively transferred abroad the personal information of more than 100,000 individuals, or the sensitive personal information of more than 10,000 individuals, or; (iv) other circumstances where the security assessment for the outbound data transfer is required by the State Cyberspace Administration.

On December 28, 2021, the CAC and other relevant PRC governmental authorities jointly promulgated the Cybersecurity Review Measures Transfer (《网络安全审查办法》), which took effect on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to “critical information infrastructure operators” (CIIOs) that intend to purchase Internet products and services, online platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.

On November 14, 2021, the CAC published the Network Internet Data Protection Draft Regulations (draft for comments), (《网络数据安全管理条例（征求意见稿）》). The Network Internet Data Protection Draft Regulations provides that data processors refer to individuals or organizations that autonomously determine the purpose and the manner of processing data. If a data processor that processes the personal data of more than one million users intends to list overseas, it shall apply for a cybersecurity review. In addition, data processors that process important data or are listed overseas shall carry out an annual data security assessment on their own or by engaging a data security services institution, and the data security assessment report for the prior year should be submitted to the local cyberspace affairs administration department before January 31 of each year.

As advised by our PRC counsel, based on our aforementioned business operation, we are not a CIIO nor an internet platform operator as mentioned above. However, it remains unclear on how the rule will be interpreted, amended and implemented by the relevant PRC governmental authorities. If the implementation of the Cybersecurity Review Measures (2021 version), the Measures for the Security Assessment of Outbound Data Transfer, and/or the Network Internet Data Protection Draft Regulations (draft for comments) mandates clearance of cybersecurity review and other specific actions to be completed by companies like us, we will face uncertainties as to whether such clearance can be timely obtained, or at all.

As of the date of this annual report, we do not expect that the current PRC laws on cybersecurity or data security would have a material adverse impact on our business operations. However, as uncertainties remain regarding the interpretation and implementation of these laws and regulations, we cannot assure you that we will comply with such regulations in all respects, and we may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. We may also become subject to fines and/or other sanctions and the costs of compliance with, and other burdens imposed by such laws and regulations may limit the use and adoption of our products, which may have material adverse effects on our business, operations, and financial condition.

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The Opinions on Severely Cracking Down on Illegal Securities Activities According to Law recently issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council may subject us to additional compliance requirement in the future.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law (《关于依法从严打击证券违法活动的意见》), 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 supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirements in the future that may be onerous. As the Opinions were recently issued, official guidance and interpretation of the Opinions remain unclear in several respects at this time. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of the Opinions or any future implementation rules on a timely basis, or at all.

Labor Contract Law and other labor-related laws in the PRC may adversely affect our business and our results of operations.

On December 28, 2012, the PRC government released the revision of the Labor Contract Law of the PRC (《中华人民共和国劳动合同法》), which became effective on July 1, 2013. Pursuant to the Labor Contract Law of the PRC, 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 we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract Law of the PRC 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. According to the PRC Social Insurance Law (《中华人民共和国社会保险法》), employees must participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance and maternity insurance and the employers must, together with their employees or separately, pay the social insurance premiums for such employees.

As of the date of this annual report, we are in compliance with labor-related laws and regulations in China in material aspects, including those relating to obligations to make social insurance payments and contribute to the housing provident fund. From July 2018 to March 2019, we had not made adequate contributions to social insurance and other employee benefits for our employees. We have recorded accruals for the estimated amount of underpayment in our financial statements. Pursuant to the PRC Social Insurance Law, if an employer fails to make full and timely contributions to social insurance, the relevant enforcement agency shall order the employer to make all outstanding contributions within five days of such order and impose penalties equal to 0.05% of the total outstanding amount for each additional day such contributions are overdue. If the employer fails to make all outstanding contributions within five days of such order, the relevant enforcement agency may impose penalties equal to one to three times the amount overdue. We estimate the amount of outstanding contributions from July 2018 to December 2018 to be approximately $0.1 million, and the amount of outstanding contributions from January 2019 to March 2019 to be approximately $0.09 million. As of the date of this annual report, we have not received any employee complaint or any government audit request, or penalty orders for these outstanding contributions.

Ms. Wenxiu Zhong, our founder, through a guarantee letter dated April 29, 2020 (the “Guarantee Letter”), promised to unconditionally, irrevocably and personally bear any and all the economic losses and expenses actually incurred by our Company if we are subject to any payment or penalty in relation to our outstanding social insurance contributions from July 2018 to April 2019.

As of the date of this annual report, we have not received any notice from relevant government authorities or any claim or request from our employees in this regard. However, we cannot assure you that the relevant government authorities will not require us to pay the outstanding amount and impose late fees or fines on us. If we are otherwise subject to investigations related to non-compliance with labor laws and are imposed severe penalties or incur significant legal fees in connection with labor disputes or investigations, our business, financial condition and results of operations may be adversely affected.

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As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practices will not violate PRC labor-related laws and regulations in the future, which may subject us to labor disputes or government investigations. We cannot assure you that we will be able to comply with all labor-related law and regulations regarding including those relating to obligations to make social insurance payments and contribute to the housing provident fund. If we are deemed to violate relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations will be adversely affected.

Failure to obtain or maintain any preferential tax treatments, or the discontinuation, reduction or delay of any preferential tax treatments available to us in China could adversely affect our results of operations and financial condition.

Under the Enterprise Income Tax Law (《中华人民共和国企业所得税法》) (the “EIT Law”), foreign-invested companies, such as wholly foreign-owned enterprises, and domestic companies, such as our consolidated affiliated entity and its subsidiaries, are subject to a unified income tax rate of 25%. Various favorable income tax rates are, however, available to qualified enterprises in certain encouraged sectors of the economy.

Pursuant to the Notice on Preferential EIT Policies for Two Special Economic Development Zones of Kashi and Horgos in Xinjiang Uygur Autonomous Region (《关于新疆喀什霍尔果斯两个特殊经济开发区企业所得税优惠政策的通知》), and the Implementation Opinions on Accelerating the Construction of Kashi and Horgos Economic Development Zones (《关于加快喀什、霍尔果斯经济开发区建设的实施意见》) (together the “Xinjiang EIT Exemption Policies”), an enterprise established in Horgos or Kashi between January 1, 2010 and December 31, 2020 and falling within the scope of the Catalogue of EIT Incentives for Industries Particularly Encouraged for Development by Poverty Areas of Xinjiang (《新疆困难地区重点鼓励发展产业企业所得税优惠目录》) are exempted from enterprise income tax, or EIT, for five years beginning from the first year in which the manufacturing or business operational revenue is earned. After the initial EIT exemption period, the enterprise is entitled to another five-year exemption on the local portion of its EIT.

Historically, we benefited from preferential tax treatments from the PRC government. Horgos Baosheng enjoyed EIT exemption from 2016 to 2020, Kashi Baosheng enjoyed EIT exemption from 2018 to 2022, and Baosheng Technology has enjoyed EIT exemption since 2020 and is expected to continue enjoying the exemption until 2024.

Although we have been or are now eligible for the foregoing preferential tax treatments, these preferential tax treatments are subject to uncertainties as to their interpretation, administrative implementation, changes and amendments from time to time, or even suspension and termination by relevant authorities. In particular, we cannot assure you that the Xinjiang EIT Exemption Policies will continue to be applied in such a way that will entitle Baosheng Technology to continue to enjoy full EIT exemption in accordance with the existing applicable provisions, or that Baosheng Technology will continue to be able to satisfy the qualifications provided for in the Xinjiang EIT Exemption Policies, the failure of which may render us no longer entitled to such EIT exemption. As we generated net losses in the fiscal years ended December 31, 2021, 2022 and 2023, we did not enjoy any tax reduction benefits available under the EIT exemption.

Any changes in tax laws, regulations, rules, policies, administrative measures or their interpretation or administrative implementation which are applicable to us, or any change in our EIT exemption or any other preferential tax treatment status we may enjoy, could result in a significant increase in our tax obligations and tax payments, which in turn will have a material and adverse impact on our financial results and financial condition.

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Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise”, meaning that it can be subject to an EIT rate of 25.0% on its global income. In April 2009, the State Administration of Taxation (“SAT”) promulgated a circular, known as Circular 82, and partially amended by Circular 9 promulgated in January 2014, to clarify the certain criteria for the determination of the “de facto management bodies” for foreign enterprises controlled by PRC enterprises or PRC enterprise groups. Under Circular 82, a foreign enterprise is considered a PRC resident enterprise if all of the following apply: (1) the senior management and core management departments in charge of daily operations are located mainly within China; (2) decisions relating to the enterprise’s financial and human resource matters are made or subject to approval by organizations or personnel in China; (3) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholders’ meeting minutes are located or maintained in China; and (4) 50.0% or more of voting board members or senior executives of the enterprise habitually reside in China. Further to Circular 82, SAT issued a bulletin, known as Bulletin 45, effective in September 2011 and amended on 1 June 2015 and 1 October 2016 to provide more guidance on the implementation of Circular 82 and clarify the reporting and filing obligations of such “Chinese controlled offshore incorporated resident enterprises.” Bulletin 45 provides for, among other matters, procedures for the determination of resident status and administration of post-determination matters. Although Circular 82 and Bulletin 45 explicitly provide that the above standards apply to enterprises that are registered outside China and controlled by PRC enterprises or PRC enterprise groups, Circular 82 may reflect SAT’s criteria for determining the tax residence of foreign enterprises in general.

If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Currently, we do not have any non-China source income, as we conduct our business operations in China. Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would be deemed as “qualified investment income between resident enterprises” and therefore qualify as “tax-exempt income” pursuant to the clause 26 of the EIT Law. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which the dividends we pay with respect to our Ordinary Shares, or the gain our non-PRC shareholders may realize from the transfer of our Ordinary Shares, may be treated as PRC-sourced income and may therefore be subject to a 10% PRC withholding tax. The EIT Law and its implementing regulations are, however, relatively new and ambiguities exist with respect to the interpretation and identification of PRC-sourced income, and the application and assessment of withholding taxes. If we are required under the EIT Law and its implementing regulations to withhold PRC income tax on dividends payable to our non-PRC shareholders, or if non-PRC shareholders are required to pay PRC income tax on gains on the transfer of their Ordinary Shares, our business could be negatively impacted and the value of your investment may be materially reduced. Further, if we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC tax may not be creditable against such other taxes.

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PRC regulation of loans to PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using proceeds from our future financing activities to make loans to our PRC operating subsidiaries, which might adversely affect our liquidity and our ability to fund and expand our business.

Any foreign loan provided by us to our PRC operating subsidiaries is required to be registered or filed with the State Administration of Foreign Exchange, or SAFE, or the authorized local banks, and our PRC operating subsidiaries may not procure foreign loans which exceed the difference between its total investment amount and registered capital (the “Current Foreign Debt Mechanism”) or, as an alternative, only procure loans subject to the calculation approach and limitations as provided in the People’s Bank of China (“PBOC”) Circular on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing (银发〔2017〕9号《中国人民银行关于全口径跨境融资宏观审慎管理有关事宜的通知》), or “PBOC Notice No. 9” (the “PBOC Notice No. 9 Mechanism”), which shall not exceed 200% of the net asset of the relevant PRC operating subsidiary. According to PBOC Notice No. 9, after a transition period of one year since its promulgation, PBOC and SAFE will determine the cross-border financing administration mechanism for the foreign-invested enterprises after evaluating the overall implementation of PBOC Notice No. 9. On March 11, 2020, Notice of PBOC and SAFE on the Adjustment of Macro-Prudential Adjustment Parameters for Full-Covered Cross-border Financing was issued, according to which, the Macro-Prudential Adjustment Parameters provided in the PBOC Notice No. 9 was adjusted from 1 to 1.25. On January 7, 2021, Notice of People’s Bank of China and State Administration of Foreign Exchange on the Adjustment of Macro-Prudential Adjustment Parameters for Cross-border Financing of Enterprises (《中国人民银行、国家外汇管理局关于调整企业跨境融资宏观审慎调节参数的通知》) was issued, according to which, the Macro-Prudential Adjustment Parameters provided in the PBOC Notice No. 9 was adjusted from 1.25 to 1. On October 25, 2022, the PBOC and SAFE further adjusted the Macro-Prudential Adjustment Parameters from 1 to 1.25.On July 20, 2023, the PBOC and SAFE increased the Macro-Prudential Adjustment Parameters from 1.25 to 1.5. As of the date of this annual report, neither PBOC nor SAFE has promulgated and made public any further rules, regulations, notices, or circulars in this regard. It is uncertain which mechanism will be adopted by PBOC and SAFE in the future and what statutory limits will be imposed on us when providing loans to our PRC operating subsidiaries. Currently, our PRC operating subsidiaries have the flexibility to choose between the Current Foreign Debt Mechanism and the PBOC Notice No. 9 Mechanism. However, if a more stringent foreign debt mechanism becomes mandatory, our ability to provide loans to our PRC subsidiaries may be significantly limited, which may adversely affect our business, financial condition, and results of operations.

If we seek to provide any loans to our PRC operating subsidiaries in the future, we may not be able to obtain the required government approvals or complete the required registrations on a timely basis, if at all. If we fail to receive such approvals or complete such registrations, our ability to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

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

Relevant mainland PRC laws and regulations permit the companies in mainland China to pay dividends only out of their respective retained earnings, if any, as determined in accordance with mainland China accounting standards and regulations. Additionally, each of the companies in mainland China are required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. The companies in mainland China are also required to further set aside a portion of their after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at their discretion. These reserves are not distributable as cash dividends. Furthermore, in order for us to pay dividends to our shareholders, we may rely on payments made from our mainland PRC subsidiaries to their respective shareholders and then to our Company. If these entities incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.

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Our cash dividends, if any, will be paid in U.S. dollars. If we are considered a tax resident enterprise of mainland China for tax purposes, any dividends we pay to our overseas shareholders may be regarded as mainland China-sourced income and as a result may be subject to mainland PRC withholding tax. See “Item 3. Key Information—D. Risk Factors — Risks Related to Doing Business in China — Under the Enterprise Income Tax Law, we may be classified as a ‘Resident Enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.” The PRC government also imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. Shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.

As of the date of this annual 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 mainland China), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future. If there is a significant change to current political arrangements between mainland China and Hong Kong, or the applicable laws, regulations, or interpretations change, our Hong Kong subsidiary may become subject to PRC laws or authorities. As a result, our Hong Kong subsidiary could be subject to similar government controls on the convertibility of foreign currency and the remittance of currency out of Hong Kong as described above.

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

We may rely on dividends paid by our subsidiaries for our cash needs, 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 business.

As a holding company, we conduct substantially all of our business through our consolidated subsidiaries incorporated in China, and this structure involves unique risks to investors. We may rely on dividends paid by these PRC subsidiaries for our cash needs, including the funds necessary to pay any dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses.

According to the Company Law of the PRC, the Foreign Investment Law of the PRC and its implementing rules, which jointly established the legal framework for the administration of foreign-invested companies, a foreign investor may, in accordance with other applicable laws, freely transfer into or out of China its contributions, profits, capital earnings, income from asset disposal, intellectual property rights, royalties acquired, compensation or indemnity legally obtained, and income from liquidation, made or derived within the territory of China in RMB or any foreign currency, and any entity or individual shall not illegally restrict such transfer in terms of the currency, amount and frequency. According to the Company Law of the PRC and other Chinese laws and regulations, our PRC subsidiaries may pay dividends only out of their respective accumulated profits as determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax profits, if any, each year to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Where the statutory reserve fund is insufficient to cover any loss the PRC subsidiary incurred in the previous financial year, its current financial year’s accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund is drawn therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be distributed to us as dividends. At their discretion, our PRC subsidiaries may allocate a portion of their after-tax profits based on Chinese accounting standards to a discretionary reserve fund.

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Renminbi is not freely convertible into other currencies. As result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use any future Renminbi revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under the “current account transactions,” which includes dividends, trade and service-related foreign exchange transactions, but not under the “capital account,” which includes foreign direct investment and foreign currency debt, including loans we may secure for our onshore subsidiaries. Currently, our PRC subsidiaries may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements. However, the relevant Chinese governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. Any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to fund our business activities outside of China or pay dividends in foreign currencies to holders of our Ordinary Shares. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration with, SAFE and other relevant Chinese governmental authorities. This could affect our ability to obtain foreign currency through debt or equity financing for our subsidiaries.

In response to the persistent capital outflow in China and Renminbi’s depreciation against the U.S. dollar in the fourth quarter of 2016, PBOC and SAFE have promulgated a series of capital controls in early 2017, including stricter vetting procedures for domestic companies to remit foreign currency for overseas investments, dividends payments and shareholder loan repayments.

The Chinese government may continue to strengthen its capital controls, and more restrictions and substantial vetting processes may be put forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC subsidiaries 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.

Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident Shareholders to personal liability, may limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, may limit the ability of our PRC subsidiaries to distribute profits to us or may otherwise materially and adversely affect us.

Pursuant to the Circular on relevant issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return Investments Conducted by Domestic Residents through Overseas Special Purpose Vehicle (《关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》) (“Circular 37”), which was promulgated by SAFE, and became effective on July 4, 2014, (1) a PRC resident must register with the local SAFE branch before he or she contributes assets or equity interests in an overseas special purpose vehicle, or an Overseas SPV, that is directly established or indirectly controlled by the PRC resident for the purpose of conducting investment or financing; and (2) following the initial registration, the PRC resident is also required to register with the local SAFE branch for any major change, in respect of the Overseas SPV, including, among other things, a change in the Overseas SPV’s PRC resident shareholder, name of the Overseas SPV, term of operation, or any increase or reduction of the contributions by the PRC resident, share transfer or swap, and merger or division. Additionally, pursuant to the Circular of SAFE on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies (《关于进一步简化和改进直接投资外汇管理政策的通知》) (“Circular 13”), which was promulgated on February 13, 2015 and became effective on June 1, 2015, the aforesaid registration shall be directly reviewed and handled by qualified banks in accordance with the Circular 13, and SAFE and its branches shall perform indirect regulation over the foreign exchange registration via qualified banks.

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Ms. Wenxiu Zhong, Mr. Sheng Gong and Mr. Hui Yu have completed the initial foreign exchange registration on January 9, 2019. As it remains unclear how Circular 37 and Circular 13 will be interpreted and implemented, and how or whether SAFE will apply them to us. Therefore, we cannot predict how they will affect our business operations or future strategies. For example, the ability of our present and prospective PRC subsidiaries to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 37 and Circular 13 by our PRC resident beneficial holders. In addition, as we have little control over either our present or prospective, direct or indirect shareholders or the outcome of such registration procedures, we cannot assure you that these shareholders who are PRC residents will amend or update their registration as required under Circular 37 and Circular 13 in a timely manner or at all. Failure of our present or future shareholders who are PRC residents to comply with Circular 37 and Circular 13 could subject these shareholders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit the ability of our PRC subsidiaries to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our Ordinary Shares.

Under the EIT Law and its implementation rules, subject to any applicable tax treaty or similar arrangement between the PRC and your jurisdiction of residence that provides for a different income tax arrangement, PRC withholding tax at the rate of 10.0% is normally applicable to dividends from PRC sources payable to investors that are non-PRC resident enterprises, which do not have an establishment or place of business in China, or which have such establishment or place of business if the relevant income is not effectively connected with the establishment or place of business. Any gain realized on the transfer of shares by such investors is subject to 10.0% PRC income tax if such gain is regarded as income derived from sources within China unless a treaty or similar arrangement otherwise provides. Under the Individual Income Tax Law of the PRC (《中华人民共和国个人所得税法》) and its implementation rules, dividends from sources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and PRC laws.

There is a risk that we will be treated by the PRC tax authorities as a PRC tax resident enterprise. In that case, any dividends we pay to our Shareholders may be regarded as income derived from sources within China and we may be required to withhold a 10.0% PRC withholding tax for the dividends we pay to our investors who are non-PRC corporate Shareholders, or a 20.0% withholding tax for the dividends we pay to our investors who are non-PRC individual Shareholders, including the holders of our Ordinary Shares. In addition, our non-PRC Shareholders may be subject to PRC tax on gains realized on the sale or other disposition of our Ordinary Shares, if such income is treated as sourced from within China. It is unclear whether our non-PRC Shareholders would be able to claim the benefits of any tax treaties between their tax residence and China in the event that we are considered as a PRC resident enterprise. If PRC income tax is imposed on gains realized through the transfer of our Ordinary Shares or on dividends paid to our non-resident investors, the value of your investment in our Ordinary Shares may be materially and adversely affected. Furthermore, our Shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for benefits under such tax treaties or arrangements.

We may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain other PRC regulations.

On August 8, 2006, six PRC regulatory authorities, including the Ministry of Commerce of the PRC (“MOFCOM”), the State Assets Supervision and Administration Commission, SAT, the Administration for Industry and Commerce (“SAIC”), the CSRC and SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (《关于外国投资者并购境内企业的规定》) (the “M&A Rules”), which became effective on September 8, 2006 and was amended in June 2009. The M&A Rules, governing the approval process by which a PRC company may participate in an acquisition of assets or equity interests by foreign investors, require the PRC parties to make a series of applications and supplemental applications to the government agencies, depending on the structure of the transaction. The M&A Rules also prohibit a transaction at an acquisition price obviously lower than the appraised value of the business or assets in China and in certain transaction structures, require that consideration must be paid within defined periods, generally not in excess of a year. In addition, the M&A Rules also limit our ability to negotiate various terms of the acquisition, including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities.

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Following the promulgation of the Foreign Investment Law, the Measures on Reporting of Foreign Investment Information (effective from January 1, 2020) and other relevant regulations recently in China, certain provisions of the M&A Rules, which are in conflict with the new foreign investment rules, are no longer enforceable. For example, mergers and acquisitions by foreign investor of a PRC entity which is not an affiliate to the foreign investor and does not engage in any business on the special administrative measures for access of foreign investment (the “Negative List”) for foreign investment, will not be subject to the approval process as prescribed by the M&A Rules. However, given the M&A Rules are not officially abolished and due to lack of official interpretation and guidance, the M&A Rules might still be enforceable against the transaction parties in terms of price evaluation, payment terms, and certain other aspects that the new foreign investment rules are silent on. Therefore, the M&A Rules may impede our ability to negotiate and complete a business combination transaction on legal and/or financial terms that satisfy our investors and protect our shareholders’ economic interests.

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

SAT released a circular on December 15, 2009 that addresses the transfer of shares by nonresident companies, generally referred to as Circular 698. Circular 698, which became effective retroactively to January 1, 2008, may have a significant impact on many companies that use offshore holding companies to invest in China. Circular 698 has the effect of taxing foreign companies on gains derived from the indirect sale of a PRC company. Where a foreign investor indirectly transfers equity interests in a PRC resident enterprise by selling the shares in an offshore holding company, and the latter is located in a country or jurisdiction that has an effective tax rate less than 12.5% or does not tax foreign income of its residents, the foreign investor must report this indirect transfer to the tax authority in charge of that PRC resident enterprise. 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 avoiding PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC withholding tax at a rate of up to 10.0%.

SAT subsequently released public notices to clarify issues relating to Circular 698, including the Announcement on Several Issues concerning the EIT on the Indirect Transfers of Properties by Nonresident Enterprises (《关于非居民企业间接转让财产企业所得税若干问题的公告》) (the “SAT Notice 7”), which became effective on February 3, 2015. SAT Notice 7 abolished the compulsive reporting obligations originally set out in Circular 698. Under SAT Notice 7, if a non-resident enterprise transfers its shares in an overseas holding company, which directly or indirectly owns PRC taxable properties, including shares in a PRC company, via an arrangement without reasonable commercial purpose, such transfer shall be deemed as indirect transfer of the underlying PRC taxable properties. Accordingly, the transferee shall be deemed as a withholding agent with the obligation to withhold and remit the EIT to the competent PRC tax authorities. Factors that may be taken into consideration when determining whether there is a “reasonable commercial purpose” include, among other factors, the economic essence of the transferred shares, the economic essence of the assets held by the overseas holding company, the taxability of the transaction in offshore jurisdictions, and economic essence and duration of the offshore structure. SAT Notice 7 also sets out safe harbors for the “reasonable commercial purpose” test.

On October 17, 2017, SAT released the Notice on Several Issues concerning the Withholding and Collection of Income Tax of Non-resident Enterprises from the Source (《关于非居民企业所得税源泉扣缴有关问题的公告》) (“SAT Notice 37”). SAT Notice 37 clarifies: (1) matters concerning the withholding and collection of corporate income tax, and property transfer of non-resident enterprises based on the EIT Law; (2) the currencies required to be used by the withholding agents (when the payments is made in a currency rather than RMB), as well as the time, venue and business for the performance of the withholding and collection obligations; and (3) the abolishment of Circular 698.

There is little guidance and practical experience regarding the application of SAT Notice 7 and SAT Notice 37 and the related SAT notices. Moreover, the relevant authority has not yet promulgated any formal provisions or formally declared or stated how to calculate the effective tax rates in foreign tax jurisdictions. As a result, due to our complex offshore restructuring, we may become at risk of being taxed under SAT Notice 7 and SAT Notice 37 and we may be required to expend valuable resources to comply with SAT Notice 7 and SAT Notice 37 or to establish that we should not be taxed under SAT Notice 7 and SAT Notice 37, which could have a material adverse effect on our financial condition and results of operations.

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You may have difficulty effecting service of legal process, enforcing judgments or bringing actions against us and our management.

We are an exempted Cayman Islands holding company. In addition, substantially all of our assets and substantially all of the assets of our directors and executive officers are located in the PRC. As a result, investors may not be able to effect service of process upon us or our directors and executive officers.

Further, China has not entered into treaties or arrangements providing for the recognition and enforcement of judgments made by courts of most other jurisdictions. Any final judgment obtained against us in any court other than the courts of the PRC in connection with any legal suit or proceeding arising out of or relating to our Ordinary Shares will be enforced by the courts of the PRC without further review of the merits only if the court of the PRC in which enforcement is sought is satisfied that:

● the court rendering the judgment has jurisdiction over the subject matter according to the laws of the PRC;

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

● if the judgment was rendered by default by the court rendering the judgment, we, or the above-mentioned persons, were duly served within a reasonable period of time in accordance with the laws and regulations of the jurisdiction of the court or process was served on us with judicial assistance of the PRC; and

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

If you fail to establish the foregoing to the satisfaction of the courts in the PRC, you may not be able to enforce a judgment against us rendered by a court in the United States.

Further, pursuant to the Civil Procedures Law of the PRC, any matter, including matters arising under U.S. federal securities laws, in relation to assets or personal relationships may be brought as an original action in China, only if the institution of such action satisfies the conditions specified in the Civil Procedures Law of the PRC. As a result of the conditions set forth in the Civil Procedures Law and the discretion of the PRC courts to determine whether the conditions are satisfied and whether to accept action for adjudication, there remains uncertainty as to whether an investor will be able to bring an original action in a PRC court based on U.S. federal securities laws.

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

We are incorporated in the Cayman Islands and conduct our operations in China through our subsidiaries. Substantially all of our assets are located outside of the United States. In addition, all of our directors and officers reside in China, including our chief executive officer and chairperson of the board, Shasha Mi, our chief financial officer, Yue Jin, and our directors, Sheng Gong, Yun Wu, Guangyao Zhu, and Changhong Jiang. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe we have violated your rights, either under United States federal or state securities laws or otherwise, or if you have a claim against us. Even if you are successful in bringing an action of this kind, the laws of the Cayman Island and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

The U.S. Securities and Exchange Commission (the “SEC”), the U.S. Department of Justice and other U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in the PRC. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation in China. China has adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted in China.

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Our Ordinary Shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of trading of our Ordinary Shares, or the treat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections.

Pursuant to the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act 2023, if the SEC

determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the

PCAOB for two consecutive years, the SEC will prohibit our Ordinary Shares from being traded on a national securities exchange or in

the over-the-counter trading market in the United States.
​

Our auditor, YCM CPA INC., the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards and was not identified in the Determination Report as a firm subject to the PCAOB’s determination. YCM CPA INC. is headquartered in Irvine, California, and has been inspected by the PCAOB on a regular basis.

If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the Holding Foreign Companies Accountable Act, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. A prohibition of being able to trade in the United States would substantially impair or completely hinder your ability to sell or purchase our Ordinary Shares when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our Ordinary Shares or render them worthless. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would

have a material adverse impact on our business, financial condition, and prospects.

Additionally, we cannot assure you whether the national securities exchange we are listed on 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.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

We are subject to the U.S. Foreign Corrupt Practices Act (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 are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. We have operations, agreements with third parties, and provide services in China, which may experience corruption. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants or distributors of our Company, because these parties are not always subject to our control.

Although we believe we have complied in all material respects with the provisions of the FCPA and Chinese anti-corruption law to date, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption law 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 government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

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Because our business is conducted in RMB and the price of our Ordinary Shares is quoted in the U.S. dollar, changes in the exchange rate between RMB and the U.S. dollar may affect the value of your investments.

Our business is conducted in the PRC with our books and records maintained in RMB. However, the financial statements that we file with the SEC and provide to our shareholders are presented in the U.S. dollar. Changes in the exchange rate between RMB and the U.S. dollar affect the value of our assets and the results of our operations in the U.S. dollar. The exchange rate between RMB and the U.S. dollar is affected by, among other things, changes in the PRC’s political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition.

Risks Related to Our Ordinary Shares

Our share price has recently declined substantially, and our Ordinary Shares could be delisted from the Nasdaq or trading could be suspended.

The continuous listing of our Ordinary Shares on the Nasdaq Capital Market is contingent on our compliance with the Nasdaq Capital Market’s conditions for continued listing. A decline in the closing price of our Ordinary Shares could result in a breach of the requirements for listing on the Nasdaq Capital Market. If we do not maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of our Ordinary Shares. The commencement of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted Ordinary Shares, we would expect decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such Ordinary Shares. A suspension or delisting would likely decrease the attractiveness of our Ordinary Shares to investors and cause the trading volume of our Ordinary Shares to decline, which could result in a further decline in the market price of our Ordinary Shares.

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

The market price of our shares could decline as a result of sales of substantial amounts of our shares in the public market, or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of our Ordinary Shares. We cannot predict the effect, if any, market sales of shares held by our significant shareholders or any other shareholders or the availability of these shares for future sale will have on the market price of our Ordinary Shares.

A sale or perceived sale of a substantial number of our Ordinary Shares may cause the price of our Ordinary Shares to decline.

If our shareholders sell substantial amounts of our Ordinary Shares in the public market, the market price of our Ordinary Shares could fall. Moreover, the perceived risk of this potential dilution could cause shareholders to attempt to sell their shares and investors to short our Ordinary Shares. These sales also make it more difficult for us to sell equity-related securities in the future at a time and price that we deem reasonable or appropriate.

We cannot assure you that we will declare and distribute any dividends in the future.

Our historical dividend distribution should not be used as a reference or basis to determine the level of dividends that may be declared and paid by us in the future. A decision to declare and pay any dividends would require the recommendations of our board of directors and approval of our shareholders. Under our amended and restated articles of association, our directors have the power to pay interim dividends but only if they are justified by the position of our Company. The decision to pay dividends will be reviewed in light of the factors such as the results of operations, financial condition and position, and other factors deemed relevant. Any distributable profits that are not distributed in any given year may be retained and available for distribution in subsequent years. To the extent profits are distributed as dividends, such portion of profits will not be available to be reinvested in our operations. There can be no assurance that we will be able to declare or distribute any dividend. Our future declarations of dividends will be at the absolute discretion of our board of directors. You may not realize a return on your investment in our Ordinary Shares and you may even lose your entire investment in our Ordinary Shares.

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For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

In April 2012, President Obama signed into law the Jumpstart Our Business Startups Act, or the JOBS Act. We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.235 billion of revenues in a fiscal year, have more than $700 million in market value of our Ordinary Shares held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our Ordinary Shares to be less attractive as a result, there may be a less active trading market for our Ordinary Shares and our stock price may be more volatile.

If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired.

Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to file a report by our management on our internal control over financial reporting, including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. The presence of material weaknesses in internal control over financial reporting could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our financial reporting, which could require us to restate our operating results. We might not identify one or more material weaknesses in our internal controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we need to expend significant resources and provide significant management oversight. Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns. These changes may not, however, be effective in maintaining the adequacy of our internal control.

If we are unable to conclude that we have effective internal controls over financial reporting, investors may lose confidence in our operating results, the price of the Ordinary Shares could decline and we may be subject to litigation or regulatory enforcement actions. In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, the Ordinary Shares may not be able to remain listed on Nasdaq Capital Market.

As a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements that apply to a domestic U.S. issuer, which may limit the information publicly available to our shareholders.

Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

● the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

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● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time;

● the selective disclosure rules by issuers of material nonpublic information under Regulation FD; and

● certain audit committee independence requirements in Rule 10A-3 of the Exchange Act.

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq Stock Market corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards.

As a foreign private issuer, we are permitted to take advantage of certain provisions in the Nasdaq Stock Market listing rules that allow us to follow Cayman Islands law for certain governance matters. Certain corporate governance practices in the Cayman Islands may differ significantly from corporate governance listing standards as, except for general fiduciary duties and duties of care, Cayman Islands law has no corporate governance regime which prescribes specific corporate governance standards. When our Ordinary Shares are listed on the Nasdaq Capital Market, we intend to continue to follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of the Nasdaq Stock Market in respect of the following: (i) the majority independent director requirement under Section 5605(b)(1) of the Nasdaq Stock Market listing rules, (ii) the requirement under Section 5605(d) of the Nasdaq Stock Market listing rules that a compensation committee comprised solely of independent directors governed by a compensation committee charter oversee executive compensation, (iii) the requirement under Section 5605(e) of the Nasdaq Stock Market listing rules that director nominees be selected or recommended for selection by either a majority of the independent directors or a nominations committee comprised solely of independent directors and (iv) the requirement under Section 5605(b)(2) of the Nasdaq Stock Market listing rules that our independent directors hold regularly scheduled executive sessions. Cayman Islands law does not impose a requirement that our board of directors consist of a majority of independent directors. Nor does Cayman Islands law impose specific requirements on the establishment of a compensation committee or nominating committee or nominating process. Therefore, our shareholders may be afforded less protection than they otherwise would have under corporate governance listing standards applicable to U.S. domestic issuers.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our Ordinary Shares are directly or indirectly held by residents of the U.S. and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq listing rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange.

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

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal, accounting, and financial compliance costs and investor relations and public relations costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results as well as proxy statements.

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

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

The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States. For instance, you may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

Our corporate affairs are governed by our memorandum and articles of association, as amended from time to time, by the Companies Act (As Revised) of the Cayman Islands and by the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands and from English common law. Decisions of the Privy Council (which is the final Court of Appeal for British Overseas Territories such as the Cayman Islands) are binding on a court in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court and the Court of Appeal are generally of persuasive authority but are not binding in the courts of the Cayman Islands. Decisions of courts in other Commonwealth jurisdictions are similarly of persuasive but not binding authority. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws relative to the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

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

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. If we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

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

Our securities are listed on the Nasdaq Capital Market. We cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market. In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules, including those regarding minimum stockholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the criteria for maintaining our listing, our securities could be subject to delisting.

If our securities are subsequently delisted from trading, we could face significant consequences, including:

● a limited availability for market quotations for our securities;

● reduced liquidity with respect to our securities;

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

● limited amount of news and analyst coverage; and

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

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

Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. These rights, however, may be provided in a company’s articles of association. Our amended and restated articles of association allow our shareholders holding shares representing in aggregate not less than one-third (1/3) of our voting share capital in issue, to requisition a general meeting of our shareholders. Advance notice of at least seven clear days is required for any general meeting of our shareholders. A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third (1/3) of all votes attaching to all issued and outstanding shares that carry the right to vote at a general meeting of the Company.

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

We have become a public company in the United States. As a public company, we will be required to file periodic reports with the SEC upon the occurrence of matters that are material to our Company and shareholders. Although we may be able to attain confidential treatment of some of our developments, in some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our Company. Similarly, as a U.S. public company, we will be governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public company status could affect our results of operations.

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ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

We are an offshore holding company incorporated in the Cayman Islands and we are not a Chinese operating company. As a holding company with no operations of our own, our operations are conducted in China through our wholly owned PRC subsidiary, Beijing Baosheng, and its subsidiaries. Holders of our Ordinary Shares will not directly hold any equity interests in our operating subsidiaries. This structure involves unique risks to investors. Holders of our Ordinary Shares will not directly hold any equity interests in our operating subsidiaries. The Chinese regulatory authorities could disallow our corporate structure, which would likely result in a material change in our operations and/or a material change in the value of our securities, including that it could cause the value of such securities to significantly decline or become worthless.

We initially conducted our business through Beijing Baosheng, a PRC company formed on October 17, 2014.

With the growth of our business, Horgos Baosheng was formed as a limited liability company in the PRC on August 30, 2016, and Kashi Baosheng was formed as a limited liability company in the PRC on May 15, 2018. Baosheng Technology was formed as a limited liability company in the PRC on January 2, 2020. As of the date of this annual report, Horgos Baosheng, Kashi Baosheng and Baosheng Technology are wholly owned and controlled by Beijing Baosheng.

Our Company completed its reorganization on June 4, 2019. In December 2018, our current holding company, Baosheng Media Group Holdings Limited was incorporated in the Cayman Islands, as an exempted company with limited liability. In December 2018, Baosheng BVI, a direct wholly owned subsidiary of our Company, was incorporated in the BVI as a business company with limited liability. Baosheng Hong Kong was incorporated in Hong Kong as a limited liability company in January 2019 and became a direct wholly owned subsidiary of Baosheng BVI and an indirect wholly owned subsidiary of our Company. In January 2019, Baosheng Hong Kong acquired 100% of the equity interests in Beijing Baosheng.

On March 22, 2021, Baosheng Hong Kong established a wholly-owned subsidiary, Baosheng Network, a limited liability company in the PRC. On April 2, 2022, Baosheng Network set up a wholly owned subsidiary, Beijing Xunhuo, a limited liability company in the PRC primarily engaged in the business of live streaming.

On February 8, 2021, our Ordinary Shares commenced trading on the Nasdaq Capital Market under the symbol “BAOS.” On March 3, 2021, the underwriters of our initial public offering exercised in full the over-allotment option. We raised approximately US$30.2 million in net proceeds from our initial public offering after deducting underwriting commissions and the offering expenses payable by us.

On February 1, 2022, we received a notification letter from the Nasdaq Stock Market LLC (“Nasdaq”) that we were not in compliance with the minimum bid price requirement of US$1.00 per share under the Nasdaq Listing Rules. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share, and Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company’s ordinary shares for the 30 consecutive business days from December 16, 2021 to January 31, 2022, the Company did not the minimum bid price requirement. In accordance with Nasdaq Listing Rules, we must regain compliance within 180 calendar days, or until August 1, 2022. To regain compliance, our ordinary shares must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days. In the event we do not regain compliance by August 1, 2022, we may be eligible for an additional 180 calendar days to regain compliance or face delisting.

On April 29, 2022, we held our 2022 annual general meeting of shareholders, during which our shareholders approved the proposal to effect a share consolidation at a ratio of 3.2-to-1 (the “2022 Share Consolidation”). On May 11, 2022, our board of directors adopted resolutions to set the effective date of the 2022 Share Consolidation to May 24, 2022, and has been reflected with the Nasdaq Stock Market and in the marketplace at the opening of business on May 25, 2022.

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On December 19, 2022, we received another notification letter from the Nasdaq that we were not in compliance with the minimum bid price requirement of US$1.00 per share under the Nasdaq Listing Rules. Based on the closing bid price of the Company’s ordinary shares for the 30 consecutive business days from November 2, 2022 to December 16, 2022, the Company no longer meets the minimum bid price requirement. In accordance with Nasdaq Listing Rules, we must regain compliance within 180 calendar days, or until June 19, 2023. To regain compliance, our ordinary shares must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days. In the event we do not regain compliance by June 19, 2023, we may be eligible for an additional 180 calendar days to regain compliance or face delisting.

On March 6, 2023, we held our 2023 annual general meeting of shareholders, during which our shareholders adopted ordinary resolutions approving the proposals considered at the meeting. The shareholders passed the ordinary resolution in the meeting, to approve an increase of authorized share capital of the Company from US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each to US$60,000 divided into 37,500,000 ordinary shares of a par value US$0.0016 each (the proposal the “Share Capital Proposal”). The shareholders passed the ordinary resolution in the meeting, to approve a share consolidation of six (6) ordinary shares with a par value of US$0.0016 each in the Company’s issued and unissued share capital into one (1) ordinary share with a par value of US$0.0096 (the “2023 Share Consolidation”), effective on such date as the Board of Directors of the Company shall determine (the proposal the “Share Consolidation Proposal”).

On March 21, 2023, the 2023 Share Consolidation became effective, and was reflected with the Nasdaq Stock Market and in the marketplace at the opening of business on March 22, 2023. On April 5, 2023, we received a letter from the Nasdaq Stock Market that we regained compliance with regained compliance with Nasdaq Listing Rule 5550(a)(2) by evidencing a closing bid price of our ordinary shares at or greater than $1.0 for 10 consecutive business days from March 22, 2023 to April 4, 2023.

Our principal executive office is located at East Floor 5, Building No. 8, Xishanhui, Shijingshan District Beijing, People’s Republic of China. Our telephone number at this address is +86 010-82088021. Our registered office in the Cayman Islands is located at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. Investors should submit any inquiries to the address and telephone number of our principal executive offices set forth above. We maintain a corporate website at http://ir.bsacme.com. The information contained in our website is not a part of this annual report.

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 using its EDGAR system.

See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures” for a discussion of our capital expenditures.

Risks Related to Doing Business in China

We are subject to certain legal and operational risks associated with our subsidiaries’ operations in China, which could cause the value of our Ordinary Shares to significantly decline or be worthless and could lead to our Ordinary Shares being unable to continue being listed on a foreign exchange. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, they may impose risks that could result in material changes in our subsidiaries’ operations, significant depreciation of the value of our Ordinary Shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors.

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Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structures, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this annual report, neither we nor our subsidiaries have been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. In the opinion of our PRC counsel, Beijing Dacheng, we are not subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, under the Measures for Cybersecurity Censorship which became effective on February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Measures for Cybersecurity Censorship; we are also not subject to network data security review by the CAC if the draft Regulations on Network Data Security Administration are enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the draft Regulations on Network Data Security Administration. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.”

Furthermore, on February 17, 2023, the CSRC released the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures, if a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, or the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. Based on the foregoing, we are an Existing Issuer, and is required to file with the CSRC for any subsequent offerings within three (3) working days after the completion of each offering. Other than the CSRC filing procedures we are required to make within three working days after the completion of follow-on offerings, we and our PRC subsidiaries, in the opinion of our PRC legal counsel, Beijing Dacheng Law Offices, LLP, are not required to obtain any other permissions from the CSRC. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The Chinese government exerts substantial influence over the manner in which we must conduct our business, and 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, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless.”

Since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1, 2008), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises. As of the date of this annual report, the Chinese government’s recent statements and regulatory actions related to anti-monopoly concerns have not impacted our or our subsidiaries’ ability to conduct business, our ability to accept foreign investments or issue our securities to foreign investors because neither we nor our subsidiaries engage in monopolistic behaviors that are subject to these statements or regulatory actions.

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As of the date of this annual report, we and our subsidiaries have received from PRC authorities all requisite licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, and no permission or approval has been denied. However, we cannot assure you that we will be able to receive clearance of any compliance requirements imposed on us in a timely manner, or at all. Any failure to fully comply with such compliance requirements may cause our PRC subsidiaries to be unable to conduct their businesses or operations in the PRC, subject them to fines, business suspension, or other sanctions. If we and/or our subsidiaries do not receive or maintain the approvals, or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that we and/or our subsidiaries are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, ordered to suspend our relevant business and rectify, prohibited from engaging in relevant business, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See “Item 4. Information on the Company—A. History and Development of the Company—Permissions Required from PRC Authorities” of this annual report.

Holding Foreign Companies Accountable Act

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

Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations.

On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”) governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.

On December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination.

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On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, the Consolidated Appropriations Act 2023 was signed into law, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three years to two years. Our auditor, YCM CPA INC., has served the Company since July 20, 2022 and prepared the audit report included elsewhere in this annual report. YCM CPA INC., as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess YCM CPA INC.’s compliance with applicable professional standards. YCM CPA INC. is headquartered in Irvine, California with no branches or offices outside the United States and has been inspected by the PCAOB on a regular basis. As such, as of the date of this annual report, our auditor is not affected by the Holding Foreign Companies Accountable Act and related regulations. However, there is a risk that our auditor cannot be inspected by the PCAOB in the future. The lack of inspection could cause trading in our securities to be prohibited under the Holding Foreign Companies Accountable Act, and, as a result, Nasdaq may determine to delist our securities, which may cause the value of our securities to decline or become worthless. See “Item 3. Key Information—D. Risk Factor— Risks Related to Doing Business in China— Our Ordinary Shares may be delisted and prohibited from being traded under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting and the cessation of trading of our Ordinary Shares, or the treat of their being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. Additionally, any inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections” and “Item 3. Key Information—D. Risk Factor— Risks Related to our Ordinary Shares— If we cannot satisfy, or continue to satisfy, the continued listing requirements and other rules of the Nasdaq Capital Market, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.”

Permissions Required from PRC Authorities

We are subject to certain legal and operational risks associated with being based in China, which could cause the value of our securities to become worthless. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the PRC subsidiaries, significant depreciation of the value of our Ordinary Shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this annual report, neither we nor our subsidiaries have been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. In the opinion of our PRC counsel, Beijing Dacheng, we are not subject to cybersecurity review with the CAC, under the Measures for Cybersecurity Censorship which became effective on February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Measures for Cybersecurity Censorship; we are also not subject to network data security review by the CAC if the draft Regulations on Network Data Security Administration are enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the draft Regulations on Network Data Security Administration. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.”

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The PRC government also exerts more control over offerings conducted overseas and foreign investment in China-based issuers. Furthermore, on February 17, 2023, the CSRC released the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures, if a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any subsequent offerings. Based on the foregoing, we are an Existing Issuer, and is required to file with the CSRC for any subsequent offerings within three (3) working days after the completion of each offering. Other than the CSRC filing procedures we are required to make within three working days after the completion of follow-on offerings, we and our PRC subsidiaries, in the opinion of our PRC legal counsel, Beijing Dacheng Law Offices, LLP, are not required to obtain any other permissions from the CSRC. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The Chinese government exerts substantial influence over the manner in which we must conduct our business, and 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, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless.”

Since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1, 2008), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises. As of the date of this annual report, the Chinese government’s recent statements and regulatory actions related to anti-monopoly concerns have not impacted our or our subsidiaries’ ability to conduct business, our ability to accept foreign investments or issue our securities to foreign investors because neither we nor our subsidiaries engage in monopolistic behaviors that are subject to these statements or regulatory actions.

As of the date of this annual report, we and our subsidiaries have received from the PRC authorities all requisite licenses, permissions, and approvals needed to engage in the businesses currently conducted in the PRC, which solely include the business licenses that authorize the scope of business operations, and no permission or approval has been denied. As of the date of this annual report, each of our PRC subsidiaries has obtained its business license to engage in the respective business currently being conducted by it in the PRC. For us to offer the securities being registered hereunder to foreign investors, we are required to submit filings with the CSRC within three (3) working days after completion of an offering by the Company. For details regarding this approval requirement, see the above discussion under Item 4. Information on the Company—A. History and Development of the Company—Permissions Required from PRC Authorities.” However, we cannot assure you that we will be able to receive clearance of any compliance requirements imposed on us in a timely manner, or at all. Any failure to fully comply with such compliance requirements may cause our PRC subsidiaries to be unable to conduct their businesses or operations in the PRC, subject them to fines, business suspension, or other sanctions. If we and/or our subsidiaries do not receive or maintain the approvals, or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that we and/or our subsidiaries are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, ordered to suspend our relevant business and rectify, and/or prohibited from engaging in the relevant business, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China” of this annual report.

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Dividends and other distributions

Currently, we do not have a cash management policy in place that dictate how funds are transferred between us and our subsidiaries, or investors. We are a holding company, and we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements, including the furnishing of funds necessary to pay dividends and other cash distributions to our shareholders or to service any debt we may incur. If any of our PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us. There have not been any such dividends or other distributions from our PRC subsidiaries to our subsidiaries located outside of China, as of the date of this annual report. In addition, as of the date of this annual report, none of our subsidiaries have ever issued any dividends or distributions to us or their respective shareholders outside of China, and neither we nor any of our subsidiaries have ever paid dividends or made distributions to U.S. investors. As of the date of this annual report, neither we nor any of our subsidiaries have ever paid dividends or made distributions to U.S. investors. Other than the following transactions, no cash transfers have occurred between us and our subsidiaries: our Hong Kong subsidiary, Baosheng HK, received cash of $38.3 million from us, which represented proceeds raised in the initial public offering of our Ordinary Shares in February 2021, and the private placement of our Ordinary Shares and warrants in March 2021. In addition to the forgoing, on March 16, 2021, Baosheng HK transferred cash of $6 million, in the form of shareholder loans, to its wholly owned subsidiary, Beijing Baosheng. In April 2021 and August 2021, Baosheng HK transferred cash in the aggregate of $30.79 million, in the form of capital contributions, to its wholly owned subsidiary, Baosheng Network. In the future, cash proceeds raised from overseas financing activities may be transferred by us to our PRC subsidiaries by means of capital contributions or shareholder loans, as the case may be.

According to the Foreign Investment Law of the People’s Republic of China and its implementing rules, which jointly established the legal framework for the administration of foreign-invested companies, a foreign investor may, in accordance with other applicable laws, freely transfer into or out of China its contributions, profits, capital earnings, income from asset disposal, intellectual property rights, royalties acquired, compensation or indemnity legally obtained, and income from liquidation, made or derived within the territory of China in RMB or any foreign currency, and any entity or individual shall not illegally restrict such transfer in terms of the currency, amount and frequency. According to the Company Law of the People’s Republic of China and other Chinese laws and regulations, our PRC subsidiaries may pay dividends only out of their respective accumulated profits as determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax profits, if any, each year to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Where the statutory reserve fund is insufficient to cover any loss the PRC subsidiary incurred in the previous financial year, its current financial year’s accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund is drawn therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be distributed to us as dividends. At their discretion, our PRC subsidiaries may allocate a portion of their after-tax profits based on Chinese accounting standards to a discretionary reserve fund.

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Renminbi is not freely convertible into other currencies. As result, any restriction on currency exchange may limit the ability of our PRC operating subsidiaries to use their potential future Renminbi revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but not under the “capital account,” which includes foreign direct investment and foreign currency debt, including loans we may secure for our onshore subsidiaries. Currently, our PRC subsidiaries may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements. However, the relevant Chinese governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. The Chinese government may continue to strengthen its capital controls, and additional restrictions and substantial vetting processes may be instituted by SAFE for cross-border transactions falling under both the current account and the capital account. Any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to pay dividends in foreign currencies to holders of our securities. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration with, SAFE and other relevant Chinese governmental authorities. This could affect our ability to obtain foreign currency through debt or equity financing for our subsidiaries. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may rely on dividends paid by our subsidiaries for our cash needs, 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 business” for a detailed discussion of the Chinese legal restrictions on the payment of dividends and our ability to transfer cash within our group. In addition, holders of our Ordinary Shares may potentially be subject to Chinese taxes on dividends paid by us in the event we are deemed a Chinese resident enterprise for Chinese tax purposes. See “Item 10. Additional Information—E. Taxation—People’s Republic of China Taxation” for more details.

To the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China— To the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our Company or our subsidiaries by the PRC government to transfer cash.”

B. Business Overview

We are an online marketing solution provider based in China. We are dedicated to helping our advertiser clients manage their online marketing activities with a view to achieving their business goals. We advise advertisers on online marketing strategies, offer value-added advertising optimization services and facilitate the deployment of online ads of various forms such as search ads, in-feed ads, mobile app ads and social media marketing ads. At the same time, as the authorized agency of some popular online media, such as Super Huichuan (超级汇川), and Today’s Headline (今日头条), we help online media procure advertisers to buy their ad inventory and facilitate ad deployment on their advertising channels.

Relying on our management’s extensive industry experience, deep industry insights and well-established network of media resources, we have grown rapidly from a start-up online marketing agency founded in 2014 to a multi-channel online marketing solution provider.

We help advertisers formulate their online advertising strategies, optimize their ads and run their ads on suitable online advertising channels with a view to achieving their business goals. We have built a broad and diverse advertiser base across various industries, including ecommerce and online service platforms, online travel agencies, financial services, online gaming, car services and other advertising agencies. We believe our ability to attract and retain these advertisers reflects the high level of our services, which is essential to our business growth.

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Our business value chain. As an online advertising service provider, we regard our business values as revolving around our ability to serve the needs of two major business stakeholders: (i) advertisers; and (ii) media (or their authorized agencies).

● Value to advertisers: As an online marketing service provider, we connect advertisers and online media, helping advertisers to manage their online marketing activities in many ways, including, but not limited to, (i) advising on advertising strategies, budget and choice of advertising channels; (ii) procuring ad inventory; (iii) offering ad optimization services; and (iv) administrating and fine-tuning the ad placement process.

● Value to media: As an authorized agency of media, we create value to media businesses in several ways, including, but not limited to, (i) identifying advertisers to buy their ad inventory, (ii) facilitating payment arrangements with advertisers, (iii) assisting advertisers in handling ad deployment logistics with media, and (iv) engaging in other marketing and promotion activities aimed at educating and inducing advertisers to use online advertising.

Our advertising services. We offer two types of advertising services, SEM services, and Non-SEM services. Our SEM services include the deployment of ranked search ads and other display search ads offered by search engine operators. Our Non-SEM services, on the other hand, include social media marketing, in-feed advertising, and mobile app advertising through deploying ads on media such as social media platforms, short-video platforms, news portals and mobile apps. The display forms of our Non-SEM ads include in-feed ads, banner ads, button ads, interstitial ads, and posts on selected social media accounts.

Set forth below is a summary of the relevant ad formats, the corresponding pricing models generally adopted by media and our revenue model:

Type	Description	Media’s principal pricing model	Our principal revenue model
SEM Services
Search ads	Search ads are normally located at the top, or on the side of the search results page, or the related products of the search engine operators.	Auction-based ads: mainly CPC Non-auction-based ads: mainly CPT	Rebates and incentives
Non-SEM services
In-feed ads	In-feed ads are advertisements that match the format, appearance and function of the platform upon which they appear, typically placed on short video sharing, social media and newsfeed platforms.	Mainly CPM, CPC	Rebates and incentives
Mobile app ads	Mobile app ads are displayed in apps with various formats such as banner ads, button ads, open screen ads, and interstitial ads.	Mainly CPT, CPA	Net fees; rebates and incentives
Social media ads	Social media ads take the form of contents appearing in the designated blogs or social media accounts with suitable target audience.	Mainly CPT	Net fees

Our gross billing decreased from $54.7 million in 2021 to $54.6 million in 2022, representing a decrease of 0.3%, and decreased to $18.8 million in 2023, representing a decrease of 65.6%. In the meantime, the media costs increased from $50.8 million in 2021 to $52.2 million in 2022, while decreased to $17.8 million in 2023, representing an increase of 2.7% and a decrease of 65.8%, respectively. Our revenue on a net basis (i.e. difference between gross billing and media costs) has decreased, in tandem our advertiser base and their advertising spend, from $3.9 million in 2021 to $2.4 million in 2022, and decreased to $0.9 million in 2023, representing a decrease of 38.3% and a decrease of 61.8%, respectively.

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Our Business Model

Business value chain

As an online advertising service provider, we regard our business values as revolving around our ability to serve the needs of two major business stakeholders: (i) advertisers; and (ii) media (or their authorized agencies).

● Value to advertisers: Advertising is driven by advertisers’ need to reach their target customers to create demand for their products and services, build their brands, gain market shares, boost sales and enhance profitability. As an online marketing service provider, we act as intermediary between advertisers and online media, helping advertisers to manage their online marketing activities in many ways, including, but not limited to, (i) advising on advertising strategies, budget and choice of advertising channels; (ii) procurement of ad inventory; (iii) offering ad optimization services; and (iv) administrating and fine-tuning the ad placement process. We consider that our values to advertisers mainly lie in our ability to help them carry out effective online marketing activities economically. In particular, we can offer our advertisers various types of ad inventory, such as search ads, in-feed ads on various social media and media platforms, and mobile app ads, as well as various optimization services specific to such ad formats.

● Value to media: Media serve as the medium through which advertisers’ marketing messages are conveyed to their target audience, and monetize their media resources mainly by offering ad inventory for sales to advertisers. Under the current online advertising ecosystem, established media acquire advertisers primarily through their networks of authorized agencies. We, as an authorized agency, create values to media’s business in many ways, including but not limited to, (i) identifying advertisers to buy their ad inventory, (ii) facilitating payment arrangements with advertisers, (iii) assisting advertisers in handling ad deployment logistics with media, and (iv) engaging in other marketing and promotion activities aimed at educating and inducing advertisers to use online advertising. The use of the authorized agency model enables media to leverage their authorized agencies’ connections to extend their reach to a large base of advertisers, and expand their business scale quickly without inflating their sales and marketing costs. To become the authorized agency of a media, we are typically subject to two to three rounds of evaluation by the media, during which the media takes into account factors including, but not limited to, the history of our Company, the size of our Company, our achievements, our service offerings, the advertisers we cooperate with, the history of our revenue, and the expertise of our employees.

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The following is a simplified graphical illustration of our business value chain and the interrelationships among advertisers, media and advertising agencies:

As illustrated in the chart above, in cases where we have direct access to media’s ad inventory, for instance as their authorized agency, we acquire ad inventory directly from the relevant media for our advertisers, which include both (i) direct advertisers; and (ii) third-party advertising agencies which do not have direct access to the relevant ad inventory and wish to place ads for their advertisers through us. Meanwhile, we may receive rebate and incentives from the media for selling their ad inventory.

When we do not have direct access to certain media’s ad inventory, we can acquire such ad inventory for our advertisers from other third-party advertising agencies which have direct access, for instance, advertising agencies which are authorized agencies of certain media. Again, we may receive rebate and incentives from such advertising agencies for procuring buyer to acquire ad inventory through them.

Based on the above business value chain, we generate revenue typically (i) in the form of rebates and incentives we earn from media (or their authorized agencies) for procuring advertisers to place ads with them, or (ii) in the form of net fees we earn from advertisers when we purchase ad inventory on their behalf and provide advertising services to them.

Accordingly, both advertisers or media (or their authorized agencies) can be identified as our customers, depending on the revenue model applicable to the relevant services we provide. See “— Revenue model and payment cycle” in this section for further details.

Advertisers

Through our PRC subsidiaries, we have built a broad and diverse advertiser base from a broad range of industries, including ecommerce and online service platforms, online travel agencies, financial services, online gaming, car services, and advertising agencies, among others.

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Certain of our advertisers carry well-known brands, such as C-trip (携程), Bilibili (B站), Tuhu（途虎养车）, 满运(江苏满运), T3Go (南京领行), Snack Video (达佳互联), and i-9game (爱九游). During the fiscal years 2023, 2022 and 2021, the number of advertisers we served decreased from 462 in 2021 to 228 in 2022, and increased to 285 in 2023. Our gross billing decreased from $54.7 million in 2021 to $54.6 million in 2022 and decreased to $18.8 million in 2023. Our top five advertisers contributed to 54.2%, 47.2% and 96.0% of our total gross billing in the fiscal years 2023, 2022 and 2021, respectively.

The table below sets out the breakdown of our gross billing by industries of our advertisers:

	Gross billing for the years ended December 31,
	2023				2022				2021
	Amount		%		Amount		%		Amount		%
E-commerce & online service platforms	$	3,667,880	19.5	%	$	24,613,492	45.0	%	$	19,085,684	34.8	%
Online education		2,712,961	14.5	%		6,636,018	12.2	%		11,034,006	20.2	%
Online travel agencies		1,649,663	8.8	%		1,783,556	3.3	%		5,524,212	10.1	%
Financial services		108,299	0.6	%		1,052,485	1.9	%		1,019,921	1.9	%
Online gaming		4,226,350	22.5	%		10,620,778	19.5	%		12,438,353	22.7	%
Car services		610,969	3.3	%		2,975,537	5.5	%		609,995	1.1	%
Third-party advertising agencies		3,145,393	16.8	%		4,075,110	7.5	%		4,929,690	9.0	%
Others		2,648,522	14.0	%		2,826,101	5.1	%		90,671	0.2	%
Total	$	18,770,037	100	%	$	54,583,077	100	%	$	54,732,532	100	%

Our Media

We have established and maintained collaborative relationships (either directly or through their authorized agencies) with a wide range of media such as search engines, short-video platforms, and social media platforms, which enable us to offer our advertisers a diverse choices of ad formats, including search ads, in-feed ads (i.e. ads that match the format, appearance and function of the media format in which they appear), mobile app ads and social media ads on an array of advertising channels.

We act as the authorized agency for a number of media during the fiscal years 2023, 2022 and 2021, and will endeavor to secure new authorized agency status with media in the future. With our authorized agency status, we can offer our advertisers with direct access for placements of ads.

Set forth below is a summary of the media for which we have secured authorized agency status during the fiscal years 2023, 2022 and 2021, and up to the date of this annual report, and which we consider to be significant to our business operations:

Media	Description of media	Ad inventory covered by our authorized agency status	Effective period of authorized agency status
Beijing Sogou Information Services Co., Ltd. (北京搜狗信息服务有限公司)	Operator of Sogou (搜狗), the second most used search engine in China in 2019	Various forms of search ads offered by Sogou	From January 2016 to March 2021
Guangzhou Juyao Information Technology Co. Ltd. (广州聚耀信息科技有限公司) (“Guangzhou Juyao”)	Operator of an intelligent marketing platform owned by one of the leading internet technology conglomerates in China	Through Super Huichuan (超级汇川)search engine that includes search ads (卧龙), information flow ads (汇川), and ads provided through various channels such as UC browsers (UC浏览器), UC Headline (UC头条), Youku (优酷) (Note) PP mobile assistant apps (PP手机助手) and SnapPea (豌豆荚).	From January 2017 to December 2024
Hubei Today’s Headline Technology Co., Ltd. (湖北今日头条科技有限公司)	Operator of one of the leading news portal apps and short-video apps in China	In-feed ads on various content distribution channels, including one of the most popular news portals and short-video apps in China.	January 2019 to December 2020, January 2021 to December 2024

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To the best of our understanding and based on our experience, certain media may require their authorized agencies to place deposits as payment security and/or to signify the authorized agencies’ commitment in procuring certain minimum amount of ad inventory purchases and/or advertising spend for their advertisers. We determine the amount of deposits and the term of deposits based on the contractual terms with relevant media. These media typically require deposits in the amount of 5% to 10% of the minimum amount of ad inventory purchases and/or advertising spend, which will be refunded to us upon the expiration of the agreement if ad purchases and/or advertising spend our advertisers place with such media reach the minimum requirement. In our agreements with the advertisers seeking to purchase ad inventory from these media, we require the advertisers to pay deposits in the same amount required to be paid to the media, which will be refunded to the advertisers if the minimum requirement for ad inventory purchase and/or advertising spend is fulfilled. From time to time we may pay such deposits on behalf of our advertisers for our own as well as our advertisers’ ease of administrative management. In such cases, depending on the background of such advertisers and our relationship with them, we may or may not require our advertisers to place deposits to us on a back-to-back basis. We determine whether to pay deposits on behalf of an advertiser based on several factors including, but not limited to, the advertiser’s credit history, reputation in the industry, and the amount of ad inventory the advertiser purchases through the current order or has purchased in the past. We pay deposits on behalf of roughly 80% of our advertisers, and the amount of such deposits are about 85% of total deposits to be paid to media.

When we contemplate a potential partnership as an authorized agency of a media, we generally take into consideration various factors, including but not limited to:

(i) the types of online media with potential to attract more user traffic in the future;

(ii) the competitiveness of the advertising market of the media concerned;

(iii) the market position and growth potential of the media;

(iv) the sufficiency of the support which the media can offer to its advertising agencies; and

(v) the commercial terms, in particular the rebate policy, offered by the media and their requirements for deposits.

Overlapping of our advertisers and media (or their authorized agencies)

As an industry practice, some ad inventory is only available through the relevant media’s authorized agencies as a result of the media’s own policies or practices. Thus, advertising agencies may tap into the marketing channels possessed by other advertising agencies to gain access to a wider array of online media.

In our ordinary course of business, we may procure ad inventory on behalf of our advertisers from, and facilitate sales of ad inventory of media which we have authorized agency relationship with to, the same company in the following circumstances:

(i) An advertising agency procure ad inventory (of a media to which we have direct access and they do not) from us for itself or its advertisers, whereas we source from the same advertising agency on behalf of our advertisers for ad inventory (of a media to which they have direct access and we do not); and

(ii) We procure ad inventory from a media (such as operators of social media, video-sharing or gaming platforms) for our advertisers, whereas the same media acquires ad inventory of other media through us to market its own services and products.

As a result of the foregoing, we had three, three and three overlapping advertisers and media (which were mostly third-party advertising agencies) that we both procured ad inventory from and facilitated sales of ad inventory to in the fiscal years 2023, 2022 and 2021, respectively. The table below summarizes the aggregate gross billing and media cost attributable to such overlapping advertisers and media (or their authorized agencies) in the fiscal years 2023, 2022 and 2021.

	For the years ended December 31,
	2023				2022				2021
	Amount		%		Amount		%		Amount		%
Gross billing (as our advertisers)	$	2,222	0.01	%	$	16,680,318	30.6	%	$	186,042	0.3	%
Media costs (as our media or media agency)	$	6,698	0.01	%	$	15,365,395	29.5	%	$	29,787,671	58.6	%

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Our procurement of ad inventories from these overlapping advertisers and media (or their authorized agencies) and our procurement of advertisers to purchase ad inventories from these overlapping advertisers and media (or their authorized agencies) were neither inter-connected nor inter-conditional with each other, and were negotiated and conducted independently with each other in the ordinary course of business under normal commercial terms and on an arm’s length basis.

Revenue Model and Payment Cycle

Our revenue is comprised primarily of (a) rebates and incentives offered by media (or their authorized agencies); and (b) net fees earned from advertisers. We determine the type of our revenue based on the contractual terms with relevant advertisers and media (or their authorized agents) and the nature of the business transactions, and we recognize the corresponding revenue when the related services are delivered. In business transactions where we receive rebates and incentives from media (or their authorized agencies), we are rewarded for assuming the role as sales agents of media (with which we have authorized agency arrangements) or other third-party advertising agencies (which are in turn authorized agencies of the relevant media), and these rebates and incentives are recognized as revenue for our provision of such sales agency services. Conversely, in cases where we procure advertising services or ad inventory from media (or other advertising agents and service providers) on behalf of our advertisers, we are rewarded for the arrangements of advertising services on behalf of our advertisers (but not as principal to the arrangements) such as sourcing and procuring ad inventory and executing ad placements, and we report our revenue earned and costs incurred in these transactions on a net basis as net fees from advertisers.

The following table sets forth a breakdown of our revenues during the fiscal years 2023, 2022 and 2021 by revenue model:

	For the years ended December 31,
	2023				2022				2021
	Amount		%		Amount		%		Amount		%
Rebates and incentives earned from publishers	$	887,038	96.2	%	$	1,930,188	79.9	%	$	3,663,168	93.6	%
Net fees earned from advertisers		34,796	3.8	%		484,910	20.1	%		248,392	6.4	%
Total	$	921,834	100.0	%	$	2,415,098	100.0	%	$	3,911,560	100.0	%

Rebates and incentives from publishers

In the arrangements with certain media or their authorized agencies, we typically receive rebates and incentives for procuring advertisers to acquire the relevant media’s ad inventory, and we recognize these media (or their authorized agencies) as our customers. On the other hand, to encourage advertisers to subscribe our services and acquire their desired ad inventories through us, we may also offer rebates to our advertisers for their acquisition of ad inventory and/or incurrence of advertising spend. Our revenue is recognized as the rebates and incentives we receive from media (or their authorized agencies) net of any rebates we offer to our advertisers. This revenue model is more commonly applicable in connection with our provision of SEM services and certain in-feed ad services, with major media including search engines, social media platforms and newsfeed platforms.

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The following is a simplified illustration of our rebates and incentives revenue model:

Rebates and incentives offered by media (or their authorized agencies)

The rebates and incentives we earn from media (or their authorized agencies) come with a variety of structures and rates, which are primarily determined based on the contract terms with these media (or their authorized agencies) and their applicable rebate policies. Occasionally, media may also offer additional discretionary incentives to encourage their authorized agencies to achieve certain benchmarks according to the media’s then sales and marketing goals.

Set forth below are some of the more typical structures of rebates and incentives that media (or their authorized agencies) offered to us during the fiscal years 2023, 2022 and 2021:

● across-the-board standard-rate rebates based on the amount of ad currency units^* acquired or actual advertising spend;

● differential standard-rate rebates based on the amount of ad currency units acquired or actual advertising spend and certain prescribed classifications (e.g., industry of advertisers, new or existing advertisers, types of ad inventory);

● rebates and incentives on a scale of progressive rates based on accumulated ad currency units acquired or accumulated advertising spend; and

● rebates and incentives on progressive or differential rates based on certain prescribed measuring benchmarks (e.g., the number of new advertisers secured, accumulated ad currency units acquired or actual advertising spend from advertisers of a particular industry, growth in ad currency units acquired or actual advertising spend).

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Note: “Ad currency units” are effectively a kind of virtual currency that needs to be purchased from relevant media for use in acquiring their ad inventory. See “— Our services and operational flow — Campaign launch and performance review” for further details.

The rates offered to us by media (or their authorized agencies) are based on the contractual terms and typically range from 5% to 20%.

These rebates and incentives may (i) take the form of cash which, when paid, are typically applied to set off our accounts payable with the relevant media or their authorized agency; or (ii) in the form of ad currency units which will be deposited in the account we maintained in the back-end platform of the media, and can then be utilized to fulfill our advertisers’ orders for purchases of ad currency units, or as our rebates offered to our advertisers. These rebates and incentives are generally ascertained and settled on a quarterly or annual basis.

Rebates offered by us to advertisers

We may offer rebates to our advertisers in the form of ad currency units, or cash discounts which can be used to offset future payments with us.

The rates of rebates we offer to our advertisers are determined by us on a case-by-case basis, generally with reference to the rebates and incentives we obtain from the relevant media (or its authorized agency), an advertiser’s committed total spend, and our business relationships with such advertiser.

Net fees from advertisers

Under our net fees revenue model, we are rewarded for our services provided to advertisers, which typically include, among other things, sourcing and procurement of ad inventory and advertising services on behalf of our advertisers with costs incurred in connection thereto. Under this revenue model, since we are not the principal in these arrangements, we report our revenue earned and costs incurred in these transactions on a net basis as net fees from advertisers and we recognize our advertisers as our customers.

This revenue model is more commonly applicable in connection with our provision of mobile app ad services and social media marketing services. We determine the gross fees we charge our advertisers on a client-by-client and campaign-by-campaign basis primarily based on the corresponding media and other advertising service costs and our targeted fee margin.

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The following is a simplified illustration of our net fees revenue model:

	Our revenue as the difference between the gross fee we charge our advertisers and the costs incurred on its behalf

Payment Cycle

As described in “— Our services and operational flow” in this section below, we typically effect payments to media (or their authorized agencies and other advertising service providers) on behalf of our advertisers. We issue billing to our advertisers for our gross fees and/or payments we make on their behalf, and receive billing from media (or their authorized agencies and other advertising service providers) for acquisition of their advertising services and ad inventory. In this regard, the payment cycle of our business typically involves receivables and settlements from advertisers for our gross fees and/or the amounts we pay on their behalf, and payables and settlements with media (or their authorized agencies and other advertising service providers) for acquisition of their advertising services and ad inventory.

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The following table sets out a general summary of our receipts and pay-outs with our advertisers and media, our two major stakeholders:

	Media (or their authorized agencies) or other service providers	Advertisers
Receipts	Rebates and incentives receivable by us from the media (or their authorized agencies)	Amounts receivable by us from advertisers for acquiring ad inventory and advertising services on their behalf
Pay-outs	Amounts payable by us for acquiring ad inventory and advertising services from media or other advertising service providers on behalf of our advertisers	Rebates payable by us to advertisers (or their advertising agencies)

For our SEM services, we are generally granted credit periods of up to105 days by media (or their authorized agencies) for settlement of payments on acquisition of ad inventory on behalf of our advertisers. For our non-SEM services, given the variety of types and nature of media and service providers involved, credit terms granted to us by these media (or other advertising service providers) for settlement of payments on acquisition of advertising services and ad inventory are more diverse, which may range from prepayments to 180 days. For our non-SEM services, the most common credit terms granted to us by media for our in-feed ad services are 0 to 105 days, and media for our mobile app ad services and social media ad services typically require prepayments.

On the other hand, we may grant credit terms of up to 180 to 210 days to our advertisers in settlement of our billing to them (i.e., payments made on their behalf for acquisition of ad currency units, ad inventory and other advertising services). When considering whether credit terms are to be granted to our advertisers and the duration of credit terms to be granted, we generally take into account a variety of factors, including, but not limited to, the scale and profile of our advertisers’ businesses, their length of business relationships with us, the media of their choices, their budgeted or committed total advertising spend, their financial conditions, their past legal proceedings, their reputation in the industry, and their historical settlement records. For advertisers with new or relatively short business history with us, we may require prepayments or deposits from our advertisers.

It should be noted that the above credit periods are primarily applicable to payments we make on behalf of our advertisers to media (or their authorized agencies and other service providers) for acquisition of their advertising services and ad inventory. In respect of our revenue, the specific credit terms for rebates and incentives from media (or their authorized agencies) are subject to the terms in our written contracts with them, and they are typically settled either by direct set-off of our accounts payable with them (in case of cash rebates and incentives) or through deposits of ad currency units into our accounts maintained with them (in case of in-kind rebates and incentives). Depending on the media, rebates and incentives we receive from media are settled on a quarterly or a yearly basis and at the beginning of the following quarter or following year. For revenue in the form of net fees, given that they represent the difference between the gross fees we charge our advertisers and the media costs incurred on their behalf, credit terms would correspond to our payments made to media (and other advertising agencies and service providers) and payments received from advertisers as described in the preceding paragraphs.

The following table illustrates the major composition of our accounts receivable and accounts payable generally corresponding to our business:

	Counter-party	Nature or Origin
Accounts receivable	Advertisers	Gross billing charged to advertisers for acquisition of advertising services and ad inventory on their behalf
Accounts payable	Media (or their authorized agencies) and other advertising services providers	Amounts owed to media (or their authorized agencies) or other advertising service providers for acquisition of ad inventory and other advertising services on behalf of our advertisers

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Our Services and Operational Flow

Ad formats for which we offer our advertising services

We offer online advertising services for ads typically in the forms of search ads, in-feed ads, mobile app ads, and social media ads.

Search ads

Search engine marketing (SEM) is a form of internet marketing that involves the promotion of the advertisers’ products or services by increasing the visibility of their ads on the search result pages or the derivative products of search engine operators, typically triggered by a keyword searching action initiated by the user of the search engine.

Generally, search ads may take the form of (i) ranked search ads, which are typically ads displayed among the search results triggered by and directly relevant to a user’s keyword searches, and are typically bought through an auction-based model; or (ii) display search ads that appear in other positions (such as the margin) of a search results page, which is more typically bought through a non-auctioned based model.

In an auction-based model, advertisers typically place bids for a higher likelihood to have their ads displayed in the top positions of the search results page to potentially obtain more clicks on their ad. Under this model, ad inventory is typically priced under a “cost per click” (“CPC”) model, which means the advertisers will pay for every click on their ad. The cost is determined by several factors determined by the search engine’s algorithm, typically including the maximum bid, quality score, and the ad rank of other advertisers bidding for the same keyword. For non-auction-based model, advertisers generally acquire an ad space on a search results page at a price which is usually determined under a “cost per time” (“CPT”) pricing model.

The following depicts samples of our search ad offerings:

●Ranked search ads (搜索排名广告):

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●Display search ads (显示类搜索广告):

In-feed ads

In-feed ads are a form of display ads that blend into the environment they appear in, for instance, looking like part of the news feed on a news or social media webpage, or appearing as a video clip on a short-video sharing platform.

As a form of “precision marketing”, in-feed advertising pushes ads to viewers based on data collected that is relevant to the user’s interests and therefore improves the likelihood of delivering ads to the desired audience of the advertisers. Due to the nature of in-feed ads, optimization in their presentation based on the features of advertisers’ products and services, including factors such as the graphic design of ads and the selection of the target audience, time slots, geographic regions and tiers of cities to display the ads, plays a vital role in improving the likelihood to attract clicks.

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We have access to various in-feed advertising channels either directly with the media or with their authorized agencies. These channels include short-video sharing platforms such as Kuaishou and ByteDance, and various news portal and social media platforms.

快手)	微信)
Kuaishou (快手)	WeChat (微信)
Baidu news and content network (百度原生)	Today’s Headline (今日头条)

The cost model for in-feed ads is mostly CPC and CPM.

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Mobile app ads

Mobile app ads generally refer to ads that are deployed in selected mobile sites or mobile apps, and typically appear in the form of banners, buttons, app-launch screen images and interstitial ads. During the fiscal years 2022 and 2021, media channels we utilized for deployment of mobile app ads for our advertisers included independent apps with acceptable level of traffic, app stores as well as demand-side platforms, or DSPs. We did not provide mobile app ads deployment services in the fiscal year ended December 31, 2023.

Banner ad	Button ad
App-launch screen ad	Interstitial ads

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The cost model for mobile app is normally CPT and CPA. CPA allows advertisers to pay for a specific action from a prospective customer where a payment is made only when a specific action takes place, such as download (also referred to as CPD), installation and activation.

Social media ads

With the emergence of popular online social media attracting numerous users, advertisers are increasingly receptive of the idea of identifying social media accounts that have influence over potential customers on these platforms. Our social media marketing services generally involves the design and implementation of creative advertising campaigns carried out on social media platforms through the use of influential social media accounts with suitable target audiences.

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Our social media campaigns generally take the form of coordinated issuances of content on accounts in various popular media platforms, including popular social networking platforms, video sharing platforms, live-streaming platforms, knowledge sharing platforms and information content platforms, which are intended to reach the readers of the contents of these accounts. Depending on the advertisers’ marketing objectives, various types of social media accounts can be used, such as (i) the accounts of celebrities and famous bloggers who have many followers; (ii) the accounts of key opinion leaders who commands authority and influence in certain areas (such as fashion, cars); (iii) online publications; and (iv) “grass root” accounts within a more niche audience.

Social media ads (example 1)	Social media ads (example 2)

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Our services and operational flow

The diagram below illustrates the major stages of operation flow for the delivery of our advertising services.

Acquiring advertisers

We acquire advertisers through various means, including (i) approaching potential advertisers based on market intelligence and our industry insights; (ii) exploit our industry connections to identify potential advertisers; (iii) reaching out to our existing advertisers to explore further business opportunities, and (iv) through referrals by our advertisers (including advertising agencies) and media. See “— Sales and marketing” in this section for details.

It is common in the advertising industry to have cross-referrals among advertising agencies to utilize each other’s media resources which are not available to the others. For instance, we have been engaged by advertising agencies from time to time for placement of ads with media for which we are authorized agency, and we treat these advertising agencies and our direct advertisers alike in terms of the services we offer. Similarly, we may approach other advertising agencies who act as authorized agencies or have direct access of other media to acquire ad inventory for our advertisers.

We would negotiate with the advertisers on the commercial terms of the engagement, then we would enter into legally-binding contracts (framework agreements or one-off agreements) for the provision of our services.

Pre-launch

Before launching an advertising campaign, we would usually discuss with our advertiser to understand its products or services to be marketed, its marketing budget and its marketing objectives.

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Depending on the needs of our advertisers, we may provide advices and services on advertising strategies and ad optimization, generally covering:

Ad Type	Our advices or services
SEM ads:	Keywords research and selection: We offer advices on selection of desired keywords and search-match criteria as well as exclusion of irrelevant search words to improve the click through rates (CTR) of ads.
	Bidding price: We offer advices on bidding price for various types of keywords under the CPC model with a view to improving the effectiveness of an advertising campaign within a certain budget.
	Time and place for ad deployment: We help advertisers identify their target audiences (such as their profiles and geographical locations) and target time slots to target the ad displays based on the characteristic of the advertisers’ products and services. By setting these parameters, we aim to target the relevant audiences of the products and services we promoted to improve the efficiency of reaching users with higher likelihood to click on the ads.
	Ad presentation: In addition to optimization on search actions and search-match process as described in “Keyword research and selection” above, we also provide design optimization on the presentation of search results such as title phrases, text descriptions and special appearances.
In-feed ads:	Customized audience: Through direct access to the backend platform of the in-feed ad media which provides “tags” based on user profiles and behavior, we advise our advertisers on how to use these “tags” to define their target audiences, and assist our advertisers in adjusting the ad-trigger criteria to achieve more precise marketing.
	Time and place for ad deployment: We help our advertisers set parameters such as geographical regions and time slots of ad displays and profiles of target audiences based on the features of advertisers’ products and services to increase the likelihood of the ads reaching their target audience.
	Ad presentation: In addition to increasing the precision of the advertisement, we also provide optimization services on the design and format of ads, such as the desired length, content, script and color tone of short video ads to make them more receptive to the target audiences.
Mobile app ads:	We advise our advertisers on the choice of media, length of deployment and the format of the advertisements, and negotiate pricing terms with the relevant media operators on behalf of our advertisers.
Social media marketing ads:	We assist our advertisers in the design of advertising strategies, provide advices on choices of ad formats and materials (such as short-video, image and text descriptions), and recommend appropriate social media accounts and suitable media channels for implementation and deployment of the advertising campaigns based on the themes and the desired effects of the campaigns. From time to time, we may be requested to arrange third party service providers to assist in the preparation of advertising materials on behalf of our advertisers.

We provide these advices and services on advertising strategies and ad optimization to our advertisers to improve the effectiveness of their ads, which we believe will serve to enhance our advertisers’ satisfaction, promote their stickiness with us, and encourage them to retain our services.

Campaign launch and performance review

After the advertising strategies and materials are agreed with our advertisers, the advertising campaign will be ready to be launched.

Upon receiving our advertisers’ orders, we would proceed to make ad placement orders with the relevant media or caused ad currency units to be recorded in our advertisers’ accounts on behalf of our advertisers either directly in cases where we are an authorized agency of the relevant media or, in cases where we do not have direct access of the relevant media, through other advertising agencies acting as authorized agency of or having direct access to such media.

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For auctioned-based ads (typically ranked search ads and certain in-feed ads), ad inventory is typically acquired through a bidding algorithm using “ad currency units”, a record of virtual currency purchased and recorded in the back-end platform of the media. We typically maintain accounts of ad currency units directly with media or indirectly with media’s authorized agencies on behalf of our advertisers. Ad currency units we purchase on behalf of our advertisers will be recorded in these ad currency accounts for use in bidding for ad inventory. When an ad was clicked or viewed, an amount of ad currency units which the advertiser bid will be deducted from the corresponding ad currency accounts. The advertiser can top up ad currency units in their ad currency accounts to keep the advertising campaign alive. When the balance in the ad currency accounts drops to zero, the campaign will go offline.

For non-auction-based ads (more commonly associated with display search ads, mobile app ads, certain in-feed ads and social media marketing ads), the costs of ad inventory are generally determined based on the ad placement order with reference to, among other things, the prices of the relevant ad inventory set by media, the form and length of exposure of the ads. The actual duration of an advertising campaign, on the other hand, will be determined by the advertiser with reference to its advertising budget and the actual advertising spend.

We have implemented measures to ensure that our ad content does not violate these laws and regulations. After we receive the ad content from our advertisers, it will be subject to a compliance review by our experienced employees. If we determine that the ad content does not violate any applicable laws and regulations, we will share the ad content with the relevant media for their internal review. If we determine that the ad content may be in violation of applicable laws or regulations, we will provide suggested edits to the ad content and send it back to the advertiser for revision. After both we and the media have determined that the ad content is in full compliance with applicable laws and regulations on information dissemination, we will confirm with the advertiser on its opinion with respect to the compliance prior to the deployment of the ad.

After an ad is launched, we monitor and assess the overall effectiveness of the advertising campaign in various dimensions, such as the click consumption of search ads, ad exposure of in-feed ads and the visibility and degree of customer engagement of social media campaigns.

Based on the above review, we may further advise our advertisers on advertising strategies and optimization refinements to continuously improve the effectiveness of their ad campaigns. We would update our advertisers of the effectiveness of their advertising campaigns. Review reports may be prepared to highlight our suggested optimization strategies. For social media campaigns, we may also issue closing reports to our advertisers to summarize the key ad deliverables (such as screen shots of the relevant social media accounts) and analyze the campaign effectiveness.

Customers

The identities of our customers vary depending on the type of revenue and the nature of the business transactions. Where we recognize rebates and incentives we earn from media (or their authorized agencies) as our revenue, our customers are the media or their authorized agencies. If we recognize net fees we earn for procuring advertising services and ad inventory from media (or other advertising service providers) on behalf of our advertisers, our customers are our advertisers.

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The table below summarizes our revenue model for different services:

Type	Our principal revenue model
SEM Services
●         Search ads	Rebates and incentives
Non-SEM Services
●         In feed ads	Rebates and incentives
●         Mobile app ads	Net fees; rebates and incentives
●         Social media ads	Net fees

Top customers

In 2021, our top five customers were Beijing Sogou Technology Development Co., Ltd, Hubei Toutiao Technology Co., Ltd., Guangzhou Juyao Information Technology Co., Ltd., Horgos Zhijiantiancheng Technology Co., Ltd., and Hangzhou Qubian Network Technology Co., Ltd., representing 41.8%, 28.1%, 16.5%, 7.6% and 2.0% of our total revenue, respectively.

In 2022, our top five customers were Hubei Toutiao Technology Co., Ltd., Hangzhou Qubian Network Technology Co., Ltd., Guangzhou Juyao Information Technology Co., Ltd., Shanghai Mingkan Advertising Co., Ltd. and Beijing Yiling Shengshi Cultural Media Co., Ltd., representing 36.8%, 13.3%, 10.7%, 5.1% and 4.7% of our total revenue, respectively.

In 2023, our top five customers were Xiamen Toutiao Information Technology Co., Ltd., Guangzhou Juyao Information Technology Co., Ltd., Jiangxi Toujing Network Technology Co., Ltd., Tianjin Hengchuang Xintai Technology Co., Ltd., and Beijing Dajia Internet Information Technology Co., Ltd., representing 37.6%, 30.8%, 5.0%, 3.9% and 2.5% of our total revenue, respectively.

Concentration of customers

35.6%, 23.6% and 41.0% of our gross billing, and 60.7%, 13.3% and 62.6% of our revenue, for the fiscal years 2023, 2022 and 2021, respectively, were associated with our SEM services. The search engine market in China demonstrates a highly concentrated feature on resource distribution. Very few search engines host the vast majority of online search traffics. As a result, search ad resources are concentrated on a few search engines. Accordingly, advertising service providers which offer SEM services will inevitably face customer concentration by the very nature of the market landscape.

We have been actively expanding our advertiser base and other revenue sources, and at the same time identifying and securing authorized agency status with suitable media with a view to reducing our customer concentration and our risk of over-reliance on any particular customer. In this connection, we have successfully secured authorized agency status with other media. See “— Business model — Our media” in this section for further details of the media that we have secured authorized agency status and that we believe are significant to our business operations. On the other hand, the number of advertisers we served decreased from 410 in 2021 to 228 in 2022 and increased to 285 in 2023. Our gross billing and revenue contribution from our non-SEM services increased from $32.1 million and $1.5 million in 2021 to $41.7 million and $2.1 million in 2022, respectively, and decreased to $12.1 million and $0.1 million in 2023, respectively. We endeavor to continue our efforts in further diversifying our revenue and customer base, and we are confident that our added authorized agency status with other media would facilitate our efforts in expanding our revenue source and attract new advertisers.

Suppliers

As we recognize all our revenue on a net basis as either rebates and incentives from media or net fees from advertisers, we do not have any significant suppliers and our cost of sales is mostly composed of our staff costs. For more details on our revenue model, see “— Revenue model and payment cycle” in this section.

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Sales and Marketing

As of the date of this annual report, we had six employees in our sales and marketing teams who are mainly responsible for pitching and soliciting advertisers to place ads with media through us. They are tasked with growing and optimizing our advertiser base, understanding advertisers’ needs, and cultivating and maintaining relationships with such advertisers.

To grow our advertiser base, it is part of our strategy to identify rapidly expanding industry sectors which show a growing need of online advertising services by gathering and analyzing available market intelligence (such as third-party industry research reports, observation regarding ad placements on major media, news about rolling out of new online products and services). We generally prioritize our focus on the lead players in these targeted sectors and reach out to them with a view to introducing our services to them. On the other hand, our management and sales and marketing team has extensive experience in the online marketing industry. It is also our strategy to exploit such industry connections to enhance our visibility in the market and explore opportunities to reach potential advertisers.

We also acquire new business opportunities from our existing advertiser base. By keeping in touch with our existing advertisers, we are able to gain a deeper understanding of our advertisers’ latest business development and their specific advertising needs, and introduce services and ad inventory that are suitable for them.

While our business could come from direct marketing by contacting potential and existing advertisers, a significant portion of our business also come through various referral sources, with the most significant referrals coming from:

(i) Existing and former advertisers who have used our services: We believe we have established good reputation for the quality of our services in the online advertising industry spread through the word of mouth. Our authorized agency status of popular media also gives us a strong presence in the online advertising market. We believe these factors have increased the likelihood that an existing or former advertiser may recommend our services to its business connections.

(ii) Media with existing and former business relationship with us: Being an authorized agency for our media is an important source of referrals. Typically, popular media would take effort to market their media platforms to attract more advertisers. As a result, they may from time to time receive direct inquiries from advertisers regarding placement of ads on their platforms. For those media which maintain a network of authorized agencies, they would naturally refer the advertisers which have directly approached them to their authorized agency like us.

(iii) Other third-party advertising agencies: It is common in the advertising industry to have cross-referrals among advertising agencies to utilize each other’s media resources which are not available to the others. On the back of our relationships and authorized agency status with certain media, we have direct access to the ad inventory offered by such media and attracts other third-party advertising agencies without such direct access to place ads through us. Occasionally, we may also receive referrals from other advertising agencies if they consider the services requested by an advertiser do not fit their business goals and strategies (for instance, in terms of sector focus and target profit margin).

Supporting our sales and marketing team are our customer service team, which helps to offer online advertising services to our clients. Our customer service officers are responsible for supporting our advertisers in the ad placement process. They provide consultative services on advertising strategies, campaign planning, execution and post-launch review. We believe that the quality of our service enables us to develop deeper, longer-lasting relationships with our advertisers, identify new opportunities and win new advertisers.

Competition

The online advertising services market in China is highly fragmented and competitive. Along with further consolidation of the market and the continuous innovation of marketing technologies, the concentration level of independent online advertising market is expected to increase gradually, as leading online marketing technology platforms are expected to take up higher market share in the future. Top-tier service providers with various distribution channels and technology advantages are expected to prevail in the future.

Online advertising service providers compete primarily on access to media resources, size of advertiser base, experience of management and service professionals, sufficiency of funding, quality of service, brand recognition, optimization capability, and technological competency. In addition to competition among online advertising service providers, the industry also faces competition from offline advertising through diversion of advertisers’ marketing budgets.

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We believe we can effectively compete with other online advertising service providers with our broad and diverse advertiser base, established relationships with media and their authorized agencies, authorized agency status with popular media, and our experienced and visionary management team.

Intellectual Property

We regard our proprietary domain names, copyrights, trademarks, trade secrets and other intellectual property critical to our business operations. We rely on a combination of copyrights, trademarks and trade secret laws and restrictions on disclosure to protect our intellectual property.

As of the date of this annual report, we have registered:

● two trademarks in Hong Kong;

● one domain name in China; and

● 13 software copyrights in China.

We implement a set of comprehensive measures to protect our intellectual properties, in addition to making trademark and patent registration applications. Key measures include: (i) timely registration, filing and application for ownership of our intellectual properties, (ii) actively tracking the registration and authorization status of intellectual properties and take action in a timely manner if any potential conflicts with our intellectual properties are identified, (iii) clearly stating all rights and obligations regarding the ownership and protection of intellectual properties in all employment contracts and commercial contracts we enter into.

As of the date of this annual report, we have not been subject to any material dispute or claims for infringement upon third parties’ trademarks, licenses and other intellectual property rights in China.

Seasonality

We have experienced, and expect to continue to experience, seasonal fluctuations in our results of operations, due to seasonal changes in our advertisers’ budgets and spending on advertising campaigns. For example, our revenues tend to increase as advertising spend rises in holiday seasons with consumer holiday spending, or closer to end-of-year in fulfillment of their annual advertising budgets.

Insurance

We maintain certain insurance policies to safeguard us against risks and unexpected events. For example, we provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees in compliance with applicable PRC laws. We do not maintain business interruption insurance or product liability insurance, which are not mandatory under PRC laws. We do not maintain key man insurance, insurance policies covering damages to our network infrastructures or information technology systems nor any insurance policies for our properties. During the fiscal years 2022, 2021 and 2020, we did not make any material insurance claims in relation to our business.

Legal Proceedings

We may from time to time become a party to various legal administrative proceedings arising in our ordinary course of our business. As we routinely enter into business contracts with our advertisers, we have been and may continue to be involved in legal proceedings arising from contract disputes.

In 2019, Horgos Baosheng brought a breach of contract claim against Qingdao Xingyuan Automobile Information Technology Co., Ltd. (“Qingdao Xingyuan”) and sought recovery of RMB3.85 million in aggregate. On December 21, 2020, the reviewing court entered a judgment, ruling in favor of Horgos Baosheng and requiring Qingdao Xingyuan to compensate Horgos Baosheng RMB3.25 million and an extra penalty calculated based on the loan prime rate from August 28, 2019, to the actual date of payment. As of the date of this annual report, the judgment is under the stage of enforcement.

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In April 2020, Beijing Baosheng brought a breach of contract claim against Guangzhou Aiyou Information Technology Co. Ltd. (“Guangzhou Aiyou”) and sought recovery of RMB1,255,000 in aggregate. On August 22, 2020, the Beijing arbitration committee entered a judgment, ruling in favor of Beijing Baosheng and requiring Guangzhou Aiyou to compensate Beijing Baosheng RMB1,255,000, with a penalty of RMB592,360, and an extra daily penalty of 0.05%, calculated from April 20, 2020 to the actual date of payment, and arbitration-related expenses. On November 17, 2020, Beijing Baosheng filed a request with Guangzhou Intermediate People’s Court, seeking to mandatorily enforce the judgment. As of the date of this annual report, the judgment is under the stage of enforcement.

In January 2022, Beijing Baosheng brought a breach of contract claim against Beijing Hekai Qianyu Intelligent Technology Co., Ltd. (“Hekai Qianyu”) and Beijing Zhigu Education Technology Co., Ltd. (“Zhigu Education”) and Mr. Hongpeng Yao (the legal representatives of both Hekai Qianyu and Zhigu Education) in the Beijing Dongcheng District People’s Court and sought recovery of RMB756,000 (approximately $118,681) and related liquidated damages. Beijing Baosheng subsequently withdrew its action against Zhigu Education and agreed to resolve this dispute with the other two defendants through court mediation. On March 25, 2022, the court issued a civil mediation statement confirming that the parties had reached the following agreement: (1) Hekai Qianyu shall pay Beijing Baosheng RMB756,000 (approximately $118,681) by April 24, 2022, and in case of any late payment of the foregoing, an additional daily penalty calculated from April 25, 2022 to the actual date of payment shall be imposed; (2) Mr. Hongpeng Yao assumes jointly and several liability for the payment under item (1); and (3) the litigation-related expenses shall be borne by Hekai Qianyu and Mr. Hongpeng Yao. On April 25, 2022, Beijing Baosheng filed a request with the court, seeking to mandatorily enforce the settlement. As of the date of this annual report, the settlement is under the stage of enforcement, and Beijing Baosheng has not yet received any payment from the defendants.

In March 2022, Beijing Baosheng brought a breach of contract claim against Beijing Aipu New Media Technology Co., Ltd. (“Aipu”) in the Beijing Haidian District People’s Court and sought recovery of RMB1,783,834.04 (approximately $270,102) and related liquidated damages. On March 14, 2022, Beijing Baosheng applied for reservation of Aipu’s property in an amount of RMB1,783,834.04 (approximately $270,102) and said application was approved by the court on March 17, 2022. On February 10, 2023, Beijing Baosheng applied for extension for reservation of Aipu’ s property in an amount of RMB1,783,834.04 (approximately $270,102), and the court approved the extension of reservation to March 17, 2024. As of the date of this annual report, Beijing Baosheng is waiting for the court’s notice of hearing.
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In December 2022, the Beijing Chaoyang District People’s Court accepted a breach of contract case filed by Beijing Baosheng, as the complainant and Beijing Zhijin Dapeng Education Technology Co., Ltd (“Dapeng”), as the defendant. In this case, Beijing Baosheng sought recovery of RMB435,731.02 (approximately $63,271) and related liquidated damages from Dapeng. Later in February 2023, Beijing Baosheng submitted additional evidence to the court. The court hearing was held on September 20, 2023. On January 31, 2024, the court approved Beijing Baosheng’s application for reservation of the bank accounts of Dapeng. As of the date of this annual report, Beijing Baosheng is waiting for the court’s ruling on this case.

In November 2022, Beijing Baosheng brought a breach of contract claim against Shanghai Yituo Information Technology Co., Ltd (“Yituo”) in the Shanghai Jinshan District People’s Court and sought recovery of RMB50,843.31 (approximately $7,383) and related liquidated damages. The court held the hearings on February 14, 2023 and March 27, 2023. The court entered a judgment on April 11, 2023, ruling in favor of Beijing Baosheng. The judgment was served to Beijing Baosheng on April 24, 2023, and became final and binding on the parties asYituo did not file any appeals against the judgement before May 9, 2023. As of the date of this annual report, Beijing Baosheng has not yet received any payment from the defendants. Given that Yituo had no assets, the court enforcement procedures against Yituo were terminated on August 30, 2023. In the event that the court or Beijing Baosheng locates any asset of Yituo, Beijing Baosheng will be able to apply for resumption of the enforcement procedures against Yituo.

In April 2022, the Beijing Haidian District People’s Court accepted a breach of contract case, filed by Beijing Baosheng as the complainant and Beijing Kaikeba Technology Co., Ltd. (“Beijing Kaikeba”), Huike Education Technology Group Co., Ltd., Hangzhou Kaikeba Technology Co., Ltd. (“HZ Kaikeba”), and Fang Yechang, as the defendants. In this case, Beijing Baosheng sought recovery of RMB34,436,345.13 (approximately $5,010,488.22) and related liquidated damages from Beijing Kaikeba, HZ Kaikeba, and Fang Yechang. The court reached a ruling in favor of Beijing Baosheng and requiring Beijing Kaikeba and Fang Yechang to compensate Beijing Baosheng the outstanding service fee of RMB35,781,421.17 (US$5,039,707.77), with liquidated damages of RMB2,620,526.68 (US$369,093.46), and court expenses and reservation expenses. The case is now under enforcement procedures.

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In April 2022, the Beijing Haidian District People’s Court accepted a breach of contract case filed by Beijing Baosheng, as the complainant, and Beijing Kaikeba, HZ Kaikeba, and Fang Yechang, as the defendants. In this case, Beijing Baosheng sought recovery of RMB4,756,957.57 (approximately $692,137.33) and related liquidated damages from defendants. On February 27, 2023, the People’s Court of Hangzhou Yuhang District ruled to accept the bankruptcy liquidation case of HZ Kaikeba and requested the creditors of HZ Kaikeba file their claims by April 21, 2023. Beijing Baosheng has filed its creditor claims involved in this case against HZ Kaikeba following the bankruptcy procedures. The bankruptcy administrator confirmed Beijing Baosheng’s rights as a creditor (including the principal debt amount of RMB35,781,421.17 (US$5,039,707.77), and the amount of liquidate damages RMB2,620,526.68 (US$369,093.46). Beijing Baosheng accepted the bankruptcy administrator’s decision and then withdrew the case filed at the Beijing Haidian District People’s Court. As of the date of this annual report, Beijing Baosheng is waiting for the administrator’s notice of the subsequent procedures.

In April 2022, the Beijing Dongcheng District People’s Court accepted a breach of contract case filed by Beijing Baosheng, as the complainant, and Beijing Kaikeba, as the defendant. In this case, Beijing Baosheng sought recovery of RMB2,197,472.35 (approximately $319,732.23) and related liquidated damages from Beijing Kaikeba. On July 11, 2022, the court issued a civil mediation statement confirming that the parties had reached an agreement that, among others, Beijing Kaikeba agreed to pay Beijing Baosheng the service fee for the period from January 1, 2022 to March 31, 2022, in an amount of RMB 2,197,472.35 (approximately $317,974.25) in three installments by the end of 2022. As of the date of this annual report, Beijing Baosheng has not received any payment from Beijing Kaikeba. Given that Beijing Kaikeba currently has no assets, the court enforcement procedures against Beijing Kaikeba has been terminated in April 2023. In the event that the court or Beijing Baosheng locates any asset of Beijing Kaikeba, Beijing Baosheng will be able to apply for resumption of the enforcement procedures against Beijing Kaikeba.

On November 10, 2022, the Beijing Shijingshan District People’s Court accepted a contract claim case filed by Beijing Baosheng, as the complainant, and Fang Yechang and his spouse, as defendants. In this case, Beijing Baosheng requested the defendants to assume joint and several guarantee liability for Beijing Kaikeba’s debt to Beijing Baosheng in an amount of RMB2,197,472.35 (approximately $319,732.23). As of the date of this annual report, Baosheng is waiting for the court’s notice on the hearing.

In April 2023, the Beijing Shijingshan People’s Court accepted a contract claim case filed by Beijing Baosheng, as the complainant, and Fang Yechang and his spouse, as defendants. In this case, Beijing Baosheng requested the defendants to assume joint and several guarantee liability for Beijing Kaikeba’s debt to Beijing Baosheng in an amount of RMB2,715,663.75 (US$382,493.24). On November 16, 2023, the court issued a civil mediation statement confirming that the parties had reached settlement that the defendants will compensate Beijing Baosheng RMB2,715,663.75 and assume the court expenses. As of the date of this annual report, Beijing Baosheng has not received any payment from the defendants. Beijing Baosheng has filed a request with the court, seeking to mandatorily enforce the settlement.

On April 6, 2023, the Longhua District People’s Court of Shenzhen City, Guangdong Province accepted a case filed by Shenzhen Pusi Technology Co., Ltd (“Shenzhen Pusi”), as the complainant, and Baosheng Network as the defendant. In this case, Shenzhen Pusi sought recovery of outstanding service fee of RMB160,964.7 (approximately $23,291.59) and related liquidated damages from Baosheng Network and other expenses (i.e., attorney’s fee, court expense and property reservation fee). The court made a ruling in favor of the complainant. Baosheng Network appealed to Shenzhen Intermediate People’s Court against the trial court’s judgement. The appellate court made a final ruling on April 29, 2024, affirming the trial court’s judgement. A bank account of Baosheng Network (with an aggregate amount of RMB171,477.98 (US$24,152.17) in the account) was reserved by the court on July 2, 2023, following Shenzhen Pusi’s application. The case is now under enforcement procedures.

On January 30, 2024, Beijing Arbitration Committee accepted a case filed by Beijing Baosheng against Tianjin Hongen Wanmei Future Education Technology Co., Ltd (“Tianjin Hongen”) for recovery of RMB1,434,059.00 (US$201,982.99). As of March 15, 2024, Tianjin Hongen had already paid Beijing Baosheng RMB1,050,047.00 (US$147,896.03). As of the date of this annual report, Beijing Baosheng is waiting for the arbitration committee’s notice of hearing.

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On March 1, 2024, the Company was served a complaint regarding a lawsuit brought by three institutional investors (the “Plaintiffs”) against the Company and certain other parties, filed with the United States District Court of the Southern District of New York, alleging that the Company violated Section 11 and Section 12 of the Securities Act of 1933, as amended, by including untrue statements of material facts and omitting to state material facts required to make the statements therein not misleading, in its registration statement on Form F-1, as amended (File No. 333-239800), which was declared effective by the SEC on February 5, 2021. On March 17, 2021, two institutional investors, which are also two of the Plaintiffs, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. On March 5, 2024, the Plaintiffs filed an amended complaint and served the Company on March 6, 2024. The Company extended the deadline to respond to May 22, 2024 in order to coordinate with other defendants in the matter. As of the date of this annual report, there is no anticipated court dates of this lawsuit. The Company believes that the complaint is without any merit and intends to defend the matter vigorously.

On April 10, 2024, the Company was served with a copy of the winding up petition (the “Petition”), filed by Orient Plus International Limited (the “Petitioner”) with the Grand Court of the Cayman Islands, seeking an order that the Company be wound up pursuant to Section 92(e) of the Cayman Islands Companies Act (2023 Revision), claiming that the management of the Company have acted unfairly and/or oppressively towards the Petitioner and other minority shareholders, and/or the affairs of the Company have been conducted with a lack of probity, and the Petitioner and the other investors have justifiably lost confidence in the management of the Company. On March 17, 2021, two institutional investors, one of which is the Petitioner, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. The Company believes that the Petition is without any merit and intends to defend the matter vigorously.

Regulation

This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.

Regulations relating to Advertising Businesses

The Advertising Law (《中华人民共和国广告法》) which was promulgated by the Standing Committee of the National People’s Congress (“SCNPC”) on October 27, 1994 and amended on April 24, 2015, October 26, 2018, April 29, 2021 respectively and became effective on April 29, 2021, requires that advertisers, advertisement operators and advertisement publishers shall ensure that contents of advertisements produced or spread by them are true and totally comply with applicable laws and regulations, and contents of advertisements shall not include, inter alia, information which (1) damages the national dignity or interest, or involves state secrets; (2) contains such words as “national”, “highest level” and “the best”; and (3) involves ethnic, racial, religious and gender discrimination. In addition, advertisements with certain special contents shall be subject to government review prior to publication, and advertisement operators and advertisement publishers shall confirm that such review has been sufficiently implemented and relevant approvals have been obtained. Violation of the aforesaid requirements may lead to penalties, confiscation of advertising revenues, or being ordered to stop spreading the advertisement or to publish an advertisement for correcting any misleading information. If such case is serious, the industrial and commercial administration authority may order termination of advertising operation or cancelation of the business license.

The Interim Measures for the Administration of Internet Advertising (《互联网广告管理暂行办法》) which was promulgated by SAIC on July 4, 2016 and came into effect on September 1, 2016 governs all advertisements published on the Internet, including but not limited to advertisements in the form of text, image, audio and video which are published through website, web page and application. Internet advertisement operators and publishers shall not design, produce, provide agency services for or publish any false advertisement they know or should have known; shall establish a review and file management system, inspect and verify relevant supporting documents, and check contents of advertisements; and shall not design, produce, provide agency services for or publish any advertisement whose contents are untrue or without sufficient supporting documents.

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The Administrative Measures for Internet Advertising (《互联网广告管理办法》) (promulgated on February 25, 2023) will replace the Interim Measures from May 1, 2023. The Administrative Measures will generally uphold the legal principals and substantial requirements under the Interim Measures, whilst making some improvement based on recent development of the online advertising industry. Among others, it requires internet advertisement operators to timely cooperate with the market regulatory authorities in official inspections over internet advertising industry and allows the regulatory authority to mitigate or exempt the operators from certain administrative penalty, if the operators can prove that they have fulfilled the relevant responsibilities, adopted measures to prevent the illegal advertising and provided the contact information of the responsibility party to the authorities.

Regulations relating to Internet Information Services

On September 25, 2000, the State Council of the People’s Republic of China (the “State Council”) promulgated the Administrative Measures on Internet Information Services (《互联网信息服务管理办法》) (the “Internet Measures”), which was later amended and became effective on January 8, 2011. Under the Internet Measures, internet information services are divided into profitable services and non-profitable services, a license requirement shall be satisfied before conducting profitable internet information service, and a filing requirement shall be satisfied before conducting non-profitable internet information service. The provision of information services through mobile apps is subject to the PRC laws and regulations governing Internet information services.

The content of the Internet information is highly regulated in China and pursuant to the Internet Measures, the PRC government may shut down the websites of internet information providers (for non-profitable Internet information services) if they produce, reproduce, disseminate or broadcast internet content that contains content that is prohibited by law or administrative regulations. Internet information services providers are also required to monitor their websites. They may not post or disseminate any content that falls within the prohibited categories, and must remove any such content from their websites, save the relevant records and make a report to the relevant governmental authorities. Additionally, as the Internet information service providers, under the Civil Code of the PRC (《中华人民共和国民法典》), which became effective on January 1, 2021, they shall bear tortious liabilities in the event they infringe upon other persons’ rights and interests. Where an internet service provider conducts tortious acts through internet services, the infringed person has the right to request the Internet service provider take necessary actions such as deleting contents, screening and de-linking. Failing to take necessary actions after being informed, the Internet service provider will be subject to its liabilities with regard to the additional damages incurred. Where an Internet service provider knows that an internet user is infringing upon other persons’ rights and interests through its Internet service but fails to take necessary actions, it is jointly and severally liable with the Internet user.

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Regulations relating to Information Security and Privacy Protection

Internet content in China is regulated and restricted from a state security standpoint. On December 28, 2000, the SCNPC enacted the Decisions on Maintaining Internet Security (《全国人民代表大会常务委员会关于维护互联网安全的决定》), later amended on August 27, 2009, which subject violators to criminal punishment in China for any effort to: (1) use the Internet to market fake and substandard products or carry out false publicity for any commodity or service; (2) use the Internet for the purpose of damaging the commercial goodwill and product reputation of any other person; (3) use the Internet for the purpose of infringing on the intellectual property of any person; (4) use the Internet for the purpose of fabricating and spreading false information that affects the trading of securities and futures or otherwise jeopardizes the financial order; or (5) create any pornographic website or webpage on the Internet, provide links to pornographic websites, or disseminate pornographic books and magazines, movies, audio-visual products, or images. Pursuant to the Administrative Measures for the Security Protection of Computer Information Networks Linked to the Internet (《计算机信息网络国际联网安全保护管理办法》) which was promulgated by the Ministry of Public Security (the “MPS”) on December 16, 1997 and later amended and became effective on January 8, 2011, the Internet is prohibited to be used in ways which, among other things, would result in a leakage of state secrets or a spread of socially destabilizing content. On December 13, 2005, the MPS promulgated the Provisions on the Technical Measures for the Protection of the Security of the Internet (《互联网安全保护技术措施规定》) which require internet service providers to take proper measures including anti-virus, data back-up and other related measures, to keep records of certain information about its users (including user registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days, and to detect illegal information, stop transmission of such information, and keep relevant records. If an internet information service provider violates these measures, the MPS and the local public security bureaus may recommend that the original certificate examination, approval and issuing organizations revoke its operating license and shut down its websites. Pursuant to the Circular of the MPS, the State Secrecy Bureau, the State Cipher Code Administration and the Information Office of the State Council on Printing and Distributing the Administrative Measures for the Graded Protection of Information Security (《公安部、国家保密局、国家密码管理局、国务院信息化工作办公室关于印发〈信息安全等级保护管理办法〉的通知》) which was promulgated on June 22, 2007, the state shall, by formulating nationally effective administrative norms and technical standards for the graded protection of information security, organize citizens, legal persons and other organizations to grade information systems and protect their security, and supervise and administer the graded protection work. The security protection grade of an information system may be classified into the five grades. To newly build an information system of Grade II or above, its operator or user shall, within 30 days after it is put into operation, handle the record-filing procedures at the local public security organ at the level of municipality divided into districts or above of its locality.

PRC governmental authorities have enacted laws and regulations on internet use to protect personal information from any unauthorized disclosure. On December 28, 2012, the SCNPC promulgated the Decision on Strengthening Network Information Protection (《关于加强网络信息保护的决定》), which became effective on the same day, to enhance the legal protection of information security and privacy on the Internet. On July 16, 2013, the Ministry of Industry and Information Technology of the PRC (the “MIIT”) promulgated the Provisions on Protection of Personal Information of Telecommunication and Internet Users (《电信和互联网用户个人信息保护规定》) to regulate the collection and use of users’ personal information in the provision of telecommunication services and internet information services in China. Telecommunication business operators and internet service providers are required to establish its own rules for collecting and use of users’ information and cannot collect or use users’ information without users’ consent. Telecommunication business operators and internet service providers are prohibited from disclosing, tampering with, damaging, selling or illegally providing others with, collected personal information.

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On November 7, 2016, the SCNPC published the Cyber Security Law of the PRC (《中华人民共和国网络安全法》), or the Cyber Security Law, which took effect on June 1, 2017 and requires network operators to perform certain functions related to cyber security protection and the strengthening of network information management. For instance, under the Cyber Security Law, network operators of key information infrastructure shall store within the territory of the PRC all the personal information and important data collected and produced within the territory of PRC and their purchase of network products and services that may affect national securities shall be subject to national cybersecurity review. Our PRC legal counsel, Beijing Dacheng, has advised us that, based on its understanding of the Cyber Security Law, we are not a network operator and not subject to the requirements imposed to network operators under the Cyber Security Law. However, as a non-network operator, like any individual or organization, we have an obligation under the Cyber Security Law not to acquire personal information by stealing or through other illegal means, or illegally sell or provide personal information to any other person. As of the date of this annual report, we are in material compliance with the Cyber Security Law, and this law has not had a significant impact on our business operations. However, our PRC legal counsel, Beijing Dacheng, has further advised us that there are uncertainties as to how the Cyber Security Law will be interpreted or amended by competent authorities in the future.

On April 13, 2020, the Cyberspace Administration of China and other departments issued Cybersecurity Review Measures (《网络安全审查办法》), which took effect on June 1, 2020, to provide for more detailed rules regarding cybersecurity review requirements. On July 10, 2021, the CAC issued the Circular on Seeking Comments on Cybersecurity Review Measures (Revised Draft for Comments) (the “Review Measures Draft”). Later on December 28, 2021, the CAC and other relevant PRC governmental authorities jointly promulgated the Cybersecurity Review Measures Transfer (《网络安全审查办法》), which took effect on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to CIIOs that intend to purchase Internet products and services, net platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries. See “Item 3. Key Information—D. Risk Factor— Risks Related to Doing Business in China— Recent greater oversight by the Cyberspace Administration of China, or the CAC, over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.”

Regulations relating to Intellectual Property Rights

Copyrights

In accordance with the Copyright Law of the PRC (《中华人民共和国著作权法》) promulgated by the SCNPC on September 7, 1990, last amended on October 27, 2001, February 26, 2010, and November 11, 2020, respectively, and came into effect on June 1, 2021, Chinese citizens, legal persons or other entities own the copyright in their works whether published or not, including written works, oral works, music, comedy, arts of talking and singing, dance and acrobatics, work of art and architecture work, photographic works, video and audio works; engineering design drawing, product design drawing, map, sketch and other graphic works and model works, computer software and other works specified by laws and administrative regulations. The rights a copyright owner has include but not limited to the following rights of the person and property rights: the right of publication, right of authorship, right of modification, right of integrity, right of reproduction, distribution right, rental right, right of network communication, translation right and right of compilation.

In accordance with the Regulations on the Protection of Computer Software (《计算机软件保护条例》) promulgated by the State Council on December 20, 2001 and last amended on January 30, 2013, Chinese citizens, legal persons or other entities own the copyright, including the right of publication, right of authorship, right of modification, right of reproduction, distribution right, rental right, right of network communication, translation right and other rights software copyright owners shall have in software developed by them, regardless of whether it has been published. In accordance with the Measures for the Registration of Computer Software Copyright (《计算机软件著作权登记办法》) promulgated by the National Copyright Administration on April 6, 1992 and last amended on February 20, 2002, software copyrights, exclusive licensing contracts for software copyrights and software copyright transfer contracts may be registered, and the National Copyright Administration shall be the competent authority for the administration of software copyright registration and designates the Copyright Protection Center of China as a software registration authority. The Copyright Protection Center of China shall grant a registration certification to a computer software copyright applicant who complies with regulations.

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Trademark

In accordance with the Trademark Law of the PRC (《中华人民共和国商标法》) (the “Trademark Law”), which was promulgated by the SCNPC on August 23, 1982 and came into effect on March 1, 1983, and was last amended on April 23, 2019 and came into effect on November 1, 2019, and the Regulations for the Implementation of the Trademark Law of the PRC (《中华人民共和国商标法实施条例》) which was promulgated by the State Council on August 3, 2002, came into effect on September 15, 2002 and was last amended on April 29, 2014 and came into effect on May 1, 2014, any trademark which is registered with the approval of the Trademark Office is a registered trademark, including commodity trademark, service trademark, collective trademark, certification trademark, and the trademark registrant has the exclusive right to use a registered trademark and such right is protected by law. A registered trademark is valid for a period of 10 years commencing from the date on which the registration is approved. Use of a trademark that is identical with or similar to a registered trademark, for the same kind of or similar commodities, without authorization of the trademark registrant, constitutes infringement of the exclusive right to use a registered trademark.

Domain name

In accordance with the Measures for the Administration of Internet Domain Names (《互联网域名管理办法》) which was promulgated by the MIIT on August 24, 2017 and came into effect on November 1, 2017, the Implementing Rules of China Internet Network Information Center on Domain Name Registration (the “Implementing Rules of Domain Name Registration”) (《中国互联网信息中心域名注册实施细则》) which was promulgated by China Internet Network Information Center (the “CNNIC”) on May 28, 2012 and came into effect on May 29, 2012, and the Measures of the China Internet Network Information Center on Domain Name Dispute Resolution (the “Measures on Domain Name Dispute Resolution”) (《中国互联网络信息中心域名争议解决办法》) which was promulgated by CNNIC May 28, 2012, came into effect on June 28, 2012, domain name registrations are handled through domain name service agencies established under relevant regulations, and the applicant becomes a domain name holder upon successful registration, and domain name disputes shall be submitted to an organization authorized by CNNIC, for resolution. Both the Implementing Rules of Domain Name Registration and the Measures on Domain Name Dispute Resolution were abolished on June 18, 2019 and replaced by Implementing Rules of China Top Level Domain Name Registration (《国家顶级域名注册实施细则》), which was promulgated by CNNIC on June 18, 2019 and came into effect on the same day.

In accordance with the Notice from the Ministry of Industry and Information Technology on Regulating the Use of Domain Names in Internet Information Services (《工业和信息化部关于规范互联网信息服务使用域名的通知》) which was promulgated by the MIIT on November 27, 2017 and came into effect on January 1, 2018, internet access service providers shall verify the identity of each internet information service provider, and shall not provide services to any internet information service provider which fails to provide real identity information.

Regulations Relating to Overseas Listings and Offerings

On December 24, 2021, the CSRC issued Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (the “Administration Provisions”), and the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (the “Measures”).

The Administration Provisions and Measures for overseas listings lay out specific requirements for filing documents and include unified regulation management, strengthening regulatory coordination, and cross-border regulatory cooperation. Domestic companies seeking to list abroad must carry out relevant security screening procedures if their businesses involve such supervision. Companies endangering national security are among those off-limits for overseas listings.

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On February 17, 2023, the CSRC released the Trial Measures, (《境内企业境外发行证券和上市管理试行办法》), and five supporting guidelines, which became effective on March 31, 2023. On the same date of the issuance of the Overseas Listings Rules, the CSRC circulated No.1 to No.5 Supporting Guidance Rules, the Notes on the Overseas Listings Rules, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of CSRC, or collectively, the Guidance Rules and Notice. The Overseas Listings Rules, together with the Guidance Rules and Notice, reiterate the basic supervision principles as reflected in the Administration Provisions and Measures by providing substantially the same requirements for filings of overseas offering and listing by domestic companies. Under the Overseas Listings Rules and the Guidance Rules and Notice, domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submissions of initial public offerings or listing applications. The companies that have already been listed on overseas stock exchanges or have obtained the approval from overseas supervision administrations or stock exchanges for their offerings and listings and will complete their overseas offering and listing prior to September 30, 2023 are not required to make immediate filings for their listings yet need to make filings for subsequent offerings in accordance with the Overseas Listings Rules. The companies that have already submitted an application for an initial public offering to overseas supervision administrations prior to the effective date of the Overseas Listings Rules but have not yet obtained the approval from overseas supervision administrations or stock exchanges for the offerings and listings may arrange for the filing within a reasonable time period and should complete the filing procedure before such companies’ overseas issuance and listing.

As of the date of this annual report, we have not received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with respect to our listing or subsequent offerings. However, if we decide to conduct offerings in the future, we will be required to complete filings under the Overseas Listings Rules with the CSRC. As the Overseas Listings Rules were newly published and there exists uncertainty with respect to the filing requirements and its implementation, if we are required to submit to the CRSC and complete the filing procedure of our subsequent overseas public offerings, we cannot be sure that we will be able to complete such filings in a timely manner. Any failure or perceived failure by us to comply with such filing requirements under the Overseas Listings Rules may result in forced corrections, warnings and fines against us and could materially hinder our ability to offer or continue to offer our securities.

Regulations relating to Labor and Social Welfare

The Labor Contract Law

Pursuant to the Labor Contract Law of the PRC (《中华人民共和国劳动合同法》), which was issued on June 29, 2007, amended on December 28, 2012 and became effective on July 1, 2013, labor contracts shall be concluded in writing if employment relationships are to be or have been established between enterprises or institutions and the employees. Enterprises and institutions are forbidden to force employees to work beyond the time limit and employers shall pay employees for overtime work in accordance with national regulations. In addition, employee wages shall not be lower than local standards on minimum wages and shall be paid to employees in a timely manner.

According to the Labor Law of the PRC (《中华人民共和国劳动法》) which was promulgated on July 5, 1994 and last amended and came into effect on December 29, 2018, enterprises and institutions shall establish and improve their system of workplace safety and sanitation, strictly abide by state rules and standards on workplace safety, educate employees in occupational safety and sanitation in the PRC. Occupational safety and sanitation facilities shall comply with state-fixed standards. Enterprises and institutions shall provide employees with a safe workplace and sanitation conditions which are in compliance with state stipulations and the relevant articles of occupational protection.

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Social Insurance and Housing Fund

Pursuant to the Interim Regulations on Levying Social Insurance Premiums (《社会保险费征缴暂行条例》 ) promulgated on January 22, 1999 and revised on March 24, 2019, Decisions of the State Council on Modifying the Basic Endowment Insurance System for Enterprise Employees (《国务院关于完善企业职工基本养老保险制度的决定》) promulgated on December 3, 2005, Decision on Establishment of Basic Medical System for Urban Employee (《国务院关于建立城镇职工基本医疗保险制度的决定》) issued by State Council with effect from December 14, 1998, the Regulations on Unemployment Insurance (《失业保险条例》) effective from January 22, 1999, Regulations on Work-Related Injury Insurance (《工伤保险条例》) promulgated on April 27, 2003, amended on December 20, 2010, and became effective on January 1, 2011, and the Interim Measures concerning the Maternity Insurance for Enterprise Employees (《企业职工生育保险试行办法》) promulgated on December 14, 1994 with effect from January 1, 1995, employers are required to register with the competent social insurance authorities and provide their employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance and medical insurance.

Pursuant to Opinions of the General Office of the State Council on Comprehensively Advancing Combined Implementation of Maternity Insurance and Basic Medical Insurance for Employees (《国务院办公厅关于全面推进生育保险和职工基本医疗保险合并实施的意见》), promulgated by the General Office of State Council on March 6, 2019, maternity insurance fund shall merge into the basic medical care insurance fund for employees so as to unify payment and harmonize consolidation level. The new ratio of employers’ contribution to basic medical care insurance for employees is determined based on the aggregate of the ratios of employers’ contribution to maternity insurance and basic medical care insurance for employees, and an individual is not required to pay for maternity insurance. Therefore, after March 6, 2019, our Company has no record of maternity insurance fund in the payment details of social security, since it has been merged into the basic medical care insurance fund.

Pursuant to the Social Insurance Law of the PRC (《中华人民共和国社会保险法》), which became effective on July 1, 2011 with last amendment on December 29, 2018, all employees are required to participate in basic pension insurance, basic medical insurance schemes and unemployment insurance, which must be contributed by both the employers and the employees. All employees are required to participate in work-related injury insurance and maternity insurance schemes, which must be contributed by the employers. Employers are required to complete registrations with local social insurance authorities. Moreover, employers must timely make all social insurance contributions. Except for mandatory exceptions such as force majeure, social insurance premiums may not be paid late, reduced or be exempted. Where an employer fails to make social insurance contributions in full and on time, the social insurance contribution collection agencies shall order it to make all or outstanding contributions within a specified period and impose a late payment fee at the rate of 0.05% per day from the date on which the contribution becomes due. If such employer fails to make the overdue contributions within such time limit, the relevant administrative department may impose a fine equivalent to one to three times the overdue amount.

Pursuant to the Emergency Notice on Practicing Principles of the State Council Executive Meeting and Stabilizing Work on Collecting Social Insurance Premiums (《人力资源社会保障部办公厅关于贯彻落实国务院常务会议精神切实做好稳定社保费征收工作的紧急通知》), promulgated by the Ministry of Human Resources and Social Security on September 21, 2018, local authorities are prohibited from organizing the centralized settlement of historical unpaid social insurance premiums of enterprises.

Pursuant to the Administrative Regulations on the Housing Provident Fund (《住房公积金管理条例》) effective from April 3, 1999, amended on March 24, 2002 and March 24, 2019, enterprises are required to register with the competent administrative centers of housing provident fund and open bank accounts for housing provident funds for their employees. Employers are also required to timely pay all housing fund contributions for their employees. Where an employer fails to submit and deposit registration of housing provident fund or fails to go through the formalities of opening housing provident fund accounts for its employees, the housing provident fund management center shall order it to go through the formalities within a prescribed time limit. Failing to do so at the expiration of the time limit will subject the employer to a fine of not less than RMB10,000 and up to RMB50,000. When an employer fails to pay housing provident fund due in full and in time, housing provident fund center is entitled to order it to rectify, failing to do so would result in enforcement exerted by the court.

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Regulations relating to Tax

Enterprise income tax

According to the EIT Law, enacted on March 16, 2007, effective on January 1, 2008 and last amended on December 29, 2018 by the SCNPC and the Implementation Regulations for the Enterprise Income Tax Law of the PRC (《中华人民共和国企业所得税法实施条例》), enacted on December 6, 2007, amended and came into effect on April 23, 2019 by the State Council, and its relevant implementation regulations, taxpayers consist of resident enterprises and non-resident enterprises. Resident enterprises are defined as enterprises that are established in China in accordance with PRC laws, or that are established in accordance with the laws of foreign countries but whose actual or de facto control is administered from within the PRC. Non-resident enterprises are defined as enterprises that are set up in accordance with the laws of foreign countries and whose actual administration is conducted outside the PRC, but have established institutions or premises in the PRC, or have no such established institutions or premises but have income generated from inside the PRC. Under the EIT Law and relevant implementing regulations, a uniform corporate income tax rate of 25% is applicable. However, if nonresident enterprises have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment institutions or premises in the PRC but there is no actual relationship between the relevant income derived in the PRC and the established institutions or premises set up by them, the enterprise income tax is, in that case, set at the rate of 10% for their income sourced from inside the PRC.

Pursuant to the Notice on Preferential EIT Policies for Two Special Economic Development Zones of Kashi and Horgos in Xinjiang Uygur Autonomous Region (《关于新疆喀什霍尔果斯两个特殊经济开发区企业所得税优惠政策的通知》) promulgated by MOF and SAT on November 29, 2011 and the Implementation Opinions on Accelerating the Construction of Kashi and Horgos Economic Development Zones (《关于加快喀什、霍尔果斯经济开发区建设的实施意见》) promulgated by the Government of Xinjiang Uygur Autonomous Region of China on April 29, 2012, an enterprise established in Horgos or Kashi between January 1, 2010 and December 31, 2020 and fallen within the scope of the Catalogue of EIT Incentives for Industries Particularly Encouraged for Development by Poverty Areas of Xinjiang (新疆困难地区重点鼓励发展产业企业所得税优惠目录) shall be exempted from EIT for five years beginning from the first year in which the manufacturing or business operational revenue is earned. After the initial EIT exemption period, the enterprise is entitled to another five-year exemption on the local portion of its EIT.

Value-added Tax

Pursuant to the Provisional Regulations on VAT of the PRC (《中华人民共和国增值税暂行条例》) promulgated by the State Council on December 31, 1993, and subsequently amended on November 5, 2008, February 6, 2016 and November 19, 2017 respectively, and the Implementation Rules of the Provisional Regulations on VAT of the PRC (《中华人民共和国增值税暂行条例实施细则》) promulgated by MOF on December 25, 1993 and amended on December 15, 2008 and October 28, 2011 respectively, tax payers engaging in sale of goods, provision of processing services, repairs and replacement services or importation of goods within the territory of the PRC shall pay VAT.

On November 16, 2011, MOF and SAT jointly promulgated the Pilot Plan for Levying VAT in Lieu of Business Tax (《营业税改征增值税试点方案》). Starting from January 1, 2012, the PRC government has been gradually implementing a pilot program in certain provinces and municipalities to levy a 6% VAT on revenue generated from certain kinds of services in lieu of the business tax.

The Administrative Measures on Tax Exemption for Cross-border Acts Subject to VAT in the Pilot Scheme for Levying VAT in Place of Business Tax (for Trial Implementation) (《营业税改征增值税跨境应税行为增值税免税管理办法(试行)》), which was promulgated on May 6, 2016 by SAT and effective on May 1, 2016, and was amended on June 15, 2018, effective on the same day, provides that if a domestic enterprise provides cross-border taxable services such as technology transfer (provided to and received by overseas entities), technical consulting (provided to and received by overseas entities), and software service (provided to and received by overseas entities), technical consulting (provided to and received by overseas entities), the above mentioned cross-border taxable services shall be exempt from the VAT. Technical consulting services provided by a domestic enterprise are subject to zero-rated policies, but such taxpayer might choose to forfeit the application of zero rate and opt for the tax exemption.

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On March 23, 2016, MOF and SAT jointly issued the Circular of Full Implementation of Business Tax to VAT Reform (the “Circular 36”) (《关于全面推开营业税改征增值税试点的通知》), which was last amended by the Announcement of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs on Relevant Policies for Deepening the Value-Added Tax Reform (《财政部、税务总局、海关总署关于深化增值税改革有关政策的公告》) on March 20, 2019 and came into effect on April 1, 2019, confirms that business tax will be completely replaced by VAT from May 1, 2016. The Notice of MOF and SAT on the Adjustment to VAT Rates (《关于调整增值税税率的通知》), promulgated on April 4, 2018 and effective as of May 1, 2018, adjusted the applicative rate of VAT. The deduction rates of 17% and 11% applicable to the taxpayers who have VAT taxable sales activities or imported goods are adjusted to 16% and 10%, respectively. For the export goods to which a tax rate of 17% was originally applicable and the export rebate rate was 17%, the export rebate rate is adjusted to 16%. For the export goods and cross-border taxable activities to which a tax rate of 11% was originally applicable and the export rebate rate was 11%, the export rebate rate is adjusted to 10%.

Pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax Reform (《关于深化增值税改革有关政策的公告》),which was promulgated by MOF, SAT and the General Administration of Customs on March 20, 2019 and became effective on April 1, 2019, where (i) for VAT taxable sales or imports of goods originally subject to value-added tax rates of 16%, such tax rates shall be adjusted to 13%; (ii) for the exported goods originally subject to a tax rate of 16% and an export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%.

Dividend withholding tax

According to the EIT Law and its implementing rules, dividends paid to investors of an eligible PRC resident enterprise can be exempted from EIT and dividends paid to foreign investors are subject to a withholding tax rate of 10%, unless relevant tax agreements entered into by the PRC government provide otherwise.

The PRC and the government of Hong Kong entered into the Arrangement between the Mainland of the PRC and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Incomes (《内地和香港特别行政区关于对所得避免双重征税和防止偷漏税的安排》), or the Arrangement, on August 21, 2006. According to the Arrangement, 5% withholding tax rate shall apply to the dividends paid by a PRC company to a Hong Kong resident, provided that such Hong Kong resident directly holds at least 25% of the equity interests in the PRC company, and 10% of withholding tax rate shall apply if the Hong Kong resident holds less than 25% of the equity interests in the PRC company.

Pursuant to the Circular on Relevant Issues Relating to the Implementation of Dividend Clauses in Tax Treaties (《关于执行税收协定股息条款有关问题的通知》), which was promulgated by SAT and became effective on February 20, 2009, all of the following requirements shall be satisfied where a fiscal resident of the other party to a tax agreement needs to be entitled to such tax agreement treatment as being taxed at a tax rate specified in the tax agreement for the dividends paid to it by a PRC resident company: (i) such a fiscal resident who obtains dividends shall be a company as provided in the tax agreement; (ii) owner’s equity interests and voting shares of the PRC resident company directly owned by such a fiscal resident reaches a specified percentage; and (iii) the equity interests of the PRC resident company directly owned by such a fiscal resident, at any time during the 12 months prior to obtaining the dividends, reach a percentage specified in the tax agreement.

According to the Tentative Administrative Measures on Tax Convention Treatment for Non-Residents (《非居民享受税收协定待遇管理办法(试行)》), which was promulgated by SAT on August 24, 2009 and became effective on October 1, 2009, where a non-resident enterprise that receives dividends from a PRC resident enterprise wishes to enjoy the favorable tax benefits under the tax arrangements, it shall submit an application for approval to the competent tax authority. Without being approved, the non-resident enterprise may not enjoy the favorable tax treatment provided in the tax agreements.

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The Tentative Administrative Measures on Tax Convention Treatment for Non-Residents (《非居民享受税收协定待遇管理办法(试行)》) was repealed by the Administrative Measures on Tax Convention Treatment for Non-Resident Taxpayers (《非居民纳税人享受税收协议待遇管理办法》), which was promulgated by SAT on August 27, 2015 and became effective on November 1, 2015 with last amendment on June 15, 2018, where a non-resident enterprise that receives dividends from a PRC resident enterprise, it could directly enjoy the favorable tax benefits under the tax arrangements at tax returns, and subject to the subsequent regulation of the competent tax authority. The Administrative Measures on Tax Convention Treatment for Non-Resident Taxpayers has subsequently been repealed by the Administrative Measures on Treaty Benefits Treatment for Non-Resident Taxpayers (《非居民纳税人享受协定待遇管理办法》), promulgated by SAT on October 14, 2019 and became effective on January 1, 2020, which still adopts the same provisions as the Administrative Measures on Tax Convention Treatment for Non-Resident Taxpayers.

PRC Laws and Regulations relating to Foreign Exchange

General Administration of Foreign Exchange

According to the Regulations on the Control of Foreign Exchange (《中华人民共和国外汇管理条例》), which were promulgated by the State Council on January 29, 1996, came into effect on April 1, 1996, and were amended on January 14, 1997, and August 5, 2008, payments for transactions that take place within the PRC must be made in RMB. Unless otherwise approved, PRC companies may not repatriate foreign currency payments received from abroad or retain the same abroad. RMB 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 RMB 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. According to regulations on foreign exchange settlement of FIEs, they 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.

SAFE Circular No. 21

On May 10, 2013, the SAFE promulgated the Circular of the SAFE on Printing and Distributing the Administrative Provisions on Foreign Exchange in Domestic Direct Investment by Foreign Investors and Relevant Supporting Documents (《外国投资者境内直接投资外汇管理规定》) (“SAFE Circular No. 21”), which was amended on December 30, 2019. It provided for and simplified the operational steps and regulations on foreign exchange matters related to direct investment by foreign investors, including foreign exchange registration, account opening and use, receipt and payment of funds, and settlement and sales of foreign exchange.

SAFE Circular No. 59

Pursuant to the Circular of the SAFE on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment (《国家外汇管理局关于进一步改进和调整直接投资外汇管理政策的通知》), promulgated by SAFE on November 19, 2012, which became effective on December 17, 2012, and was further amended on May 4, 2015, October 10, 2018, and December 30, 2019, respectively, approval is not required for opening a foreign exchange account and depositing foreign exchange into the accounts relating to the direct investments. SAFE Circular No. 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 FIEs.

SAFE Circular No. 13

Pursuant to the Circular on Further Simplifying and Improving the Foreign Currency Management Policy on Direct Investment (《国家外汇管理局关于进一步简化和改进直接投资外汇管理政策的通知》), effective from June 1, 2015, and amended on December 30, 2019, which 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, the investors shall register with banks for direct domestic investment and direct overseas investment.

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SAFE Circular No. 19

The Notice of the State Administration of Foreign Exchange on Reforming the Mode of Management of Settlement of Foreign Exchange Capital of Foreign-Funded Enterprises(《国家外汇管理局关于改革外商投资企业外汇资本金结汇管理方式的通知》), or the SAFE Circular No.19, which was promulgated by the SAFE on March 30, 2015, and became effective on June 1, 2015 and was amended on December 30, 2019 and March 23, 2023, 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 No.19, for the time being, FIEs are allowed to settle 100% of their foreign exchange capitals 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 shall 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.

Based on the foregoing, when 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 shall register such changes with the bank located at its registered place after obtaining the 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. If we intend to provide funding to our WFOE through capital injection at or after their establishment, we shall register the establishment of and any follow-on capital increase in our wholly foreign owned subsidiaries with the State Administration for Industry and Commerce or its local counterparts, file such via the FICMIS and register such with the local banks for the foreign exchange related matters.

Offshore Investment

Circular 37

Under the Circular 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 (《关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》), 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 the establishment or control of an offshore special purpose vehicle, or SPV, which is defined as offshore enterprises directly established or indirectly controlled by PRC residents for offshore equity financing of the enterprise assets or interests they hold in China. 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.

Under the relevant rules, any failure by any of our shareholders who is a PRC resident, or is controlled by a PRC resident, to comply with relevant requirements under these regulations could subject our SPV to restrictions imposed on foreign exchange activities, including restrictions on its ability to receive registered capital as well as additional capital from PRC resident shareholders, and contribute registered capital as well as additional capital to WFOE. If WFOE fails to obtain necessary registered capital within the approved business time limit, the industries and commercial administrative authorities might revoke its business license. Due to the failure by shareholders to complete the registration, WFOE’s ability to pay dividends or make distributions to our SPV is also restricted, and repatriation of profits and dividends derived from SPV by PRC residents to China are illegal. The offshore financing funds are also not allowed to be used in China. In addition, the failure of the PRC resident shareholders to complete the registration may subject the shareholders to fines less than RMB50,000, and the enterprises to fines less than RMB300,000.

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Regulations relating to Foreign Investment

Investment activities in the PRC conducted by foreign investors and foreign-owned enterprises shall comply with the Catalogue for the Guidance of Foreign Investment Industries (Revised in 2017) (《外商投资产业指导目录(2017年修订)》) (the “Catalogue”), which was promulgated jointly by MOFCOM and National Development and Reform Commission (“NDRC”) on June 28, 2017 and became effective on July 28, 2017, and which Catalogue contains specific provisions guiding market access of foreign capital. Under the Catalogue, foreign-invested industries are classified into two categories, namely (1) encouraged foreign-invested industries; and (2) foreign-invested industries which are subject to special administrative measures for access of foreign investment (the “Negative List”). The Negative List is further divided into restricted foreign-invested industries and prohibited foreign-invested industries, setting out restrictions such as shareholding requirements and qualifications of the senior management. Any industry not listed in the Negative List is a permitted industry.

On December 27, 2021, the Special Administrative Measures for the Access of Foreign Investment (Negative List) (外商投资准入特别管理措施(负面清单) (2021年版)) (the “Negative List 2021”), which was promulgated by NDRC and MOFCOM and became effective on January 1, 2022. Industries listed in the Negative List 2021 are divided into two categories with respect to foreign investment: restricted and prohibited. On March 12, 2022, the Negative List for Market Access (2022) (市场准入负面清单2022 年版) was promulgated by NDRC and MOFCOM, which sets forth prohibited investment industries and industries requiring special permission, applicable to both the PRC investors and foreign investors. Industries not listed in the Negative List 2021 and Negative List for Market Access (2022) are generally deemed as falling under a third “permitted” category and are generally open to foreign investment unless otherwise specifically restricted by other PRC regulations.

Our principal businesses are precluded from the Negative List 2021 and the Negative List for Market Access (2022) and is thus within a permitted industry for foreign investment.

Regulations relating to Foreign-Owned Enterprises

The establishment, operation and management of corporate entities in China are governed by the Company Law of the PRC (《中华人民共和国公司法》) (the “PRC Company Law”), which was promulgated by the SCNPC on December 29, 1993 and last amended and will become effective on July 1, 2024. Under the PRC Company Law, companies are generally classified into two categories, i.e., limited liability companies and joint stock limited companies. The PRC Company Law also applies to foreign-invested limited liability companies. According to the PRC Company Law, any stipulations by other PRC laws governing foreign investment shall prevail over the PRC Company Law.

Pursuant to the Law on Wholly Foreign-owned Enterprises of the PRC (《中华人民共和国外资企业法》) (the “Law on Wholly Foreign-owned Enterprises of the PRC”), which was promulgated by the SCNPC on April 12, 1986, last amended on September 3, 2016 and became effective on October 1, 2016, where the establishment of wholly foreign-owned enterprises does not involve the implementation of special access administrative measures prescribed by the state, the establishment, breakup, merger, or any other major change and the operation period of such enterprises are subject to record-filing administration.

The Implementing Rules for the Law on Wholly Foreign-owned Enterprises of the PRC (《中华人民共和国外资企业法实施细则》) (the “Implementing Rules on Wholly Foreign-owned Enterprises”) was promulgated by the State Council on December 12, 1990, then was amended on April 12, 2001 and February 19, 2014, and became effective on March 1, 2014. According to the Implementing Rules on Wholly Foreign-owned Enterprises, industries in which the establishment of wholly foreign-owned enterprises is prohibited or restricted shall be regulated in accordance with the provisions of the State about foreign investment orientation and the Catalogue.

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The Law on Wholly Foreign-owned Enterprises of the PRC and the Implementing Rules on Wholly Foreign-owned Enterprises have been repealed by the Foreign Investment Law of the PRC (《中华人民共和国外商投资法》 (the “Foreign Investment Law”), which was adopted by the National People’s Congress on March 15, 2019 and came into effect on January 1, 2020. According to the Foreign Investment Law, the State shall implement the management systems of pre-establishment national treatment and negative list for foreign investment. The pre-establishment national treatment refers to the treatment given to foreign investors and their investments during the investment access stage, which is not lower than that given to their domestic counterparts. The negative list refers to special administrative measures for the access of foreign investment in specific fields as stipulated by the State. The State shall give national treatment to foreign investment beyond the negative list. The organization form, institutional framework and standard of conduct of a foreign-funded enterprise shall be subject to the provisions of the PRC Company Law and the Partnership Enterprise Law of the PRC (《中华人民共和国合伙企业法》) and other laws. Foreign investors shall not invest in any field forbidden by the negative list for access of foreign investment. For any field restricted by the negative list, foreign investors shall conform to the investment conditions as required in the negative list, and fields not included in the negative list shall be managed under the principle that domestic investment and foreign investment shall be treated uniformly.

The Law on Sino-Foreign Equity Joint Ventures of the PRC (《中华人民共和国中外合资经营企业法》), the Law on Wholly Foreign-owned Enterprises of the PRC (《中华人民共和国外资企业法》) and the Law on Sino-Foreign Cooperative Joint Ventures of the PRC (《中华人民共和国中外合作经营企业法》) were repealed simultaneously when the Foreign Investment Law came into effect on January 1, 2020, and foreign-funded enterprises which were established in accordance with such laws before the implementation of the Foreign Investment Law may retain their original organization forms and other aspects for five years upon the implementation hereof.

PRC Regulations Relating to Offshore Investments by PRC Residents

SAFE promulgated 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 SPV 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.

Circular 37 was issued to replace Circular 75 (the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Round-trip Investments via Overseas Special Purpose Vehicles). SAFE further enacted the Notice on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment effective from June 1, 2015, which allows PRC residents or entities to register with qualified banks in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. However, remedial registration applications made by PRC residents that previously failed to comply with Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE. In the event that a PRC shareholder holding interests in a SPV fails to fulfill the required SAFE registration, the PRC subsidiaries of that SPV may be prohibited from distributing profits to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the SPV may be restricted in its ability to contribute additional capital into its PRC subsidiary. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. As of the date of this annual report, two of our beneficial owners who are PRC residents have completed the registrations required by Circular 37.

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Regulations relating to M&A and Overseas Listing

The M&A Rules was promulgated by six PRC ministries including MOFCOM, the State-owned Assets Supervision and Administration Commission of the State Council, SAT, SAIC, CSRC and SAFE on August 8, 2006, became effective on September 8, 2006, and was amended and became effective on June 22, 2009. A foreign investor is required to comply with the M&A Rules when it: (1) acquires the equity of a domestic enterprise so as to convert the domestic enterprise into a foreign-invested enterprise; (2) subscribes for the increased capital of a domestic enterprise so as to convert the domestic enterprise into a foreign-invested enterprise; (3) establishes a foreign-invested enterprise through which it purchases the assets of any domestic enterprise and operates these assets; or (4) purchases the assets of a domestic enterprise, and then invests such assets to establish a foreign-invested enterprise. The M&A Rules, among other things, further prescribed that a special purpose vehicle, formed for overseas listing purposes and controlled directly or indirectly by PRC companies or individuals, shall be approved by MOFCOM prior to its establishment and obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.

Pursuant to the Manual of Guidance on Administration for Foreign Investment Access (《外商投资准入管理指引手册》), which was issued and became effective on December 18, 2008 by MOFCOM, notwithstanding the fact that (1) the domestic shareholder is connected with the foreign investor or not; or (2) the foreign investor is the existing shareholder or the new investor, the M&A Rules shall not apply to the transfer of an equity interest in an incorporated foreign-invested enterprise from the domestic shareholder to the foreign investor.

Following the promulgation of the Foreign Investment Law, the Measures on Reporting of Foreign Investment Information (effective from January 1, 2020) and other relevant regulations recently in China, certain provisions of the M&A Rules, which are in conflict with the new foreign investment rules, are no longer enforceable. For example, mergers and acquisitions by foreign investor of a PRC entity which is not an affiliate to the foreign investor and does not engage in any business on the Negative Lists, including Negative List 2021 and Negative List for Market Access (2022) for foreign investment will not be subject to the approval process as prescribed by the M&A Rules. However, given the M&A Rules is not officially abolished and due to lack of official interpretation and guidance, the M&A Rules might still be enforceable against the transaction parties in terms of price evaluation, payment terms, and certain other aspects that the new foreign investment rules are silent on.

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C.  Organizational Structure

The following diagram illustrates our current corporate structure, which includes our significant subsidiaries as of the date of this annual report:

For details of each shareholder’s ownership, please refer to the beneficial ownership table in “Item 6. Directors, Senior Management and Employees — 6.E. Share Ownership.”

Notes:

1. “EJAM Group” represents EJAM Group Co., Ltd., a joint stock company established in the PRC with limited liability on November 23, 2010, whose shares are quoted on the National Equities Exchange and Quotations (全国中小企业股份转让系统) (stock code: 834498), and is a financial investor of our Company and one of our pre-IPO investors.

2. “EJAM International” represents EJAM International Limited, a company formed in Hong Kong with limited liability in November 2015 and is a direct wholly owned subsidiary of EJAM Group.

3. “Pubang Landscape” represents Pubang Landscape Architecture Co., Ltd., a joint stock company established in the PRC with limited liability on July 19, 1995, whose shares are listed on the Shenzhen Stock Exchange (stock code: 002663.SZ), and is a financial investor of our Company and one of our pre-IPO investors.

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4. “Pubang Hong Kong” represents Pubang Landscape Architecture (HK) Co., Ltd., a company formed in Hong Kong with limited liability in September 2013 and is a direct wholly owned subsidiary of Pubang Landscape.

5. “CYY Holdings” represents CYY Holdings Limited, a business company formed in the BVI with limited liability in November 2013 and is wholly owned by Mr. Yick Yan Chan.

D.  Property, Plants and Equipment

Our corporate headquarter is located in Beijing, China. We use the ten properties we own and two properties we lease from an unrelated third party in Horgos as office spaces with an aggregate gross floor area of approximately11,737.51 ft².We use a property we own in Beijing as office space, with a total gross floor area of 8,167.98 ft². We lease two properties as office spaces in Horgos and Kashi, from unrelated third parties under operating lease agreements. We believe that our existing facilities are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate future growth.

ITEM 4.A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included elsewhere in this annual report. This annual report contains forward-looking statements. See “Forward-Looking Information” in this annual report. In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.

A.  Operating Results

Overview

We are an online marketing solution provider based in China. We are dedicated to helping advertisers manage their online marketing activities to achieve their business goals. Founded in 2014, our business has grown rapidly from a start-up online marketing agency to a multi-channel online marketing solution provider. We advise advertisers on online marketing strategies, offer value-added advertising optimization services and facilitate the deployment of online ads in various forms such as search ads, in-app ads, mobile app ads and social media marketing ads. At the same time, as authorized agencies of some popular online media, we help online media to procure advertisers and facilitate ad deployment on their advertising channels.

Along with the further penetration of the Internet, particularly on mobile devices, we believe an increasing number of advertisers would use online advertising channels because of their unlimited geographic coverage, promptness and inclusivity. With our experience in the online advertising industry and insights on industry trends, we are well-positioned to capture the opportunities offered by the continued rapid growth of the online marketing industry.

Our service categories

Our advertising services are classified into two categories:

● SEM services, which include the deployment of ranked search ads and other display search ads offered by search engine operators; and

● Non-SEM services, which include social media marketing, in-feed advertising, and mobile app advertising by deploying ads on media such as social platforms, short-video platforms, news portals, and mobile apps in the forms of in-feed ads, banner ads, button ads, interstitial ads, and posts on selected social media accounts.

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We regard our business value as revolving around our ability to serve the needs of two major business stakeholders: advertisers and media. On one hand, with our experience and insights in the online advertising industry, we help advertisers to effectively carry out their advertising campaigns by offering advices on online advertising strategies, carrying out advertising optimization and facilitating the deployment of online ads. On the other hand, we help media to connect with advertisers and facilitate the monetization of their advertising resources.

We have built a broad and diverse advertiser base from a broad range of industries, including ecommerce and online service platforms, online travel agencies, financial services, online gaming, car services and advertising agencies, among others. For the years ended December 31, 2023, 2022 and 2021, the number of advertisers (including direct advertisers and third-party advertising agencies subscribing our services on behalf of their advertising clients) was 285, 228, and 462, respectively. Our gross billing were $18.8 million, $54.6 million and $54.7 million, respectively. For the years ended December 31, 2023, 2022 and 2021, top five advertisers contributed 52.4%, 47.2% and 44.8% of total gross billing, respectively. However as affected by termination of authorized agency agreement with Sogou in March 2021, we did not earn gross billings or revenues from Sogou and experienced a decrease in both the number of advertisers and the amount of revenues in the years of 2023, 2022 and 2021. Our gross billing further decreased to $18.8 million because of a decrease of advertising orders from advertisers.

We earn rebates and incentives from media or their authorized agencies (collectively “publishers”) for procuring advertisers to place ads with them, or net fees from advertisers when we purchase ad inventory and advertising services from media and other advertising service providers on their behalf. As such, our customers are comprised of publishers and advertisers. We recognize revenues on a net basis as either rebates and incentives from publishers or net fees from advertisers. For the years ended December 31, 2023, 2022 and 2021, we generated rebates and incentives from publishers of $0.9 million, $1.9 million and $3.7 million, respectively, and net fees from advertisers of $34,796, $0.5 million and $0.2 million, respectively.

Gross billing and media costs

Gross billing is defined as the actual dollar amount of advertising spend of our advertisers, net of any rebates and discounts given by us to the advertisers (if any). We use gross billing to assess the business growth, market share and scale of operations.

Media cost represents the cost for acquisition of ad inventory or other advertising services from media and other advertising service providers, offset by rebates and incentives we receive from the relevant media and advertising service providers (if any).

Factors Affecting Our Results of Operations and Trend Information

Size and spending of advertiser base

We earn revenue in the form of (i) rebates and incentives offered by publishers for procuring advertisers to place ads with them, which are usually calculated with reference to the advertising spend of the advertisers and are closely correlated to the gross billing from advertisers, netting of rebates to advertisers (if any); and (ii) the net fees from advertisers, which are essentially the fees we charge advertisers (i.e. gross billing) net of the media costs and other costs of procuring advertising services we incur on their behalf. Accordingly, our revenue base and our profitability are very much driven by our gross billing with advertisers, and the relevant media’s rebate policies which determine, among other things, the rates of rebates we receive from media (or their authorized agencies). The rebates and incentives we receive from media are calculated as a percentage of the total advertising spend of the advertisers procured by us in a given period, with the percentage typically ranging from 10% to 20%. See “Item 4. Information on the Company—B. Business Overview — Revenue Model and Payment Cycle — Rebates and incentives from publishers — Rebates and incentives offered by media (or their authorized agencies)” for details.

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The willingness of advertisers to spend their online advertising budget through us is critical to our business and our ability to generate gross billing. Our advertisers’ demand for advertising services can be influenced by a variety of factors including:

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

2 Industry-related factors: such as the trends, preferences and habits of audiences towards online media and their receptiveness towards online advertising as well as the development of emerging and varying forms of online media and contents.

3 Advertiser-specific factors: an advertiser’s specific development strategies, business performance, financial condition and sales and marketing plans.

A change in any of the above factors may result in significant cutbacks on advertising budgets by advertisers, which would not only result in a reduction of our revenue but would also weaken our negotiating position with media on rebate policies and negatively impact our ability to earn advertising spend-driven rebates and incentives from media.

Rebate policies offered from publishers and those offered to advertisers

Publishers may change the rebate and incentive policies offered to us based on prevailing economic outlook, competitive landscape of the online advertising market, and their own business strategy and operational targets. For instance, a media may reduce the rate of rebate offered to us for reason of changes in its business strategies, resource reallocation, increased popularity and demand for their media resources, etc., or may adjust their incentive programs or their benchmarks and measuring parameters for incentive offerings based on their changing marketing and target audience strategies. If media impose rebate and incentive policies that are less favorable to us, our revenue, results of operations and financial condition may be adversely affected.

On the other hand, we may offer rebates to our advertisers. The level of rebates we offer to our advertisers is determined case by case with reference to the rebates and incentives we are entitled to receive from the relevant media (or its authorized agency), an advertiser’s committed total spend, our business relationships with such advertiser and the competitive landscape in the online advertising industry. If it emerges that an increase in the rate of rebate to our advertisers is necessary for us to remain competitive or align with the emerging competitive environment, our revenue and profitability may reduce.

Our ability to attract new media and to maintain relationship with existing media

We have established and maintained relationships with a wide range of media, which offer our advertisers diverse choices of ad formats, including search ads, in-feed ads, mobile app ads and social media ads. Our future growth will depend on our ability to maintain our relationships with existing media partners as well as building partnerships with new media.

In particular, we act as authorized agency for some popular online media to help them procure advertisers to buy their ad inventory and facilitate ad deployment on their advertising channels. As media’s authorized agency, our relationships with the media are mainly governed by agency agreements which provide for, among other things, credit periods and the rebate polices offered to us. These agency agreements typically have a term of one year and are subject to renewal upon expiry. The commercial terms under the agency agreements are subject to renegotiation when they are renewed. Besides, media usually retain the right to terminate the authorized agency relationship based on business needs at their discretion.

If any media ends its cooperative relationship with us or terminates our authorized agency status or imposes commercial terms which are less favorable to us, or we fail to secure partnerships with new media partners, we may lose access to the relevant advertising channels, sustain advertiser deflection, and suffer revenue drop.

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Results of Operations for the Years Ended December 31, 2023 and 2022

The following table summarizes the results of our operations during the years ended December 31, 2023 and 2022, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years.

	For the years ended
	December 31,				Variance
	2023		2022		Amount		%
Revenues	$	921,834	$	2,415,098	$	(1,493,264)	(61.8)	%
Cost of revenues		(308,395)		(2,446,941)		2,138,546	(87.4)	%
Gross profit (loss)		613,439		(31,843)		645,282	(2,026.4)	%
Operating expenses
Selling and marketing expenses		(381,635)		(764,258)		382,623	(50.1)	%
General and administrative expenses		(1,845,064)		(2,811,215)		966,151	(34.4)	%
Provision for doubtful accounts		(726,294)		(20,460,667)		19,734,373	(96.5)	%
Impairment of long-term investments		(128,204)		—		(128,204)	100.0	%
Total operating expenses		(3,081,197)		(24,036,140)		20,954,943	(87.2)	%
Loss from operations		(2,467,758)		(24,067,983)		21,600,225	(89.7)	%
Other income (expenses)
Interest (expense) income, net		(14,492)		16,397		(30,889)	(188.4)	%
Changes in fair value of warrant liabilities		832		1,912		(1,080)	(56.5)	%
Changes in fair value of short-term investments		596,796		17,335		579,461	3,342.7	%
Subsidy income		9,876		3,089		6,787	219.7)	%
Other income (expenses), net		29,576		290,413		(260,837)	(89.8)	%
Total other income, net		622,588		329,146		293,442	(89.2)	%
Loss before income taxes		(1,845,170)		(23,738,837)		21,893,667	(92.2)	%
Income tax expense		—		—		—	0.0	%
Net loss	$	(1,845,170)	$	(23,738,837)	$	21,893,667	(92.2)	%

Revenues

We primarily generate our revenues from providing online marketing solutions. We recognize all our revenues on a net basis, which comprises of (i) rebates and incentives offered by publishers for procuring advertisers to place ads with them, which are typically calculated with reference to the advertising spend of our advertisers and are closely correlated to our gross billing from advertisers; and (ii) net fees from advertisers, which are essentially the fees we charge our advertisers (i.e. gross billing) net of the media costs we incurred on their behalf.

Our total revenues decreased by $1.5 million or 61.8%, from $2.4 million for the year ended December 31, 2022, to $0.9 million for the year ended December 31, 2023. The following table sets forth a breakdown of our revenues:

	For the Years Ended
	December 31,								Variance
	2023		%		2022		%		Amount		%
Rebates and incentives offered by publishers	$	887,038	96.2	%	$	1,930,188	79.9	%	$	(1,043,150)	(54.0)	%
Net fees from advertisers		34,796	3.8	%		484,910	20.1	%		(450,114)	(92.8)	%
Total	$	921,834	100.0	%	$	2,415,098	100.0	%	$	(1,493,264)	(61.8)	%

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The rebates and incentives offered by publishers decreased by $1.0 million, or 54.0%, from $1.9 million for the year ended December 31, 2022 to $0.9 million for the year ended December 31, 2023, which was mainly caused by the a decrease of $0.6 million in rebates and incentives offered by new media publishers and a decrease of $0.7 million in rebates and incentives offered by news feed ads publishers. The decrease in rebates and incentives offered by new media publishers and news feed ads publishers was resulted from decrease of advertising orders from advertisers.

The net fees from advertisers decreased by $0.5 million, or 92.8%, to $34,796 for the year ended December 31, 2023 from $0.5 million for the year ended December 31, 2022. The decrease was mainly caused by the decrease orders from advertisers.

The following table sets forth a breakdown of revenues by services offered during the years ended December 31, 2023 and 2022:

	For the years ended
	December 31,						Variance
	2023			2022			Amount		%
SEM services
Gross billing	$	6,684,788		$	12,900,814		$	(6,216,026)	(48.2)	%
Less: Media costs		6,125,481			12,579,451			(6,453,970)	(51.3)	%
(as % of gross billing)		91.6	%		97.5	%
Revenue from SEM services	$	559,307		$	321,363		$	237,944	74.0	%
Non-SEM services
Gross billing	$	12,085,248		$	41,682,263		$	(29,597,015)	(71.1)	%
Less: Media costs		11,722,721			39,588,528			(27,865,807)	(70.4)	%
(as % of gross billing)		97.0	%		95.0	%
Revenue from Non-SEM services	$	362,527		$	2,093,735		$	(1,731,208)	(82.7)	%
Revenues	$	921,834		$	2,415,098		$	(1,493,264)	(61.8)	%

The revenues from SEM services consist of rebates and incentives offered by publishers. The revenues from SEM services increased by $0.2 million, or 74.0%, to $0.6 million for the year ended December 31, 2023 from $0.3 million for the year ended December 31, 2022. The increase in revenues from SEM services was primarily due to a reversal of revenues of $0.2 million arising from Sogou in the year of 2022. The reversal was caused by payments to media publishers as final settlement as we had not provided agency services to Sogou since April 2021.

The revenues from non-SEM services consist of both rebates and incentives offered by publishers and the net fees from advertisers. The revenues from non-SEM services decreased by $1.7 million, or 82.7%, to $0.4 million for the year ended December 31, 2023 from $2.1 million for year ended December 31, 2022. Such a decrease was mainly attributable to a decrease in advertising orders from our advertisers.

Cost of revenues

Our total cost of revenues decreased by $2.1 million or 87.4%, from $2.4 million for the year ended December 31, 2022, to $0.3 million for the year ended December 31, 2023. The following table sets forth a breakdown of our cost of revenues by services offered for the years ended December 31, 2023 and 2022:

	For the years ended
	December 31,								Variance
	2023		%		2022		%		Amount		%
SEM services	$	187,113	83.8	%	$	325,600	13.3	%	$	(138,487)	(42.5)	%
Non-SEM services		121,282	16.2	%		2,121,341	86.7	%		(2,000,059)	(94.3)	%
Total	$	308,395	100.0	%	$	2,446,941	100.0	%	$	(2,138,546)	(87.4)	%

Given that the revenues are recognized on a net basis, the cost of revenues was primarily comprised of payroll and welfare expenses incurred by staff responsible for advertiser services and media relations, and taxes and surcharges.

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The decrease was primarily attributable to a decrease of staff costs by $1.9 million, or 81.2%, as a result staff resignations because of a decrease in advertising orders from our advertisers.

Gross profit

As a result of changes in revenue and cost of revenues, our gross profit changed by $0.4 million from gross loss of $31,843 for the year ended December 31, 2022 to gross profit of $0.6 million for the year ended December 31, 2023. The following table sets forth a breakdown of gross profit by services offered for the year ended December 31, 2023 and 2022:

	For the years ended
	December 31,								Variance
	2023		%		2022		%		Amount		%
SEM services	$	372,194	49.0	%	$	(4,237)	42.9	%	$	376,431	(8,884.4)	%
Non-SEM services		241,245	51.0	%		(27,606)	57.1	%		268,851	(973.9)	%
Total	$	613,439	100.0	%	$	(31,843)	100.0	%	$	645,282	(2,026.4)	%

Operating expenses

Our operating expenses decreased by $20.9 million, or 87.2%, from $24.0 million for the year ended December 31, 2022, to $3.1 million for the year ended December 31, 2023. The following table sets forth a breakdown of our operating expenses for the years ended December 31, 2023 and 2022:

	For the years ended
	December 31,								Variance
	2023		%		2022		%		Amount		%
Revenues	$	921,834	100	%	$	2,415,098	100	%	$	(1,493,264)	(61.8)	%
Operating expenses
Selling and marketing expenses		381,635	41.4	%		764,258	31.6	%		(382,623)	(50.1)	%
General and administrative expenses		1,845,064	200.2	%		2,811,215	116.4	%		(966,151)	(34.4)	%
Provision for doubtful accounts		726,294	78.8	%		20,460,667	847.2	%		(19,734,373)	(96.5)	%
Impairment of long-term investments		128,204	13.9	%		—	0.0	%		128,204	100.0	%
Total operating expenses	$	3,081,197	334.3	%	$	24,036,140	995.2	%	$	(20,954,943)	(87.2)	%

Selling and marketing expenses

Selling and marketing expenses primarily included payroll and welfare expenses incurred by sales and marketing personnel, business travel expenses, and entertainment expenses. Selling expenses decreased by $0.4 million, or 50.1%, from $0.8 million for the year ended December 31, 2022 to $0.4 million for the year ended December 31, 2023. This decrease in selling expenses was primarily due to a decrease of $0.2 million in salary and welfare expenses because of resignation of sales staff and a decrease of $0.2 million in entertainment expenses. Both decrease in expenses are primarily affected by decreased advertising orders from advertisers.

General and administrative expenses

General and administrative expenses primarily consist of payroll and welfare expenses incurred by administration department as well as management, operating lease expenses for office rentals, depreciation and amortization expenses, travelling and entertainment expenses, and consulting and professional fees. General and administrative expenses decreased from $2.8 million for the year ended December 31, 2022 to $1.8 million for the year ended December 31, 2023. The decrease was primarily due to a decrease of $0.5 million in office lease expenses because we terminated a lease agreement in Beijing in September 2022, and a decrease of $0.2 million in renovation expenses and a decrease of $0.2 million in payroll and welfare expenses because of resignation of administrative staff.

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Provision for doubtful accounts

The following table sets forth a breakdown of (reversal of provision)/provision for doubtful accounts for the years ended December 31, 2023 and 2022:

	For the years ended December 31,				Variances
	2023		2022		Amount		%
(Reversal of provision) provision for doubtful accounts receivables	$	(702,156)	$	19,276,587	$	(19,978,743)	(103.6)	%
(Reversal of provision) provision for doubtful prepayments		(1,243,233)		1,196,563		(2,439,796)	(203.9)	%
Provision for doubtful other current assets		7,061		(12,483)		19,544	(156.6)	%
Provision for doubtful prepayments for licensed copyrights		2,664,622		—		2,664,622	100.0	%
	$	726,294	$	20,460,667	$	(19,734,373)	(96.5)	%

(Reversal of provision) provision for doubtful accounts receivables

The Company recorded reversal of provision for doubtful accounts receivable of $0.7 million for the year ended December 31, 2023, as compared with a provision for doubtful accounts receivable of $19.3 million for the year ended December 31, 2022.

For the year ended December 31, 2022, because some of our mobile app ads advertisers were adversely affected by both the COVID-19 pandemic and stricter governmental regulations affecting the financial and insurance industry, education industry and gaming industry, our advertisers in these industries slowed down paying accounts receivables and required us to provide longer credit terms. Accordingly, we provided increasing significant amount of allowances on accounts receivables due from these advertisers according to the Company’s provision policy.

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. For the year ended December 31, 2023, we reversed provision for expected credit losses of $0.7 million.

Provision for doubtful prepayments

Reversal of provision for doubtful prepayments was $1.2 million for the year ended December 31, 2023. The reversal was primarily because we received media services from our publishers in the year ended December 31, 2023, while the prepayments on these services were previously impaired.

Provision for doubtful prepayments was $1.2 million for the year ended December 31, 2022. Such prepayments were made to certain publishers for purpose of lock in media cost. However, as they were affected by COVID-19, the Company did not place advertising service orders with these publishers over the past two years, and the Company provided full allowance against these prepayments because the prepayment aged over two years and the Company was uncertain if it could obtain the services underlying the prepayments or to be refunded.

Provision for doubtful prepayments for licensed copyrights

For the year ended December 31, 2023, the Company provided full on impairment of $2,664,622 against the prepayments for licensed copyrights underlying two games, the development of which were not completed by the vendors in due course as agreed.

Other income, net

For the year ended December 31, 2023, other income, net primarily consisted of changes in fair value of short-term investments of $0.6 million. For the year ended December 31, 2022, other income, net primarily consisted of nondeductible input value-added taxes of $0.4 million.

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Income tax expense

For the years ended December 31, 2023 and 2022, we incurred net operating losses and were not subject to or subject to minimal income tax expenses due to tax payments in quarterly tax return.

Net Loss

As a result of the foregoing, we reported a net loss of $1.8 million for the year ended December 31, 2023, as compared to a net loss of $23.7 million for the year ended December 31, 2022.

Results of Operations for the Years Ended December 31, 2022 and 2021

The following table summarizes the results of our operations during the years ended December 31, 2022 and 2021, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years.

	For the years ended
	December 31,				Variance
	2022		2021		Amount		%
Revenues	$	2,415,098	$	3,911,560	$	(1,496,462)	(38.3)	%
Cost of revenues		(2,446,941)		(2,077,516)		(369,425)	17.8	%
Gross (loss) profit		(31,843)		1,834,044		(1,865,887)	(101.7)	%
Operating expenses
Selling and marketing expenses		(764,258)		(1,086,078)		321,820	(29.6)	%
General and administrative expenses		(2,811,215)		(2,856,789)		45,574	(1.6)	%
Provision for doubtful accounts		(20,460,667)		(6,880,008)		(13,580,659)	197.4	%
Impairment of property and equipment		—		(434,878)		434,878	(100.0)	%
Total operating expenses		(24,036,140)		(11,257,753)		(12,778,387)	113.5	%
Loss from operations		(24,067,983)		(9,423,709)		(14,644,274)	155.4	%
Other income (expenses)
Interest income (expense), net		16,397		(57,109)		73,506	(128.7)	%
Change in fair value of warrant liabilities		1,912		2,367,632		(2,365,720)	(99.9)	%
Subsidy income		3,089		574,878		(571,789)	(99.5)	%
Other income (expenses), net		307,748		(209,145)		516,893	(247.1)	%
Total other income, net		329,146		2,676,256		(2,347,110)	(87.7)	%
Loss before income taxes		(23,738,837)		(6,747,453)		(16,991,384)	251.8	%
Income tax expense		—		—		—	—	%
Net loss	$	(23,738,837)	$	(6,747,453)	$	(16,991,384)	251.8	%

Revenues

We primarily generate our revenues from providing online marketing solutions. We recognize all our revenues on a net basis, which comprises of (i) rebates and incentives offered by publishers for procuring advertisers to place ads with them, which are typically calculated with reference to the advertising spend of our advertisers and are closely correlated to our gross billing from advertisers; and (ii) net fees from advertisers, which are essentially the fees we charge our advertisers (i.e. gross billing) net of the media costs we incurred on their behalf.

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Our total revenues decreased by $1.5 million or 38.3%, from $3.9 million for the year ended December 31, 2021, to $2.4 million for the year ended December 31, 2022. The following table sets forth a breakdown of our revenues:

	For the Years Ended
	December 31,								Variance
	2022		%		2021		%		Amount		%
Rebates and incentives offered by publishers	$	1,930,188	79.9	%	$	3,663,168	93.6	%	$	(1,732,980)	(47.3)	%
Net fees from advertisers		484,910	20.1	%		248,392	6.4	%		236,518	95.2	%
Total	$	2,415,098	100.0	%	$	3,911,560	100.0	%	$	(1,496,462)	(38.3)	%

The rebates and incentives offered by publishers decreased by $1.7 million, or 47.3%, from $3.7 million for the year ended December 31, 2021 to $1.9 million for the year ended December 31, 2022, which was mainly caused by the net effect of i) a decrease of $2.2 million in revenue from Sogou, as the authorized agency agreement between the Company and Sogou expired on March 31, 2021. We did not generate revenues from Sogou for the year ended December 31, 2022, and ii) an increase of $0.6 million in rebates and incentives offered by new media publishers. For the year ended December 31, 2022, the Company obtained two new media publishers which offered rebates of incentives of $0.6 million to the Company.

The net fees from advertisers increased by $0.3 million, or 95.2%, to $0.5 million for the year ended December 31, 2022 from $0.2 million for the year ended December 31, 2021. The increase was mainly caused by the increase of $0.4 million in net fees earned from advertisers for news feed ads services which is an increasingly popular advertising type among advertisers.

The following table sets forth a breakdown of revenues by services offered during the years ended December 31, 2022 and 2021:

	For the years ended
	December 31,						Variance
	2022			2021			Amount		%
SEM services
Gross billing	$	12,900,814		$	22,618,957		$	(9,718,143)	(43.0)	%
Less: Media costs		12,579,451			20,169,837			(7,590,386)	(37.6)	%
(as % of gross billing)		97.5	%		89.2	%
Revenue from SEM services	$	321,363		$	2,449,120		$	(2,127,757)	(86.9)	%
Non-SEM services
Gross billing	$	41,682,263		$	32,113,575		$	9,568,688	29.8	%
Less: Media costs		39,588,528			30,651,135			8,937,393	29.2	%
(as % of gross billing)		95.0	%		95.4	%
Revenue from Non-SEM services	$	2,093,735		$	1,462,440		$	631,295	43.2	%
Revenues	$	2,415,098		$	3,911,560		$	(1,496,463)	(38.3)	%

The revenues from SEM services consist of rebates and incentives offered by publishers. The revenues from SEM services decreased by $2.1 million, or 86.9%, to $0.3 million for the year ended December 31, 2022 from $2.4 million for the year ended December 31, 2021. The decrease in revenues from SEM services was primarily due to a decrease of $2.2 million in revenues from Sogou as we have not provided agency services to Sogou since April 2021.

The revenues from non-SEM services consist of both rebates and incentives offered by publishers and the net fees from advertisers. The revenues from non-SEM services increased by $0.6 million, or 43.2%, to $2.1 million for the year ended December 31, 2022 from $1.5 million for year ended December 31, 2021. Such an increase was mainly attributable to an increase in rebates and incentives offered by new media publishers. For the year ended December 31, 2022, the Company obtained two new media publishers which offered rebates of incentives of $0.6 million to the Company.

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Cost of revenues

Our total cost of revenues increased by $0.3 million or 17.8%, from $2.1 million for the year ended December 31, 2021, to $2.4 million for the year ended December 31, 2022. The following table sets forth a breakdown of our cost of revenues by services offered for the years ended December 31, 2022 and 2021:

	For the years ended
	December 31,								Variance
	2022		%		2021		%		Amount		%
SEM services	$	325,600	13.3	%	$	1,662,013	80.0	%	$	(1,336,413)	(80.4)	%
Non-SEM services		2,121,341	86.7	%		415,503	20.0	%		1,705,838	410.5	%
Total	$	2,446,941	100.0	%	$	2,077,516	100.0	%	$	369,425	17.8	%

Given that the revenues are recognized on a net basis, the cost of revenues was primarily comprised of payroll and welfare expenses incurred by staff responsible for advertiser services and media relations, and taxes and surcharges.

The increase was primarily attributable to an increase of staff costs by $0.4 million, or 17.8%, as a result of hiring additional employees (based on monthly average headcount) for agency services for Alibaba and ByteDance since April 2021. The Company employed staff who were expert in producing short video clips and flow media for these two customers. However, as they were affected by the Chinese government’s policies on the educational industry, the two customers contributed less revenue than previously forecasted, leading to a loss in gross profit for the year ended December 31, 2022.

Gross profit

As a result of changes in revenue and cost of revenues, our gross profit decreased by $1.8 million, or 101.7% from $1.8 million for the year ended December 31, 2021 to $31,843 for the year ended December 31, 2022. The following table sets forth a breakdown of gross profit by services offered for the year ended December 31, 2022 and 2021:

	For the years ended
	December 31,								Variance
	2022		%		2021		%		Amount		%
SEM services	$	(4,237)	13.3	%	$	787,107	42.9	%	$	(791,344)	(100.5)	%
Non-SEM services		(27,606)	86.7	%		1,046,937	57.1	%		(1,074,543)	(102.6)	%
Total	$	(31,843)	100.0	%	$	1,834,044	100.0	%	$	(1,865,887)	(101.7)	%

Operating expenses

Our operating expenses increased by $12.8 million, or 98.2%, from $11.3 million for the year ended December 31, 2021, to $24.0 million for the year ended December 31, 2022. The following table sets forth a breakdown of our operating expenses for the years ended December 31, 2022 and 2021:

	For the years ended
	December 31,								Variance
	2022		%		2021		%		Amount		%
Revenues	$	2,415,098	100	%	$	3,911,560	100	%	$	(1,496,462)	(38.3)	%
Operating expenses
Selling and marketing expenses		764,258	31.6	%		1,086,078	27.8	%		(321,820)	(29.6)	%
General and administrative expenses		2,811,215	116.4	%		2,856,789	73.0	%		(45,574)	(1.6)	%
Provision for doubtful accounts		20,460,667	847.2	%		6,880,008	175.9	%		13,580,659	197.4	%
Impairment of property and equipment		—	0.0	%		434,878	11.1	%		(434,878)	(100.0)	%
Total operating expenses	$	24,036,140	995.2	%	$	11,257,753	287.8	%	$	12,778,387	113.5	%

100

Selling and marketing expenses

Selling and marketing expenses primarily included payroll and welfare expenses incurred by sales and marketing personnel, business travel expenses, and entertainment expenses. Selling expenses decreased by $0.3 million, or 29.6%, from $1.1 million for the year ended December 31, 2021 to $0.8 million for the year ended December 31, 2022. This decrease in selling expenses was primarily due to a decrease of $0.3 million in salary and welfare expenses because of resignation of sales staff who were hired to promote advertisers for ByteDance, a newly acquired customer in the year 2021. However the publisher was underperformed as affected by the Chinese government’s policies on the educational industry and contributed less to our revenue in the fiscal year ended December 31, 2022 than expected.

General and administrative expenses

General and administrative expenses primarily consist of payroll and welfare expenses incurred by administration department as well as management, operating lease expenses for office rentals, depreciation and amortization expenses, travelling and entertainment expenses, and consulting and professional fees. General and administrative expenses kept stable at $2.8 million and $2.9 million for the years ended December 31, 2022 and 2021, respectively.

Provision for doubtful accounts

The following table sets forth a breakdown of provision for doubtful accounts for the years ended December 31, 2022 and 2021:

	For the years ended December 31,				Variances
	2022		2021		Amount		%
Provision for doubtful accounts receivables	$	19,276,587	$	4,155,246	$	15,121,341	363.9	%
Provision for doubtful prepayments		1,196,563		2,668,421		(1,471,858)	(55.2)	%
Provision for doubtful other current assets		(12,483)		56,341		(68,824)	(122.2)	%
	$	20,460,667	$	6,880,008	$	13,580,659	197.4	%

Provision for doubtful accounts receivables

Provision for doubtful accounts receivable increased by $15.1 million, or 363.9%, from $4.2 million for the year ended December 31, 2021 to $19.3 million for the year ended December 31, 2022. The increase was primarily because some of our mobile app ads advertisers were adversely affected by both the COVID-19 pandemic and stricter governmental regulations affecting the financial and insurance industry, education industry and gaming industry. Accordingly, our advertisers in these industries slowed down payments of accounts receivables and required us to provide longer credit terms. We provided increasing allowances on accounts receivables due from these advertisers according to the Company’s provision policy.

Provision for doubtful prepayments

Provision for doubtful prepayments was $1.2 million and $2.7 million for the years ended December 31, 2022 and 2021. Such prepayments were made to certain publishers for purpose of lock in media cost. However as they were affected by COVID-19, the Company did not place advertising service orders with these publishers over the past two years, and the Company provided full allowance against these prepayments because the prepayment aged over two years and the Company was uncertain if it could obtain the services underlying the prepayments or to be refunded.

Other income (expenses), net

For the year ended December 31, 2022, other income, net primarily consisted of nondeductible input value-added taxes of $0.4 million. For the year ended December 31, 2021, other expenses, net primarily consisted of loss from nonrefundable rental deposits of $0.1 million and nondeductible input value-added taxes of $0.1 million.

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Income tax expense

For the years ended December 31, 2022 and 2021, we incurred net operating losses and were not subject to or subject to minimal income tax expenses due to tax payments in quarterly tax return.

Net Loss

As a result of the foregoing, we reported a net loss of $23.7 million for the year ended December 31, 2022, as compared to a net loss of $6.7 million for the year ended December 31, 2021.

B.  Liquidity and Capital Resources

Liquidity and Capital Resources

To date, we have financed the operations primarily through cash flow from operations, loans from third parties, and proceeds raised in our initial public offering. We plan to support our future operations primarily from cash generated from our operations and cash on hand, borrowings from third parties and bank borrowings, and proceeds from equity instrument financing, where necessary.

In December 2022, Baosheng Network entered into a bank loan agreement with Bank of Beijing under which under which Baosheng Network borrowed a one-year loan of RMB10,000,000, or $1,449,846. The interest rate for the borrowing was fixed at 3.65% per annum. In December 2023, the borrowing was renewed for one year through December 2024. The loan is guaranteed by two third parties, for whom the Company involved a third-party counter-guarantor. In addition, the Company pledged its properties with the counter guarantor.

In July 2023, Beijing Baosheng entered into a bank loan agreement with Bank of Communication under which Beijing Baosheng borrowed a one-year loan of RMB6,000,000, or $847,350. The interest rate for the borrowing was fixed at 3.55% per annum. The loan is guaranteed by Mr. Gong Sheng, the Company’s director and his spouse, and one third party. Beijing Baosheng also involved Baosheng Network as counter-guarantor for the third-party guarantor. In addition, Mr. Gong Sheng and his spouse pledged their property with the counter guarantor.

As reflected in the Company’s consolidated financial statements, the Company had a net loss of $1.8 million, $23.7 million and $6.7 million for the years ended December 31, 2023, 2022 and 2021, and reported a cash inflow of $2,259,466 and $1,601,481 for the years ended December 31, 2023 and 2022, respectively, while cash outflow of $31,213,199 from operating activities for the year ended December 31, 2021. These factors raise a substantial doubt about the Company’s ability to continue as a going concern.

As of December 31, 2023, the Company had cash and cash equivalent of $3.3 million and short-term investments of $2.6 million. On the other hand, the balance of current liabilities of $6.5 million, among which advance from customers of $0.8 million were not required to be settled in cash. The current assets are sufficient to cover the current liabilities which were expected to get paid in the year ending December 31, 2024. The Company also obtained a one-year bank borrowing during the year ended December 31, 2023. The Company expected to renew the bank borrowing upon its maturity. The Company intends to meet the cash requirements for the next 12 months from the date of this annual report through a combination of application of credit terms, bank loans, and principal shareholder’s financial support. Given the factors mentioned above, the Company assesses current working capital is sufficient to meet its obligations for the next 12 months from the date of this annual report. Accordingly, management continues to prepare the Company’s consolidated financial statements on going concern basis.

However, future financing requirements will depend on many factors, including the scale and pace of the expansion of the Company’s advertising business, the expansion of the Company’s sales and marketing activities, and potential investments in, or acquisitions of, businesses or technologies. Inability to obtain credit terms from medias or access to financing on favorable terms in a timely manner or at all would materially and adversely affect the Company’s business, results of operations, financial condition, and growth prospects.

We have limited financial obligations denominated in U.S. dollars, thus the foreign currency restrictions and regulations in the PRC on the dividends distribution will not have a material impact on our liquidity, financial condition, and results of operations.

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Cash Flows

The following table presents the summary of our cash flows for the periods indicated:

	For the Years Ended
	December 31,
	2023		2022		2021
Net Cash Provided by (Used in) Operating Activities	$	2,259,466	$	1,601,481	$	(31,213,199)
Net Cash Used in Investing Activities		(6,312,936)		(3,777,782)		(6,414,339)
Net Cash Provided by Financing Activities		847,350		295,765		36,085,744
Effect of exchange rate changes on cash and cash equivalents		(156,895)		(323,238)		152,389
Net decrease in cash, cash equivalents and restricted cash		(3,363,015)		(2,203,774)		(1,389,405)
Cash, cash equivalents and restricted cash at beginning of year		6,679,077		8,882,851		10,272,256
Cash, cash equivalents and restricted cash at end of year	$	3,316,062	$	6,679,077	$	8,882,851

Operating Activities

Net cash provided by operating activities was $2.3 million for the year ended December 31, 2023, mainly derived from (i) net loss of $1.8 million for the year adjusted for noncash provision for doubtful accounts of $0.7 million and increase of $0.6 million in fair value of short-term investments, (ii) net changes in our operating assets and liabilities, principally comprising of (a) a decrease in accounts receivable of $5.8 million because of collections; and (b) a decrease in prepayment of $1.1 million and $3.0 million to third parties and related parties, respectively, and a decrease of accounts payable to third parties of $6.3 million as a result of the decrease of purchases of ads on behalf of advertisers.

Net cash provided by operating activities was $1.6 million for the year ended December 31, 2022, mainly derived from (i) net loss of $23.7 million for the year adjusted for noncash provision for doubtful accounts of $20.5 million, (ii) net changes in our operating assets and liabilities, principally comprising of (a) a decrease in accounts receivable of $1.4 million because of collections; (b) a decrease of advances from advertisers of $0.8 million due to the intense competition in the advertising agency industry, which resulted in less advances required; and (c) a decrease in prepayment of $6.9 million and accounts payable to third parties of $2.4 million as a result of the decrease of purchases of ads on behalf of advertisers.

Net cash used in operating activities was $31.2 million for the year ended December 31, 2021, mainly derived from (i) net loss of $6.7 million for the year adjusted for noncash provision for doubtful accounts receivable and prepayments of $4.2 million and $2.7 million, respectively, as well as the change in fair value of warrant liabilities of $2.4 million, and (ii) net changes in our operating assets and liabilities, principally comprising of (a) a decrease in accounts receivable of $6.1 million as a result of decrease of revenues; (b) an increase of customer deposits of $5.0 million due to the intense competition in the advertising agency industry and less advances required; and (c) an increase in prepayment of $5.8 million and a decrease in accounts payable of $23.8 million due to the increasing prepayment requirements by publishers from the Company.

We generally grant a credit term of up to 180 days to advertisers. The turnover days for accounts receivable for the years ended December 31, 2023, 2022 and 2021 were 558 days, 369 days and 442 days, respectively. The long turnover days of accounts receivable was mainly due to a slowdown in payment from our mobile apps customers, who were severely affected by the COVID-19 pandemic and required a longer term for extension of credit from us. Our turnover days for accounts receivable is calculated as the average of the beginning and ending balance of the gross carrying amount of accounts receivable for the year, divided by our gross billing for the year, multiplied by 365 days.

We are generally granted credit term of up to 90 days by publishers for our SEM services, and credit term ranging from prepayments to 180 days for our non -SEM services. The turnover days for accounts payable for the years ended December 31, 2023, 2022 and 2021 were 112 days, 72 days and 172 days, respectively. Our turnover days for accounts payable is calculated as the average of the beginning and ending balance of the carrying amount of accounts payable for the year, divided by our media costs for the year, multiplied by 365 days.

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Investing Activities

Net cash used in investing activities amounted to $6.3 million for the year ended December 31, 2023, primarily including the payment of deposits of $2.6 million to a third party to support our future business combinations, purchases of short-term investments of $1.3 million and investment in two investee of $4.8 million, partially offset by proceeds of $2.4 million from redemption of short-term investments.

Net cash used in investing activities amounted to $3.8 million for the year ended December 31, 2022, primarily including the purchase of property and equipment of $1.5 million, purchases of short-term investments of $5.2 million and investment in an investee of $0.8 million, partially offset by proceeds of $1.9 million from redemption of short-term investments and repayment of loans of $1.6 million from related parties.

Net cash used in investing activities amounted to $6.4 million for the year ended December 31, 2021, primarily including purchase of property and equipment of $1.1 million, purchase of intangible assets of $3.8 million, and investment of $1.6 million in one investee over which the Company owned 10% equity interest.

Financing Activities

Net cash provided by financing activities amounted to $0.8 million for the year ended December 31, 2022, primarily consisting of proceeds from bank borrowing of $2.3 million, partially offset by repayment of bank borrowings of $1.4 million.

Net cash provided by financing activities amounted to $0.3 million for the year ended December 31, 2022, primarily consisting of proceeds from bank borrowing of $1.5 million, partially offset by payment of dividends of $1.2 million to shareholders.

Net cash provided by financing activities amounted to $36.1 million for the year ended December 31, 2021, primarily consisting of net proceeds of $30.7 million from issuance of ordinary shares in our initial public offering, including over-allotment shares, net proceeds of $9.9 million from issuance of ordinary shares in a private placement, and proceeds from bank borrowing of $7.8 million, partially offset by repayment of bank borrowings of $9.3 million, repayment of related party loans of $0.7 million and repayment of dividends of $2.2 million to shareholders.

Capital Expenditures

Our capital expenditures were $30,108, $1.5 million and $1.9 million in fiscal years ended December 31, 2023, 2022 and 2021, respectively. We intend to fund our future capital expenditures with our existing cash balance and cash flow from operating activities. We will continue to make capital expenditures to meet the expected growth of our business.

Holding Company Structure

Baosheng Media Group Holdings Limited is a holding company with no operations of its own. We conduct our operations primarily through our subsidiaries in China. As a result, our ability to pay dividends depends upon dividends paid by our PRC subsidiaries. In addition, our PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with the Accounting Standards for Business Enterprise as promulgated by the Ministry of Finance of the PRC, or PRC GAAP. Pursuant to the law applicable to China’s foreign investment enterprise, foreign investment enterprise in the PRC have to make appropriation from their after-tax profit, as determined under PRC GAAP, to reserve funds including (i) general reserve fund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of our subsidiary. Appropriation to the other two reserve funds are at our subsidiary’s discretion.

C. Research and Development, Patents and Licenses, etc.

See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”

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D. Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the fiscal year ended December 31, 2023 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

E. Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

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

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) accounts receivable, net; and (iii) income taxes. See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.

While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions. We believe that the following critical accounting estimates involve the most significant judgments used in the preparation of our financial statements.

Allowance against accounts receivable

Accounts receivable are recognized and carried at the gross billing amount less an allowance for any uncollectible accounts due from the advertisers.

On January 1, 2023, the Company adopted ASU No. 2016-13, using the modified retrospective transition method.

Prior to the Company’s adoption of ASU 2016-13, the Company applied ASC 310, Receivables (“ASC 310”) to recognize and measure accounts receivable. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when necessary. An allowance for doubtful accounts is made and recorded into general and administrative expenses based on any specifically identified accounts receivable that may become uncollectible. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

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After the adoption of ASU 2016-13, the Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “provision for doubtful accounts” in the consolidated statements of loss and comprehensive loss. The Company assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable were primarily consisted of accounts due from the advertisers for the acquisition of ad inventory and other advertising services on their behalf. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit loss after management has determined that the likelihood of collection is not probable.

For the year ended December 31, 2023, the Company reversed allowance for expected credit losses of $0.7 million for accounts receivable. For the years ended December 31, 2022 and 2021, the Company provided allowance of $19.3 million and $4.2 million against the accounts receivable, respectively.

Valuation of deferred tax assets

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

As of December 31, 2023 and 2022, deferred tax assets from the net operating loss carryforwards amounted to $3.1 million and $1.2 million, respectively. We have recognized a valuation allowance of $3.1 million, $1.2 million and $1.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The PRC operating entities in PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($14,100). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

We did not accrue any liability, interest or penalties related to uncertain tax positions in its provision for income taxes line of its consolidated statements of income for the years ended December 31, 2023, 2022 and 2021, respectively. We do not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.

Recent accounting pronouncements

A list of recently issued accounting pronouncements that are relevant to us is included in note 2 to our consolidated financial statements included elsewhere in this annual report.

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ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Executive Officers

The following table sets forth information regarding our directors and executive officers as of the date of this annual report.

Name	Age	Position(s)
Shasha Mi	37	Chairperson of the board and Chief Executive Officer
Sheng Gong	42	Director
Yue Jin	42	Chief Financial Officer
Yun Wu	52	Independent Director
Guangyao Zhu	42	Independent Director
Changhong Jiang	46	Independent Director

The following is a brief biography of each of our executive officers and directors:

Shasha Mi, age 37, serves as the Company’s Chief Executive Officer, the Chairperson of the Board of Directors, and director since July 2022. Ms. Shasha Mi has more than ten years of management experience in the online advertising industry. Since September 2022, Ms. Shasha Mi has served as the Chief Executive Officer and the chairperson of the board of Baosheng Network and Beijing Baosheng, indirect wholly-owned subsidiaries of the Company. Ms. Shasha Mi is responsible for designing business strategies for Beijing Baosheng and Baosheng Network, overseeing the execution of business strategies, and managing the daily operations of the companies. From September 2017 to August 2022, Ms. Shasha Mi served as the head of business department of Baosheng Network and Beijing Baosheng, overseeing the operations of the companies’ advertising business. From August 2016 to June 2017, Ms. Shasha Mi served as the vice president at Jiangsu Wansheng Weiye Network Technology Co., Ltd., an online advertising company in the PRC. From May 2012 to July 2016, Ms. Shasha Mi served as the sales director at Beijing Qihoo Technology Co., Ltd. Ms. Shasha Mi obtained her bachelor’s degree in accounting from Beijing Union University in 2008. Ms. Mi is pursuing her master’s degree in business administration from Tsinghua University and expects to obtain her degree in 2024.

Sheng Gong, age 42, serves as our director and the national sales director of our SEM advertising, and is primarily responsible for overseeing the business development, sales and marketing of our SEM services. Mr. Sheng Gong has over 10 years of experience in business development and sales and marketing in the media industry in China. Since August 2021, Mr. Sheng Gong has served as the legal corporate representative and director of Baosheng Network, responsible for overseeing the company’s business development, client relations, and management functions. From June 2018 to July 2021, Mr. Sheng Gong served as the head of business department of the Beijing branch company of Horgos Baosheng. Prior to that, Mr. Sheng Gong served as a director, head of business development, and legal corporate representative of Beijing Baosheng from May 2016 to May 2018. Mr. Sheng Gong received a bachelor’s degree in computer application from Beijing Jianshe University in the PRC in 2004.

Yue Jin, age 42, serves as our chief financial officer and our financial director. Mr. Yue Jin is responsible for managing our finances, evaluating our financial risks and opportunities, and is responsible for financial reporting. Mr. Yue Jin has over 10 years of financial experience. Prior to joining us in January 2020 as the financial director of Beijing Baosheng, Mr. Yue Jin served as the financial director at Using Media Group from November 2018 to December 2019. From May 2011 to October 2018, Mr. Yue Jin served as the financial manager and vice financial director at Beijing Zoom Interactive Online Marketing Technology Co., Ltd. Mr. Yue Jin received a diploma from Renmin University in the PRC in 2003 with a major in financial accounting and received a bachelor’s degree in accounting from Capital University of Economics and Business in Beijing in 2012.

Yun Wu, age 52, has served as the Company’s independent director since December 2023. Since January 2022, Mr. Wu has been serving as the general manager at Air CITC Information Technology (Beijing) Co., Ltd., where he is responsible for business management. From December 2014 to December 2021, Mr. Wu served as the co-founder and chief operating officer at Beijing Haitaoche Technology Co., Ltd., a vertical e-commerce platform specializing in parallel-imported cars, where he was responsible for the overall company management. Mr. Wu obtained his bachelor’s degree in Computer Science and Technology from Peking University in 1995, and his Master of Business Administration degree from the Guanghua School of Management at Peking University in 2001.

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Guangyao Zhu, age 42, has served as the Company’s independent director since September 2022. Mr. Zhu has served as the chairman at Beijing Mingdi Technology and Trade Development Co., Ltd., a company that invests in the business of landscaping, construction, and construction supplies since October 2021. Since December 2018, Mr. Guangyao Zhu has served as the deputy secretary general at the artificial intelligence education special committee of the China Electronics Chamber of Commerce, where Mr. Zhu was primarily responsible for outreach activities of the special committee. From September 2017 to November 2018, Mr. Zhu served as the chairman of the board of directors at Beijing Kunyue Education Technology Co., Ltd., a company investing in Sino-foreign cooperative education and school-enterprise cooperative education, where Mr. Zhu was mainly responsible for overseeing the company’s daily operations and making strategic decisions for the company. Mr. Zhu obtained his bachelor’s degree in English from Beijing Foreign Studies University in the PRC in 2003 and his master’s degree in international trade from the University of Murcia in Spain in 2022.

Changhong Jiang, age 46, has served as the Company’s independent director since February 2022. Mr. Changhong Jiang has over 15 years of experience in corporate finance and auditing and is familiar with the reporting requirements of U.S. GAAP. Since June 2019, Mr. Changhong Jiang has served as the deputy general manager, board secretary and partner of Beijing Zhongke Natong Electronic Technology Co., Ltd., where he mainly oversees the company’s initial public offering process. From December 2015 to May 2019, Mr. Jiang served as the financial director of Tianjin Taida Energy Group Co., Ltd, overseeing the company’s financial management, financing, budgeting and auditing functions. Mr. Changhong Jiang obtained his associate degree in accounting from Beijing Forestry University in the PRC in 2004 and bachelor’s degree in labor and social security from Jilin University in the PRC in 2015.

Board Diversity

The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.

Board Diversity Matrix
Country of Principal Executive Offices:	China
Foreign Private Issuer	Yes
Disclosure Prohibited under Home Country Law	No
Total Number of Directors	5
				Did Not
			Non-	Disclose
	Female	Male	Binary	Gender
Part I: Gender Identity
Directors	1	3	0	1
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction	0
LGBTQ+	0
Did Not Disclose Demographic Background	5

Family Relationships

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

B. Compensation

For the fiscal year ended December 31, 2023, we paid an aggregate of $109,008.82 in cash to our executive officers, and we paid $22,583.33 in cash to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our PRC subsidiary is required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.

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Employment Agreements and Indemnification Agreements

We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period, which will be automatically renewed for additional one-year terms unless either party provides a two-month prior written notice before the end of the current employment term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions of their employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receiving bribes, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a three-month prior written notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.

We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agreed to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.

C. Board Practices

Board of directors

Our board of directors consists of five directors, including three independent directors. A director is not required to hold any shares in our company to qualify to serve as a director. A director who is in any way, whether directly or indirectly, interested in a contract or proposed contract or arrangement with our company is required to declare the nature of his interest at a meeting of our directors. A director may vote in respect of any contract, proposed contract or arrangement notwithstanding that he may be interested therein, and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of our directors at which any such contract, proposed contract or arrangement is considered. Our directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third party. None of our directors has a service contract with us that provides for benefits upon termination of service.

Committees of the board of directors

We have established the following committees in our board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. The committees operate in accordance with terms of reference established by our board of directors.

Audit Committee. Our audit committee consists of Changhong Jiang, Guangyao Zhu, and Yun Wu. Changhong Jiang is the chairman of our audit committee. We have determined that Changhong Jiang, Guangyao Zhu, and Yun Wu satisfy the “independence” requirements of the Nasdaq corporate governance rules and Rule 10A-3 under the Securities Exchange Act. Our board also has determined that Mr. Changhong Jiang qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq corporate governance rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

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

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

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

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

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● reviewing and approving all proposed related party transactions;

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

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

Compensation Committee. Our compensation committee consists of Yun Wu, Guangyao Zhu, and Changhong Jiang. Mr. Yun Wu is the chairperson of our compensation committee. We have determined that Yun Wu, Guangyao Zhu, and Changhong Jiang satisfy the “independence” requirements of the Nasdaq corporate governance rules and Rule 10C-1 under the Securities Exchange Act. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:

● reviewing and recommending compensation packages for our most senior executive officers to the board;

● approving and overseeing compensation packages for our executives other than the most senior executive officers;

● reviewing and recommending to the board with respect to the compensation of our directors;

● reviewing periodically and approving any long-term incentive compensation or equity plans;

● selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and

● reviewing programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Guangyao Zhu, Changhong Jiang, and Yun Wu. Mr. Guangyao Zhu is the chairperson of our nominating and corporate governance committee. Guangyao Zhu, Changhong Jiang, and Yun Wu satisfy the “independence” requirements of the Nasdaq corporate governance rules. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:

● identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy;

● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us;

● identifying and recommending to our board the directors to serve as members of committees;

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

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

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Duties of Directors

Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise skills they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than what may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care, and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights vested thereunder in the holders of the shares. Our company has the right to seek damages if a duty owed by our directors is breached. A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached.

Our board of directors has all powers necessary for managing, and for directing and supervising, our business affairs. The functions and powers of our board of directors include, among others:

● convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings;

● declaring dividends and distributions;

● appointing officers and determining the terms of office of the officers;

● exercising the borrowing powers of our company and mortgaging the property of our Company; and

● approving the transfer of shares in our Company, including the registration of such shares in our share register.

Terms of Directors and Executive Officers

Our directors may be elected by a resolution of our board of directors or by an ordinary resolution of our shareholders. Our directors are not subject to a term of office and hold office until such time as they are removed from office by ordinary resolution of our shareholders. A director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be or becomes of unsound mind; (iii) resigns his or her office by notice in writing to our company; or (iv) without special leave of absence from our board, is absent from three consecutive board meetings and our directors resolve that his office be vacated.

Our officers are elected by and serve at the discretion of the board of directors.

D. Employees

As of December 31, 2021, 2022 and 2023, we had a total of 110, 59 and 32 employees, all of whom are located in China. The following table sets forth the breakdown of our employees by function as of December 31, 2023:

	As of
	December 31,
	2023
		% of
	Number	Total
Functions:
Sales and marketing	6	19	%
Advertiser services	4	13	%
Ad optimization	12	37	%
Media relationships	2	6	%
Management and administration	8	25	%
Total	32	100	%

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Our success depends on our ability to attract, retain and motivate qualified personnel. As part of our human resources strategy, we offer employees competitive salaries, performance-based cash bonuses and other incentives.

We primarily recruit our employees in China through direct hiring. We provide robust training programs for new employees that we hire. We also conduct regular and specialized internal training to meet the need of our employees in different departments. We believe such training program is effective in equipping our employees with the skill set and work ethics we require.

As required under PRC regulations, we participate in various employee social security plans that are organized by applicable local municipal and provincial governments, including housing, pension, medical, work-related injury, maternity and unemployment benefit plans.

We enter into standard contracts and agreements regarding confidentiality, intellectual property, employment, ethic policies and non-competition with most of our executive officers, managers and employees. These contracts typically include a non-competition provision effective during and up to one year after termination of their employment with us and a confidentiality provision effective during and up to one year after their employment with us.

Our employees have not formed any employee union or association. We believe we maintain a good working relationship with our employees and we have not experienced any difficulty in recruiting staff for our operations as of the date of this annual report.

Compensation Recovery Policy

We have adopted a compensation recovery policy to provide for the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules and applicable listing standards.

E. Share Ownership

Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of May 15, 2024 by:

● each of our directors and executive officers; and

● each of our principal shareholders who beneficially own more than 5% of our total outstanding Ordinary Shares.

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The calculations in the table below are based on 1,534,487 Ordinary Shares issued and outstanding as of May 15, 2024.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

	Ordinary Shares Beneficially Owned
				Percentage
		Percentage of		of aggregate
		Total Ordinary		voting
	Number	Shares*		power**
Directors and Executive Officers: †
Shasha Mi	—	—		—
Sheng Gong (1)	34,375	2.24	%	—	%
Yue Jin	—	—		—
Guangyao Zhu	—	—		—
Yun Wu	—	—		—
Changhong Jiang	—	—		—
All directors and executive officers as a group:	34,375	2.26	%	—	%
5% Shareholders:
An Rui Tai BVI (2)	343,750	22.40	%	22.40	%
Deng Guan BVI (3)	96,857	6.31	%	6.31	%
PBCY Investment (4)	156,250	10.18	%	10.18	%

Notes:

* For each person included in this column, percentage ownership is calculated by dividing the number of Ordinary Shares beneficially owned by such person by the sum of the total number of outstanding shares.

** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Ordinary Shares as a single class.

† The business address for our directors and executive officers is East Floor 5, Building No. 8, Xishanhui, Shijingshan District, Beijing, People’s Republic of China.

(1) Represents the number of Ordinary Shares beneficially owned by Mr. Sheng Gong through An Rui Tai BVI, a business company incorporated under the laws of the BVI, which is owned as to 10% by Mr. Sheng Gong. The registered address of An Rui Tai BVI is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.

(2) Represents the number of Ordinary Shares beneficially owned by An Rui Tai BVI, a business company incorporated under the laws of the BVI, which is owned as to 90% by Ms. Wenxiu Zhong and 10% by Mr. Sheng Gong. The registered address of An Rui Tai BVI is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.

(3) Represents the number of Ordinary Shares beneficially owned by Deng Guan BVI, a business company incorporated under the laws of the BVI and is wholly owned by Mr. Hui Yu. The registered address of Deng Guan BVI is Craigmuir Chambers, Road Town, Tortola VG 1110, British Virgin Islands.

(4) Represents the number of Ordinary Shares beneficially owned by PBCY Investment, a business company incorporated under the laws of the BVI and is owned as to 86.35% by Pubang Landscape through Pubang Hong Kong and 13.65% by CYY Holdings. The registered address of PBCY Investment is Craigmuir Chambers, Road Town, Tortola VG 1110, British Virgin Islands.

As of the date of this annual report, approximately 57.03% of our issued and outstanding Ordinary Shares are held in the United States by one record holder (Cede & Co.).

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None of our shareholders has informed us that it is affiliated with a member of Financial Industry Regulatory Authority, or FINRA.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”

B. Related Party Transactions

Material Transactions with Related Parties

For the years ended December 31, 2023, 2022 and 2021, our transactions with related parties were summarized in the below table:

1) Nature of relationships with related parties

Name	Relationship with the Company
EJAM GROUP Co., Ltd. (“EJAM Group”)	Indirectly hold a 6.8% equity interest in the Company
Pubang Landscape Architecture (HK) Company Limited (“Pubang Hong Kong”)	Indirectly hold a 20.4% equity interest in the Company
Horgos Zhijiantiancheng	Controlled by EJAM Group
Guangzhou Yijiantiancheng Technology Co., Ltd. (“Guangzhou Yijiantiancheng”)	Controlled by EJAM Group
Horgos Meitui Network Technology Co., Ltd. (“Horgos Meitui”)	Controlled by EJAM Group, and was disposed of by EJAM Group on March 24, 2020
Ms. Wenxiu Zhong	Former chairperson of the Board of Directors, former CEO and indirect equity shareholder of the Company
Anruitai Investment Limited (“Anruitai”)	90% owned by Ms. Wenxiu Zhong and 10% owned by Mr. Sheng Gong, the Director and indirect equity shareholder of the Company
Sheng Gong	Director of the Company
Shasha Mi	Chief Executive Officer and Chairperson of the Board of Directors of the Company

2) Transactions with related parties

	For the Years Ended
	December 31,
	2023		2022		2021
Gross billing from a related party
Horgos Zhijiantiancheng	$	—	$	—	$	83,909
Guangzhou Yijiantiancheng		—		—		8,743
	$	—	$	—	$	92,652
Services purchased from related parties
Horgos Zhijiantiancheng	$	161,264	$	4,464,919	$	11,298,397

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3) Balances with related parties

As of December 31, 2023 and 2022, the balances due from related parties were as follows:

	December 31,		December 31,
	2023		2022
Media deposits
Horgos Zhijiantiancheng (a)	$	215,689	$	104,390
Prepayments
Horgos Zhijiantiancheng (a)	$	—	$	3,314,744
Due from related parties
Anruitai Investment Limited	$	28,667	$	28,667
Sheng Gong (b)		1,408		—
	$	30,075	$	28,667

(a) Horgos Zhijiantiancheng is both a media with the Company. For the years ended December 31, 2023 and 2022, the Company provided services to Horgos Zhijiantiancheng and paid media deposits with Horgos Zhijiantiancheng.

(b) Representing advance from the Company to Sheng Gong for employee expenses.

As of December 31, 2023 and 2022, the balances due to related parties were as follows:

	December 31,		December 31,
	2023		2022
Other payable
Wenxiu Zhong	$	3,546	$	14,499
Shasha Mi		6,849		—
Sheng Gong		1,781		—
	$	12,176	$	14,499

Employment Agreements and Indemnification Agreements

See “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—Employment Agreements and Indemnification Agreements.”

C. Interests of Experts and Counsel

Not applicable.

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ITEM 8.   FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

We have appended consolidated financial statements filed as part of this annual report.

Legal Proceedings

We may from time to time become a party to various legal administrative proceedings arising in our ordinary course of our business. As of the date of this annual report, we were a party to one pending and one recently decided material legal proceedings. As we routinely enter into business contracts with our advertisers, we have been and may continue to be involved in legal proceedings arising from contract disputes.

In 2019, Horgos Baosheng brought a breach of contract claim against Qingdao Xingyuan Automobile Information Technology Co., Ltd. (“Qingdao Xingyuan”) and sought recovery of RMB3.85 million in aggregate. On December 21, 2020, the reviewing court entered a judgment, ruling in favor of Horgos Baosheng and requiring Qingdao Xingyuan to compensate Horgos Baosheng RMB3.25 million and an extra penalty calculated based on the loan prime rate from August 28, 2019 to the actual date of payment. As of the date of this annual report, the judgment is under the stage of enforcement.

In April 2020, Beijing Baosheng brought a breach of contract claim against Guangzhou Aiyou Information Technology Co. Ltd. (“Guangzhou Aiyou”) and sought recovery of RMB1,255,000 in aggregate. On August 22, 2020, the Beijing arbitration committee entered a judgment, ruling in favor of Beijing Baosheng and requiring Guangzhou Aiyou to compensate Beijing Baosheng RMB1,255,000, with a penalty of RMB592,360, and an extra daily penalty of 0.05%, calculated from April 21, 2020 to the actual date of payment, and arbitration-related expenses. On November 17, 2020, Beijing Baosheng filed a request with Guangzhou Intermediate People’s Court, seeking to mandatorily enforce the judgment. As of the date of this annual report, the judgment is under the stage of enforcement.

In January 2022, Beijing Baosheng brought a breach of contract claim against Beijing Hekai Qianyu Intelligent Technology Co., Ltd. (“Hekai Qianyu”) and Beijing Zhigu Education Technology Co., Ltd. (“Zhigu Education”) and Mr. Hongpeng Yao (the legal representatives of both Hekai Qianyu and Zhigu Education) in the Beijing Dongcheng District People’s Court and sought recovery of RMB756, 000 (approximately $118,681) and related liquidated damages. Beijing Baosheng subsequently withdrew its action against Zhigu Education and agreed to resolve this dispute with the other two defendants through court mediation. On March 25, 2022, the court issued a civil mediation statement confirming that the parties had reached the following agreement: (1) Hekai Qianyu shall pay Beijing Baosheng RMB756,000 (approximately $118,681) by April 24, 2022, and in case of any late payment of the foregoing, an additional daily penalty calculated from April 25, 2022 to the actual date of payment shall be imposed; (2) Mr. Hongpeng Yao assumes jointly and several liability for the payment under item (1); and (3) the litigation-related expenses shall be borne by Hekai Qianyu and Mr. Hongpeng Yao. On April 25, 2022, Beijing Baosheng filed a request with the court, seeking to mandatorily enforce the settlement. As of the date of this annual report, the settlement is under the stage of enforcement, and Beijing Baosheng has not yet received any payment from the defendants.

In March 2022, Beijing Baosheng brought a breach of contract claim against Beijing Aipu New Media Technology Co., Ltd. (“Aipu”) in the Beijing Haidian District People’s Court and sought recovery of RMB1,783,834.04 (approximately $270,102) and related liquidated damages. On March 14, 2022, Beijing Baosheng applied for reservation of Aipu’s property in an amount of RMB1,783,834.04 (approximately $270,102) and said application was approved by the court on March 17, 2022. On February 10, 2023, Beijing Baosheng applied for extension for reservation of Aipu’ s property in an amount of RMB1,783,834.04 (approximately $270,102), and the court approved the extension of reservation to March 17, 2024. As of the date of this annual report, Beijing Baosheng is waiting for the court’s notice of hearing.

In December 2022, the Beijing Chaoyang District People’s Court accepted a breach of contract case filed by Beijing Baosheng, as the complainant and Beijing Zhijin Dapeng Education Technology Co., Ltd (“Dapeng”), as the defendant. In this case, Beijing Baosheng sought recovery of RMB435,731.02 (approximately $63,271) and related liquidated damages from Dapeng. Later in February 2023, Beijing Baosheng submitted additional evidence to the court. The court hearing was held on September 20, 2023. On January 31, 2024, the court approved Beijing Baosheng’s application for reservation of the bank accounts of Dapeng. As of the date of this annual report, Beijing Baosheng is waiting for the court’s ruling on this case.

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In November 2022, Beijing Baosheng brought a breach of contract claim against Shanghai Yituo Information Technology Co., Ltd (“Yituo”) in the Shanghai Jinshan District People’s Court and sought recovery of RMB50,843.31 (approximately $7,383) and related liquidated damages. The court held the hearings on February 14, 2023 and March 27, 2023. The court entered a judgment on April 11, 2023, ruling in favor of Beijing Baosheng. The judgment was served to Beijing Baosheng on April 24, 2023, and became final and binding on the parties as Yituo did not file any appeals against the judgement before May 9, 2023. As of the date of this annual report, Beijing Baosheng has not yet received any payment from the defendants. Given that Yituo had no assets, the court enforcement procedures against Yituo were terminated on August 30, 2023. In the event that the court or Beijing Baosheng locates any asset of Yituo, Beijing Baosheng will be able to apply for resumption of the enforcement procedures against Yituo.

In April 2022, the Beijing Haidian District People’s Court accepted a breach of contract case, filed by Beijing Baosheng as the complainant and Beijing Kaikeba Technology Co., Ltd. (“Beijing Kaikeba”), Huike Education Technology Group Co., Ltd., Hangzhou Kaikeba Technology Co., Ltd. (“HZ Kaikeba”), and Fang Yechang, as the defendants. In this case, Beijing Baosheng sought recovery of RMB34,436,345.13 (approximately $5,010,488.22) and related liquidated damages from Beijing Kaikeba, HZ Kaikeba, and Fang Yechang. The court has a ruling in favor of Beijing Baosheng and requiring Beijing Kaikeba and Fang Yechang to compensate Beijing Baosheng the outstanding service fee of RMB35,781,421.17 (US$5,039,707.77), with liquidated damages of RMB2,620,526.68 (US$369,093.46), and court expenses and reservation expenses. The case is now under enforcement procedures.

In April 2022, the Beijing Haidian District People’s Court accepted a breach of contract case filed by Beijing Baosheng, as the complainant, and Beijing Kaikeba, HZ Kaikeba, and Fang Yechang, as the defendants. In this case, Beijing Baosheng sought recovery of RMB4,756,957.57 (approximately $692,137.33) and related liquidated damages from defendants. On February 27, 2023, the People’s Court of Hangzhou Yuhang District ruled to accept the bankruptcy liquidation case of HZ Kaikeba and requested the creditors of HZ Kaikeba file their claims by April 21, 2023. Beijing Baosheng has filed its creditor claims involved in this case against HZ Kaikeba following the bankruptcy procedures. The bankruptcy administrator confirmed Beijing Baosheng’s rights as a creditor (including the principal debt amount of RMB35,781,421.17 (US$5,039,707.77), and the amount of liquidate damages RMB2,620,526.68 (US$369,093.46). Beijing Baosheng accepted the bankruptcy administrator’s decision and then withdrew the case filed at the Beijing Haidian District People’s Court. As of the date of this annual report, Beijing Baosheng is waiting for the administrator’s notice of the subsequent procedures.

In April 2022, the Beijing Dongcheng District People’s Court accepted a breach of contract case filed by Beijing Baosheng, as the complainant, and Beijing Kaikeba, as the defendant. In this case, Beijing Baosheng sought recovery of RMB2,197,472.35 (approximately $319,732.23) and related liquidated damages from Beijing Kaikeba. On July 11, 2022, the court issued a civil mediation statement confirming that the parties had reached an agreement that, among others, Beijing Kaikeba agreed to pay Beijing Baosheng the service fee for the period from January 1, 2022 to March 31, 2022, in an amount of RMB 2,197,472.35 (approximately $317,974.25) in three installments by the end of 2022. As of the date of this annual report, Beijing Baosheng has not received any payment from Beijing Kaikeba. Given that Beijing Kaikeba currently has no assets, the court enforcement procedures against Beijing Kaikeba has been terminated in April 2023. In the event that the court or Beijing Baosheng locates any asset of Beijing Kaikeba, Beijing Baosheng will be able to apply for resumption of the enforcement procedures against Beijing Kaikeba.

On November 10, 2022, the Beijing Shijingshan District People’s Court accepted a contract claim case filed by Beijing Baosheng, as the complainant, and Fang Yechang and his spouse, as defendants. In this case, Beijing Baosheng requested the defendants to assume joint and several guarantee liability for Beijing Kaikeba’s debt to Beijing Baosheng in an amount of RMB2,197,472.35 (approximately $319,732.23). As of the date of this annual report, Baosheng is waiting for the court’s notice on the hearing.

In April 2023, the Beijing Shijingshan People’s Court accepted a contract claim case filed by Beijing Baosheng, as the complainant, and Fang Yechang and his spouse, as defendants. In this case, Beijing Baosheng requested the defendants to assume joint and several guarantee liability for Beijing Kaikeba’s debt to Beijing Baosheng in an amount of RMB2,715,663.75 (US$382,493.24). On November 16, 2023, the court issued a civil mediation statement confirming that the parties had reached settlement that the defendants will compensate Beijing Baosheng RMB 2,715,663.75 and assume the court expenses. As of the date of this annual report, Beijing Baosheng has not received any payment from the defendants. Beijing Baosheng has filed a request with the court, seeking to mandatorily enforce the settlement.

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On April 6, 2023, the Longhua District People’s Court of Shenzhen City, Guangdong Province accepted a case filed by Shenzhen Pusi Technology Co., Ltd (“Shenzhen Pusi”), as the complainant, and Baosheng Network as the defendant. In this case, Shenzhen Pusi sought recovery of outstanding service fee RMB160,964.7 (approximately $23,291.59) and related liquidated damages from Baosheng Network and other expenses (i.e., attorney’s fee, court expense and property reservation fee). The court made a ruling in favor of the complainant. Baosheng Network appealed to Shenzhen Intermediate People’s Court against the trial court’s judgement. The appellate court made a final ruling on April 29, 2024, affirming the trial court’s judgement. A bank account of Baosheng Network (with amount of RMB171,477.98 (US$24,152.17) in the account) was reserved by the court on July 2, 2023, following Shenzhen Pusi’s application. The case is now under enforcement procedures.

On January 30, 2024, Beijing Arbitration Committee accepted a case filed by Beijing Baosheng against Tianjin Hongen Wanmei Future Education Technology Co., Ltd (“Tianjin Hongen”) for recovery of RMB1,434,059.00 (US$201,982.99). As of March 15, 2024, Tianjin Hongen had already paid to Beijing Baosheng RMB1,050,047.00 (US$147,896.03). As of the date of this annual report, Beijing Baosheng is waiting for the arbitration committee’s notice of hearing.

On March 1, 2024, the Company was served a complaint regarding a lawsuit brought by three institutional investors (the “Plaintiffs”) against the Company and certain other parties, filed with the United States District Court of the Southern District of New York, alleging that the Company violated Section 11 and Section 12 of the Securities Act of 1933, as amended, by including untrue statements of material facts and omitting to state material facts required to make the statements therein not misleading, in its registration statement on Form F-1, as amended (File No. 333-239800), which was declared effective by the SEC on February 5, 2021. On March 17, 2021, two institutional investors, which are also two of the Plaintiffs, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. On March 5, 2024, the Plaintiffs filed an amended complaint and served the Company on March 6, 2024. The Company extended the deadline to respond to May 22, 2024 in order to coordinate with other defendants in the matter. As of the date of this annual report, there is no anticipated court dates of this lawsuit. The Company believes that the complaint is without any merit and intends to defend the matter vigorously.

On April 10, 2024, the Company was served with a copy of the winding up petition (the “Petition”), filed by Orient Plus International Limited (the “Petitioner”) with the Grand Court of the Cayman Islands, seeking an order that the Company be wound up pursuant to Section 92(e) of the Cayman Islands Companies Act (2023 Revision), claiming that the management of the Company have acted unfairly and/or oppressively towards the Petitioner and other minority shareholders, and/or the affairs of the Company have been conducted with a lack of probity, and the Petitioner and the other investors have justifiably lost confidence in the management of the Company. On March 17, 2021, two institutional investors, one of which is the Petitioner, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. The Company believes that the Petition is without any merit and intends to defend the matter vigorously.

Dividend Policy

We do not have any present plan to pay any cash dividends on our Ordinary Shares 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.

We are a holding company incorporated in the Cayman Islands. We rely principally on dividends from our PRC subsidiary for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiary to pay dividends to us.

Our board of directors has discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. 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 our board of directors may deem relevant.

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B. Significant Changes

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

ITEM 9.   THE OFFER AND LISTING

A. Offering and Listing Details

Our Ordinary Shares have been listed on the Nasdaq Capital Market since February 8, 2021. Our Ordinary Shares trade under the symbol “BAOS.”

B. Plan of Distribution

Not applicable.

C. Markets

Our Ordinary Shares have been listed on the Nasdaq Capital Market since February 8, 2021. Our Ordinary Shares trade under the symbol “BAOS.”

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands and our affairs are governed by our Amended and Restated Memorandum and Articles of Association, as amended and restated from time to time, and Companies Act (As Revised) of the Cayman Islands, which we refer to as the Companies Act or the Cayman Companies Act below, and the common law of the Cayman Islands.

Our Amended and Restated Memorandum and Articles of Association is filed as Exhibit 1.1 to this annual report. Our shareholders adopted our Amended and Restated Memorandum and Articles of Association by a special resolution on July 20, 2020 and effective on February 10, 2021.

The following are summaries of material provisions of our Amended and Restated Memorandum and Articles of Association and the Companies Act insofar as they relate to the material terms of our Ordinary Shares.

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Board of Directors

See “Item 6. Directors, Senior Management and Employees.”

Ordinary Shares

General

Our authorized share capital is US$9,600,000 divided into 1,000,000,000 Ordinary Shares, par value $0.0096 per share. All of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Certificates representing the Ordinary Shares are issued in registered form.

Dividends

Subject to the provisions of the Cayman Companies Act and any rights attaching to any class or classes of shares under and in accordance with the articles:

(a) the directors may declare dividends or distributions out of our funds which are lawfully available for that purpose; and

(b) the Company’s shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors.

Subject to the requirements of the Cayman Companies Act regarding the application of a company’s share premium account and with the sanction of an ordinary resolution, dividends may also be declared and paid out of the funds of our Company lawfully available therefor. The directors when paying dividends to shareholders may make such payment either in cash or in specie.

Unless provided by the rights attached to a share, no dividend shall bear interest.

Voting Rights

Subject to any rights or restrictions as to voting attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote per Ordinary Share. On a poll, every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote for each share of which he or the person represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by proxy.

Variation of Rights of Shares

Whenever our capital is divided into different classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class) may be varied with the consent in writing of all of the holders of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The necessary quorum shall be one or more persons holding or representing by proxy at least one-third in nominal or par value amount of the issued shares of the relevant class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those shareholders who are present shall form a quorum).

Unless the terms on which a class of shares was issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation or issue of further shares ranking pari passu with the existing shares of that class or subsequent to them or the redemption or purchase of any shares of any class by our company. The rights conferred upon the holders of the shares of any class issued shall not be deemed to be varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.

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Alteration of Share Capital

Subject to the Cayman Companies Act, our shareholders may, by ordinary resolution:

(a) increase our share capital by new shares of the amount fixed by that ordinary resolution and with the attached rights, priorities and privileges set out in that ordinary resolution;

(b) consolidate and divide all or any of our share capital into shares of larger amount than our existing shares;

(c) convert all or any of our paid-up shares into stock, and reconvert that stock into paid up shares of any denomination;

(d) sub-divide our shares or any of them into shares of an amount smaller than that fixed, so, however, that in the sub-division, the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and

(e) cancel shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled or, in the case of shares without nominal par value, diminish the number of shares into which our capital is divided.

Subject to the Cayman Companies Act and to any rights for the time being conferred on the shareholders holding a particular class of shares, our shareholders may, by special resolution, reduce its share capital in any way.

Liquidation

If we are wound up, the shareholders may, subject to the articles and any other sanction required by the Cayman Companies Act, pass a special resolution allowing the liquidator to do either or both of the following:

(a) to divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine how the division shall be carried out as between the shareholders or different classes of shareholders; and

(b) to vest the whole or any part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up.

The directors have the authority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf without the sanction of a resolution passed at a general meeting.

Calls on Shares and Forfeiture

Subject to the terms of allotment, the directors may make calls on the shareholders in respect of any monies unpaid on their shares including any premium and each shareholder shall (subject to receiving at least 14 calendar days’ notice specifying when and where payment is to be made), pay to us the amount called on his shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the share or in the notice of the call or if no rate is fixed, at the rate of ten percent per annum. The directors may, at their discretion, waive payment of the interest wholly or in part.

We have a first and paramount lien on all shares (whether fully paid up or not) registered in the name of a shareholder (whether solely or jointly with others). The lien is for all monies payable to us by the shareholder or the shareholder’s estate:

(a) either alone or jointly with any other person, whether or not that other person is a shareholder; and

(b) whether or not those monies are presently payable.

At any time, the directors may declare any share to be wholly or partly exempt from the lien on shares provisions of the articles.

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We may sell, in such manner as the directors may determine, any share on which the sum in respect of which the lien exists is presently payable, if due notice that such sum is payable has been given (as prescribed by the articles) and, within 14 days of the date or other longer period as specified in the notice on which the notice is deemed to be given under the articles, such notice has not been complied with.

Unclaimed Dividend

A dividend that remains unclaimed for a period of six years after it became due for payment shall be forfeited to, and shall cease to remain owing by, the company.

Forfeiture or Surrender of Shares

If a shareholder fails to pay any capital call, the directors may give to such shareholder not less than 14 clear days’ notice requiring payment and specifying the amount unpaid including any interest which may have accrued, any expenses which have been incurred by us due to that person’s default and the place where payment is to be made. The notice shall also contain a warning that if the notice is not complied with, the shares in respect of which the call is made will be liable to be forfeited.

If such notice is not complied with, the directors may, before the payment required by the notice has been received, resolve that any share the subject of that notice be forfeited (which forfeiture shall include all dividends or other monies payable in respect of the forfeited share and not paid before such forfeiture).

A forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the directors determine and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the directors think fit.

A person whose shares have been forfeited shall cease to be a shareholder in respect of the forfeited shares, but shall, notwithstanding such forfeiture, remain liable to pay to us all monies which at the date of forfeiture were payable by him to us in respect of the shares, together with all expenses and interest from the date of forfeiture or surrender until payment, but his liability shall cease if and when we receive payment in full of the unpaid amount.

A declaration, whether statutory or under oath, made by a director or the secretary shall be conclusive evidence that the person making the declaration is our director or secretary and that the particular shares have been forfeited or surrendered on a particular date.

Subject to the execution of an instrument of transfer, if necessary, the declaration shall constitute good title to the shares.

Share Premium Account

The directors shall establish a share premium account and shall carry the credit of such account from time to time to a sum equal to the amount or value of the premium paid on the issue of any share or capital contributed or such other amounts required by the Cayman Companies Act.

Redemption and Purchase of Own Shares

Subject to the Cayman Companies Act and any rights for the time being conferred on the shareholders holding a particular class of shares, we may by action of our directors:

(a) issue shares that are to be redeemed or liable to be redeemed, at our option or the shareholder holding those redeemable shares, on the terms and in the manner our directors determine before the issue of those shares;

(b) with the consent by special resolution of the shareholders holding shares of a particular class, vary the rights attaching to that class of shares so as to provide that those shares are to be redeemed or are liable to be redeemed at our option on the terms and in the manner which the directors determine at the time of such variation; and

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(c) purchase all or any of our own shares of any class including any redeemable shares on the terms and in the manner which the directors determine at the time of such purchase.

We may make a payment in respect of the redemption or purchase of its own shares in any manner authorized by the Cayman Companies Act, including out of any combination of capital, our profits and the proceeds of a fresh issue of shares.

When making a payment in respect of the redemption or purchase of shares, the directors may make the payment in cash or in specie (or partly in one and partly in the other) if so authorized by the terms of the allotment of those shares or by the terms applying to those shares, or otherwise by agreement with the shareholder holding those shares.

Transfer of Shares

Provided that a transfer of Ordinary Shares complies with applicable rules of Nasdaq, a shareholder may transfer Ordinary Shares to another person by completing an instrument of transfer in a common form or in a form prescribed by Nasdaq or in any other form approved by the directors, executed:

(a) where the Ordinary Shares are fully paid, by or on behalf of that shareholder; and

(b) where the Ordinary Shares are partly paid, by or on behalf of that shareholder and the transferee.

The transferor shall be deemed to remain the holder of an Ordinary Share until the name of the transferee is entered into the register of members of the Company.

Where the Ordinary Shares in question are not listed on or subject to the rules of Nasdaq, our board of directors may, in its absolute discretion, decline to register any transfer of any Ordinary Share that has not been fully paid up or is subject to a company lien. Our board of directors may also decline to register any transfer of such Ordinary Share unless:

(a) the instrument of transfer is lodged with us, accompanied by the certificate for the Ordinary Shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

(b) the instrument of transfer is in respect of only one class of Ordinary Shares;

(c) the instrument of transfer is properly stamped, if required;

(d) in the case of a transfer to joint holders, the number of joint holders to whom the Ordinary Shares are to be transferred does not exceed four; and

If our directors refuse to register a transfer, they are required, within one month after the date on which the instrument of transfer was lodged, to send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, on prior notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and our register of members closed at such times and for such periods as our board of directors may from time to time determine. The registration of transfers, however, may not be suspended, and the register of members may not be closed, for more than 30 calendar days in any year.

Inspection of Books and Records

Holders of our Ordinary Shares will have no general right under the Cayman Companies Act to inspect or obtain copies of our register of members or our corporate records (other than the memorandum and the articles, any special resolutions passed by such companies, the registers of mortgages and charges of such companies). The Registrar of Companies of the Cayman Islands shall make available the list of the names of the current directors of the Company (and where applicable the current alternate directors of the Company) for inspection by any person upon payment of a fee by such person.

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General Meetings

As a Cayman Islands exempted company, we are not obligated by the Cayman Companies Act to call annual general meetings; accordingly, we may, but shall not be obliged to, in each year hold a general meeting as an annual general meeting. Any annual general meeting held shall be held at such time and place as may be determined by our board of directors. All general meetings other than annual general meetings shall be called extraordinary general meetings.

The directors may convene general meetings whenever they think fit. General meetings shall also be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than one-third (1/3) of the rights to vote at such general meeting in accordance with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders making the requisition. If the directors do not convene such meeting for a date not later than 21 clear days’ after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be reimbursed by us.

At least 7 calendar days’ notice of general meetings shall be given to shareholders entitled to attend and vote at such meeting. The notice shall specify the place, the day and the hour of the meeting and the general nature of that business. In addition, if a resolution is proposed as a special resolution, the text of that resolution shall be given to all shareholders. Notice of every general meeting shall also be given to the directors and our auditors.

Subject to the Cayman Companies Act and with the consent of the shareholders who, individually or collectively, hold at least two-thirds (2/3rd) of the voting rights of all those who have a right to vote in the case of an extraordinary general meeting, and by all the shareholders in the case of an annual general meeting, a general meeting may be convened on shorter notice.

A quorum shall consist of the presence (whether in person or represented by proxy) of one or more shareholders holding shares that represent not less than one-third of the outstanding shares carrying the right to vote at such general meeting.

If, within 15 minutes from the time appointed for the general meeting, or at any time during the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be cancelled. In any other case it shall stand adjourned to the same time and place seven days or to such other time or place as is determined by the directors.

The chairman may, with the consent of a meeting at which a quorum is present, adjourn the meeting. When a meeting is adjourned for seven days or more, notice of the adjourned meeting shall be given in accordance with the articles.

At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on, the declaration of the result of the show of hands) demanded by the chairman of the meeting or by at least two shareholders having the right to vote on the resolutions or one or more shareholders present who together hold not less than ten percent of the voting rights of all those who are entitled to vote on the resolution. Unless a poll is so demanded, a declaration by the chairman as to the result of a resolution and an entry to that effect in the minutes of the meeting, shall be conclusive evidence of the outcome of a show of hands, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.

If a poll is duly demanded it shall be taken in such manner as the chairman directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall not be entitled to a second or casting vote.

Anti-Takeover Provisions

Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders.

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However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

Exempted Company

We are an exempted company with limited liability incorporated under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

● does not have to file an annual return of its shareholders with the Registrar of Companies;

● is not required to open its register of members for inspection;

● does not have to hold an annual general meeting;

● may issue shares with no par value;

● may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance);

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and

● may register as a segregated portfolio company.

“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

C. Material Contracts

We have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 4. Information on the Company,” “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions” or elsewhere in this annual report.

D. Exchange Controls

See “Item 4. Information on the Company—B. Business Overview—Regulation—PRC Laws and Regulations relating to Foreign Exchange.”

E. Taxation

The following summary of the Cayman Islands, PRC and U.S. federal income tax considerations of an investment in the Ordinary Shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible tax considerations relating to an investment in the Ordinary Shares, such as the tax considerations under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, the People’s Republic of China and the United States.

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Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Ordinary Shares, as the case may be, nor will gains derived from the disposal of our Ordinary Shares be subject to Cayman Islands income or corporate tax.

People’s Republic of China Taxation

The following brief description of Chinese enterprise laws is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends, if any, we are ultimately able to pay to our shareholders. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy.”

Enterprise Income Tax

According to the EIT Law, which was promulgated by the Standing Committee of the National People’s Congress on March 16, 2007, and became effective on January 1, 2008, and last amended on December 29, 2018, and the Implementation Rules of the EIT Law, or the Implementation Rules, which were promulgated by the State Council on December 6, 2007, and last amended on April 23, 2019, enterprises are divided into resident enterprises and non-resident enterprises. Resident enterprises pay enterprise income tax on their incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC pay enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and non-resident enterprises with income having no substantial connection with their institutions in the PRC, pay enterprise income tax on their income obtained in the PRC at a reduced rate of 10%.

We are an exempted company with limited liability incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.

Under the EIT Law, an enterprise established outside of China with a “de facto management body” within China is considered a “resident enterprise,” which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define “de facto management body” as a managing body that actually, comprehensively manage and control the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition currently available is set forth in SAT Notice 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although Baosheng Group does not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of SAT Notice 82, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in SAT Notice 82 to evaluate the tax residence status of Baosheng Group and its subsidiaries organized outside the PRC.

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According to SAT Notice 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.

We believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of Baosheng Group, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities. Accordingly, we believe that Baosheng Group and its offshore subsidiaries should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in SAT Notice 82 were deemed applicable to us. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status.

The implementation rules of the EIT law provides that, (i) if the enterprise that distributes dividends is domiciled in the PRC or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or gains are treated as China-sourced income. It is not clear how “domicile” may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for PRC tax purposes, any dividends we pay to our overseas shareholders which are non-resident enterprises as well as gains realized by such shareholders from the transfer of our shares may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%. Beijing Dacheng, our PRC counsel, is unable to provide a “will” opinion because it believes that it is more likely than not that we and our offshore subsidiaries would be treated as non-resident enterprises for PRC tax purposes because we do not meet some of the conditions outlined in SAT Notice 82. In addition, Beijing Dacheng is not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC “resident enterprise” by the PRC tax authorities as of the date of this annual report. Therefore, Beijing Dacheng believes that it is possible but highly unlikely that the income received by our overseas shareholders will be regarded as China-sourced income. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—Under the Enterprise Income Tax Law, we may be classified as a ‘Resident Enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.”

Currently, as resident enterprises in the PRC, Beijing Baosheng and its subsidiaries in PRC are subject to the enterprise income tax at the rate of 25%, except that once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the part of its taxable income not more than RMB1 million is subject to a reduced rate of 5% and the part between RMB1 million and 3 million is subject to a reduced rate of 10%. The EIT is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. If the PRC tax authorities determine that Baosheng Group is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our Ordinary Shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether our non-PRC shareholders would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. There is no guidance from the PRC government to indicate whether or not any tax treaties between the PRC and other countries would apply in circumstances where a non-PRC company was deemed to be a PRC tax resident, and thus there is no basis for expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.

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Value-added Tax

Pursuant to the Provisional Regulations on Value-Added Tax of the PRC, or the VAT Regulations, which were promulgated by the State Council on December 13, 1993, and took effect on January 1, 1994, and were amended on November 5, 2008, February 6, 2016, and November 19, 2017, respectively, and the Rules for the Implementation of the Provisional Regulations on Value Added Tax of the PRC, which were promulgated by MOF, on December 25, 1993, and were amended on December 15, 2008, and October 28, 2011, respectively, entities and individuals that sell goods or labor services of processing, repair or replacement, sell services, intangible assets, or immovables, or import goods within the territory of the People’s Republic of China are taxpayers of value-added tax. The VAT rate is 17% for taxpayers selling goods, labor services, or tangible movable property leasing services or importing goods, except otherwise specified; 11% for taxpayers selling transportation services, postal services, basic telecommunications, construction, real estate leasing services, sales of real estate, transfer of land use right; 6% for taxpayers selling services or intangible assets.

According to Provisions in the Notice on Adjusting the Value added Tax Rates (Cai Shui [2018] No. 32), or the Notice, issued by SAT and MOF, where taxpayers make VAT taxable sales or import goods, the applicable tax rates shall be adjusted from 17% to 16% and from 11% to 10%, respectively. The Notice took effect on May 1, 2018, and the adjusted VAT rates took effect at the same time.

The Notice of the Ministry of Finance and SAT on Implementing the Pilot Program of Replacing Business Tax with Value-Added Tax in an All-round Manner on March 23, 2016, which took effect on May 1, 2016. Pursuant to such circular, the Value Added Tax Pilot Program has been applicable nationwide since May 1, 2016.

According to the VAT Regulations and the related rules, as of the date of this annual report, as taxpayers selling services, Beijing Baosheng and its consolidated affiliated entities are generally subject to 6% VAT rate.

Dividend Withholding Tax

The EIT Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.

Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes, or the Double Tax Avoidance Arrangement, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%. However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the SAT Circular 81, issued on February 20, 2009, by SAT, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. According to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018, by SAT and took effect on April 1, 2018, when determining the applicant’s status of the “beneficial owner” regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of his or her income in 12 months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases. This circular further provides that applicants who intend to prove his or her status of the “beneficial owner” shall submit the relevant documents to the relevant tax bureau according to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements.

As of the date of this annual report, when considered as a non-PRC resident investor, which is much more likely to happen than not, Baosheng Hong Kong shall be subject to the dividend withholding tax at the rate of 10%. See “Item 3. Key Information—D. Risk Factors” and “Item 10. Additional Information—E. Taxation.” Upon identified as the Hong Kong resident enterprise stipulated by the Double Tax Avoidance Arrangement and other applicable laws, the withholding tax may be reduced to 5%.

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Hong Kong Taxation

Entities incorporated in Hong Kong are subject to profits tax in Hong Kong at the rate of 16.5%. Under Hong Kong tax laws, our Hong Kong subsidiaries are exempted from Hong Kong income tax on its foreign-derived income. In addition, payments of dividends from our Hong Kong subsidiaries to us are not subject to any withholding tax in Hong Kong.

United States Federal Income Tax Considerations

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

● banks;

● financial institutions;

● insurance companies;

● regulated investment companies;

● real estate investment trusts;

● broker-dealers;

● persons that elect to mark their securities to market;

● U.S. expatriates or former long-term residents of the U.S.;

● governments or agencies or instrumentalities thereof;

● tax-exempt entities;

● persons liable for alternative minimum tax;

● persons holding our Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;

● persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Ordinary Shares);

● persons who acquired our Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation;

● persons holding our Ordinary Shares through partnerships or other pass-through entities;

● beneficiaries of a Trust holding our Ordinary Shares; or

● persons holding our Ordinary Shares through a Trust.

The brief discussion set forth below is addressed only to U.S. Holders that purchase Ordinary Shares. Prospective purchasers and U.S. Holders are urged to consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign, and other tax consequences to them of the purchase, ownership, and disposition of our Ordinary Shares.

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Material Tax Consequences Applicable to U.S. Holders of Our Ordinary Shares

The following sets forth a brief summary of the material U.S. federal income tax consequences related to the ownership and disposition of our Ordinary Shares. It is directed to U.S. Holders (as defined below) of our Ordinary Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This description does not deal with all possible tax consequences relating to ownership and disposition of our Ordinary Shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

The brief description below of the U.S. federal income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of Ordinary Shares and you are, for U.S. federal income tax purposes,

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

● an estate whose income is subject to U.S. federal income taxation regardless of its source; or

● a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our Ordinary Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our Ordinary Shares and their partners are urged to consult their tax advisors regarding an investment in our Ordinary Shares.

Taxation of Dividends and Other Distributions on our Ordinary Shares

Subject to the passive foreign investment company (PFIC) rules (defined below), the gross amount of distributions made by us to you with respect to the Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.

With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Ordinary Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and the Cayman Islands, clause (1) above can be satisfied only if the Ordinary Shares are readily tradable on an established securities market in the United States. Under U.S. Internal Revenue Service authority, Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently includes the Nasdaq Stock Market, on which the Ordinary Shares are currently traded. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Ordinary Shares, including the effects of any change in law after the date of this annual report.

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Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Ordinary Shares will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Ordinary Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. The Company did not declare any dividends during the current year.

Taxation of Dispositions of Ordinary Shares

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.

Passive Foreign Investment Company (PFIC) Consequences

A non-U.S. corporation, such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year if, applying applicable look-through rules, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income (the “asset test”). For this purpose, cash and assets readily convertible into cash are categorized as passive assets and the company’s goodwill and other unbooked intangibles not reflected on its balance sheet are taken into account. Passive income generally includes, among other things, dividends, interest, income equivalent to interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, the value of our assets must be determined based on the market value of our Ordinary Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets on any particular quarterly testing date for purposes of the asset test.

Based on our operations and the composition of our assets we do not expect to be treated as a PFIC under the current PFIC rules. It was determined we are not a PFIC for the current year, however, we must make a separate determination each year as to whether we are a PFIC, and there can be no assurance with respect to our status as a PFIC for any future taxable year. Depending on the amount of assets held for the production of passive income, it is possible that, for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax year. In addition, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Ordinary Shares, our PFIC status will depend in large part on the market price of our Ordinary Shares. Accordingly, fluctuations in the market price of the Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend our liquid assets. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price of our Ordinary Shares from time to time) that may not be within our control. If we are a PFIC for any year during which you hold Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely “mark-to-market” election as described below, you still may avoid some of the adverse effects of the PFIC regime by making a “purging election” (as described below) with respect to the Ordinary Shares.

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If we are a PFIC for your taxable year(s) during which you hold Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Ordinary Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Ordinary Shares will be treated as an excess distribution. Under these special tax rules:

● the excess distribution or gain will be allocated ratably over your holding period for the Ordinary Shares;

● the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

● the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Ordinary Shares cannot be treated as capital, even if you hold the Ordinary Shares as capital assets.

A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the US Internal Revenue Code for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed to hold) Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Ordinary Shares as of the close of such taxable year over your adjusted basis in such Ordinary Shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Ordinary Shares over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any net mark-to-market gains on the Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Ordinary Shares. Your basis in the Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “—Taxation of Dividends and Other Distributions on our Ordinary Shares” generally would not apply.

The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. If the Ordinary Shares continue to be regularly traded on the Nasdaq Capital Market and if you are a holder of Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election under Section 1295(b) of the US Internal Revenue Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. The qualified electing fund election, however, is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding such Ordinary Shares, including regarding distributions received on the Ordinary Shares and any gain realized on the disposition of the Ordinary Shares.

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If you do not make a timely “mark-to-market” election (as described above), and if we were a PFIC at any time during the period you hold our Ordinary Shares, then such Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a “purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed sale of such Ordinary Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Ordinary Shares for tax purposes.

IRC Section 1014(a) provides for a step-up in basis to the fair market value for our Ordinary Shares when inherited from a decedent that was previously a holder of our Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Ordinary Shares, or a mark-to-market election and ownership of those Ordinary Shares are inherited, a special provision in IRC Section 1291(e) provides that the new U.S. Holder’s basis should be reduced by an amount equal to the Section 1014 basis minus the decedent’s adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent’s passing, the PFIC rules will cause any new U.S. Holder that inherits our Ordinary Shares from a U.S. Holder to not get a step-up in basis under Section 1014 and instead will receive a carryover basis in those Ordinary Shares.

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

Information Reporting and Backup Withholding

Dividend payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.

Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Ordinary Shares, subject to certain exceptions (including an exception for Ordinary Shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Ordinary Shares.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

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H. Documents on Display

We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov. The SEC also maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

In accordance with Nasdaq Stock Market Rule 5250(d), we will post this annual report on Form 20-F on our website at http://ir.bsacme.com/.

I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to interest rate risk while we have short-term bank loans outstanding. The loan terms are typically 12 months and interest rates for our short-term loans are typically fixed for the terms of the loans.

Liquidity Risk

We are also exposed to liquidity risk which is risk that it 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 and related parties to obtain short-term funding to cover any liquidity shortage.

Foreign Exchange Risk

While our reporting currency is the U.S. dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. All of our assets are 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 the U.S. dollar 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. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

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Inflation Risk

To date, inflation in China has not materially affected our results of operations. Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected by higher rates of inflation in China in the future. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future.

Seasonality

We have experienced, and expect to continue to experience, seasonal fluctuations in our results of operations, due to seasonal changes in our advertisers’ budgets and spending on advertising campaigns. For example, our revenues tend to increase as advertising spend rises in holiday seasons with consumer holiday spending, or closer to end-of-year in fulfillment of their annual advertising budgets.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable.

C. Other Securities

Not applicable.

D. American Depositary Shares

Not applicable.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Material Modifications to the Rights of Security Holders

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

Use of Proceeds

The following “Use of Proceeds” information relates to the registration statement on Form F-1, as amended (File Number: 333-239800) in relation to the initial public offering of 6,000,000 Ordinary Shares at an initial public offering price of $5.00 per Ordinary Share. The

registration statement was declared effective by the SEC on February 5, 2021.Our initial public offering closed on February 10, 2021. Univest Securities, LLC was the representative of the underwriters for our initial public offering. On March 3, 2021, Univest Securities, LLC exercised the over-allotment option in full to purchase an additional 900,000 Ordinary Shares.

We received net proceeds of approximately $30.2 million, after deducting underwriting discounts and estimated offering expenses payable by us. The total expense incurred by the Company in connection with our initial public offering was approximately $4.3 million, which included approximately $2.4 million in underwriting discounts for the initial public offering and approximately $1.9 million in other costs and expenses. None of the transaction expenses included payments to directors or officers of our Company or their associates, persons owning more than 10% or more of our equity securities or our affiliates. None of the net proceeds we received from the initial public offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates. As of the date of this annual report, we used about $28.97 million of the net proceeds we received from our initial public offering as working capital and for general corporate purposes. We still intend to use the remaining proceeds from our initial public offering as disclosed in our registration statement on Form F-1 (File No.: 333-239800).

On March 18, 2021, we issued a total of 1,960,784 units (the “Units”) to Orient Plus International Limited and Union High-Tech Development Limited through a private placement, with each Unit consisting of one Ordinary Share and one Warrant to purchase one half of one Ordinary Share at an exercise price of $5.61 per Ordinary Share. We received net proceeds of $9.9 million in this private placement. We may receive up to an aggregate of approximately $5.5 million from exercise of the Warrants for cash. As of the date of this annual report, no warrants have been exercised, and we have spent all of the proceeds from this private placement for working capital and for general corporate purposes. We intend to use the proceeds from the exercise of the Warrants for working capital and for general corporate purposes.

On February 7, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with VG Master Fund SPC (the “Investor”), under which, subject to specified terms and conditions, the Company may sell and issue in its discretion, up to US$2,000,000 of the Ordinary Shares to the Investor, from time to time during the period commencing on February 7, 2024 and ending on the earlier of (i) the date on which the Investor shall have cumulatively purchased such number of Ordinary Shares pursuant to the Purchase Agreement equal to US$2,000,000 or (ii) February 6, 2025. The Ordinary Shares to be issued to the Investor are registered under the Company’s Form F-3, as amended (File No. 333-273720). The Company’s net proceeds under the Purchase Agreement will depend on the frequency of sales and the number of shares sold to the Investor and the prices at which the Company sells shares to the Investor. The Company expects that any net proceeds it receives from such sales will be used for general corporate purposes, including working capital. As of the date of this annual report, the Company has not sold any Ordinary Shares to the Investor under the Purchase Agreement.

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ITEM 15. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act.

Based upon that evaluation, our management has concluded that, due to the material weaknesses identified below, as of December 31, 2023, our disclosure controls and procedures were not effective in ensuring that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of our company’s assets that could have a material effect on the consolidated financial statements.

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

As required by Rule 13a-15(c) of the Exchange Act, our management conducted an evaluation of our company’s internal control over financial reporting as of December 31, 2023 based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023.

In accordance with reporting requirements set forth by the SEC, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual consolidated financial statements will not be prevented or detected on a timely basis.

The material weakness identified relate to (i) our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review our consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements, and (ii) our lack of comprehensive accounting policies and procedures manual in accordance with U.S. GAAP. Due to the foregoing material weakness, management concluded that as of December 31, 2023, our internal control over financial reporting was ineffective.

To remedy our identified material weakness identified to date, we plan to undertake steps to strengthen our internal control over financial reporting, including (i) recruiting more financial reporting and accounting personnel who have adequate U.S. GAAP knowledge; and (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial personnel.

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However, we cannot assure you that we will remediate our material weakness in a timely manner, or at all. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We have identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.”

Attestation Report of the Registered Public Accounting Firm

As a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the assessment of the emerging growth company’s internal control over financial reporting. This annual report on Form 20-F does not include an attestation report of our registered public accounting firm because we are an emerging growth company.

Changes in Internal Control over Financial Reporting

Other than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Mr. Changhong Jiang, chairman of our audit committee and an independent director (under the standards set forth in Nasdaq Stock Market Rule 5605(a)(2) and Rule 10A-3 under the Exchange Act), is an audit committee financial expert.

ITEM 16.B. CODE OF ETHICS

Our board of directors has adopted a code of business conduct and ethics that applies to all of our directors, officers, employees, including certain provisions that specifically apply to our principal executive officer, principal financial officer or controller and any other persons who perform similar functions for us. We have filed our code of business conduct and ethics as Exhibit 99.1 of our registration statement on Form F-1 (File Number: 333-239800), as amended, initially filed with the SEC on July 10, 2020.

ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by YCM CPA Inc., our independent registered public accounting firm, for the periods indicated.

	For the Years Ended December 31,
	2023		2022
Audit fees(1)		305,000		40,000
Audit-Related fees(2)		—		—
Tax fees(3)		—		—
All other fees(4)		—		—
Total	$	305,000	$	40,000

Note:

(1) “Audit fees” refer to the aggregate fees billed for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements, review of the interim financial statements and for the audits of the financial statements in connection with the initial public offering, as well as the issuance of comfort letter in connection with the initial public offering and consent letter for shelf registration.

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(2) “Audit-related fees” means the aggregate fees billed for professional services rendered by our principal accounting firm for the assurance and related services, which mainly included the audit and review of financial statements and are not reported under “Audit fees” above.

(3) “Tax fees” means the aggregate fees billed for professional services rendered by our principal accounting firm for tax compliance, tax advice and tax planning.

(4) “Other fees” means the aggregate fees incurred in each of the fiscal years listed for the professional tax services rendered by our principal accounting firm other than services reported under “Audit fees,” “Audit-related fees” and “Tax fees.”

From January 20, 2020 to July 20, 2022, the policy of our audit committee was to pre-approve all audit and non-audit services provided by Friedman LLP, our former independent registered public accounting firm including audit services, audit-related services, tax services, and other services as described above.

Since July 20, 2022, the policy of our audit committee is to pre-approve all audit and non-audit services provided by YCM CPA INC., our independent registered public accounting firm including audit services, audit-related services, tax services, and other services as described above.

ITEM 16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

ITEM 16.F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16.G. CORPORATE GOVERNANCE

As a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing standards. However, Nasdaq Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Capital Market corporate governance listing standards.

Pursuant to the home country rule exemption set forth under Nasdaq Listing Rule 5615, we elected to be exempt from the requirement under Nasdaq Listing Rule 5635(d) to obtain shareholder approval for a business combination and to obtain shareholder approval for the issuance of 20% or more of our outstanding Ordinary Shares. As a result, our shareholders may be afforded less protection than they would have otherwise enjoy under Nasdaq’s corporate governance requirements applicable to U.S. domestic issuers. See “Item 3. Key Information—D. Risk Factors— As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq Stock Market corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards.”

ITEM 16.H. MINE SAFETY DISCLOSURE

Not applicable.

Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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Item 16J. INSIDER TRADING POLICIES

Not applicable.

Item 16K. CYBERSECURITY

We believe that cybersecurity is important to our operations and we recognize the importance of timely and appropriately assessing, preventing, identifying and managing risks associated with cybersecurity threats. Such risks include, among other things, potential operational risks, financial risks, intellectual property theft, fraud, extortion, harm to employees and clients, violation of privacy and other litigation and legal risks, and reputational risks.

Our board of directors is aware of the importance of adopting a group-wide cybersecurity program. Our board of directors actively oversees our cybersecurity risks by actively reviewing reports on cybersecurity risks, legislation, and incidents. To date, we have never experienced material cybersecurity threats, disruptions, data losses, or major impacts.

We have engaged a third-party advisor in assisting us in assessing and managing cybersecurity risks. They are responsible for providing assistance in managing daily cybersecurity tasks, updating cybersecurity policies, implementing remedial measures, and providing assessment reports. Our management receives regular briefings from the advisor on cybersecurity incidents and cybersecurity reports. Nevertheless, our efforts may not be adequate, and we may fail to accurately assess the severity of an incident, may not be sufficient to prevent or limit harm, or may fail to sufficiently remediate an incident in a timely fashion, any of which could harm our business, reputation, results of operations and financial condition.

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PART III

ITEM 17. FINANCIAL STATEMENTS

We have elected to provide financial statements pursuant to Item 18.

ITEM 18. FINANCIAL STATEMENTS

The consolidated financial statements of Baosheng Media Group Holdings Limited are included at the end of this annual report.

ITEM 19. EXHIBITS

Exhibit Number	Description
1.1*	Amended and Restated Memorandum and Articles of Association
2.1	Registrant’s Specimen Certificate for Ordinary Shares (incorporated herein by reference to Exhibit 2.1 to our annual report on Form 20-F for the fiscal year ended December 31, 2022 (File No. 001-39977), filed with the SEC on May 8, 2023)
2.2	Form of Warrant (incorporated herein by reference to Exhibit 4.2 to our registration statement on Form F-1 (File No. 254449), filed with the SEC on March 18, 2021)
2.3*	Description of Securities
4.1	Form of Employment Agreement by and between executive officers and the Registrant (incorporated herein by reference to Exhibit 10.1 to our registration statement on Form F-1 (File No. 333-239800), as amended, initially filed with the SEC on July 10, 2020)
4.2	Form of Indemnification Agreement with the Registrant’s directors and officers (incorporated herein by reference to Exhibit 10.2 to our registration statement on Form F-1 (File No. 333-239800), as amended, initially filed with the SEC on July 10, 2020)
4.3*	English Translation of Agent Data Promotion Business Cooperation Agreement between Beijing Baosheng Technology Co., Ltd. and Xiamen Jinri Toutiao Information Technology Co., Ltd., dated January 1, 2024
4.4*	English Translation of Agent Data Promotion Business Cooperation Agreement among Beijing Baosheng Technology Co., Ltd., Beijing Baosheng Network Technology Co., Ltd. and Xiamen Jinri Toutiao Information Technology Co., Ltd., as amended, dated January 1, 2024
4.5*	English Translation of System Technology Services Agreement by and between Beijing Baosheng Technology Co., Ltd. and Guangzhou Juyao Information Technology Co., Ltd., dated January 1, 2024
4.6*	English Translation of System Technology Services Agreement by and between Beijing Baosheng Network Technology Co., Ltd. and Guangzhou Juyao Information Technology Co., Ltd., dated January 1, 2024
4.7*	English Translation of Asset Merger and Acquisition Security Deposit Agreement between Beijing Baosheng Network Technology Co., Ltd. and Nanjing Yunbei E-Commerce Co., Ltd.
8.1	List of Subsidiaries of the Registrant (incorporated herein by reference to Exhibit 8.1 to our annual report on Form 20-F (File No. 001-39977), filed with the SEC on May 17, 2022)
11.1	Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to our registration statement on Form F-1 (File No. 333-239800), as amended, initially filed with the SEC on July 10, 2020)
12.1*	Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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12.2*	Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**	Certification by the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**	Certification by the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*	Consent of Beijing Dacheng Law Offices, LLP
15.2*	Consent of YCM CPA INC.
97.1*	Compensation Recovery Policy of the Registrant
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 Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** Furnished herewith.

142

SIGNATURES

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

	Baosheng Media Group Holdings Limited
	By:	/s/ Shasha Mi
	Name:	Shasha Mi
	Title:	Chief Executive Officer and Chairperson of the Board of Directors (Principal Executive Officer)
Date: May 15, 2024

143

TABLE OF CONTENTS

Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID: 6781)	F-2
Consolidated Balance Sheets as of December 31, 2023 and 2022	F-3
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2023, 2022, and 2021	F-4
Consolidated Statements of Changes in Shareholder’s Equity for the years ended December 31, 2023, 2022, and 2021	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Baosheng Media Group Holdings Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Baosheng Media Group Holdings Limited and subsidiaries (collectively, the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income (loss), change in shareholders’ equity, and cash flows for the year ended December 31, 2023, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flow for year ended December 31, 2023, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered a net loss of $1,845,170 for the year ended December 31, 2023. This factor raises a substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

/s/ YCM CPA, Inc.

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

PCAOB ID 6781

Irvine, California

May 15, 2024

F-2

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

As of December 31, 2023 and 2022

(Expressed in U.S. dollar, except for the number of shares)

	December 31,		December 31,
	2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	3,316,062	$	6,679,077
Short-term investments		2,554,319		3,082,990
Accounts receivable, net		26,082,773		32,101,818
Prepayments - third parties		959,135		803,956
Prepayments - a related party		215,689		3,314,744
Media deposits - third parties		713,938		1,281,434
Media deposits - a related party		—		104,390
Due from related parties		30,075		28,667
Deposit due from a third party		2,816,941		—
Other current assets		2,831,873		2,742,406
Total Current Assets		39,520,805		50,139,482
Long-term investment		6,848,964		2,261,787
Property and equipment, net		2,056,424		2,351,328
Intangible assets, net		401,549		558,226
Othe non-current assets		—		2,735,592
Total Assets	$	48,827,742	$	58,046,415
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term bank borrowings	$	2,253,553	$	1,449,864
Accounts payable		2,292,871		8,853,669
Advance from advertisers		841,250		748,039
Advertiser deposits		90,065		541,444
Income tax payable		249,917		257,262
Due to related parties		12,176		14,499
Warrant liabilities		—		832
Accrued expenses and other liabilities		727,799		744,181
Total Current Liabilities		6,467,631		12,609,790
Total Liabilities		6,467,631		12,609,790
Commitments and Contingencies
Shareholders’ Equity
Ordinary Share (par value $0.0096 per share, 1,000,000,000 shares authorized; 1,534,487 shares issued and outstanding at December 31, 2023 and 2022, respectively)*		14,731		14,731
Additional paid-in capital		41,564,418		41,564,418
Statutory reserve		898,133		898,133
Retained earnings		3,412,457		5,257,627
Accumulated other comprehensive loss		(3,529,628)		(2,298,284)
Total Shareholders’ Equity		42,360,111		45,436,625
Total Liabilities and Shareholders’ Equity	$	48,827,742	$	58,046,415

* Retrospectively restated to give effect to an increase in the Company’s share capital from $50,000 to $60,000, a share consolidation at a ratio of one-for-six (6) ordinary shares effective on March 21, 2023, and an increase in authorized share from 6,250,000 into 1,000,000,000 (Note 15).

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

F-3

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

For the Years Ended December 31, 2023, 2022, and 2021

(Expressed in U.S. dollar, except for the number of shares)

	For the Years Ended
	December 31,
	2023		2022		2021
Revenues	$	921,834	$	2,415,098	$	3,911,560
Cost of revenues		(308,395)		(2,446,941)		(2,077,516)
Gross profit (loss)		613,439		(31,843)		1,834,044
Operating Expenses
Selling and marketing expenses		(381,635)		(764,258)		(1,086,078)
General and administrative expenses		(1,845,064)		(2,811,215)		(2,856,789)
Provision for doubtful accounts		(726,294)		(20,460,667)		(6,880,008)
Impairment of long-term investments		(128,204)		—		—
Impairment of property and equipment		—		—		(434,878)
Total Operating Expenses		(3,081,197)		(24,036,140)		(11,257,753)
Loss from Operations		(2,467,758)		(24,067,983)		(9,423,709)
Other Income (Expenses)
Interest (expense) income, net		(14,492)		16,397		(57,109)
Changes in fair value of warrant liabilities		832		1,912		2,367,632
Changes in fair value of short-term investments		596,796		17,335		—
Subsidy income		9,876		3,089		574,878
Other income (expenses), net		29,576		290,413		(209,145)
Total Other Income, Net		622,588		329,146		2,676,256
Loss Before Income Taxes		(1,845,170)		(23,738,837)		(6,747,453)
Income tax expenses		—		—		—
Net Loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Other Comprehensive (Loss) Income
Foreign currency translation adjustment		(1,231,344)		(4,885,827)		1,393,597
Comprehensive Loss	$	(3,076,514)	$	(28,624,664)	$	(5,353,856)
Weighted average number of ordinary share outstanding
Basic and Diluted*		1,534,487		1,534,487		1,459,390
Loss per share
Basic and Diluted*	$	(1.20)	$	(15.47)	$	(4.62)

* Retrospectively restated to give effect to a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares effective on May 24, 2022 and a share consolidation at a ratio of one-for-six (6) ordinary shares effective on March 21, 2023 (Note 15).

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

F-4

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Years Ended December 31, 2023, 2022, and 2021

(Expressed in U.S. dollar, except for the number of shares)

										Accumulated
				Additional						Other
	Ordinary Shares			Paid-in		Statutory		Retained		Comprehensive		Total
	Shares*	Amount		Capital		Reserve		Earnings		(Loss) Income		Equity
Balance as of December 31, 2020	1,062,502	$	10,200	$	3,814,665	$	898,133	$	35,743,917	$	1,193,946	$	41,660,861
Issuance of ordinary shares in connection with initial public offering (“IPO”)	312,500		3,000		26,079,224		—		—		—		26,082,224
Issuance of ordinary shares in connection with over-allotment of IPO	46,875		450		4,154,537		—		—		—		4,154,987
Issuance of ordinary shares in connection with a private placement	112,610		1,081		7,515,992		—		—		—		7,517,073
Net loss	—		—		—		—		(6,747,453)		—		(6,747,453)
Foreign currency translation adjustments	—		—		—		—		—		1,393,597		1,393,597
Balance as of December 31, 2021	1,534,487	$	14,731	$	41,564,418	$	898,133	$	28,996,464	$	2,587,543	$	74,061,289
Net loss	—		—		—		—		(23,738,837)		—		(23,738,837)
Foreign currency translation adjustments	—		—		—		—		—		(4,885,827)		(4,885,827)
Balance as of December 31, 2022	1,534,487	$	14,731	$	41,564,418	$	898,133	$	5,257,627	$	(2,298,284)	$	45,436,625
Net loss	—		—		—		—		(1,845,170)		—		(1,845,170)
Foreign currency translation adjustments	—		—		—		—		—		(1,231,344)		(1,231,344)
Balance as of December 31, 2023	1,534,487	$	14,731	$	41,564,418	$	898,133	$	3,412,457	$	(3,529,628)	$	42,360,111

* Retrospectively restated to give effect to a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares effective on May 24, 2022, and a share consolidation at a ratio of one-for-six (6) ordinary shares effective on March 21, 2023 (Note 15).

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

F-5

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2023, 2022 and 2021

(Expressed in U.S. dollar, except for the number of shares)

	For the Years Ended
	December 31,
	2023		2022		2021
Cash Flows from Operating Activities:
Net loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expenses		392,619		387,020		286,874
Amortization of right-of-use assets		—		513,218		731,923
Loss from disposal of property and equipment		6,991		1,275		14,810
Impairment of property and equipment		—		—		434,878
Provision for doubtful accounts of accounts receivables		(702,156)		19,276,587		4,155,246
Provision for doubtful accounts of prepayments		(1,243,233)		1,196,563		2,668,421
Provision for doubtful accounts of other current assets		7,061		(12,483)		56,341
Impairment of prepayments for licensed copyrights		2,664,622		—		—
Changes in fair value of short-term investments		(596,796)		(17,335)		—
Changes in fair value of warrant liabilities		(832)		(1,912)		(2,367,632)
Share of equity loss in one equity investee		9,214		—		—
Impairment of long-term investments		128,204		—		—
Issuance cost in connection with warrant liabilities		—		—		34,927
Changes in operating assets and liabilities:
Accounts receivable		5,818,395		1,197,088		6,069,121
Prepayments - third parties		1,064,623		6,859,021		(5,802,836)
Prepayments - a related party		3,012,482		(1,160,912)		(2,333,148)
Media deposits - third parties		532,336		(134,687)		5,686,916
Media deposits - a related party		101,682		1,243,870		(1,409,128)
Other current assets		(445,227)		1,745,634		(1,353,409)
Accounts payable		(6,324,955)		(2,442,824)		(23,769,006)
Advance from advertisers		114,874		(769,787)		(1,722,679)
Advertiser deposits		(437,091)		(313,009)		(5,029,471)
Income tax payable		—		—		(302,038)
Accrued expenses and other liabilities		(6,830)		(1,848,320)		354,692
Due to related parties		8,653		—		—
Operating lease liabilities		—		(378,689)		(870,548)
Net Cash Provided by (Used in) Operating Activities		2,259,466		1,601,481		(31,213,199)
Cash Flows from Investing Activities:
Purchases of property and equipment		(7,412)		(1,514,414)		(1,101,948)
Purchases of intangible assets		(22,696)		(13,463)		(837,299)
Proceeds from disposal of property and equipment		—		222,916		—
Prepayments for licensed copyrights		—		—		(2,924,897)
Purchases of short-term investments		(1,285,147)		(5,215,262)		—
Redemption of short-term investments		2,359,920		1,931,936		—
Purchase of long-term investments		(4,801,650)		(832,219)		(1,550,195)
Deposits made to a third party for future business combination		(2,554,539)		—		—
Loans made to a related part		(1,412)		—		—
Repayment of loans from related parties		—		1,642,724		—
Net Cash Used in Investing Activities		(6,312,936)		(3,777,782)		(6,414,339)
Cash Flows from Financing Activities:
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs		—		—		26,507,760
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs		—		—		4,154,987
Issuance of units pursuant to a private placement, net of issuance costs		—		—		9,852,486
Proceeds from bank borrowings		2,259,600		1,486,105		7,750,977
Repayment of bank borrowings		(1,412,250)		—		(9,301,172)
Repayment of borrowings to third parties		—		(1,456)		—
Repayment of borrowings to related parties		—		—		(709,021)
Payments of dividends to shareholders		—		(1,188,884)		(2,170,273)
Net Cash Provided by Financing Activities		847,350		295,765		36,085,744
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(156,895)		(323,238)		152,389
Net decrease in cash, cash equivalents and restricted cash		(3,363,015)		(2,203,774)		(1,389,405)
Cash, cash equivalents and restricted cash at beginning of year		6,679,077		8,882,851		10,272,256
Cash, cash equivalents and restricted cash at end of year	$	3,316,062	$	6,679,077	$	8,882,851
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets
Cash and cash equivalents	$	3,316,062	$	6,679,077	$	4,751,538
Restricted cash		—		—		4,131,313
Total cash, cash equivalents and restricted cash	$	3,316,062	$	6,679,077	$	8,882,851
Supplemental Cash Flow Information
Cash paid for interest expense	$	—	$	—	$	88,518
Cash paid for income tax	$	—	$	2,158	$	—
Non-cash operating, investing and financing activities
Right of use assets obtained in exchange for operating lease obligations	$	—	$	4,299	$	1,574,311

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

F-6

1.ORGANIZATION AND BUSINESS DESCRIPTION

Baosheng Media Group Holdings Limited (“Baosheng Group”) was incorporated on December 4, 2018 under the laws of the Cayman Islands as an exempted company with limited liability.

Baosheng Group owns 100% of the equity interests of Baosheng Media Group Limited (“Baosheng BVI”), an entity incorporated under the laws of British Virgin Islands (“BVI”) on December 14, 2018.

Baosheng BVI owns 100% of the equity interests of Baosheng Media Group (Hong Kong) Holdings Limited (“Baosheng HK”), a business company incorporated in accordance with the laws and regulations of Hong Kong on January 7, 2019. On March 21, 2021, Baosheng HK established Beijing Baosheng Network Technology Co., Ltd. (“Baosheng Network”), a wholly owned subsidiary in China. On April 2, 2022, Baosheng Network set up a wholly owned subsidiary, Beijing Xunhuo E-commerce Co., Ltd. (“Beijing Xunhuo”).

Beijing Baosheng Technology Company Limited (“Beijing Baosheng”) was established on October 17, 2014 under the laws of the People’s Republic of China (“China” or the “PRC”) with a registered capital of $289,540 (RMB 2,000,000). Beijing Baosheng has three wholly-owned subsidiaries, Horgos Baosheng Advertising Co., Ltd. (“Horgos Baosheng”), Kashi Baosheng Information Technology Co., Ltd. (“Kashi Baosheng”), and Baosheng Technology (Horgos) Co., Ltd. (“Baosheng Technology”), which were established on August 30, 2016, May 15, 2018 and January 2, 2020 in China, respectively.

On January 21, 2019, Baosheng HK entered into an equity transfer agreement with Beijing Baosheng and the shareholders of Beijing Baosheng. Pursuant to the equity transfer agreement, each of the shareholders of Beijing Baosheng transferred to Baosheng HK their respective equity interests in Beijing Baosheng at a consideration aggregating $13,844,895 (RMB94,045,600), determined by reference to the evaluation of the equity interest of Beijing Baosheng as of June 30, 2018 (the “reorganization”). Upon completion of such transfers, Beijing Baosheng became a direct wholly-owned subsidiary of Baosheng HK and an indirect-wholly owned subsidiary of the Company.

On June 4, 2019, Baosheng Group completed the reorganization of entities under common control of its then existing shareholders, who collectively owned 100% of the equity interests of Beijing Baosheng prior to the reorganization. Baosheng Group, Baosheng BVI and Baosheng HK were established as holding companies of Beijing Baosheng and its subsidiaries, and all of these entities are under common control which results in the consolidation of Beijing Baosheng and its subsidiaries, which have been accounted for as a reorganization of entities under common control at carrying value.

The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the consolidated financial statements.

Baosheng Group, Baosheng BVI, Baosheng HK, Beijing Baosheng and its subsidiaries (herein collectively referred to as the “Company”) are engaged in providing online marketing channels to advertisers for them to manage their online marketing activities.

Share consolidation and increase in authorized share capital

On May 11, 2022, the Company’s Board of Directors resolved to approve a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares with a par value of US$0.0005 each in the Company’s issued and unissued share capital into one ordinary share with a par value of US$0.0016 (“2022 Share Consolidation”), for which the Company obtained shareholder approval on April 28, 2023. Immediately following the 2022 Share Consolidation, the authorized share capital of the Company was US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each. The 2022 Share Consolidation became effective on May 24, 2022.

F-7

1.ORGANIZATION AND BUSINESS DESCRIPTION (CONTINUED)

On March 6, 2023, the Company effected an increase in its authorized share capital from US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each to US$60,000 divided into 37,500,000 ordinary shares of a par value US$0.0016 each(the “Increase in Share Capital”), and on March 21, 2023, the Company effected a share consolidation at a ratio of one-for-six, such that each (6) ordinary shares with a par value of US$0.0016 each in the Company’s issued and unissued share capital were consolidated into one ordinary share with a par value of US$0.0096 (“2023 Share Consolidation”). Effective on September 29, 2023, the Company increased the authorized share capital of the Company from US$60,000 divided into 6,250,000 Ordinary Shares of par value US$0.0096 each, to US$9,600,000 divided into 1,000,000,000 Ordinary Shares of a par value of US$0.0096 each (the “2023 Share Capital Increase”). Immediately following the Increase in Share Capital, 2023 Share Consolidation, and the 2023 Share Capital Increase, the authorized share capital of the Company increased from US$50,000 to US$60,000, divided into 6,250,000 ordinary shares of a par value US$0.0096 each. The Company believes it is appropriate to reflect the Increase in Share Capital, 2022 Share Consolidation and 2023 Share Consolidation on a retroactive basis pursuant to ASC 260. The Company has retroactively restated all shares and per share data for all periods presented. As a result, the Company had 1,000,000,000 authorized shares, par value of US$0.0096, of which 1,534,487 shares were issued and outstanding as of December 31, 2023 and 2022, respectively.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities Exchange Commission (“SEC”).

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for doubtful accounts, valuation allowance for deferred tax assets, fair value of warrant liabilities, revenue recognition, and other provisions and contingencies.

Cash and cash equivalents

Cash and cash equivalents primarily consist of bank deposits, as well as highly liquid investments, with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains most of the bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.

Short-term investments

Short-term investments consist of US Treasury Bills and investments in trading securities.

F-8

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

US Treasury Bills

The Company purchased US Treasury Bills with variable interest rates during the year of 2022. US Treasury bills were redeemable within a period of three through six months. In accordance with ASC 825, Financial Instruments, for financial products with variable interest rates referenced to performance of underlying assets, the Company elected the fair value method at the date of initial recognition and carries these investments at fair value with fair value change gains or losses recorded in the investment income in the consolidated statements of loss and comprehensive loss. As of December 31, 2023 and 2022, the Company had US Treasury Bills of $nil and $987,600, respectively. For the years ended December 31, 2023 and 2022, the Company recorded gross unrealized gains of $nil and $7,135. For the years ended December 31, 2023 and 2022, the Company recorded realized gains of $3,188 and $nil, respectively.

Investments in trading securities

Trading securities are investments in publicly-listed equity securities through various open market transactions. During the year ended December 31, 2023 and 2022, the Company purchased certain publicly-listed equity securities through various open market transactions and accounted for such investments as “short-term investments” and subsequently measure the investments at fair value. The Company made a gain of $593,608 and $10,200 in investment in trading securities for the years ended December 31, 2023 and 2022, respectively.

Accounts receivable, net of provision for doubtful accounts

Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from the advertisers for the acquisition of ad inventory and other advertising services on their behalf. Accounts receivable do not bear interest.

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. Upon the adoption of the guidance, the Company reversed allowance for expected credit losses of $702,156 for accounts receivable for the year ended December 31, 2023.

Prior to the Company’s adoption of ASU 2016-13, the Company applied ASC 310, Receivables (“ASC 310”) to recognize and measure accounts receivable. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when necessary. An allowance for doubtful accounts is made and recorded into general and administrative expenses based on any specifically identified accounts receivable that may become uncollectible. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

After the adoption of ASU 2016-13, the Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “provision for doubtful accounts” in the consolidated statements of loss and comprehensive loss. The Company assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable were primarily consisted of accounts due from the advertisers for the acquisition of ad inventory and other advertising services on their behalf. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit loss after management has determined that the likelihood of collection is not probable.

For the year ended December 31, 2023, the Company reversed allowance for expected credit losses of $702,156 for accounts receivable. For the years ended December 31, 2022 and 2021, the Company provided allowance of $19,276,587 and $4,155,246 against the accounts receivable, respectively.

F-9

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Prepayments

Prepayments represent amounts advanced to media or their authorized agencies (collectively “publishers”) for running of advertising campaigns of the advertisers. The publishers usually require advance payments when the Company orders advertising campaign services on behalf of its advertisers, and the prepayments will be utilized to offset the Company’s future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature, which are reviewed periodically to determine whether their carrying value has become impaired. For the year ended December 31, 2023, the Company reversed allowances of doubtful accounts of $1,243,233 against prepayments. For the years ended December 31, 2022 and 2021, the Company accrued allowances of doubtful accounts of $1,196,563 and $2,668,421, respectively, against prepayments.

Media deposits

Media deposits represent performance security deposit upon becoming an authorized agency of the relevant media (platforms where online advertisement is delivered) as a guarantee of performance and obligations and deposit associated with committed advertising spend on behalf of selected advertisers as required by certain media before running their advertising campaigns, which are paid to media pursuant to the terms of the framework agreements and contracts.

In the event that the advertisers or their advertising agencies on behalf of their advertising clients (collectively the “advertisers”) commit to spending a guaranteed minimum amount on a particular media with the Company, the Company enters into a back-to-back framework agreement with the relevant publishers committing the same level of guaranteed minimum spend and securing a preferential rebate policy applicable to the advertising spend of that advertiser. With the committed minimum spend, the Company is entitled to enjoy certain rebates and discounts and usually be required to pay a deposit of up to 10% of the guaranteed minimum spend. If the Company fails to fulfil the committed minimum spend, the Company would not be entitled to the additional rebates and discounts, and any deposit that has been paid may be forfeited or deducted to pay up the additional amount without the benefit of the additional rebates and discounts.

The media may deduct damages from performance security deposit if the Company has breached the agency agreement or authorized agency management rules and conditions formulated by media.

As of December 31, 2023 and 2022, the balances of media deposits paid to third parties were $713,938 and $1,281,434, respectively. As of December 31, 2023 and 2022, the balances of media deposits paid to a related party were $nil and $104,390, respectively.

Property and equipment, net

Property and equipment primarily consist of property, leasehold improvement, office equipment and electronic equipment, which is stated at cost less accumulated depreciation and impairment losses. Depreciation is provided using the straight-line method based on the estimated useful life. The useful lives of property and equipment as follows:

Property	20 years
Office equipment	5 years
Electronic equipment	3 years
Vehicle	4 years
Leasehold improvement	Shorter of useful life or lease term

Expenditures for repairs and maintenance, which do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the account of “other income or expenses” in the consolidated statement of loss and comprehensive loss.

F-10

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Intangible assets, net

Purchased intangible assets primarily consist of copyrights and software, which are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method based on their estimated useful lives as. The estimated useful lives of copyrights and software range from 3 to 10 years.

Long-term investment

Long-term investments consist of the following types of investments.

Equity investment without readily determinable fair value measured at Measurement Alternative

The Company elects to record the equity investment in a privately held company, over which the Company had no control or significant influence, using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. Suh equity investment accounted for using the measurement alternative is subject to periodic impairment review. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity investment. For the years ended December 31, 2023, 2022 and 2021, the Company recorded impairment loss of $128,204, $nil, and $nil against the long-term investment, respectively.

Equity investment accounted for using the equity method

For the year ended December 31, 2023, the Company acquired one equity investment which was accounted for using equity method.

In accordance with ASC 323 “Investments - Equity Method and Joint Ventures,”, the Company accounts for the investment using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee.

Under the equity method, the Company initially records its investment at cost. The Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of loss and comprehensive loss and its share of post-acquisition movements in accumulated other comprehensive income (loss) is recognized in other comprehensive income (loss). The Company records its share of the results of the equity investees on a one quarter in arrears basis. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.

The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. For the year ended December 31, 2023, the Company did not recognize impairment against investment in an equity investee.

Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Impairment of $nil $nil, and $434,878 was recognized on property and equipment for the years ended December 31, 2023, 2022 and 2021, respectively.

F-11

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Advertiser deposits

The advertiser deposits represented deposits made by the advertisers who undertake a minimum total advertising spend as a condition for enjoying rebates and discounts. The Company generally requires these advertisers to place deposits with the Company at a percentage (usually up to 10%) of the committed spend, which usually equals to the amount of deposit payable to the media under the corresponding framework agreement with the media specific to such advertiser (see note 2 – media deposits). If the advertiser fails to reach the committed minimum spend upon expiry or termination of the framework agreement; (i) the advertiser would not be entitled to the rebates and discounts under the preferential pricing policy, if any; (ii) the advertiser’s deposit may be forfeited or deducted to pay up the additional amount it should pay without the benefits of rebates or discounts.

As of December 31, 2023 and 2022, the balances of advertiser deposits were $90,065 and $541,444, respectively.

Warrant Liabilities

The Company evaluates the stock purchase warrants under Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of common stock warrant liability in the consolidated statement of loss and comprehensive loss.

Revenue recognition

The Company early adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018, using the modified retrospective approach for contracts that were not completed as of December 31, 2017. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

The Company identified each distinct service, or each series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, as a performance obligation. Transaction price is allocated among different performance obligations identified in one contract, by using expected cost plus margin approach, if the standalone selling price of each performance obligation is not observable.

The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company has no material incremental costs of obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year, which need to be recognized as assets.

The Company has advertising agency revenues from search engine marketing (‘SEM”, a form of online marketing that involves the promotion of websites by increasing their visibility in search engine results pages and search-related products and services) services and non-SEM services, including deployment of in-feed and mobile app ads on other media and social media marketing services in relation to running advertising campaigns on selected social media accounts. The Company acts as an agent between media or their authorized agencies (collectively “publishers”) and advertisers by helping publishers procure advertisers and facilitate ad deployment on their advertising channels, and purchasing ad inventories and advertising services from publishers for advertisers. The Company places orders with publishers as per request from advertisers. Each order is materialized by a contract and explicitly quotes one agency service to arrange for the advertising service to be provided by a third party publisher for a period of ad term. The Company provides advices and services on advertising strategies and ad optimization to advertisers to improve the effectiveness of their ads, all of which are highly interrelated and not separately identifiable. The Company’s overall promise represents a combined output that is a single performance obligation; there is no multiple performance obligations.

F-12

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company evaluated its advertising agency contracts and determined that it was not acting as principal in these arrangements with publishers and advertisers since it never takes control of the ad inventories at any time. The Company collects the costs of purchasing ad inventories and advertising services from advertisers on behalf of publishers. The Company generates advertising agency revenues either by charging additional fees to advertisers or receiving rebates and incentives offered by publishers. Accordingly, both advertisers and publishers can be identified as customers, depending on the revenue model applicable to the relevant services.

The Company recognizes revenues on a net basis, which equal to: (i) rebates and incentives offered by publishers, netting the rebates to advertises (if any); and (ii) net fees from advertisers.

Rebates and incentives offered by publishers

Rebates and incentives offered by publishers are determined based on the contract terms with publishers and their applicable rebate policies, which typically in the form of across-the-board standard-rate rebates, differential standard-rate rebates and progressive-rate rebates. Rebates and incentives offered by publishers are accounted for as variable consideration. The Company accrues and recognizes revenues in the form of rebates and incentives based on its evaluation as to whether the contractually stipulated thresholds of advertising spend are likely to being reached, or other benchmarks or certain prescribed classification are likely to being qualified (e.g. the number of new advertisers secured, growth in actual advertising spend), and to the extent that a significant reversal of cumulative revenue would not occur in future periods. These evaluations are based on the past experience and regularly monitoring of various performance factors set within the rebate policies (e.g. accumulated advertising spend, number of new advertisers). At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving such advertising spend volume and any related constraint, and if necessary, adjusts the estimate of the amount of rebates and incentives. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. The rebates and incentives are generally ascertained and settled on a quarterly or annual basis. Historically, adjustments to the estimations for the actual amounts have been immaterial. These rebates and incentives take the form of cash which, when paid, are applied to set off accounts payable with the relevant publishers or settled separately; or can be in the form of ad currency units which will be deposited in the account in the back-end platform of the media, and can then be utilized to acquire their ad inventory.

The Company may offer rebates to advertisers on a case by case basis, generally with reference to the rebates and incentives offered by publishers, the advertiser’s committed total spend, and the business relationships with such advertiser. The rebates offered by the Company to advertisers are in the form of cash discounts or ad currency units that can be utilized to acquire ad inventory from relevant media, both of which are account for as a deduction of revenues.

Net fees from advertisers

Net fees from advertisers are the difference between the gross billing amount charged to the advertisers and the costs of purchasing ad inventories and advertising services on their behalf.

The publishers do not receive the benefits from the Company’s facilitation services until the publishers deliver advertising services to the advertisers. The Company recognizes advertising agency revenues when it transfers the control of the facilitation service commitments, i.e., when the publishers deliver advertising services to the advertisers. Under the CPC and CPA pricing model of media, the Company recognizes revenues at the point of time as the publishers deliver advertising services at the point in time. Under the CPT pricing model of media, the publishers deliver advertising services over time when the advertising links are displayed over the contract periods, and therefore the Company recognizes revenue on a straight-line basis over the contracted display period. During the years ended December 31, 2023, 2022 and 2021, revenues from the advertising services under CPT pricing model that the Company arranged are immaterial.

The Company records revenues and costs on a net basis and the related accounts receivable and payable amounts on a gross basis.

F-13

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The gross billing amounts charged to the advertisers are collected either in advance to provision of services or after the services. Accounts receivable represent the gross billing charged to advertisers that the Company has an unconditional right to consideration (including billed and unbilled amount) when the Company has satisfied its performance obligation. Payment terms and conditions of accounts receivables vary by customers, and terms typically include a requirement for payment within a period from three to six months. The Company has determined that all the contracts generally do not include a significant financing component. The Company does not have any contract assets since revenue is recognized when control of the promised services is transferred and the payment from customers is not contingent on a future event. In cases where the gross billing amounts are collected in advance, the amounts are recorded as “advance from advertisers” in the consolidated balance sheets. Advance from advertisers related to unsatisfied performance obligations at the end of the year is recognized as revenue when the Company delivers the services to its advertisers. The fees are non-refundable. In cases where amounts are collected after the services, accounts receivable are recognized upon delivery of ad inventories and advertising services to the advertisers. The gross billing amounts are determinable at the inception of the services.

The cost of purchasing ad inventories and advertising services are recorded as accounts payable or a deduction against prepayments in cases where prepayments are required by the publishers.

The following table identifies the disaggregation of our revenue for the years ended December 31, 2023, 2022, and 2021, respectively.

	For the Years Ended
	December 31,
	2023		2022		2021
Nature of Revenue:
Rebates and incentives offered by publishers	$	887,038	$	1,930,188	$	3,663,168
Net fees from advertisers		34,796		484,910		248,392
Total	$	921,834	$	2,415,098	$	3,911,560
Category of Revenue:
SEM services	$	559,307	$	321,363	$	2,449,120
Non-SEM services		362,527		2,093,735		1,462,440
Total	$	921,834	$	2,415,098	$	3,911,560

Value added taxes

The Company’s PRC subsidiaries are subject to value added tax (“VAT”) and related surcharges based on gross service price depending on the type of services provided in the PRC (“output VAT”), and the VAT may be offset by VAT paid by the Company on service purchases (“input VAT”). The applicable rate of output VAT or input VAT for the Company is 6%. Gross billing charged to advertisers, which is reflected as accounts receivable on gross basis in the consolidated balance sheet, is subject to output VAT at a rate of 6% and subsequently paid to PRC tax authorities after netting input VAT on purchases incurred during the period. The Company’s revenues are presented net of costs of purchasing ad inventories and services paid on behalf of advertisers, VAT collected on behalf of PRC tax authorities and its related surcharges; the VAT is not included in the consolidated statements of loss and comprehensive loss.

Cost of revenues

Cost of revenues related to advertising agency is primarily personnel related costs and business taxes. These costs are expensed as incurred.

Income Taxes

The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes.

F-14

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forwards. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company does not believe that there was any uncertain tax position as of December 31, 2023 and 2022. As of December 31, 2023, income tax returns for the tax years ended December 31, 2018 through December 31, 2022 remain open for statutory examination.

Loss per share

Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is computed by dividing net income attributable to ordinary shareholders by the sum of the weighted average number of ordinary share outstanding and of potential ordinary share (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary share that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted loss per share. For the years ended December 31, 2023, 2022 and 2021, the Company had no dilutive shares.

Foreign currency translation

The reporting currency of the Company is U.S. dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into the reporting currency U.S. Dollars (“US$” or “$”). Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations.

The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

	December 31,	December 31,
	2023	2022
Year-end spot rate	7.0999	6.8972

	For the Years Ended
	December 31,
	2023	2022	2021
Average rate	7.0809	6.7290	6.4508

F-15

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy are described below:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value.

Financial instruments of the Company primarily comprised current assets and current liabilities including cash and cash equivalents, restricted cash, short-term investments, accounts receivable, third party and related party media deposits, other receivables, accounts payables, advertiser deposits, dividend payable, tax payable, other payables, due to related parties and warrant liabilities.

Fair value of investment in trading securities and US Treasury Bills are based on quoted prices in active markets, and were categorized in Level 1 of the fair value hierarchy.

Warrant liabilities were measured at fair value using unobservable inputs and categorized in Level 3 of the fair value hierarchy. See Note 13.

As of December 31, 2023 and 2022, the carrying values of other financial instruments approximated to their fair values because of the short-term nature of these instruments.

Concentration and credit risk

Substantially all of the Company’s operating activities are transacted into RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

The Company maintains certain bank accounts in the PRC, Hong Kong and Cayman Islands, which are not insured by Federal Deposit Insurance Corporation (“FDIC”) insurance or other insurance. As of December 31, 2023 and 2022, $3,094,310 and $5,921,461 of the Company’s cash were on deposit at financial institutions in the PRC, respectively, where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure.

Accounts receivable are typically unsecured and derived from services rendered to advertisers that are located primarily in China, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of advertisers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its receivables with specific advertisers. As of December 31, 2023, four advertisers accounted for 22.1%, 17.7%, 16.2% and 12.0% of accounts receivable, respectively. As of December 31, 2022, three advertisers accounted for 18.1%, 14.4% and 13.2% of accounts receivable, respectively.

For the year ended December 31, 2023, two publishers accounted for approximately 49.1% and 40.1% of the total revenue, respectively. For the year ended December 31, 2022, three publishers accounted for approximately 36.8%, 13.3% and 10.7% of the total revenue, respectively. For the year ended December 31, 2021, three publishers accounted for approximately 41.8%, 28.1%  and 16.5% of the total revenue, respectively.

As of December 31, 2023, one publisher accounted for 81.4% of the total accounts payable balance, respectively. As of December 31, 2022, two publishers accounted for 43.5% and 27.7% of the total accounts payable balance, respectively.

F-16

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal.

In March 2023, the FASB issued new accounting guidance, ASU 2023-01, for leasehold improvements associated with common control leases, which is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. The new guidance introduced two issues: terms and conditions to be considered with leases between related parties under common control and accounting for leasehold improvements. The goals for the new issues are to reduce the cost associated with implementing and applying Topic 842 and to promote diversity in practice by entities within the scope when applying lease accounting requirements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of loss and cash flows.

3.GOING CONCERN

As reflected in the Company’s consolidated financial statements, the Company had a net loss of $1,845,170, $23,738,837 and $6,747,453 for the years ended December 31, 2023, 2022 and 2021, and reported a cash inflow of $2,259,466 and $1,601,481 for the years ended December 31, 2023 and 2022, respectively, while cash outflow of $31,213,199 from operating activities for the year ended December 31, 2021. These factors raise a substantial doubt about the Company’s ability to continue as a going concern.

As of December 31, 2023, the Company had cash and cash equivalent of $3,316,062 and short-term investments of $2,554,319. On the other hand, the balance of current liabilities of $6,467,631, among which advance from customers of $841,250 were not required to be settled in cash. The current assets are sufficient to cover the current liabilities which were expected to get paid in the year ending December 31, 2024. The Company also obtained a one-year bank borrowing during the year ended December 31, 2023. The Company expected to renew the bank borrowing upon its maturity. The Company intends to meet the cash requirements for the next 12 months from the issuance date of this report through a combination of application of credit terms, bank loans, and principal shareholder’s financial support. Given the factors mentioned above, the Company assesses current working capital is sufficient to meet its obligations for the next 12 months from the issuance date of this report. Accordingly, management continues to prepare the Company’s consolidated financial statements on going concern basis.

F-17

3GOING CONCERN (CONTINUED)

However, future financing requirements will depend on many factors, including the scale and pace of the expansion of the Company’s advertising business, the expansion of the Group’s sales and marketing activities, and potential investments in, or acquisitions of, businesses or technologies. Inability to obtain credit terms from medias or access to financing on favorable terms in a timely manner or at all would materially and adversely affect the Company’s business, results of operations, financial condition, and growth prospects.

4.ACCOUNTS RECEIVABLE, NET

The Company records revenues and costs on a net basis and the related accounts receivable and payable amounts on a gross basis. Accounts receivable, net of provision for doubtful accounts consist of the following:

	December 31,		December 31,
	2023		2022
Accounts receivable	$	39,500,254	$	49,783,610
Less: provision for doubtful accounts		(13,417,481)		(17,681,792)
Accounts receivable, net of provision for doubtful accounts	$	26,082,773	$	32,101,818

Reversal of expected credit losses of accounts receivable were $702,156 for the year ended December 31, 2023. Provisions for doubtful accounts of accounts receivable were $19,276,587 and $4,155,246 for the years ended December 31, 2022 and 2021, respectively. Movement of allowance for doubtful accounts was as follows:

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	17,681,792	$	6,426,781
Charge to expenses		—		19,276,587
Reversal of expenses		(702,156)		—
Writing off of accounts receivable		(3,067,433)		(7,239,204)
Foreign exchange loss		(494,722)		(782,372)
Balance at end of the year	$	13,417,481	$	17,681,792

5.PREPAYMENTS – THIRD PARTIES

Prepayments – third parties consist of the following:

	December 31,		December 31,
	2023		2022
Prepayments to third party medias	$	1,540,597	$	2,957,346
Less: provision for doubtful accounts		(581,462)		(2,153,390)
	$	959,135	$	803,956

Reversal of provisions for doubtful accounts of prepayments were $1,243,233 for the year ended December 31, 2023. Provisions for doubtful accounts of prepayments were $1,196,563 and $2,668,421 for the years ended December 31, 2022 and 2021, respectively. Movement of allowance for doubtful prepayments was as follows:

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	2,153,390	$	2,701,166
Charge to expenses		—		1,196,563
Reversal of expenses		(1,243,233)		—
Writing off of accounts receivable		(271,269)		(1,547,445)
Foreign exchange loss		(57,426)		(196,894)
Balance at end of the year	$	581,462	$	2,153,390

F-18

6.OTHER CURRENT ASSETS

Other current assets consist of the following:

	December 31,		December 31,
	2023		2022
Recoverable value-added taxes	$	2,603,043	$	2,689,170
Others		235,508		60,110
Less: provision for doubtful accounts		(6,678)		(6,874)
	$	2,831,873	$	2,742,406

For the years ended December 31, 2023, 2022, and 2021, provisions for doubtful accounts of other current assets were $7,061, $nil, and $56,341, respectively, among which the Company wrote off other current assets of $7,061, $nil, and $35,976. For the year ended December 31, 2022, the Company reversed provision for doubtful accounts of $12,483. Movement of allowance for doubtful accounts was as follows:

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	6,874	$	20,621
Charge to expenses		7,061		—
Reversal of charges		—		(12,483)
Writing off of accounts receivable		(7,061)		—
Foreign exchange loss		(196)		(1,264)
Balance at end of the year	$	6,678	$	6,874

7.PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	December 31,		December 31,
	2023		2022
Property	$	1,958,723	$	2,016,287
Leasehold improvement		477,349		367,235
Office equipment		147,734		161,997
Vehicles		141,649		144,986
Electronic equipment		129,162		133,850
Less: accumulated depreciation		(798,193)		(473,027)
	$	2,056,424	$	2,351,328

Depreciation expense was $228,806, $211,213, and $210,208 for the years ended December 31, 2023, 2022 and 2021, respectively. During the year ended December 31, 2021, the Company recognized impairment loss of $434,878 on electronic equipment.

During the year ended December 31, 2023, the Company disposed of office equipment and electronic equipment, and recorded loss from disposal of property and equipment of $6,991. On the date of disposal, the cost and accumulated depreciation of electronic equipment was $9,638 and $3,052, respectively. On the date of disposal, the cost and accumulated depreciation of office equipment was $866 and $480, respectively.

During the year ended December 31, 2022, the Company disposed of electronic equipment at consideration of $222,916, and recorded loss from disposal of property and equipment of $1,275. On the date of disposal, the cost and accumulated depreciation of electronic equipment was $217,341 and $23,637, respectively.

F-19

7.PROPERTY AND EQUIPMENT, NET (CONTINIED)

During the year ended December 31, 2021, the Company disposed of leasehold improvement, office equipment and electronic equipment, and recorded loss from disposal of property and equipment of $14,810. On the date of disposal, the cost and accumulated depreciation of leasehold improvement was $382,909 and $382,909, respectively, the cost and accumulated depreciation of office equipment was $27,071 and $13,436, respectively, and the cost and accumulated depreciation of office equipment was $27,156 and $25,798, respectively.

8.INTANGIBLE ASSETS, NET

Intangible assets consisted of the following:

	December 31,		December 31,
	2023		2022
Copyrights	$	730,810	$	752,288
Software		65,335		43,954
Less: accumulated amortization		(394,596)		(238,016)
	$	401,549	$	558,226

Amortization expense was $163,813, $175,807, and $76,666 for the years ended December 31, 2023, 2022, and 2021, respectively.

9.PREPAYMENTS FOR LICENSED COPYRIGHTS

Prepayments for licensed copyrights consisted of the following:

	December 31,		December 31,
	2023		2022
Prepayments for licensed copyrights	$	—	$	2,735,592

As of December 31, 2022, the balance of prepayments for licensed copyrights represented prepayments made to two third party entities, with which the Company entered into cooperation agreements. Pursuant to the cooperation agreements, the Company would have the right to use the licensed copyrights of two games developed by such third party entity for a three-year term, and the games were expected to be launched in November 2023.

As of December 31, 2023, the two games have not been launched. For the year ended December 31, 2023, the Company provided full impairment of $2,664,622 against the prepayments for licensed copyrights.

10.DEPOSITS DUE FROM A THIRD PARTY

In November 2023, Baosheng Network and Nanjing Yunbei E-commerce Co., Ltd. entered into an Asset Merger Margin Custodian Agreement, pursuant to which the Company deposited RMB30,000,000, or $2,554,539 (the “Deposit”) into the custodian account under the name of Nanjing Yunbei to support the Company’s future business combination. The deposit would be deposited in custody account of Nanjing Yunbei for twelve months. The deposit is interest-free during the custody period. As of December 31, 2023, the Company made a deposit of $2,816,941 due from Nanjing Yunbei.

F-20

11.LONG-TERM INVESTMENTS

As of December 31, 2023 and 2022, long-term investments consisted of the following:

	December 31,		December 31,
	2023		2022
Equity investment without readily determinable fair value measured at Measurement Alternative (a)	$	2,632,742	$	2,261,787
Equity investment accounted for using the equity method (b)		4,216,222		—
	$	6,848,964	$	2,261,787

(a) As of December 31, 2023 and 2022, the movement of equity investment without readily determinable fair value measured at Measurement Alternative consisted of the following:

	December 31,		December 31,
	2023		2022
Opening balance	$	2,261,787	$	1,569,218
Investment in Beijing Qucheng Technology Co., Ltd. (“Qucheng”)		564,900		832,219
Impairment against investment in Qucheng		(128,204)		—
Foreign exchange adjustments		(65,741)		(139,650)
Ending balance	$	2,632,742	$	2,261,787

In January 2023, Beijing Baosheng closed an acquisition of 12% equity interest in Qucheng at cash consideration of RMB9,600,000, or $1,397,119. The Company made cash consideration of $564,900 and $832,219, respectively, in January 2023 and December 2022.

The Company accounted for the transaction as an investment in privately held investment using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As of December 31, 2023, the Company did not identify orderly transactions for similar investments of the investees and the Company did not record upward or downward adjustments. As of December 31, 2023, the Company reviewed the financial position and financial performance of Qucheng, and assessed that the Company’s share of fair value was below the investment. For the year ended December 31, 2023, the Company provided impairment of $128,204 against investment in Qucheng.

In February 2021, the Company acquired 10% equity interest in Bejing Xinrong Fanxing Technology Co., Ltd. (“Xinrong Fanxing”) at cash consideration of RMB 10,000,000, or $1,550,195. The Company accounted for the transaction as an investment in privately held investment using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As of December 31, 2023 and 2022, the Company did not identify orderly transactions for similar investments, or impairment indicators of the investees, and the Company did not record upward or downward adjustments or impairment against the investment in Xinrong Fanxing.

(b) As of December 31, 2023 and 2022, the movement of equity investment accounted for using the equity method consisted of the following:

	December 31,		December 31,
	2023		2022
Opening balance	$	—	$	—
Investment in Guangzhou Shanxingzhe Technology Investment LLP (“Shanxingzhe”)		4,236,750		—
Share of equity loss		(9,214)		—
Foreign exchange adjustments		(11,314)		—
Ending balance	$	4,216,222	$	—

In June 2023, Beijing Xunhuo closed acquisition of 42.85% equity interest in Shanxingzhe, at cash consideration of RMB30,000,000, or $4,236,750. In May 2023, Beijing Xunhuo fully paid the cash consideration.

F-21

11.LONG-TERM INVESTMENTS (CONTINUED)

Shanxingzhe is primarily engaged in investment in advertisement entities. The investment in Shanxingzhe is to diversify the Company’s advertising business. Beijing Xunhuo is able to exercise significant influence over Shanxingzhe, and accounted for the equity investment using equity method. For the year ended December 31, 2023, equity investment loss of $9,214 was recognized in the account of “other income, net” in the consolidated statements of loss and comprehensive loss. As of December 31, 2023, the Company did not note other-than-temporary decline in fair value below the carrying value of the investment and did not accrue impairment against the investment in Shanxingzhe.

12.BANK BORROWING

	December 31,		December 31,
	2023		2022
Bank borrowing	$	2,253,553	$	1,449,864

In December 2023, Baosheng Network entered into a bank loan agreement with Bank of Beijing under which under which Baosheng Network borrowed a one-year loan of RMB10,000,000, or $1,449,846. The interest rate for the borrowing was fixed at 3.65% per annum. In December 2023, the borrowing was renewed for one year through December 2024. The loan is guaranteed by two third parties, for whom the Company involved a third-party counter-guarantor. In addition, the Company pledged its properties with the counter guarantor.

In July 2023, Beijing Baosheng entered into a bank loan agreement with Bank of Communication under which under which Beijing Baosheng borrowed a one-year loan of RMB6,000,000, or $847,350. The interest rate for the borrowing was fixed at 3.55% per annum. The loan is guaranteed by Mr. Gong Sheng, the Company’s managing director and his spouse, and one third party. Beijing Baosheng also involved Baosheng Network as counter-guarantor for the third-party guarantor. In addition, Mr. Gong Sheng and his spouse pledged their property with the counter guarantor.

For the year ended December 31, 2023, 2022, and 2021, interest expense arising from the bank borrowing amounted to $73,406, $nil, and $88,518, respectively.

13. WARRANT LIABILITIES

In connection with the private placement on March 18, 2021 (Note 16), the Company sold an aggregate of 112,610 warrants (giving effect to a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares effective on May 24, 2022 and a share consolidation at a ratio of one-for-six (6) ordinary shares effective on March 21, 2023) with each warrant entitling the holder thereof to purchase one half of one ordinary share at an exercise price of $107.71 per ordinary share (giving effect to a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares effective on May 24, 2022, and a share consolidation at a ratio of one-for-six (6) ordinary shares effective on March 21, 2023). A warrant may be exercised at any time on or after March 18, 2021 and on or prior to 5:00 p.m. (New York City time) on September 18, 2026 but not thereafter.

The holders of warrants are granted with registration rights. If at any time after the six-month anniversary of March 18, 2021, there is no effective registration statement registering, or no current prospectus available for the issuance of the warrant shares to the holder and the resale of the warrant shares, then this warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise”. The warrants are subject to adjustments in the event of 1) stock dividends and splits, 2) subsequent right offerings, 3) pro rata dilutions and 4) fundamental transactions. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the warrants.

F-22

13.WARRANT LIABILITIES (CONTINUED)

In the event of a fundamental transaction, the Company or any successor entity shall, at the holder’s option, purchase this warrant from the holder by paying to the holder an amount of cash equal to the value of the remaining unexercised portion of the warrant, using Black-Scholes model, on the date of the consummation of such fundamental transaction; provided, however, that, if the fundamental transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, holder shall only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion), at the value of the unexercised portion of the warrant, that is being offered and paid to the holders of ordinary shares of the Company in connection with the fundamental transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of ordinary shares are given the choice to receive from among alternative forms of consideration in connection with the fundamental transaction.

If the Company fails for any reason to deliver to the holders the warrant shares subject to a notice of exercise by the warrant share delivery date, the Company shall pay to the holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of warrant shares subject to such exercise (based on the volume weighted average price of the ordinary shares on the date of the applicable Notice of Exercise), $10 per trading day (increasing to $20 per trading day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each trading day after such warrant share delivery date until such warrant shares are delivered or holder rescinds such exercise. In addition, cash payment is required as a compensation for buy-in on failure of delivery warrant shares.

The above mentioned cash-settled make-whole provisions led the warrants classified as a derivative warrant liability. The derivative warrant liability was initially recorded at fair value on the closing date of the private placement and were subsequently remeasured at fair value at each reporting dates. The changes in the fair value of derivative warrant liability were charged to the account of “Changes in fair value of warrant liabilities” in the consolidated statements of loss and comprehensive loss.

As of December 31, 2023 and 2022, the Company had 112,610 of private placement warrants outstanding. The warrant liability related to such warrants was remeasured to its fair value at each reporting period. The change in fair value was recognized in the consolidated statements of loss. The change in the fair value of the warrant liabilities is summarized as follows:

Estimated fair value as of January 1, 2021	$	—
Issuance of warrants		2,370,376
Changes in estimated fair value		(2,367,632)
Estimated fair value as of December 31, 2021		2,744
Changes in estimated fair value		(1,912)
Estimated fair value as of December 31, 2022		832
Changes in estimated fair value		(832)
Estimated fair value as of December 31, 2023	$	—

The fair value of the warrant liabilities was estimated using Black-Scholes model. Inherent in these valuations are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical and implied volatilities of selected peer companies as well as its own that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

F-23

13.WARRANT LIABILITIES (CONTINUED)

The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company’s warrants at their measurement dates:

	As of December 31,		As of December 31,		As of December 31,		As of March 18,
	2023		2022		2021		2021
Volatility	28.63	%	35.77	%	32.52	%	31.26	%
Stock price	3.61		5.16		17.28		126.34
Expected life of the warrants to convert	2.72		3.72		4.72		5.50
Risk free rate	4.20	%	4.17	%	1.27	%	1.09	%
Dividend yield	0.0	%	0.0	%	0.0	%	0.0	%

14.INCOME TAXES

Cayman Islands

Under the current and applicable laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

British Virgin Islands

Under the current and applicable laws of BVI, Baosheng BVI is not subject to tax on income or capital gains.

Hong Kong

Baosheng HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax laws, Baosheng HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

PRC

Beijing Baosheng, Horgos Baosheng, Kashi Baosheng, Baosheng Technology, Baosheng Network and Beijing Xunhuo were incorporated in the PRC and are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. On March 16, 2007, the National People’s Congress enacted a new enterprise income tax law, which took effect on January 1, 2008. The law applies a uniform 25% enterprise income tax rate to both foreign invested enterprises and domestic enterprises.

Horgos Baosheng, Kashi Baosheng, and Baosheng Technology are subject to a preferential income tax rate of 0% CIT for a period since generating revenues, as they were incorporated in the Horgos and Kashi Economic District, Xinjiang province. The five-year preferential income tax treatment ends on December 31, 2025 for Baosheng Technology. Kashi Baosheng was entitled to the five-year preferential income tax treatment for ended on December 31, 2022 and is entitled to an extension of five-year preferential income tax treatment ended on December 31, 2027. Horgos Baosheng was entitled to the five-year preferential income tax treatment for ended on December 31, 2020 and is entitled to an extension of five-year preferential income tax treatment ended on December 31, 2025.

F-24

14.INCOME TAXES (CONTINUED)

Income tax expense consist of the following:

	For the Years Ended
	December 31,
	2023		2022		2021
Current income tax expense	$	—	$	—	$	—
Deferred income tax expense		—		—		—
Income tax expense	$	—	$	—	$	—

Below is a reconciliation of the statutory tax rate to the effective tax rate:

	For the Years Ended
	December 31,
	2023		2022		2021
PRC statutory income tax rate	25	%	25	%	25	%
Impact of different income tax rates in other jurisdictions	(4.7)	%	(0.8)	%	5.9	%
Effect of preferential tax rate(a)	(20.2)	%	(18.0)	%	(23.6)	%
Effect of non-deductible expenses	(1.9)	%	(0.2)	%	(0.7)	%
Effect of change in valuation allowance	1.8	%	(6.0)	%	(6.6)	%
Effective tax rate	0.0	%	0.0	%	0.0	%

(a) The Company’s subsidiaries, Horgos Baosheng, Kashi Baosheng and Baosheng Technology are subject to a favorable tax rate of 0%. For the years ended December 31, 2023, 2022, and 2021, no tax saving was resulted from the favorable tax rate.

Deferred tax assets as of December 31, 2023 and 2022 consist of the following:

	December 31,		December 31,
	2023		2022
Deferred tax assets:
Net operating losses carryforwards	$	2,903,728	$	1,190,713
Allowance for doubtful accounts of accounts receivable		193,032		27,745
Allowance for doubtful accounts of prepayments		3,971		70,207
Allowance for doubtful accounts of other current assets		1,668		1,717
Less: allowance on deferred tax assets		(3,102,399)		(1,290,382)
	$	—	$	—

The Company evaluates its valuation allowance requirements at end of each reporting period by reviewing all available evidence, both positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a change in management’s judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under applicable tax law.

As of December 31, 2023 and 2022, due to uncertainties surrounding future utilization on Beijing Baosheng, Baosheng Network, the Beijing branch of Horgos Baosheng and Baosheng HK, the Company accrued full valuation allowance of $3,102,399 and 1,290,381, respectively, against the deferred tax assets based upon management’s assessment as to their realization.

F-25

15.EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted loss per common share for the years ended December 31, 2023, 2022, and 2021, respectively:

	For the Years Ended
	December 31,
	2023		2022		2021
Net Loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Weighted average number of ordinary share outstanding
Basic and Diluted		1,534,487		1,534,487		1,459,390
Loss per share
Basic and Diluted	$	(1.20)	$	(15.47)	$	(4.62)

For the years ended December 31, 2023, 2022, and 2021, the Company had no dilutive shares.

16.EQUITY

Ordinary shares

Effective on September 29, 2023, the Company increased the authorized share capital of the Company from US$60,000 divided into 6,250,000 Ordinary Shares of par value US$0.0096 each, to US$9,600,000 divided into 1,000,000,000 Ordinary Shares of a par value of US$0.0096 each.

On February 10, 2021, the Company closed its initial public offering (“IPO”) of 6,000,000 ordinary shares at a public offering price of US$5.00 per ordinary share. On March 2, 2021, Univest Securities, LLC, the representative of the underwriters in the IPO exercised in full its option to purchase an additional 900,000 ordinary shares at a price of $5.00. Gross proceeds of the Company’s IPO, including the proceeds from the sale of the over-allotment shares, totaled $34.5 million, before deducting underwriting discounts and other related expenses.

On March 18, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two investors, including a wholly-owned subsidiary of Ebang International Holdings Inc. (Nasdaq: EBON) for an investment of US$10 million. Pursuant to the Securities Purchase Agreement and an exemption from registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) contained in Regulation S promulgated under the Securities Act, the Company issued an aggregate of 1,960,784 units to the investors, with each unit consisting of one ordinary share of the Company, par value $0.0005 per share (the “Ordinary Shares”) and a warrant to purchase one half of one Ordinary Share at an exercise price of $5.61 per Ordinary Share (subject to adjustment).

F-26

16.EQUITY (CONTINUED)

On May 11, 2022, the Board of Directors resolved to approve a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares with a par value of US$0.0005 each in the Company’s issued and unissued share capital into one ordinary share with a par value of US$0.0016 (“2022 Share Consolidation”), for which the Company obtained shareholder approval on April 28, 2023. Immediately following the 2022 Share Consolidation, the authorized share capital of the Company will be US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each. The 2022 Share Consolidation became effective on May 24, 2022.

On March 6, 2023, the Company effected an increase in authorized share capital from US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each to US$60,000 divided into 37,500,000 ordinary shares of a par value US$0.0016 each (the “Increase in Share Capital”), and on March 21, 2023, the Company effected a share consolidation at a ratio of one-for-six, such that each (6) ordinary shares with a par value of US$0.0016 each in the Company’s issued and unissued share capital were consolidated into one ordinary share with a par value of US$0.0096 (“2023 Share Consolidation”). Immediately following the Increase in Share Capital and 2023 Share Consolidation, the authorized share capital of the Company will be increased from US$50,000 to US$60,000, divided into 6,250,000 ordinary shares of a par value US$0.0096 each. The Company believes it is appropriate to reflect the Increase in Share Capital, 2022 Share Consolidation and 2023 Share Consolidation on a retroactive basis pursuant to ASC 260. The Company has retroactively restated all shares and per share data for all periods presented. As a result, the Company had 1,000,000,000 authorized shares, par value of US$0.0096, of which 1,534,487 shares of ordinary shares were issued and outstanding as of December 31, 2023 and 2022, respectively.

Cash dividends

On December 31, 2018, the Company’s Board of Directors approved a resolution to declare cash dividends of $7,269,978 (RMB 50,000,000) to its shareholders.

During the year ended December 31, 2023, 2022 and 2021, the Company paid dividends of $nil, $1,188,884 and $2,170,273 to its shareholders. As of December 31, 2023 and 2022, the Company had no dividends payable.

Restricted net assets

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after they have met the PRC requirements for appropriation to statutory reserves. Paid in capital of the PRC subsidiaries included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. The Company is required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the Company may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.

As of December 31, 2023 and 2022, the Company’s PRC profit generating subsidiaries accrued statutory reserve funds of $898,133, respectively.

As of December 31, 2023 and 2022, the Company had net assets restricted in the aggregate, which include paid-in capital and statutory reserve of the Company’s PRC subsidiaries of $33,718,654.

F-27

17.RELATED PARTY TRANSACTIONS AND BALANCES

1)Nature of relationships with related parties

Name	Relationship with the Company
Horgos Zhijiantiancheng	Controlled by EJAM Group, which indirectly hold a 6.8% equity interest in the Company
Guangzhou Yijiantiancheng Technology Co., Ltd. (“Guangzhou Yijiantiancheng”)	Controlled by EJAM Group
Anruitai Investment Limited (“Anruitai”)	90% owned by Ms. Wenxiu Zhong and 10% owned by Mr. Sheng Gong, the Director and indirect equity shareholder of the Company

2)Transactions with related parties

	For the Years Ended
	December 31,
	2023		2022		2021
Gross billing from a related party
Horgos Zhijiantiancheng	$	—	$	—	$	83,909
Guangzhou Yijiantiancheng		—		—		8,743
	$	—	$	—	$	92,652
Services purchased from related parties
Horgos Zhijiantiancheng	$	161,264	$	4,464,919	$	11,298,397

3)Balances with related parties

As of December 31, 2023 and 2022, the balances due from related parties were as follows:

	December 31,		December 31,
	2023		2022
Media deposits
Horgos Zhijiantiancheng (a)	$	—	$	104,390
Prepayments
Horgos Zhijiantiancheng (a)	$	215,689	$	3,314,744
Due from related parties
Anruitai Investment Limited	$	28,667	$	28,667
Others		1,408		—
	$	30,075	$	28,667

(a) Horgos Zhijiantiancheng is both a media and advertiser with the Company. For the years ended December 31, 2023 and 2022, the Company provided services to Horgos Zhijiantiancheng and paid media deposits with Horgos Zhijiantiancheng.

F-28

17.RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

As of December 31, 2023 and 2022, the balances due to related parties were as follows:

	December 31,		December 31,
	2023		2022
Other payable
Wenxiu Zhong	$	3,546	$	14,499
Others		8,630		—
	$	12,176	$	14,499

18. CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subsequent to the issuance of the Company’s unaudited condensed consolidated financial statements for the six months ended June 30, 2023, the Company identified a misstatement in reclassification of $1,361,656 from reversal of provision for prepayments to revenues.

The misstatement of reclassification had no impact on items of unaudited condensed consolidated balance sheets as of June 30, 2023, or on net loss for the six months ended June 30, 2023. The misstatement of reclassification had no impact on net cash flows from operating, investing or financing activities for the six months ended June 30, 2023.

	For the Six Months Ended June 30, 2023
	As Previously
	Reported		Adjustment		As Revised
Statements of operations
Revenues	$	1,470,439	$	(1,361,656)	$	108,783
Gross profit (loss)	$	1,175,844	$	(1,361,656)	$	(185,812)
Provision for (reversal of provisions) for doubtful accounts	$	(563,896)	$	1,361,656	$	797,760
Total operating expenses	$	(1,812,649)	$	1,361,656	$	(450,993)

19.CONTINGENCIES

In the normal course of business, the Company is subject to loss contingencies, such as certain legal proceedings, claims and disputes. The Company records a liability for such loss contingencies when the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.

On March 14, 2023, Shenzhen Pusi Technology Co., Ltd. (“Shenzhen Pusi”) filed a lawsuit in a court in Shenzhen, Guangdong against Baosheng Network, requesting to be repaid service fee of $23,338 (RMB 160,965) and penalty expenses of $364. The services were rendered in the year of 2022. As of December 31, 2022, the Company recorded RMB 160,965 as a component of accounts payable. As of the date of this report, the case was still in progress.

F-29

19.CONTINGENCIES (CONTINUED)

In addition, in June 2019, Ms. Chen Chen filed another lawsuit in a court in Beijing against Beijing Baosheng (the “Contractual Dispute”), seeking to terminate the Equity Ownership Agreement compensation in the amount of RMB47.65 million ($6,838,404), representing the fair market value of the 5% equity interest in Beijing Baosheng to which she claimed title, and for any litigation related expenses. On July 30, 2021, the court issued a judgment ruling that the Equity Ownership Agreement was terminated on October 16, 2020 and requiring Beijing Baosheng to compensate Ms. Chen Chen RMB). 10,739,877 (approximately $1,685,321). Both parties have appealed the ruling to an intermediate court. On January 12, 2022, Beijing Baosheng received a final judgment from the intermediate court, upholding the original judgment issued on July 30, 2021. According to the original judgment, Beijing Baosheng is required to pay the plaintiff RMB10,739,877 (approximately $1,685,321) and court expenses of RMB71,421 (approximately $11,207). Through a guarantee letter dated April 2, 2020 (the “Guarantee Letter”), Ms. Wenxiu Zhong, the former Chairperson of the Board of Directors and CEO, promised to unconditionally, irrevocably and personally bear all the potential economic expenses and losses arising from the Equity Ownership Dispute and the Contract Dispute. On February 8, 2022, the final judgment was enforced by the court with a total of RMB10,917,701 (approximately $1,713,225) being withdrawn from one of the frozen bank accounts of Beijing Baosheng, the bank account at Bank of Hangzhou, which was unfrozen afterwards, and which amount was applied to the satisfaction of such judgment and the payment in full of the related fees and expenses. Accordingly, Beijing Baosheng requested Ms. Wenxiu Zhong to perform her obligations under the Guarantee Letter by reimbursing Beijing Baosheng’s litigation costs, including, but not limited to, the amount of damages imposed by the courts, court expenses, and attorney fees. As of March 7, 2022, as promised by the Guarantee Letter, Ms. Wenxiu Zhong has made the payment in cash of RMB11,053,940 (approximately $1,734,604) to Beijing Baosheng. Such payment made by Ms. Wenxiu Zhong includes the amount paid to Ms. Chen Chen as ordered by the courts plus interest as well as the court expense, attorney fee, and court enforcement fee.

With the final judgement enforced by the Court on February 8, 2022, the Freezing Order (including the freezing of Beijing Baosheng’s equity interests in Horgos Baosheng and Kashi Baosheng) was reversed and all of the impacted assets were unfrozen, accordingly. As of December 31, 2022, all of Beijing Baosheng’s frozen accounts, together with Beijing Baosheng’s equity interests in Horgos Baosheng and Kashi Baosheng had been unfrozen.

On April 6, 2023, the Longhua District People’s Court of Shenzhen City, Guangdong Province accepted a case filed by Shenzhen Pusi Technology Co., Ltd (“Shenzhen Pusi”), as the complainant, and Beijing Baosheng, as the defendant. In this case, Shenzhen Pusi sought recovery of outstanding service fee RMB160,965 (approximately $23,292) and related liquidated damages from Beijing Baosheng and other expenses (i.e., attorney’s fee, court expense and property reservation fee). The court made a ruling in favor of the complainant. Beijing Baosheng appealed to Shenzhen Intermediate People’s Court against the trial court’s judgement. The appellate court made a final ruling on April 29, 2024, affirming the trial court’s judgement. A bank account of Baosheng with bank deposit balance of RMB 171,478 has been reserved by the court on July 2, 2023, following Shenzhen Pusi’s application. The case is now under enforcement procedures.

On March 1, 2024, the Company was served a complaint regarding a lawsuit brought by three institutional investors (the “Plaintiffs”) against the Company and certain other parties, filed with the United States District Court of the Southern District of New York, alleging that the Company violated Section 11 and Section 12 of the Securities Act of 1933, as amended, by including untrue statements of material facts and omitting to state material facts required to make the statements therein not misleading, in its registration statement on Form F-1, as amended (File No. 333-239800), which was declared effective by the SEC on February 5, 2021. On March 17, 2021, two institutional investors, which are also two of the Plaintiffs, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. On March 5, 2024, the Plaintiffs filed an amended complaint and served the Company on March 6, 2024. The Company extended the deadline to respond to May 22, 2024 in order to coordinate with other defendants in the matter. As of the date of this annual report, there is no anticipated court dates of this lawsuit. The Company believes that the complaint is without any merit and intends to defend the matter vigorously.

F-30

19.CONTINGENCIES (CONTINUED)

On April 10, 2024, the Company was served with a copy of the winding up petition (the “Petition”), filed by Orient Plus International Limited (the “Petitioner”) with the Grand Court of the Cayman Islands, seeking an order that the Company be wound up pursuant to Section 92(e) of the Cayman Islands Companies Act (2023 Revision), claiming that the management of the Company have acted unfairly and/or oppressively towards the Petitioner and other minority shareholders, and/or the affairs of the Company have been conducted with a lack of probity, and the Petitioner and the other investors have justifiably lost confidence in the management of the Company. On March 17, 2021, two institutional investors, one of which is the Petitioner, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. The Company believes that the Petition is without any merit and intends to defend the matter vigorously.

As of this annual report, there is no other legal proceedings, claims and disputes that might cause the Company to be subject to loss contingencies.

20.SUBSEQUENT EVENTS

These consolidated financial statements were approved by management and available for issuance on May 15, 2024, and the Company has evaluated subsequent events through this date.

F-31

21.CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY

The subsidiaries did not pay any dividend to the parent company for the periods presented. For the purpose of presenting parent only financial information, the parent company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the parent company as “Investment in subsidiaries” and the income or loss of the subsidiaries is presented as “Equity in (loss) gain of subsidiaries”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted.

The parent company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2023 and 2022.

The following is the condensed financial information of the Company on a parent company only basis.

Condensed balance sheets

	December 31,		December 31,
	2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	96,182	$	378,987
Due from related parties		57,661		57,661
Other current assets		1,251		—
Total Current Assets		155,094		436,648
Investments in subsidiaries		4,411,762		5,526,988
Amounts due from subsidiaries		37,806,599		39,515,899
Total Assets	$	42,373,455	$	45,479,535
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Due to related parties	$	—	$	8,170
Warrant liabilities		—		2,744
Accrued expenses and other liabilities		13,344		31,996
Total Liabilities		13,344		42,910
Commitments and Contingencies
Shareholders’ Equity
Ordinary Share (par value $0.0096 per share, 1,000,000,000 shares authorized; 1,534,487 shares issued and outstanding at December 31, 2023 and 2022, respectively)		14,731		14,731
Additional paid-in capital		41,564,418		41,564,418
Retained earnings		4,310,590		6,155,760
Accumulated other comprehensive loss		(3,529,628)		(2,298,284)
Total Shareholders’ Equity		42,360,111		45,436,625
Total Liabilities and Shareholders’ Equity	$	42,373,455	$	45,479,535

F-32

21.CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY (CONTINUED)

Condensed statements of comprehensive loss

	For the Years Ended
	December 31,
	2023		2022		2021
Revenues	$	—	$	—	$	—
Cost of revenues		—		—		—
Gross profit		—		—		—
Operating Expenses
General and administrative expenses		(736,646)		(769,017)		(787,744)
Loss from Operations		(736,646)		(769,017)		(787,744)
Equity in loss of subsidiaries	$	(1,110,118)	$	(22,990,360)	$	(8,327,398)
Interest income		771		837		57
Changes in fair value of warrant liabilities		823		19,703		2,367,632
Net Loss Before Income Taxes	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Income tax expense		—		—		—
Net Loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Other Comprehensive (Loss) Income
Foreign currency translation adjustment		(1,231,344)		(4,885,827)		1,393,597
Comprehensive Loss	$	(3,076,514)	$	(28,624,664)	$	(5,353,856)

Condensed statements of cash flows

	For the Years Ended
	December 31,
	2023		2022		2021
Cash Flows from Operating Activities:
Net Cash Used in Operating Activities	$	(755,736)	$	(706,913)	$	(824,929)
Cash Flows from Investing Activities:
Loans made to subsidiaries		—		(500,000)		(38,300,000)
Collection of loans from subsidiaries		503,854		—		—
Net Cash Provided by (Used in) Investing Activities		503,854		(500,000)		(38,300,000)
Cash Flows from Financing Activities:
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs		—		—		26,597,919
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs		—		—		4,154,987
Issuance of units pursuant to a private placement, net of issuance costs		—		—		9,852,486
Net Cash Provided by Financing Activities		—		—		40,605,392
Effect of exchange rate changes on cash and cash equivalents		(30,923)		(21,907)		127,317
Net (decrease) increase in cash and cash equivalents		(282,805)		(1,228,820)		1,607,780
Cash and cash equivalents at beginning of year		378,987		1,607,807		27
Cash and cash equivalents at end of year	$	96,182	$	378,987	$	1,607,807

F-33

EX-1.1

Exhibit 1.1

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

宝盛传媒集团控股有限公司 (THE “COMPANY”)

MINUTES OF THE 2023 EXTRAORDINARY GENERAL MEETING OF THE

SHAREHOLDERS

Minutes of the 2023 extraordinary general meeting of the shareholders of the Company (the “Meeting”) held at 9:00 p.m. EST on September 28, 2023. Shareholders attended the Meeting at East Floor 5, Building No. 8, Xishanhui, Shijingshan District, Beijing 100041, People’s Republic of China and at www.virtualshareholdermeeting.com/BAOS2023.

PRESENT:

Shasha Mi	Chairperson of the Board and Chairperson of the Meeting
Changhong Jiang	Director and Inspector of Elections of the Meeting
Yue Jin	Chief Financial Officer
Yujie Han	Secretary and Chief Compliance Officer (acting as secretary of the Meeting)
Shareholders	As per attendance list attached hereto as Annex A

A. Quorum and Notice

The Meeting was held at 9:00 p.m. EST on September 28, 2023, pursuant to the proxy statement and notice (the “Notice”) duly given, a copy of which has been placed in the books and records of the Company. The Meeting was held in a hybrid format.

Shasha Mi acted as the chairperson of the Meeting (the “Chairperson”) in accordance with the Amended and Restated Memorandum and Articles of Association of the Company currently in effect. The Chairperson confirmed at the Meeting that the holders of 991,372 of the Company’s issued ordinary shares were represented either in person or by proxy, which number constituted a quorum for the purposes of the Amended and Restated Memorandum and Articles of Association of the Company in relation to the matters to be considered and voted at the Meeting.

B. Appointment of Inspector of Elections

The Chairperson then advised the shareholders that the next item of business was the appointment of the Inspector of Elections. Upon receipt of the Inspector’s oath, the Chairperson appointed Changhong Jiang as Inspector of Elections.

C. Proposals Presented at the Meeting

The proposal was to approve an increase of authorized share capital of the Company, from US$60,000 divided into 6,250,000 ordinary shares of a par value US$0.0096 each to US$9,600,000 divided into 1,000,000,000 ordinary shares of a par value US$0.0096 each (the “Increase of Share Capital Proposal”).

The resolution put to the shareholders to consider and to vote upon at the Meeting in respect of the Increase of Share Capital Proposal was as follows:

Filed: 09-Oct-2023 10:39 EST

Auth Code: D62073446514

“IT IS HEREBY RESOLVED, as an ordinary resolution that the Company’s authorized share capital be increased from US$60,000 divided into 6,250,000 Ordinary Shares of par value US$0.0096 each, to US$9,600,000 divided into 1,000,000,000 Ordinary Shares of a par value of US$0.0096 each, effective immediately.”

At the Meeting, the votes in person or by proxy on the Increase of Share Capital Proposal to approve the Increase of Share Capital was as follows:

FOR	AGAINST	ABSTAIN
985,446	5,782	144

D. Voting Results

The Chairperson then announced that the required number of votes has been obtained for the Increase of Share Capital Proposal. The Increase of Share Capital Proposal was duly approved, passed, and adopted as an ordinary resolution by the shareholders by the appropriate majorities in accordance with the terms of the Amended and Restated Memorandum and Articles of Association of the Company.

E. Conclusion

There being no further business, the Chairperson declared the Meeting closed.

[Signature Page Follows]

Filed: 09-Oct-2023 10:39 EST

Auth Code: D62073446514

Yujie Han

Secretary of the Meeting

Shasha Mi

Chairperson of the Meeting

Filed: 09-Oct-2023 10:39 EST

Auth Code: D62073446514

Annex A

Shareholders

Filed: 09-Oct-2023 10:39 EST

Auth Code: D62073446514

BAOSHENG MEDIA GROUP HOLDINGS LIMITED (THE “COMPANY”)

MINUTES OF THE 2022 ANNUAL GENERAL MEETING OF THE SHAREHOLDERS

宝盛传媒集团控股有限公司（以下简称“本公司”）

2022 年年度股东大会会议记录

Minutes of the 2022 annual general meeting of the shareholders of the Company (the “Meeting”) held at 8:00 p.m. EST on April 28, 2022. Shareholders attended the Meeting at www.virtualshareholdermeeting.com/BAOS2022.

美国东部时间 2022 年 4 月 28 日晚上 8：00 召开的本公司 2022 年年度股东大会（以下简称“股东 大会”）的会议记录。股东可以在 www.virtualshareholdermeeting.com/BAOS2022.出席会议。

PRESENT:

出席：
Sheng Gong	Director and Chairman of the Meeting
Changhong Jiang	Director and Inspector of Elections of the Meeting
Wenxiu Zhong	Chairperson of the Board of Directors
Yue Jing	Chief Financial Officer
Yujie Han	Secretary and Chief Compliance Officer (acting as secretary of the Meeting)

龚胜	董事兼股东大会主席
蒋常宏	董事兼股东大会选举监察员
钟文秀	董事会主席
金钺	首席财务官
韩玉杰	秘书兼首席合规官（担任股东大会秘书）

A. Quorum and Notice 法定人数和通知

The Meeting was held at 8:00 p.m. EST on April 28, 2022, pursuant to the proxy statement and notice (the “Notice”) duly given, a copy of which has been placed in the books and records of the Company. The Meeting was held in a hybrid format.

根据正式发出的委托书和通知（“通知”），股东大会于美国东部时间 2022 年 4 月 28 日晚上 8：00

举行，该委托书和通知的副本已载入本公司的账簿和记录。股东大会以混合形式召开。

Sheng Gong acted as the chairman of the Meeting (the “Chairman”) in accordance with the Amended and Restated Memorandum and Articles of Association of the Company currently in effect. During the Meeting, Sheng Gong was at Room 1805, Unit 1, Building 14, Tianyangcheng, Yanjiao Town, Sanhe

Filed: 13-May-2022 16:25 EST

Auth Code: K98101405590

City, Langfang City, Hebei Province. The Chairman confirmed at the Meeting that the holders of more than 1/3 of the Company’s issued ordinary shares were represented either in person or by proxy, which number constituted a quorum for the purposes of the Amended and Restated Memorandum and Articles of Association of the Company in relation to the matters to be considered and voted at the Meeting.

根据现行有效的经修订和重述的备忘录和公司章程，龚胜担任股东大会的主席（“主席”）。股 东大会期间，龚胜所在地为河北省廊坊市三河市燕郊镇天洋城 14 号楼 1 单元 1805。主席在股东 大会上确认，本公司已发行普通股三分之一以上的股东亲自或由代理人出席会议，就经修订和重 述的备忘录和公司章程而言，该人数构成了股东大会审议和表决事项的法定人数。

B.Appointment of Inspector of Elections 选举监察员的任命

The Chairman then advised the shareholders that the next item of business was the appointment of the Inspector of Elections. Upon receipt of the Inspector’s oath, the Chairman appointed Changhong Jiang as Inspector of Elections.

主席随后告知股东，下一个事项是任命选举监察员。在收到监察员宣誓后，主席任命蒋常宏为选 举监察员。

C.Share Consolidation 股份合并

To approve a share consolidation or reverse stock split, of the Company’s 100,000,000 ordinary shares, par value US$0.0005 per share, at a ratio of one-for-three and one fifth such that each 3.2 ordinary shares of the Company shall be combined into one ordinary share of the Company with a par value of US$0.0016 (the “Share Consolidation” and the proposal the “Share Consolidation Proposal”).

批准公司 100,000,000 股普通股按照 1：3 和 1：5 的比例进行股份合并或反向股份分割，每股面 值 0.0005 美元，这样，每 3.2 股普通股将合并为一股面值为 0.0016 美元的公司普通股（“股份 合并”和“股份合并提案”）。

The resolution put to the shareholders to consider and to vote upon at the Meeting in respect of the Share Consolidation was as follows:

提请股东在股东大会审议并表决的有关股份合并的决议如下：

“IT IS HEREBY RESOLVED, as an ordinary resolution, that:

“特此决议一项普通事项，即：

(A) the 100,000,000 issued and unissued ordinary shares of par value of US$0.0005 each in the capital of the Company be and are hereby consolidated into 31,250,000 ordinary shares of nominal or par value of US$0.0016 each, with such Share Consolidation to be effective on or around May 15, 2022, or such other date as any director or officer of the Company shall determine and such date shall be announced by the Company (the “Effective Date”); and

(A) 本公司股本中的 100,000,000 股每股面值 0.0005 美元的已发行和未发行普通股特此合并为 31,250,000 股普通股，每股面值 0.0016 美元，该股份合并将于 2022 年 5 月 15 日或前后生效，或本公司任何董事或高级管理人员确定的其他日期生效，且该日期应由本公司公布（”生效日期“）；和

Filed: 13-May-2022 16:25 EST

Auth Code: K98101405590

(B) at the Effective Date, the authorized share capital of the Company shall be US$50,000, divided into 31,250,000 ordinary shares of a nominal or par value of US$0.0016 each.”

(B) 在生效日期，本公司的法定股本为 50,000 美元，分为 31,250,000 股普通股，每股面值0.0016 美元。”

At the Meeting, the votes in person or by proxy on the Share Consolidation Proposal to approve the Share Consolidation was as follows:

在股东大会上，由本人或代理人就批准股份合并的股份合并提案进行的表决情况如下：

FOR 支持	AGAINST 反对	ABSTAIN 弃权
14,676,296	42,485	351

It was noted that the Share Consolidation will become effective on the Effective Date.

值得注意的是，股份合并将于生效日期生效。

D. Voting Results 投票结果

The Inspector of Elections then announced that the required number of votes has been obtained for the Share Consolidation Proposal. The Share Consolidation Proposal was duly approved, passed and adopted as ordinary resolutions by the shareholders by the appropriate majorities in accordance with the terms of the Amended and Restated Memorandum and Articles of Association of the Company.

选举监察员随后宣布，股份合并提案已经获得所需票数。根据经修订和重述的备忘录和公司章程 规定，股份合并提案已作为普通决议获得适当多数股东正式批准、通过和采纳。

E.Conclusion 结论

There being no further business, the Chairman adjourned the Meeting.

由于没有其他事项，主席宣布休会。

[Signature Page Follows]

【下页为签名页】

Filed: 13-May-2022 16:25 EST

Auth Code: K98101405590

/s/ Yujie Han

Yujie Han

Secretary of the Meeting

/s/ Sheng Gong

Sheng Gong

Chairman of the Meeting

Filed: 13-May-2022 16:25 EST

Auth Code: K98101405590

BAOSHENG MEDIA GROUP HOLDINGS LIMITED (THE “COMPANY”)

MINUTES OF THE 2023 ANNUAL GENERAL MEETING OF THE SHAREHOLDERS

Minutes of the 2023 annual general meeting of the shareholders of the Company (the “Meeting”) held at 8:00 p.m. EST on March 6, 2023. Shareholders attended the Meeting at East Floor 5, Building No. 8, Xishanhui, Shijingshan District, Beijing 100041, People’s Republic of China and www.virtualshareholdermeeting.com/BAOS2023.

PRESENT:
Shasha Mi	Chairperson of the Board and Chairperson of the Meeting
Changhong Jiang	Director and Inspector of Elections of the Meeting
Yue Jin	Chief Financial Officer
Yujie Han	Secretary and Chief Compliance Officer (acting as secretary of the Meeting)
Shareholders	As per attendance list attached hereto as Annex A

A. Quorum and Notice

The Meeting was held at 8:00 p.m. EST on March 6, 2023, pursuant to the proxy statement and notice (the “Notice”) duly given. a copy of which has been placed in the books and records of the Company. The Meeting was held in a hybrid format.

Shasha Mi acted as the chairperson of the Meeting (the “Chairperson”) in accordance with the Amended and Restated Memorandum and Articles of Association of the Company currently in effect. The Chairperson confirmed at the Meeting that the holders of more than 1/3 of the Company’s issued ordinary shares were represented either in person or by proxy, which number constituted a quorum for the purposes of the Amended and Restated Memorandum and Articles of Association of the Company in relation to the matters to be considered and voted at the Meeting.

B. Appointment of Inspector of Elections

The Chairperson then advised the shareholders that the next item of business was the appointment of the Inspector of Elections. Upon receipt of the Inspector’s oath, the Chairperson appointed Changhong Jiang as Inspector of Elections.

C. Proposals Presented at the Meeting

The first proposal was to approve an increase of authorised share capital of the Company, from US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each to US$60,000 divided into 37,500,000 ordinary shares of a par value US$0.0016 each (the “Increase of Share Capital” and the proposal the “Share Capital Proposal”).

The resolution put to the shareholders to consider and to vote upon at the Meeting in respect of the Share Capital Proposal was as follows:

Filed: 15-Mar 2023 07:51 EST

Auth Code: F10354689000

“IT IS HEREBY RESOLVED, as an ordinary resolution, that the Company’s authorised share capital, being US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each, be amended and re-designated to US$60,000 divided into 37,500,000 ordinary shares of par value $0.0016 per share.”

At the Meeting, the votes in person or by proxy on the Share Capital Proposal to approve the Increase of Share Capital was as follows:

FOR	AGAINST	ABSTAIN
4,580,094	14,510	155

To approve a share consolidation of six (6) ordinary shares with a par value of US$0.0016 each in the Company’s issued and unissued share capital into one (1) ordinary share with a par value of US$0.0096, with the Company’s after-consolidation share capital being US$60,000 divided into 6,250,000 ordinary shares with a par value of US$0.0096 each, effective on such date as the Board of Directors of the Company shall determine (the “Share Consolidation” and the proposal the “Share Consolidation Proposal”).

The resolution put to the shareholders to consider and to vote upon at the Meeting in respect of the Share Consolidation was as follows:

“IT IS HEREBY RESOLVED, as an ordinary resolution, that:

conditional upon the approval of the Board of Directors in its sole discretion, with effect as of the date the Board of Directors of the Company may determine:

(A) the 31,250,000 issued and unissued ordinary shares of par value of US$0.0016 each in the capital of the Company (collectively, the “Shares”) be consolidated by consolidating each six (6) shares of the Company into one (1) share of the Company, with such consolidated shares having the same rights and being subject to the same restrictions (save as to nominal value) as the existing shares of par value US$0.0016 each in the capital of the Company as set out in the Company’s articles of association, such that the Company’s after-consolidation share capital shall be US$60,000 divided into 6,250,000 ordinary shares with a par value of US$0.0096 (each the “Share Consolidation”); and

(B) no fractional shares be issued in connection with the Share Consolidation and, in the event that a shareholder would otherwise be entitled to receive a fractional share upon the Share Consolidation, the number of shares to be received by such shareholder be rounded up to the next highest whole number of shares; and

(C) any one director or officer of the Company be and is hereby authorized, for and on behalf of the Company, to do all such other acts or things necessary or desirable to implement, carry out and give effect to the Share Consolidation, including the effective date of the Share Consolidation, if and when deemed advisable by the Board of Directors in its sole discretion

At the Meeting, the votes in person or by proxy on the Share Consolidation Proposal to approve the Share Consolidation was as follows:

FOR AGAINST ABSTAIN

Filed: 15-Mar 2023 07:51 EST

Auth Code: F10354689000

4,579,718 14,926 115

D. Voting Results

The Chairperson then announced that the required number of votes has been obtained for the Share Capital Proposal and the Share Consolidation Proposal. Each of the Share Capital Proposal and the Share Consolidation Proposal was duly approved, passed and adopted as ordinary resolutions by the shareholders by the appropriate majorities in accordance with the terms of the Amended and Restated Memorandum and Articles of Association of the Company.

E. Conclusion

There being no further business, the Chairperson declared the Meeting closed.

[Signature Page Follows]

Filed: 15-Mar 2023 07:51 EST

Auth Code: F10354689000

/s/ Yujie Han

Yujie Han

Secretary of the Meeting

/s/ Shasha Mi

Shasha Mi

Chairperson of the Meeting

Filed: 15-Mar 2023 07:51 EST

Auth Code: F10354689000

Annex A

Shareholders

Filed: 15-Mar 2023 07:51 EST

Auth Code: F10354689000

THE COMPANIES LAW (2020 REVISION)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

AMENDED AND RESTATED

MEMORANDUM OF ASSOCIATION

OF

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

宝盛传媒集团控股有限公司

(adopted by a Special Resolution passed on [] 2020 and effective immediately prior to the completion of the Company's initial public offering of Ordinary Shares)

1. The name of the Company is Baosheng Media Group Holdings Limited 宝盛传媒集团控股有限公司.

2. The Registered Office of the Company will be situated at the offices of Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands, or at such other location within the Cayman Islands as the Directors may from time to time determine.

3. The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Law or any other law of the Cayman Islands.

4. The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Law.

5. The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands.

6. The liability of each Shareholder is limited to the amount, if any, unpaid on the Shares held by such Shareholder.

7. The authorized share capital of the Company is US$50,000 divided into 100,000,000 ordinary shares of a par value of US$0.0005 each. Subject to the Companies Law and the Articles, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorized share capital and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided.

8. The Company has power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

9. Capitalized terms that are not defined in this Memorandum of Association bear the same meanings as those given in the Articles of Association of the Company.

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THE COMPANIES LAW (2020 REVISION)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

AMENDED AND RESTATED

ARTICLES OF ASSOCIATION

OF

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

宝盛传媒集团控股有限公司

(adopted by a Special Resolution passed on [] 2020 and effective immediately prior to the completion of the Company's initial public offering of Ordinary Shares)

TABLE A

The regulations contained or incorporated in Table ‘A’ in the First Schedule of the Companies Law shall not apply to the Company and the following Articles shall comprise the Articles of Association of the Company.

INTERPRETATION

1. In these Articles the following defined terms will have the meanings ascribed to them, if not inconsistent with the subject or context:

“Affiliate”	for the purposes of Article 58(2), shall have the meaning given to it in Rule 405 of the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;
“Articles”	means these articles of association of the Company, as amended or substituted from time to time;
“Board” and “Board of Directors” and “Directors”	means the directors of the Company for the time being, or as the case may be, the directors assembled as a board or as a committee thereof;
“Chairman”	means the chairman of the Board of Directors;
“Class” or “Classes”	means any class or classes of Shares as may from time to time be issued by the Company;

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“Commission”	means the Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act;
“Company”	means Baosheng Media Group Holdings Limited宝盛传媒集团控股有限公司, a Cayman Islands exempted company;
“Companies Law”	means the Companies Law (2020 Revision) of the Cayman Islands and any statutory amendment or re-enactment thereof;
“Company’s Website”	means the main corporate/investor relations website of the Company, the address or domain name of which has been disclosed in any registration statement filed by the Company in connection or which has otherwise been notified to Shareholders;
“Designated Stock Exchange”	means the stock exchange in the United States on which any Shares are listed for trading;
“Designated Stock Exchange Rules”	means the relevant code, rules and regulations, as amended, from time to time, applicable as a result of the original and continued listing of any Shares on the Designated Stock Exchange;
“electronic”	has the meaning given to it in the Electronic Transactions Law and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor;
“electronic communication”	means electronic posting to the Company’s Website, transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by not less than two-thirds of the vote of the Board;
“Electronic Transactions Law”	means the Electronic Transactions Law (2003 Revision) of the Cayman Islands and any statutory amendment or re-enactment thereof;
“electronic record”	has the meaning given to it in the Electronic Transactions Law and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor;
“Memorandum of Association”	means the memorandum of association of the Company, as amended or substituted from time to time by Special Resolution of the Company;
“Ordinary Resolution”	means a resolution: (a) passed by a simple majority of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company held in accordance with these Articles; or

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	(b) approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed;
“Ordinary Share”	means an ordinary share of a par value of US$0.0005 in the capital of the Company, and having the rights, preferences, privileges and restrictions provided for in the Memorandum and these Articles;
“paid up”	means paid up as to the par value in respect of the issue of any Shares and includes credited as paid up;
“Person”	means any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires;
“Register”	means the register of Members of the Company maintained in accordance with the Companies Law;
“Registered Office”	means the registered office of the Company as required by the Companies Law;
“Seal”	means the common seal of the Company (if adopted) including any facsimile thereof;
“Secretary”	means any Person appointed by the Directors to perform any of the duties of the secretary of the Company;
“Securities Act”	means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
“Share”	means a share in the capital of the Company, and includes an Ordinary Share. All references to “Shares” herein shall be deemed to be Shares of any or all Classes as the context may require. For the avoidance of doubt in these Articles the expression “Share” shall include a fraction of a Share;
“Shareholder” or “Member”	means a Person who is registered as the holder of one or more Shares in the Register;
“Share Premium Account”	means the share premium account established in accordance with these Articles and the Companies Law;

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“signed”	means bearing a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a person with the intent to sign the electronic communication;
“Special Resolution”	means a special resolution of the Company passed in accordance with the Companies Law, being a resolution: (a) passed by not less than two-thirds of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given; or (b) approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed;
“Treasury Share”	means a Share held in the name of the Company as a treasury share in accordance with the Companies Law; and
“United States”	means the United States of America, its territories, its possessions and all areas subject to its jurisdiction.

2. In these Articles, save where the context requires otherwise:

(a) words importing the singular number shall include the plural number and vice versa;

(b) words importing the masculine gender only shall include the feminine gender and any Person as the context may require;

(c) the word "may" shall be construed as permissive and the word "shall" shall be construed as imperative;

(d) reference to a dollar or dollars (or US$) and to a cent or cents is reference to dollars and cents of the United States of America;

(e) reference to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force;

(f) reference to any determination by the Directors shall be construed as a determination by the Directors in their sole and absolute discretion and shall be applicable either generally or in any particular case;

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(g) reference to "in writing" shall be construed as written or represented by any means reproducible in writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing including in the form of an electronic record or partly one and partly another;

(h) any requirements as to delivery under the Articles include delivery in the form of an electronic record or an electronic communication;

(i) any requirements as to execution or signature under the Articles, including the execution of the Articles themselves, can be satisfied in the form of an electronic signature as defined in the Electronic Transaction Law; and

(j) Sections 8 and 19(3) of the Electronic Transactions Law shall not apply.

3. Subject to the last two preceding Articles, any words defined in the Companies Law shall, if not inconsistent with the subject or context, bear the same meaning in these Articles.

PRELIMINARY

4. The business of the Company may be conducted as the Directors see fit.

5. The Registered Office shall be at such address in the Cayman Islands as the Directors may from time to time determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine.

6. The expenses incurred in the formation of the Company and in connection with the offer for subscription and issue of Shares shall be paid by the Company. Such expenses may be amortized over such period as the Directors may determine and the amount so paid shall be charged against income and/or capital in the accounts of the Company as the Directors shall determine.

7. The Directors shall keep, or cause to be kept, the Register at such place or (subject to compliance with the Companies Law and these Articles) places as the Directors may from time to time determine and, in the absence of any such determination, the Register shall be kept at the Registered Office.

SHARES

8. Subject to these Articles, all Shares for the time being unissued shall be under the control of the Directors who may, in their absolute discretion and without the approval of the Members, cause the Company to:

(a) issue, allot and dispose of Shares (including, without limitation, preferred shares) (whether in certificated form or non-certificated form) to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine;

(b) grant rights over Shares or other securities to be issued in one or more classes or series as they deem necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attaching to such Shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers, preferences, privileges and rights associated with the then issued and outstanding Shares, at such times and on such other terms as they think proper; and

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(c) grant options with respect to Shares and issue warrants, convertible securities or similar instruments with respect thereto;

and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued.

9. The Directors may authorize the division of Shares into any number of Classes and the different Classes shall be authorized, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by a Special Resolution. The Directors may issue from time to time, out of the authorised share capital of the Company, preferred shares with such preferred or other rights, all or any of which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate in their absolute discretion and without approval of the Members; provided, however, before any preferred shares of any such series are issued, the Directors shall by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including:

(a) the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from the par value thereof;

(b) whether the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited;

(c) the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or any other series of shares;

(d) whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions of such redemption;

(e) whether the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference shall bear to the entitlements of the holders of shares of any other class or any other series of shares;

(f) whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

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(g) whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange;

(h) the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares or shares of any other class of shares or any other series of preferred shares;

(i) the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including additional shares of such series or of any other class of shares or any other series of preferred shares; and

(j) any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof;

and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued. The Company is not obliged to issue, allot or dispose of Shares if it is, in the opinion of the Directors, unlawful or impracticable. The Company shall not issue Shares to bearer.

Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any Class or series of preferred shares, no vote of the holders of preferred shares or Ordinary Shares shall be a prerequisite to the issuance of any Shares of any Class or series of the preferred Shares authorized by and complying with the conditions of the Memorandum and these Articles.

10. The Company may insofar as may be permitted by law, pay a commission to any Person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. Such commissions may be satisfied by the payment of cash or the lodgment of fully or partly paid-up Shares or partly in one way and partly in the other. The Company may also pay such brokerage as may be lawful on any issue of Shares.

11. The Directors may refuse to accept any application for Shares, and may accept any application in whole or in part, for any reason or for no reason.

MODIFICATION OF RIGHTS

12. If at any time the capital of the Company is divided into different Classes, all or any of the rights attached to any such Class may, subject to any rights or restrictions for the time being attached to any Class, be varied with the consent in writing of all of the holders of the issued Shares of that Class or with the sanction of a special resolution passed at a separate meeting of the holders of the Shares of that Class. To every such separate meeting all the provisions of these Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis, apply, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least one-third in nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those Shareholders who are present shall form a quorum) and that, subject to any rights or restrictions for the time being attached to the Shares of that Class, every Shareholder of the Class shall on a poll have one vote for each Share of the Class held by him. For the purposes of this Article the Directors may treat all the Classes or any two or more Classes as forming one Class if they consider that all such Classes would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes.

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13. The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that Class, be deemed to be varied by the creation or issue of further Shares ranking pari passu with or subsequent to the Shares of that Class or the redemption or purchase of any Shares of any Class by the Company. The rights of the holders of Shares shall not be deemed to be varied by the creation or issue of Shares with preferred or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights.

CERTIFICATES

14. Every Person whose name is entered as a Member in the Register may, without payment and upon its written request, request a certificate within two calendar months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) in the form determined by the Directors. All certificates shall specify the Share or Shares held by that Person, provided that in respect of a Share or Shares held jointly by several persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all. All certificates for Shares shall be delivered personally or sent through the post addressed to the Member entitled thereto at the Member's registered address as appearing in the Register.

15. Every share certificate of the Company shall bear legends required under the applicable laws, including the Securities Act.

16. Any two or more certificates representing Shares of any one Class held by any Member may at the Member's request be cancelled and a single new certificate for such Shares issued in lieu on payment (if the Directors shall so require) of one dollar (US$1.00) or such smaller sum as the Directors shall determine.

17. If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same Shares may be issued to the relevant Member upon request, subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit.

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18. In the event that Shares are held jointly by several persons, any request may be made by any one of the joint holders and if so made shall be binding on all of the joint holders.

FRACTIONAL SHARES

19. The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, contributions, calls or otherwise), limitations, preferences, privileges, qualifications, restrictions, rights (including, without prejudice to the generality of the foregoing, voting and participation rights) and other attributes of a whole Share. If more than one fraction of a Share of the same Class is issued to or acquired by the same Shareholder such fractions shall be accumulated.

LIEN

20. The Company has a first and paramount lien on every Share (whether or not fully paid) for all amounts (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Company also has a first and paramount lien on every Share registered in the name of a Person indebted or under liability to the Company (whether he is the sole registered holder of a Share or one of two or more joint holders) for all amounts owing by him or his estate to the Company (whether or not presently payable). The Directors may at any time declare a Share to be wholly or in part exempt from the provisions of this Article. The Company's lien on a Share extends to any amount payable in respect of it, including but not limited to dividends.

21. The Company may sell, in such manner as the Directors in their absolute discretion think fit, any Share on which the Company has a lien, but no sale shall be made unless an amount in respect of which the lien exists is presently payable nor until the expiration of fourteen calendar days after a notice in writing, demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the Persons entitled thereto by reason of his death or bankruptcy.

22. For giving effect to any such sale the Directors may authorize a Person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

23. The proceeds of the sale after deduction of expenses, fees and commission incurred by the Company shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the Person entitled to the Shares immediately prior to the sale.

CALLS ON SHARES

24. Subject to the terms of the allotment, the Directors may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their Shares, and each Shareholder shall (subject to receiving at least fourteen calendar days' notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on such Shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed.

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25. The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof.

26. If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the Person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part.

27. The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified.

28. The Directors may make arrangements with respect to the issue of partly paid Shares for a difference between the Shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment.

29. The Directors may, if they think fit, receive from any Shareholder willing to advance the same all or any part of the moneys uncalled and unpaid upon any partly paid Shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an Ordinary Resolution, eight percent per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable.

FORFEITURE OF SHARES

30. If a Shareholder fails to pay any call or instalment of a call in respect of any Shares on the day appointed for payment, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.

31. The notice shall name a further day (not earlier than the expiration of fourteen calendar days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited.

32. If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the notice has been given may at any time thereafter, before the payment required by notice has been made, be forfeited by a resolution of the Directors to that effect.

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33. A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit.

34. A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares forfeited, but his liability shall cease if and when the Company receives payment in full of the amount unpaid on the Shares forfeited.

35. A certificate in writing under the hand of a Director of the Company that a Share has been duly forfeited on a date stated in the certificate shall be conclusive evidence of the facts in the declaration as against all Persons claiming to be entitled to the Share.

36. The Company may receive the consideration, if any, given for a Share on any sale or disposition thereof pursuant to the provisions of these Articles as to forfeiture and may execute a transfer of the Share in favor of the Person to whom the Share is sold or disposed of and that Person shall be registered as the holder of the Share and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the disposition or sale.

37. The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by the terms of issue of a Share becomes due and payable, whether on account of the amount of the Share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

TRANSFER OF SHARES

38. Subject to these Articles and any other transfer or conversion restrictions pursuant to arrangements entered into by the Company with any depositary bank or other parties, any Shareholder may transfer all or any of his Shares (including securities representing his Shares) by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Board or, if the transferor or transferee is a clearing house or a central depository house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Board may approve from time to time.

39. The instrument of transfer of any Share shall be in writing and in any usual or common form or such other form as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares.

40.(a)The Directors may in their absolute discretion decline to register any transfer of Shares which is not fully paid up or on which the Company has a lien.

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(b) The Directors may also decline to register any transfer of any Share unless:

(i) the instrument of transfer is lodged with the Company, accompanied by the certificate for the Shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;

(ii) the instrument of transfer is in respect of only one Class of Shares;

(iii) the instrument of transfer is properly stamped, if required;

(iv) in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred does not exceed four; and

(v) a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Board of Directors may from time to time require, is paid to the Company in respect thereof.

41. The registration of transfers may, after compliance with any notice required by the Designated Stock Exchange Rules, be suspended and the Register closed at such times and for such periods as the Directors may, in their absolute discretion, from time to time determine, provided always that such registration of transfer shall not be suspended nor the Register closed for more than thirty calendar days in any calendar year.

42. All instruments of transfer that are registered shall be retained by the Company. If the Directors refuse to register a transfer of any Shares, they shall within two calendar months after the date on which the instrument of transfer was lodged with the Company send notice of the refusal to each of the transferor and the transferee.

TRANSMISSION OF SHARES

43. The legal personal representative of a deceased sole holder of a Share shall be the only Person recognized by the Company as having any title to the Share. In the case of a Share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only Person recognized by the Company as having any title to the Share.

44. Any Person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall, upon such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the death or bankruptcy.

45. A Person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the Share, and if the notice is not complied with within ninety calendar days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with.

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REGISTRATION OF EMPOWERING INSTRUMENTS

46. The Company shall be entitled to charge a fee not exceeding one dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument.

ALTERATION OF SHARE CAPITAL

47. Subject to the provisions of the Companies Law and these Articles, the Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided into Shares of such Classes and amount, as the resolution shall prescribe.

48. Subject to the Companies Law and these Articles, the Company may by Ordinary Resolution:

(a) increase its share capital by new Shares of such amount as it thinks expedient;

(b) consolidate and divide all or any of its share capital into Shares of a larger amount than its existing Shares;

(c) subdivide its Shares, or any of them, into Shares of an amount smaller than that fixed by the Memorandum, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in case of the Share from which the reduced Share is derived; and

(d) cancel any Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any Person and diminish the amount of its share capital by the amount of the Shares so cancelled.

49. Unless the Board in its sole discretion determines otherwise, all new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. The Board may settle as they consider expedient any difficulty which arises in relation to any consolidation and division under the preceding Article and in particular but without prejudice to the generality of the foregoing may issue certificates in respect of fractions of shares or arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale (after deduction of the expenses of such sale) in due proportion amongst the Members who would have been entitled to the fractions, and for this purpose the Board may authorize some person to transfer the shares representing fractions to their purchaser or resolve that such net proceeds be paid to the Company for the Company’s benefit. Such purchaser will not be bound to see to the application of the purchase money nor will his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

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50. The Company may by Special Resolution reduce its share capital and any capital redemption reserve in any manner authorized by law.

REDEMPTION, PURCHASE AND SURRENDER OF SHARES

51. Subject to the provisions of the Companies Law and these Articles, the Company may:

(a) issue Shares that are to be redeemed or are liable to be redeemed at the option of the Shareholder or the Company. The redemption of Shares shall be effected in such manner and upon such terms as may be determined, before the issue of such Shares by either the Board or by the Shareholders by Special Resolution;

(b) purchase its own Shares (including any redeemable Shares) in such manner and upon such terms as have been approved by the Board or by the Shareholders by Ordinary Resolution, or are otherwise authorized by these Articles; and

(c) make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Companies Law, including out of capital.

52. The redemption, purchase or surrender of any Share shall not be deemed to give rise to the redemption, purchase or surrender of any other Share other than as may be required pursuant to applicable laws and any other contractual obligations of the Company.

53. The holder of the Shares being purchased shall be bound to deliver up to the Company the certificate(s) (if any) thereof for cancellation and thereupon the Company shall pay to him the purchase or redemption monies or consideration in respect thereof.

54. The Directors may accept the surrender for no consideration of any fully paid Share.

TREASURY SHARES

55. The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.

56. The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration).

57. In the event that the Directors do not specify that the relevant Shares are to be held as Treasury Shares, such Shares shall be cancelled.

GENERAL MEETINGS

58. All general meetings other than annual general meetings shall be called extraordinary general meetings.

59.(a)The Company may (but shall not be obliged to, unless as required by applicable law or Designated Stock Exchange Rules) in each calendar year hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as may be determined by the Directors.

(b) At these meetings the report of the Directors (if any) shall be presented.

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60.(a)The Chairman or a majority of the Directors may call general meetings, and they shall on a Shareholders' requisition forthwith proceed to convene an extraordinary general meeting of the Company.

(b) A Shareholders' requisition is a requisition of two or more Members holding at the date of deposit of the requisition Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares of the Company that as at the date of the deposit carry the right to vote at general meetings of the Company.

(c) The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists.

(d) If there are no Directors as at the date of the deposit of the Members' requisition, or if the Directors do not within twenty-one calendar days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further twenty-one calendar days, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three calendar months after the expiration of the said twenty-one calendar days.

(e) A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

NOTICE OF GENERAL MEETINGS

61. At least seven (7) calendar days' notice shall be given for any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed:

(a) in the case of an annual general meeting, by all the Shareholders (or their proxies) entitled to attend and vote thereat; and

(b) in the case of an extraordinary general meeting, by two-thirds (2/3^rd) of the Shareholders having a right to attend and vote at the meeting, present in person or by proxy or, in the case of a corporation or other non-natural person, by its duly authorized representative or proxy.

62. The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting.

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PROCEEDINGS AT GENERAL MEETINGS

63. No business except for the appointment of a chairman for the meeting shall be transacted at any general meeting unless a quorum of Shareholders is present at the time when the meeting proceeds to business. One or more Shareholders who together hold Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares that carry the right to vote at such general meeting, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative, shall be a quorum for all purposes.

64. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall be dissolved.

65. If the Directors wish to make this facility available for a specific general meeting or all general meetings of the Company, participation in any general meeting of the Company may be by means of a telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting.

66. The Chairman, if any, of the Board of Directors shall preside as chairman at every general meeting of the Company.

67. If there is no such Chairman of the Board of Directors, or if at any general meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, any Director or Person nominated by the Directors shall preside as chairman of that meeting, failing which the Shareholders present in person or by proxy shall choose any Person present to be chairman of that meeting.

68. The chairman may with the consent of any general meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting, or adjourned meeting, is adjourned for fourteen calendar days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

69. The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting, except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason, upon notice in writing to Shareholders. A postponement may be for a stated period of any length or indefinitely as the Directors may determine. Notice of the business to be transacted at such postponed general meeting shall not be required. If a general meeting is postponed in accordance with this Article, the appointment of a proxy will be valid if it is received as required by the Articles not less than 48 hours before the time appointed for holding the postponed meeting.

70. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded. A poll may be demanded by the chairman of the meeting or by any or one or more Shareholders who together hold Shares which carry in aggregate not less than ten percent of the votes attaching to all issued and outstanding Shares that carry the right to vote at such general meeting, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. Unless a poll is so demanded, a declaration by the chairman of the meeting that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution.

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71. If a poll is duly demanded it shall be taken in such manner as the chairman of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

72. All questions submitted to a meeting shall be decided by an Ordinary Resolution except where a greater majority is required by these Articles or by the Companies Law. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall not be entitled to a second or casting vote.

73. A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs.

VOTES OF SHAREHOLDERS

74. Subject to any rights and restrictions for the time being attached to any Share, on a show of hands every Shareholder present in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy) shall, at a general meeting of the Company, each have one vote and on a poll every Shareholder present in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy) shall have one vote for each Ordinary Share of which he is the holder.

75. In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy) shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register.

76. Shares carrying the right to vote that are held by a Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may be voted, whether on a show of hands or on a poll, by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person may vote in respect of such Shares by proxy.

77. No Shareholder shall be entitled to vote at any general meeting of the Company unless all calls, if any, or other sums presently payable by him in respect of Shares carrying the right to vote held by him have been paid.

78. On a poll votes may be given either personally or by proxy.

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79. Each Shareholder, other than a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)), may only appoint one proxy on a show of hand and on a poll, each such proxy is under no obligation to cast all his votes in the same way. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorized. A proxy need not be a Shareholder. On a poll a Shareholder entitled to more than one vote need not use all his votes or cast all his votes in the same way.

80. An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve.

81. The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company:

(a) not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or

(b) in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or

(c) where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded be delivered at the meeting at which the poll was demanded to the chairman or to the secretary or to any director;

provided that the Directors may in the notice convening the meeting, or in any instrument of proxy sent out by the Company, direct that the instrument appointing a proxy may be deposited at such other time (no later than the time for holding the meeting or adjourned meeting) at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company. The chairman of the meeting may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted shall be invalid.

82. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

83. A resolution in writing signed by all the Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings of the Company (or being corporations by their duly authorized representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held.

CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS

84. Any corporation which is a Shareholder or a Director may by resolution of its directors or other governing body authorize such Person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder or Director.

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DEPOSITARY AND CLEARING HOUSES

85. If a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) is a Member of the Company it may, by resolution of its directors or other governing body or by power of attorney, authorize such Person(s) as it thinks fit to act as its representative(s) at any general meeting of the Company or of any Class of Shareholders provided that, if more than one Person is so authorized, the authorization shall specify the number and Class of Shares in respect of which each such Person is so authorized. A Person so authorized pursuant to this Article shall be entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) could exercise if it were an individual Member holding the number and Class of Shares specified in such authorization, including the right to vote individually on a show of hands.

DIRECTORS

86.(a)Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than three (3) Directors, and there shall be no maximum number of Directors.

(b) The Board of Directors shall have a Chairman elected and appointed by a majority of the Directors then in office. The period for which the Chairman will hold office will also be determined by a majority of all of the Directors then in office. The Chairman shall preside as chairman at every meeting of the Board of Directors, save and except that if the Chairman is not present at a meeting of the Board of Directors within fifteen minutes after the time appointed for holding the same, or if the Chairman is unable or unwilling to act as the chairman of a meeting of the Board of Directors, the attending Directors may choose one of their number to be the chairman of the meeting.

(c) The Company may by Ordinary Resolution appoint any person to be a Director and the appointment of such Director shall firstly been approved by the Board of Directors or any committee of the Directors.

(d) The Board may, by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting, appoint any person as a Director, to fill a casual vacancy on the Board or as an addition to the existing Board.

(e) A Director shall hold office until the expiration of his or her term or his or her successor shall have been elected and qualified, or until his or her office is otherwise vacated.

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87. A Director may be removed from office by Ordinary Resolution of the Company, notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). A vacancy on the Board created by the removal of a Director under the previous sentence may be filled by Ordinary Resolution or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting. The notice of any meeting at which a resolution to remove a Director shall be proposed or voted upon must contain a statement of the intention to remove that Director and such notice must be served on that Director not less than ten (10) calendar days before the meeting. Such Director is entitled to attend the meeting and be heard on the motion for his removal.

88. The Board may, from time to time, and except as required by applicable law or Designated Stock Exchange Rules, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives of the Company and determine on various corporate governance related matters of the Company as the Board shall determine by resolution of Directors from time to time.

89. A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a Member of the Company shall nevertheless be entitled to attend and speak at general meetings.

90. The remuneration of the Directors shall be determined by the Directors.

91. The Directors shall be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive such fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other.

ALTERNATE DIRECTOR OR PROXY

92. Any Director may in writing appoint another Person to be his alternate and, save to the extent provided otherwise in the form of appointment, such alternate shall have authority to sign written resolutions on behalf of the appointing Director, but shall not be required to sign such written resolutions where they have been signed by the appointing director, and to act in such Director's place at any meeting of the Directors at which the appointing Director is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director of the Company and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them.

93. Any Director may appoint any Person, whether or not a Director, to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting.

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DISQUALIFICATION OF DIRECTORS

94. The office of Director shall be vacated, if the Director:

(a) becomes bankrupt or makes any arrangement or composition with his creditors;

(b) dies or is found to be or becomes of unsound mind;

(c) resigns his office by notice in writing to the Company;

(d) without special leave of absence from the Board, is absent from meetings of the Board for three consecutive meetings and the Board resolves that his office be vacated;

(e) is prohibited by any applicable law or Designated Stock Exchange Rules from being a Director; or

(f) is removed from office pursuant to any other provision of these Articles.

POWERS AND DUTIES OF DIRECTORS

95. Subject to the Companies Law, these Articles and to any resolutions passed in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. No resolution passed by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been passed.

96. Subject to these Articles, the Directors may from time to time appoint any natural person or corporation, whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, chief executive officer, one or more other executive officers, president, one or more vice-presidents, treasurer, assistant treasurer, manager or controller, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any natural person or corporation so appointed by the Directors may be removed by the Directors. The Directors may also appoint one or more of their number to the office of managing director upon like terms, but any such appointment shall ipso facto terminate if any managing director ceases for any cause to be a Director, or if the Company by Ordinary Resolution resolves that his tenure of office be terminated.

97. The Directors may appoint any natural person or corporation to be a Secretary (and if need be an assistant Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the Directors.

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98. The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.

99. The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys or authorized signatory (any such person being an "Attorney" or "Authorized Signatory", respectively) of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such Attorney or Authorized Signatory as the Directors may think fit, and may also authorize any such Attorney or Authorized Signatory to delegate all or any of the powers, authorities and discretion vested in him.

100. The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article.

101. The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any natural person or corporation to be a member of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such natural person or corporation.

102. The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorize the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any natural person or corporation so appointed and may annul or vary any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

103. Any such delegates as aforesaid may be authorized by the Directors to sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them.

BORROWING POWERS OF DIRECTORS

104. The Directors may from time to time at their discretion exercise all the powers of the Company to borrow money, to mortgage or charge all or any part of its undertaking, property and assets (present and future) and uncalled capital, and to issue debentures, bonds and other securities, whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party.

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THE SEAL

105. The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixings of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence.

106. The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixings of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the instrument signed by a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose.

107. Notwithstanding the foregoing, a Secretary or any assistant Secretary shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company.

PROCEEDINGS OF DIRECTORS

108. The Directors may meet together (either within or without the Cayman Islands) for the despatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. At any meeting of the Directors, each Director present in person or represented by his proxy or alternate shall be entitled to one vote. In case of an equality of votes the chairman of the meeting shall have a second or casting vote. A Director may, and a Secretary or assistant Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors.

109. A Director may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director is a member, by means of telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting.

110. The quorum necessary for the transaction of the business of the Board may be fixed by the Directors, and unless so fixed, the quorum shall be a majority of Directors then in office. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether or not a quorum is present.

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111. A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract or arrangement with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made or transaction so consummated. A Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration, provided that (a) such Director, if his interest (whether direct or indirect) in such contract or arrangement is material, has declared the nature of his interest at the earliest meeting of the Board at which it is practicable for him to do so, either specifically or by way of a general notice and (b) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee of the Company.

112. A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realized by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting of the Directors whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement.

113. Any Director may act by himself or through his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorize a Director or his firm to act as auditor to the Company.

114. The Directors shall cause minutes to be made for the purpose of recording:

(a) all appointments of officers made by the Directors;

(b) the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and

(c) all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors.

115. When the chairman of a meeting of the Directors signs the minutes of such meeting the same shall be deemed to have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings.

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116. A resolution in writing signed by all the Directors or all the members of a committee of Directors entitled to receive notice of a meeting of Directors or committee of Directors, as the case may be (an alternate Director, subject as provided otherwise in the terms of appointment of the alternate Director, being entitled to sign such a resolution on behalf of his appointer), shall be as valid and effectual as if it had been passed at a duly called and constituted meeting of Directors or committee of Directors, as the case may be. When signed a resolution may consist of several documents each signed by one or more of the Directors or his duly appointed alternate.

117. The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose.

118. Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the committee members present may choose one of their number to be chairman of the meeting.

119. A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall not have a second or casting vote.

120. All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and was qualified to be a Director.

PRESUMPTION OF ASSENT

121. A Director who is present at a meeting of the Board of Directors at which an action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

DIVIDENDS

122. Subject to any rights and restrictions for the time being attached to any Shares, the Directors may from time to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorize payment of the same out of the funds of the Company lawfully available therefor.

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123. Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors.

124. The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of the Directors, be applicable for meeting contingencies or for equalizing dividends or for any other purpose to which those funds may be properly applied, and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments (other than Shares of the Company) as the Directors may from time to time think fit.

125. Any dividend payable in cash to the holder of Shares may be paid in any manner determined by the Directors. If paid by cheque it will be sent by mail addressed to the holder at his address in the Register, or addressed to such person and at such addresses as the holder may direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such Shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company.

126. The Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the Directors may fix the value of such specific assets, may determine that cash payment shall be made to some Shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors think fit.

127. Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares, but if and for so long as nothing is paid up on any of the Shares dividends may be declared and paid according to the par value of the Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share.

128. If several Persons are registered as joint holders of any Share, any of them may give effective receipts for any dividend or other moneys payable on or in respect of the Share.

129. No dividend shall bear interest against the Company.

130. Any dividend unclaimed after a period of six calendar years from the date of declaration of such dividend may be forfeited by the Board of Directors and, if so forfeited, shall revert to the Company.

ACCOUNTS, AUDIT AND ANNUAL RETURN AND DECLARATION

131. The books of account relating to the Company's affairs shall be kept in such manner as may be determined from time to time by the Directors.

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132. The books of account shall be kept at the Registered Office, or at such other place or places as the Directors think fit, and shall always be open to the inspection of the Directors.

133. The Directors may from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right to inspect any account or book or document of the Company except as conferred by any applicable law or authorized by the Directors or by Ordinary Resolution.

134. The accounts relating to the Company's affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited.

135. The Directors may appoint an auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration.

136. Every auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.

137. The auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment, and at any time during their term of office, upon request of the Directors or any general meeting of the Members.

138. The Directors in each calendar year shall prepare, or cause to be prepared, an annual return and declaration setting forth the particulars required by the Companies Law and deliver a copy thereof to the Registrar of Companies in the Cayman Islands.

CAPITALISATION OF RESERVES

139. Subject to the Companies Law, the Directors may:

(a) resolve to capitalize any sum standing to the credit of any of the Company's reserve accounts or funds (including the Share Premium Account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution;

(b) appropriate the sum resolved to be capitalized to the Shareholders in proportion to the nominal amount of Shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards:

(i) paying up the amounts (if any) for the time being unpaid on Shares held by them respectively, or

(ii) paying up in full unissued Shares or debentures of a nominal amount equal to that sum,

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and allot the Shares or debentures, credited as fully paid, to the Shareholders (or as they may direct) in those proportions, or partly in one way and partly in the other, but the Share Premium Account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued Shares to be allotted to Shareholders credited as fully paid;

(c) make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalized reserve and in particular, without limitation, where Shares or debentures become distributable in fractions the Directors may deal with the fractions as they think fit;

(d) authorize a Person to enter (on behalf of all the Shareholders concerned) into an agreement with the Company providing for either:

(i) the allotment to the Shareholders respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalization, or

(ii) the payment by the Company on behalf of the Shareholders (by the application of their respective proportions of the reserves resolved to be capitalized) of the amounts or part of the amounts remaining unpaid on their existing Shares,

and any such agreement made under this authority being effective and binding on all those Shareholders; and

(e) generally do all acts and things required to give effect to the resolution.

140. Notwithstanding any provisions in these Articles, the Directors may resolve to capitalize any sum standing to the credit of any of the Company's reserve accounts or funds (including the Share Premium Account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up in full unissued Shares to be allotted and issued to:

(a) employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members;

(b) any trustee of any trust or administrator of any share incentive scheme or employee benefit scheme to whom shares are to be allotted and issued by the Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or Members; or

(c) any depositary of the Company for the purposes of the issue, allotment and delivery by the depositary of ADSs to employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members.

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SHARE PREMIUM ACCOUNT

141. The Directors shall in accordance with the Companies Law establish a Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share.

142. There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Companies Law, out of capital.

NOTICES

143. Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the Person entitled to give notice to any Shareholder either personally, or by posting it by airmail or by a recognized courier service in a prepaid letter addressed to such Shareholder at his address as appearing in the Register, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile to any facsimile number such Shareholder may have specified in writing for the purpose of such service of notices, or by placing it on the Company's Website should the Directors deem it appropriate. In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands first in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders.

144. Any notice, if send from one country to another, shall be sent by airmail or by a recognized courier service.

145. Any Shareholder present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened.

146. Any notice or other document, if served by:

(a) post, shall be deemed to have been served five calendar days after the time when the letter containing the same is posted;

(b) facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient;

(c) recognized courier service, shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service;

(d) electronic mail, shall be deemed to have been served immediately upon the time of the transmission by electronic mail; or

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(e) placing it on the Company's Website, shall be deemed to have been served immediately upon the time when the same is placed on the Company's Website.

In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service.

147. Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document have been removed from the Register as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share.

148. Notice of every general meeting of the Company shall be given to:

(a) all Shareholders holding Shares with the right to receive notice and who have supplied to the Company an address for the giving of notices to them; and

(b) every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who but for his death or bankruptcy would be entitled to receive notice of the meeting.

No other Person shall be entitled to receive notices of general meetings.

INFORMATION

149. No Member shall be entitled to require discovery of any information in respect of any detail of the Company's trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public.

150. The Board shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register and transfer books of the Company.

INDEMNITY

151. Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the provisions of these Articles), Secretary, assistant Secretary, or other officer for the time being and from time to time of the Company (but not including the Company's auditors) and the personal representatives of the same (each an "Indemnified Person") shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person's own dishonesty, willful default or fraud, in or about the conduct of the Company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere.

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152. No Indemnified Person shall be liable:

(a) for the acts, receipts, neglects, defaults or omissions of any other Director or officer or agent of the Company; or

(b) for any loss on account of defect of title to any property of the Company; or

(c) on account of the insufficiency of any security in or upon which any money of the Company shall be invested; or

(d) for any loss incurred through any bank, broker or other similar Person; or

(e) for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or oversight on such Indemnified Person's part; or

(f) for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers, authorities, or discretions of such Indemnified Person's office or in relation thereto;

unless the same shall happen through such Indemnified Person's own dishonesty, willful default or fraud.

FINANCIAL YEAR

153. Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31^st in each calendar year and shall begin on January 1st in each calendar year.

NON-RECOGNITION OF TRUSTS

154. No Person shall be recognized by the Company as holding any Share upon any trust and the Company shall not, unless required by law, be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the Companies Law requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register.

WINDING UP

155. If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Companies Law, divide amongst the Members in species or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.

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156. If the Company shall be wound up, and the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. If in a winding up, the assets available for distribution amongst the Members shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions.

AMENDMENT OF ARTICLES OF ASSOCIATION

157. Subject to the Companies Law, the Company may at any time and from time to time by Special Resolution alter or amend these Articles in whole or in part.

CLOSING OF REGISTER OR FIXING RECORD DATE

158. For the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at any meeting of Shareholders or any adjournment thereof, or those Shareholders that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Shareholder for any other purpose, the Directors may provide that the Register shall be closed for transfers for a stated period which shall not exceed in any case thirty calendar days in any calendar year.

159. In lieu of or apart from closing the Register, the Directors may fix in advance a date as the record date for any such determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of the Shareholders and for the purpose of determining those Shareholders that are entitled to receive payment of any dividend the Directors may, at or within ninety calendar days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination.

160. If the Register is not so closed and no record date is fixed for the determination of those Shareholders entitled to receive notice of, attend or vote at a meeting of Shareholders or those Shareholders that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof.

REGISTRATION BY WAY OF CONTINUATION

161. The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company.

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MERGERS AND CONSOLIDATIONS

162. The Company shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Companies Law) upon such terms as the Directors may determine and (to the extent required by the Companies Law) with the approval of a Special Resolution.

DISCLOSURE

163. The Directors, or any service providers (including the officers, the Secretary and the registered office agent of the Company) specifically authorized by the Directors, shall be entitled to disclose to any regulatory or judicial authority any information regarding the affairs of the Company including without limitation information contained in the Register and books of the Company.

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EX-2.3

Exhibit 2.3

Description of rights of each class of securities

registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”)

Ordinary shares of Baosheng Media Group Holdings Limited, (“we,” “our,” “our company,” or “us”) are listed and traded on the Nasdaq Capital Market and, in connection with this listing (but not for trading), the ordinary shares are registered under Section 12(b) of the Exchange Act. This exhibit contains a description of the rights of the holders of ordinary shares.

Description of Ordinary Shares

The following is a summary of material provisions of our currently effective amended and restated memorandum and articles of association (the “Memorandum and Articles of Association”), as well as the Companies Act (As Amended) of the Cayman Islands (the “Companies Act”) insofar as they relate to the material terms of our ordinary shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire Memorandum and Articles of Association, which has been filed with the SEC as an exhibit to our annual report on Form 20-F for the fiscal year ended December 31, 2023.

Type and Class of Securities (Item 9.A.5 of Form 20-F)

Each ordinary share has a par value of US$0.0096 each. The number of ordinary shares that have been issued as of the last day of the financial year ended December 31, 2023 is provided on the cover of the annual report on Form 20-F filed in May 2024. Our ordinary shares may be held in either certificated or uncertificated form.

Preemptive Rights (Item 9.A.3 of Form 20-F)

The ordinary shares are not subject to any pre-emptive or similar rights under the Companies Act or pursuant to the Memorandum and Articles of Association.

Limitations or Qualifications (Item 9.A.6 of Form 20-F)

Each ordinary share entitles the holder thereof to one vote on all matters subject to the vote at general meetings of our company, voting together as one class.

Rights of Other Types of Securities (Item 9.A.7 of Form 20-F)

Not applicable.

Rights of ordinary shares (Item 10.B.3 of Form 20-F)

Ordinary Shares

Our authorized share capital is US$9,600,000 divided into 1,000,000,000 ordinary shares of par value of US$0.0096 each. All of our issued and outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form.

Dividends

The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors or declared by our shareholders by ordinary resolution (provided that no dividend may be declared by our shareholders which exceeds the amount recommended by our directors). Our Memorandum and Articles of Association provide that dividends may be declared and paid out of funds of our Company lawfully available therefor. Under the laws of the Cayman Islands, our company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.

Voting Rights

Subject to any rights or restrictions as to voting attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote per ordinary share. On a poll, every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote for each share of which he or the person represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by proxy.

Transfer of Ordinary Shares

Provided that a transfer of ordinary shares complies with applicable rules of Nasdaq, a shareholder may transfer ordinary shares to another person by completing an instrument of transfer in a common form or in a form prescribed by Nasdaq or in any other form approved by the directors, executed:

(a) where the ordinary shares are fully paid, by or on behalf of that shareholder; and

(b) where the ordinary shares are partly paid, by or on behalf of that shareholder and the transferee.

The transferor shall be deemed to remain the holder of an ordinary share until the name of the transferee is entered into the register of members of the Company.

Where the ordinary shares in question are not listed on or subject to the rules of Nasdaq, our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share that has not been fully paid up or is subject to a company lien. Our board of directors may also decline to register any transfer of such ordinary share unless:

(a) the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

(b) the instrument of transfer is in respect of only one class of ordinary shares;

(c) the instrument of transfer is properly stamped, if required; and

(d) in the case of a transfer to joint holders, the number of joint holders to whom the ordinary shares are to be transferred does not exceed four.

If our directors refuse to register a transfer, they are required, within one month after the date on which the instrument of transfer was lodged, to send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, on prior notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and our register of members closed at such times and for such periods as our board of directors may from time to time determine. The registration of transfers, however, may not be suspended, and the register of members may not be closed, for more than 30 calendar days in any year.

Liquidation

On the winding up of our company, if the assets available for distribution among our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed among our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them.

Calls on Ordinary Shares and Forfeiture of Ordinary Shares

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at any time thereafter during such time as any part of such call or instalment remains unpaid. The notice shall name a further day (not earlier than the expiration of fourteen calendar days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the ordinary shares in respect of which the call was made will be liable to be forfeited.

Requirements to Change the Rights of Holders of Ordinary Shares (Item 10.B.4 of Form 20-F)

Variations of Rights of Shares

Whenever our capital is divided into different classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class) may be varied with the consent in writing of all of the holders of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The necessary quorum shall be one or more persons holding or representing by proxy at least one-third in nominal or par value amount of the issued shares of the relevant class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those shareholders who are present shall form a quorum).

Unless the terms on which a class of shares was issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation or issue of further shares ranking pari passu with the existing shares of that class or subsequent to them or the redemption or purchase of any shares of any class by our company. The rights conferred upon the holders of the shares of any class issued shall not be deemed to be varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.

Limitations on the Rights to Own Ordinary Shares (Item 10.B.6 of Form 20-F)

There are no limitations under the laws of the Cayman Islands or under the Memorandum and Articles of Association that limit the right of non-resident or foreign owners to hold or vote ordinary shares.

Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)

Anti-Takeover Provisions. Some provisions of our Memorandum and Articles of Association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our Memorandum and Articles of Association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

Ownership Threshold (Item 10.B.8 of Form 20-F)

There are no provisions under the Companies Act or under the Memorandum and Articles of Association that govern the ownership threshold above which shareholder ownership must be disclosed.

Differences Between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)

The Companies Act is modelled after that of England and Wales but does not follow recent statutory enactments in England. In addition, the Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the State of Delaware.

Mergers and Similar Arrangements

A merger of two or more constituent companies under Cayman Islands law requires a plan of merger or consolidation to be approved by the directors of each constituent company and authorization by a special resolution of the members of each constituent company.

A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders. For this purpose a subsidiary is a company of which at least ninety percent (90%) of the issued shares entitled to vote are owned by the parent company.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Save in certain circumstances, a dissentient shareholder of a Cayman constituent company is entitled to payment of the fair value of his shares upon dissenting to a merger or consolidation. The exercise of appraisal rights will preclude the exercise of any other rights save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by (a) 75% in value of the shareholders or class of shareholders, as the case may be, or (b)  a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

●the statutory provisions as to the required majority vote have been met;

●the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

●the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

When a takeover offer is made and accepted by holders of 90% of the shares within four months, the offeror may, within a two-month period commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

Shareholders’ Suits

In principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, there are exceptions to the foregoing principle, including when:

●a company acts or proposes to act illegally or ultra vires;

●the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and

●those who control the company are perpetrating a “fraud on the minority.”

Indemnification of Directors and Executive Officers and Limitation of Liability

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Memorandum and Articles of Association permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from dishonesty or fraud which may attach to such directors or officers. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and senior executive officers that will provide such persons with additional indemnification beyond that provided in our Memorandum and Articles of Association.

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

Anti-Takeover Provisions in the Memorandum and Articles of Association

Some provisions of our Memorandum and Articles of Association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favourable, including provisions that authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our Memorandum and Articles of Association, as amended and restated from time to time, for what they believe in good faith to be in the best interests of our company.

Directors’ Fiduciary Duties

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company—a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his or her position as director (unless the company permits him to do so) and a duty not to put himself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have moved towards an

objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

Shareholder Action by Written Consent

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Our Memorandum and Articles of Association provide that shareholders may not approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

Shareholder Proposals

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings or allow our shareholders to requisition a shareholders’ meeting. Our Memorandum and Articles of Association allow our shareholders to requisition shareholders’ meetings.

Cumulative Voting

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under Cayman Islands law, our Memorandum and Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

Removal of Directors

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.

Under our Memorandum and Articles of Association, directors may be removed by an ordinary resolution of shareholders save that, for so long SAIF IV Healthcare (BVI) Limited is a shareholder holding at least 10% of the issued shares of the Company, it shall have the exclusive right to appoint, remove and replace 1 director by written notice to the Company and such appointment, removal or replacement shall become effective forthwith upon delivery of such written notice to our company without the need for further authorisation from our board of directors or the shareholders.

Transactions with Interested Shareholders

The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an

interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

Restructuring

A company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company:

(a) is or is likely to become unable to pay its debts; and

(b) intends to present a compromise or arrangement to its creditors (or classes thereof) either pursuant to the Companies Act, the law of a foreign country or by way of a consensual restructuring.

The Grand Court may, among other things, make an order appointing a restructuring officer upon hearing of such petition, with such powers and to carry out such functions as the court may order. At any time (i) after the presentation of a petition for the appointment of a restructuring officer but before an order for the appointment of a restructuring officer has been made, and (ii) when an order for the appointment of a restructuring officer is made, until such order has been discharged, no suit, action or other proceedings (other than criminal proceedings) shall be proceeded with or commenced against the company, no resolution to wind up the company shall be passed, and no winding up petition may be presented against the company, except with the leave of the court. However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed.

Dissolution; Winding Up

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

Under the Companies Act and our Memorandum and Articles of Association, our company may be dissolved, liquidated or wound up by the vote of holders of two-thirds of our shares voting at a meeting

Variation of Rights of Shares

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our Memorandum and Articles of Association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.

Amendment of Governing Documents

Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our Memorandum and Articles of Association may only be amended by a special resolution of shareholders.

Rights of Non-Resident or Foreign Shareholders

There are no limitations imposed by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

Directors’ Power to Issue Shares

Subject to applicable law, our board of directors is empowered to issue or allot shares or grant options and warrants with or without preferred, deferred, qualified or other special rights or restrictions.

Changes in Capital (Item 10.B.10 of Form 20-F)

We may from time to time by ordinary resolution:

●increase the share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;

●consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;

●sub-divide our existing shares, or any of them into shares of a smaller amount than that fixed by the our Memorandum of Association, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced ordinary share shall be the same as it was in case of the ordinary share from which the reduced ordinary share is derived; and

●cancel any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the ordinary shares so cancelled.

We may by special resolution, subject to any confirmation or consent required by the Companies Act, reduce our share capital or any capital redemption reserve in any manner permitted by law.

Debt Securities (Item 12.A of Form 20-F)

Not applicable.

Warrants and Rights (Item 12.B of Form 20-F)

Not applicable.

Other Securities (Item 12.C of Form 20-F)

Not applicable.

Description of American Depositary Shares (Items 12.D.1 and 12.D.2 of Form 20-F)

Not applicable.

EX-4.3

Exhibit 4.3

Ocean Engine Customer Service Tel.: 400-618-1518

Ocean Engine Agent Data Promotion Business Cooperation Agreement

Contract No.: CONT20231123616833

Party A: Xiamen Jinri Toutiao Information Technology Co., Ltd.

Address: 3F-A1176, Area C, Innovation Building, No.3 Siming Software Park, Phase I of Software Park, Torch High-tech Zone, Xiamen

Contact: He Ning

Tel.:

Contact E-mail:

Mailing address: 3F-A1176, Area C, Innovation Building, No.3 Siming Software Park, Phase I of Software Park, Torch High-tech Zone, Xiamen

(The E-mail address of Party A’s contact person or that with the suffix @bytedance.com stipulated herein are valid E-mail address for Party A to send and receive notices)

Party B 1: Beijing Baosheng Technology Co., Ltd.

Address:

Contact: Zhan Wentong

Tel.:

WeChat:

Contact E-mail:

Mailing address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

(The E-mail address of Party B’s contact person or that with the suffix @bsacme.com stipulated herein are valid E-mail address for Party B to send and receive notices)

Party B 2: Beijing Baosheng Network Technology Co., Ltd.

Address:

Contact: Zhan Wentong

Tel.:

WeChat:

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Contact E-mail:

Mailing address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

(The E-mail address of Party B’s contact person or that with the suffix @bsacme.com stipulated herein are valid E-mail address for Party B to send and receive notices)

Beijing Baosheng Technology Co., Ltd. and Beijing Baosheng Network Technology Co., Ltd. are collectively referred to as Party B hereunder, and Beijing Baosheng Technology Co., Ltd. and Beijing Baosheng Network Technology Co., Ltd. shall bear joint and several liabilities to Party A for the performance of the Agreement.

Party A and Party B have signed the Agreement after friendly negotiation in accordance with the current effective laws, regulations, rules and regulations and national standards of the People’s Republic of China, regarding Party B’s entrustment of Party A to provide data promotion services to customers represented by Party B. The Ocean Engine Ark Platform Service Agreement (https://lf3-cdn-tos.draftstatic.com/obj/ies-hotsoon-draft/agent_web/user_protocol.htmlweb, hereinafter referred to as the “Online Agreement”) confirmed by Party B on the Ocean Engine Ark Platform and other related agreements that may be issued by the data promotion platform on the Ocean Engine data promotion service, platform rules, policies, specifications, service usage rules, notices, etc. are all part of the Agreement. The data promotion platform has the right to update the aforementioned agreements, rules, notices and content from time to time, and will notify Party B through web-page announcements, on-site letters, E-mails, telephone calls or letters. Such notices are deemed to have been delivered to Party B and become binding on Party B.

Part I Terms of Service

Article 1 Cooperation Matters and Definitions

1. Party B entrusts Party A to provide data promotion services for the customers represented by Party B in accordance with the Agreement, and therefore pays Party A the agreed data promotion fees.

2. Party A authorizes Party B to be a comprehensive agent in the country, except for the scope of local industry advantages, automobile manufacturers, automobile dealers, and real estate developers (Party A has the right to unilaterally adjust and change the scope and period of Party B’s agency, and the details are subject to Party A’s notice). During the agency period

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(the cooperation period of the Agreement), Party B may only act as an agent for data promotion services within the scope authorized by Party A, and may not have customer conflicts with the advantageous agents of Party A and its affiliates involved in business in this region. Regardless of any legal relationship formed or existing between Party B and the customer it represents, Party B shall sign corresponding agreements with the customer it represents in its own name and directly enjoy rights and obligations as a party hereto. Party B shall clearly agree with the customers it represent on their respective scope of work, specific service items, service standards, and other related matters. Party B shall not refuse to perform the Agreement for any reason between Party B and its customer. In case of any disputes arising from Party B’s violation of the agreement signed with the customer or the unclear agreement with the customer, Party B shall resolve it with the customer by itself.

3. Data promotion platform: Refers to the Ocean Engine Ark Platform (web.: https://agent.oceanengine.com/), Ocean Advertising Platform (including customer applications and websites) legally operated by Party A or Party A’s affiliates, web.: https://ad.oceanengine.com/) and platforms used to provide specific types of data promotion and related services and functions, which may provide services such as data promotion, cost statistics, data query, analysis, and material management (subject to the actual provision of the platform).

4. Ocean Engine Ark Platform: Refers to the service and management platform legally operated by Party A or Party A’s affiliates, which may provide services such as contract signing, customer follow-up, business process, optimized delivery, and intelligent data analysis (specifically based on the actual situation of the platform provided), hereinafter referred to as “Ark Platform”.

5. Platform rules: Refer to various normative documents that have been issued or may be issued in the future on the promotion platform, flow network platform, Ocean Engine workbench and subsequent related platforms (hereinafter referred to as “platforms”), including but not limited to the agreements, rules, specifications, notices, policies, announcements, etc. that Party B and Party B’s agency customers must abide by to use the relevant services and functions hereunder. If there is any change in the name, operating entity and website/domain

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name of each platform hereunder, the notice at that time shall prevail and the change will not affect the validity of the Agreement.

6. Restrictive measures: Refer to the restrictive measures taken by each platform on part or all of the accounts of Party B and Party B’s agency customers, and their related parties in accordance with the Agreement, Online Agreement, platform rules or relevant laws and regulations, including but not limited to closing accounts; restrictions on opening accounts; freezing the cash balance and preferential rights and interests in the accounts (including grants, convert payment, coupons, etc.); restrictions on participation in various activities organized by various platforms; restricting data promotion and delivery (including restricting promotional content, promotion display, promotion goals and objects, etc.); limiting the issuance of rebates and incentives; intercept refunds; other restrictions on data promotion functions and service use.

7. Party B’s products or promotional products refer to the commodities, services or any other legal publicity objects (including but not limited to brands, direct broadcasting rooms, stores, websites, APP products, etc.) promoted by Party B’s agency customers. Party B guarantees that Party B and its customers enjoy the legal rights or full authorizations required to perform the Agreement, including but not limited to copyrights, trademark rights, portrait rights, etc. for data promotion.

8. Performance: Refers to the business behavior related to the promotion product and the link behavior after the data promotion, specifically, after the user browses and clicks on the promotional content, Party B’s customers and/or the related party of Party B’s customers provides the product or service to the user.; all behaviors such as marketing, transactions and after-sales.

9. Flow network platform: Party B may make corresponding selections, settings or operations according to the platform rules and guidelines, and may also display its content materials on Party A’s affiliates’ customer applications, websites, applets, and other partner network platforms, applications, etc. (hereinafter referred to as “flow network platform”), related pages, interfaces or locations through the data promotion services provided by Party A in the manner agreed herein and/or use and enjoy corresponding services and functions.

10. Data promotion services, including one or a combination of the following methods:

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(1) Publish promotional content for Party B’s products in the form of text, pictures, audio, video, live broadcast, etc. on the flow network platform;

(2) Party B provides content that describes, introduces or promotes Party B’s products, with text as the main form of expression, and publishes it on the flow network platform;

(3) Party B provides the network/download link address and publishes it on the flow network platform. Users of the flow network platform may click on the link to jump to the corresponding page to view information or purchase/use specific services, commodities or download APP products. Party B shall ensure the legality of the landing page targeted by the jump link and its content, products and qualifications;

(4) Paid search services for the promotion of commodities, services or other publicity objects;

(5) Other data promotion services that may be used to promote Party B’s products.

Party B understands and confirms that the data promotion services hereunder, whether Party B places an order and confirms it through offline methods such as E-mails, or operates and executes it online through Party B and Party B’s customer account, shall abide by the provisions of the Agreement, and Party B shall bear the responsibility and pay the corresponding fees in accordance with the Agreement.

11. Promotional content or content materials: Refer to the keyword information and website information submitted by Party B or its customers; information content which Party B or its customers design and produce by themselves or entrust others to design and produce with valid authorization to display Party B’s products; information content submitted and displayed by Party B when he uses the service-related functions of the Agreement, including but not limited to text, pictures, flash, audio, video, live broadcast and other forms of content and images, portraits, names, logos, all components such as trademarks, brands, music, sound, lines, visual design, etc., and the content materials include the landing page itself.

12. Landing page: Refers to the page targeted by the link contained in the content material, that is, the page that the user jumps to or redirects after clicking the content material.

13. Creative optimization function refers to the following functions that data promotion platform provides for Party B’s content materials:

(1) Live high-quality clip editing function. When promoting the direct broadcasting room, the live content (including but not limited to text, pictures, audio, live video and other forms of

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content and image, portrait, name, logo, trademark, brand, music, sound, lines, visual design and other components contained therein) may be intelligently edited (including but not limited to selection, alternation, break-up, grouping) and processed (including but not limited to adding subtitles, music, pictures, videos) to form high-quality clips for promoting the direct broadcasting room to which the live content belongs);

(2) Dynamic creative function. This function dynamically optimizes Party B’s promotional content according to search keywords and population characteristics, including but not limited to adjusting promotional content, titles and genres, intelligently displaying creative components and short video interactive data, and enabling the live high-quality clip editing function;

(3) Programmatic creative functions. Intelligent splicing, combination and dynamic optimization according to Party B’s titles, pictures, videos and other promotional content;

(4) Creative derivation function. According to the content materials of Party B, intelligently generate ideas to enrich the promotional content.

14. self-produced programs and specific activities: Refers to videos, micro-short dramas, film and television dramas, variety shows that are filmed, produced and produced by Party A and/or Party A’s affiliates themselves or by a third party entrusted, or to which commercial content shows, sports events or live live parties, etc. may be implanted.

15. Ocean Engine account refers to account generated by Party B’s customer synchronously via authorized login method of using E-mail, mobile phone number or third-party account, on each business platform connected to the Ocean Engine account system (the list of business platforms is subject to the announcement on the Ocean Engine workbench) when they registers an account, which may be used to access and log in to various business platforms connected to the Ocean Engine account system.

16. Ocean Engine Workbench refers to a comprehensive platform that provides full-link business activity management, operation and technical service support for Ocean Engine account users (web.: https://business.oceanengine.com/). The engine workbench may be used to realize functions such as cross-account coordination, role-by-role authorization, and multi-scenario marketing; and through this workbench, you may query and configure permissions, operate assets and funds, and analyze the data of all products.

Article 2 Cooperation Period

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1. The cooperation period between Party A and Party B is: from January 1, 2024 to December 31, 2024. After the above cooperation period expires, the data promotion services hereunder will be terminated. If the Agreement is rescinded or terminated in advance, the above cooperation period ends on the date of early rescission/termination.

2. If after the expiration of the cooperation period of the Agreement, there is still a cash balance (referred to as the “cash balance”) in the accounts of Party B and its customers that has been prepaid and recharged but has not been released and consumed, and Party B chooses to continue to use it, the cash balance may only be used for bidding data promotion within three natural months after the expiration of the cooperation period of the Agreement (hereinafter referred to as the “extension period”), and the data promotion during the extension period shall still follow the Agreement, unless otherwise agreed by the parties; After the extension period expires, Party A and the data promotion platform have the right to close the accounts and account permissions of Party B and its customers. After the expiration of the cooperation period of the Agreement, Party B is not allowed to renew and recharge hereunder, and may only consume the aforementioned cash balance during the extension period. The consumption incurred after the expiration of the cooperation period of the Agreement and the consumption during the extension period may not be used for rebates, incentives and other similar preferential policies.

Article 3 Data Promotion Methods

1. Non-bidding data promotion

(1) Non-bidding data promotion includes but is not limited to CPT (Cost Per Time), CPM guaranteed delivery, CPV guaranteed delivery, special project resource packages (such as: self-produced programs and specific activities data promotion) and other non-standard resources, etc. placement.

(2) For non-bidding data promotion, the Data Promotion Order (hereinafter referred to as the “Order”) signed by Party A and Party B before the data promotion or confirmed through the valid mailbox and data promotion platform agreed herein shall prevail to specify the specific time, location, price and other elements of data promotion. If Party B issues an order through the mailbox or data promotion platform, this order is deemed to be Party B’s true expression of intention, and has legal effect and binding force on Party B. The order will take effect

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after Party A confirms it with the valid mailbox agreed herein or place an order on the data promotion platform. Party B understands and confirms that Party A will log in to the data promotion background and Party B’ and its customers’ accounts by itself or entrust a third party to log in this platform to view and perform corresponding operations according to the order agreement, and confirm the relevant Online Agreement and rules on behalf of Party B for the use of some functions, so as to realize the promotion and delivery of non-bidding data.

(3) After the order is successfully placed, Party A has locked up the inventory for Party B and reserved corresponding resources. If there are non-data promotion platform reasons and non-Party A’s reasons that affect normal, timely and continuous delivery, the resource waste will be caused, and Party B shall still pay the corresponding data promotion fees according to the order agreement and Party A shall not bear any responsibility. The aforementioned situations include but are not limited to the following: where Party B fails to upload content materials in a timely manner; where Party B’s content materials/data promotion plan fails to pass the review; where Party B’s content materials/data promotion plan violates laws, regulations and platform rules, resulting in the plan being offline; where Party B’s/Party B’s customers’ account is abnormal (including but not limited to account being suspended and unable to be released, account qualification expiring, not uploaded or changed, or other abnormal situations where restrictive measures are taken according to platform rules; where the products promoted by Party B are not in normal display status; where Party B’s operation leads to suspension of delivery (including re-submission triggered by mid-delivery editing, modification of accounts of flow network platform for promotion, authorization and cooperation, modification of promoted products, self-suspension, etc.), and other non-data promotion platforms and non-Party A reasons for Party B’s data promotion plan to be suspended, interrupted, terminated, and unable to be launched in a timely and continuous manner.

(4) During the cooperation period of the Agreement, if Party B changes the effective order, it shall notify Party A 30 days in advance for confirmation of Party A. The parties shall sign or confirm the changed order separately; otherwise, it shall be deemed that the order has not

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been changed, and Party A and Party B shall still execute and settle according to the effective order before such change. If Party B changes the order confirmed on the data promotion platform, it shall be implemented in accordance with the rules and requirements of the data promotion platform.

2. Bidding data promotion: including but not limited to CPM (oCPM) (charged according to advertising display), CPC (charged according to advertising click) and other bidding placements, Party B shall promote data through online bidding in accordance with the data promotion platform rules and delivery operation guidelines, and once Party B’s bidding meets the transaction conditions of this service, Party B’s promotional content will be displayed in an independent or aggregated form in a specific location and in a specific way according to the continuously optimized delivery model of the data promotion platform.

3. Party B understands and confirms that if Party B has selected the preferred media or scenario on the data promotion platform, Party B’s promotional content will be mainly released according to the media or scenario selected by Party B. If there are multiple preferred media or scenarios, due to content materials, platform rules, bidding strategies and other factors, some media or scenarios may not be released; then, to provide better data promotion services to Party B, the data promotion platform may optimize the content and format of Party B’s promotional content and intelligently expand it to other flow scenarios.

4. Based on legal and regulatory requirements, platform risk control requirements, platform rule adjustments, user rights protection and experience improvement, optimization of data promotion services, etc., and based on continuously optimized delivery models and strategies, Party B confirms and authorizes the data promotion platform to adjust and optimize content materials, size and format requirements, delivery location and form, data promotion methods, etc. from time to time. The optimization includes but is not limited to adding anchors, marketing components, logos or signs, aggregating and displaying content materials with other customers, or opening all or part of creative optimization functions, and the details are subject to the actual implementation of the data promotion platform. If the content material does not have or lacks a degree of matching and/or correlation with specific data promotion service attributes, Party B

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authorizes Party A and the data promotion platform to properly edit and replace Party B’s content material for adaptation and display.

5. Special agreement on the promotion of self-produced programs and specific activities data

(1) If Party B displays and promotes content materials and enjoys corresponding rights and interests in self-produced programs and specific activities, the corresponding rights and interests of Party B will be reflected in the self-produced programs and specific activities (the specific rights and interests are subject to the confirmation of the parties), and the form of rights and interests shall be based on the final form of expression in the self-produced programs and specific activities. After the expiration of the data promotion period, Party A has the right to take Party B’s content materials and rights offline or replace them. Unless otherwise agreed by the parties, all intellectual property rights related to self-produced programs and specific activities belong to Party A or Party A’s affiliates. Without Party A’s written consent, Party B may not use the self-produced programs and specific activities or authorize or transfer to any third party; otherwise, Party A and its affiliates shall be liable for compensation for all losses caused by this.

(2) Party B has the right and hereby irrevocably authorizes Party A and its affiliates to use Party B’s content materials in programs and specific activities, programs and specific activities promotion and flow network platform promotion activities on a global, non-exclusive and sub-licensable basis. Party A and its affiliates have the right to modify, reproduce, adapt, translate, compile or produce derivative products of the corresponding content. Party A shall use the content materials provided by Party B according to the purpose and use agreed by the parties, and shall not abuse or infringe on Party B’s legitimate interests or belittle Party B’s image.

(3) Party B understands and confirms that if any of Party B’s rights and interests such as adjustment of self-produced program scheduling, inability to broadcast, suspension or postponement of specific activities and launch may not be realized due to any other reasons than Party A’s reasons or factors beyond Party A’s control, the above shall not be deemed as Party A’s breach of the Contract, and Party A will not bear any liability for compensation to Party B (including but not limited to compensation for errors and omissions and compensation for losses, etc.), and the actual expenses incurred by the

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parties according to the part performed under the corresponding order (including but not limited to the consideration for rights and resources used by Party B, etc.) shall be settled according to the facts, and the production expenses actually invested by Party A shall be negotiated and handled by Party A and Party B by signing a supplementary agreement.

(4) Uncontrollable factors include but are not limited to: the programs, columns and specific activities involved in the project have not been approved, filed or permitted by the relevant government authorities, or the applicable laws, policies or government regulatory requirements have changed and adjusted during the cooperation period, or there is suspension or postponement of sports events and evening parties due to force majeure, social public events, government requirements or regulations, etc., causing programs, columns and specific activities may not be launched, postponed, modified or postponed, and still may not obtain administrative approval or filing review upon modification and the implementation of project content (including but not limited to hosts, actors, guests, directors, filming environment) needs to be changed; the adjustment of program and project arrangement caused by the broadcast channel of Party A or Party A’s affiliates to broadcast major events or news, live programs, overall revision of equipment maintenance and other reasons.

(5) If offline activities are involved, Party B shall be responsible for the personal and property safety of its personnel, materials, equipment, etc. and cooperate with the on-site management of the event (including but not limited to property, safety, fire protection, epidemic prevention, etc.).

(6) If the data promotion cooperation of self-made programs and specific activities is suspended or terminated in advance due to Party B or its customer, including but not limited to Party B or its customer canceling all or part of the cooperation without authorization, Party B, Party B’s customer and/or Party B and Party B’s customer related personnel (including but not limited to operators, executives, spokespersons) have illegal, negative events or improper behaviors. If Party A judges that the continued cooperation will affect Party A and/or Party A’s Affiliated company reputation, etc., Party B shall pay the promotion expenses corresponding to the rights and resources used before the suspension/termination. At the same time, all the

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production costs of self-made programs and specific activities shall be borne by Party B, and Party B shall be liable for compensation for all losses of Party A and its affiliates.

6. Party B understands and confirms that the results and effects of data promotion are affected by various factors, including but not limited to status of Party B’s Products, quality of Content Materials, Party B’s operation and performance and changes in external competitive environment. However, no matter what data promotion method and billing method are adopted, Party A and platforms do not make any express or implied commitment to Party B and its customers on the promotion effect of services hereunder and the sales volume, operating performance and investment income of Party B’s Products.

Article 4 Data Promotion Service Fees

1. In order to ensure the continuous use of relevant services under the Agreement, Party B shall renew the fees in a timely manner. If Party B’s data promotional content goes offline due to Party B’s failure to renew the fees in time, Party A shall not bear any responsibility and reserves the right to terminate the Agreement.

2. Billing method

According to the specific way of data promotion agreed by Party A and Party B, Party B shall settle accounts and pay fees to Party A in corresponding billing methods (including CPT, CPM, CPC and oCPM, etc.); Billing currency: RMB.

3. If there is a prepaid and unconsumed cash balance in the account of Party B and its customer before the signing of the Agreement, Party B confirms that from the cooperation start date agreed in the Agreement, the aforementioned prepaid and unconsumed cash balance will be transferred to the Agreement and shall be treated in accordance with the Agreement.

4. Payment term

(i) In case of bidding data promotion of Party B, Party B shall pay the data promotion service fees within the agreed time limit as follows:

Payment before data promotion (i.e. prepayment): Party B shall pay the promotion service fees to Party A before data promotion. Each natural month is a settlement period. The parties shall timely calculate the promotion service fees incurred in the previous settlement period within each settlement period. Party A shall timely provide Party B with an invoice of the

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same amount upon receipt of the sealed order or Data Promotion Service Fee Statement issued by Party B.

(ii) In case of non-bidding data promotion of Party B, Party B shall pay the data promotion service fees within the agreed time limit as follows:

Payment before data promotion (i.e. prepayment): Party B shall pay the promotion service fees to Party A before data promotion. Each natural month is a settlement period. The parties shall timely calculate the promotion service fees incurred in the previous settlement period within each settlement period. Party A shall timely provide Party B with an invoice of the same amount upon receipt of the sealed order or Data Promotion Service Fee Statement issued by Party B.

Party B understands and confirms that Party A has the right to adjust the payment term agreed herein for the non-bidding data promotion including Special Project Resource Package, and the adjusted payment term and method shall be subject to the supplementary agreement signed by the parties or email.

5. Party B understands and confirms that for bidding data promotion, the Cash Balance (if any) in the accounts of Party B and its agent clients will be preferentially consumed even if Party B adopts the non-prepaid payment method. After the Cash Balance is consumed out, Party B shall pay the data promotion service fees to Party A according to the above payment term. For non-bidding data promotion, Party B shall pay Party A the data promotion service fees according to the above clause of payment term.

6. Type of invoice: The items that Party A can issue include promotion fee/advertising release fee/advertising fee, and the types of invoices that Party A can issue for Party B include special VAT invoice/ordinary VAT invoice.

7. Party B shall pay to Party A by bank transfer or other methods displayed in Data Promotion Platform, and Party A does not accept other payment methods. The settlement currency is RMB. Party A’s receiving bank account information is as follows:

Account name: Xiamen Jinri Toutiao Information Technology Co., Ltd.

Bank of deposit: Beijing Fucheng Sub-branch of Shanghai Pudong Development Bank

Bank account number:

8. Upon expiration of the cooperation period of the Agreement, other non-cash amounts in the

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accounts of Party B and its customers other than preferential rights and interests shall not continue to be used for data promotion and consumption. If the non-cash amounts in the accounts of Party B and its customers are still used for data promotion and consumption, Party B agrees and guarantees to pay Party A the data promotion service fees corresponding to the non-cash amounts consumed immediately after being notified by Party A.

9. If Party B adopts the non-prepaid payment method, even if the payment term is not expired, as long as Party A has reasonable reasons to think that Party B is about to lose or has lost the ability to pay or is at risk of late payment, Party A has the right to suspend Party B’s data promotion, immediately log off the content that is being released and require Party B to pay the fees immediately, and at the same time has the right to change Party B’s payment method from “consumption before payment” to “prepayment” or require Party B to pay a certain amount of deposit.

10. Party B authorizes Party A, Party A’s affiliates and the transferee the right to deduct from Party B’s and its affiliates’ prepaid fees, account balances, rebates and incentive amounts, and the relevant amounts generated with Party A or its affiliates in accordance with other agreements the relevant fees that Party B and its affiliates shall pay, return or compensate to Party A, Party A’s affiliates and transferee or to make up for the deposit. At the same time, if Party B or its affiliates use other third-party services and products in the process of using data promotion services and shall pay the agreed fees to the third party, Party B authorizes Party A, Party A’s affiliates and the transferee to directly deduct the relevant fees that Party B and its affiliates shall pay to the third party from the above-mentioned funds.

Article 5 Cooperation Policy

1. Party B confirms that during the cooperation period of the Agreement, Party A has the right to set an assessment cycle and set relevant assessment indicators for Party B’s data promotion within the assessment cycle (subject to further notice by Party A). At the beginning of each assessment cycle, Party A assesses the completion and cumulative completion of Party B’s previous assessment cycle and previous relevant assessment indicators. If any assessment indicator of Party B is not completed, Party A has the right to terminate the Agreement immediately and does not need to bear any liability

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for breach of contract/compensation.

2. During the cooperation period of the Agreement, if Party B applies to Party A for and confirms the data promotion and delivery policy or return policy recognized by Party A through the contact information agreed in the Agreement or through Party B’s account (hereinafter collectively referred to as the “Framework Policy”, including but not limited to policy content, actual policy implementation, security deposit and other related content), the content of the Framework Policy confirmed by Party B in the aforementioned way is the true intention of Party B, and has legal effect and binding force on Party B. If a separate written agreement is signed for the Framework Policy, it shall be implemented in accordance with the written agreement.

Part II General Provisions

Article 1 Users’ Personal Information and Data Protection

1. For the purpose of the Agreement, the parties shall handle the users’ personal information in accordance with relevant laws and regulations. The data provider undertakes that the data it provides to the receiver complies with laws and regulations and has obtained the authorization and consent of the relevant personal information owner, and does not infringe upon the legitimate rights and interests of any third party. The data receiver undertakes to protect the security of personal information in a manner consistent with relevant laws and regulations and by taking necessary measures, and to handle relevant personal information in accordance with laws and regulations, the aforementioned authorization and consent of the personal information owner and provisions of the Agreement.

2. Party A, Party A’s affiliates and each platform shall have the right to view the content and data related to the data promotion and placement of Party B and its agents customers, and to collect information related to the exposure and display of Party B’s promotional content for the purposes of data promotion compliance investigation, violation identification and processing, data promotion analysis and optimization, service provision, problem solving, risk control and internal audit.

3. In order to optimize and provide data promotion services that better meet market demand, Party B authorizes Party A or its affiliates to have the right to migrate the accounts of each platform and/or relevant data in the accounts between platforms, so as to provide and

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optimize data promotion services.

4. For the purpose of verifying and ensuring the quality of services provided by Party B to its customers, Party B authorizes Party A to have the right to provide Party B’s subject identity, operation and information related to data promotion to Party A’s affiliates and each platform for viewing and analysis.

Article 2 Platform Account

1. The accounts registered and opened by Party B and its customers on each platform (including but not limited to data promotion platform accounts and Ocean Engine accounts) are limited to the use of Party B, Party B’s customers and corresponding authorized entities. It is forbidden to donate, borrow, rent, transfer, or sell in any form without the written consent of Party A. In order to protect the security of the login account and password (“login information”) and the legitimate rights and interests of Party B and its customers, if the accounts of Party B and its customers have not been logged in and not used for a certain period of time, Party A has the right to re-verify the login identity of Party B and its customers in accordance with the operation procedures of each platform.

2. Party B shall bear full legal responsibility for the activities and behaviors of logging in, accessing and operating accounts of Party B and its customers (including but not limited to signing/confirming agreements online, configuring and operating accounts, or conducting data promotion, etc.), including but not limited to bear responsibility, pay data promotion service fees, etc. as stipulated in the Agreement.

3. Party B understands and confirms that if Party B or its customers operate their accounts according to the guidelines and rules of various platforms and the agreements confirmed by Party B or its agent clients, including but not limited to authorizing to bind other platform accounts, providing/receiving data, materials, etc., Party B confirms that the aforesaid operations have sufficient authorization and authority, and the platform prompts, instructions, rules and agreements made during operation have full legal effect and binding force for Party B and/or its agent clients, and Party B bears all legal responsibilities for the aforesaid operations. Any disputes arising from the aforesaid operations and related matters shall be handled and resolved by Party B itself with its agent clients or other relevant third parties, and have nothing to do with

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Party A and its affiliates and each platform.

4. Party B and its customers shall properly keep their login information and ensure the security and confidentiality of accounts, and shall not share, resell, rent or lend the login information or related resources in the accounts of Party B and its customers to any third party. Party A only judges whether the logger has account access and use authority based on the login information, and presumes that the person who uses the login information to log in, access and operate the accounts of Party B and its customers is Party B/Party B’s customers or authorized subject of Party B/Party B’s customers. In the event of any improper use or misoperation of any account, including but not limited to login information leakage, embezzlement, or operation page in an unsafe environment by Party B/Party B’s customers or authorized subject of Party B/Party B’s customers after logging, etc., Party B shall bear the corresponding responsibilities and consequences. If Party B learns of any illegal use of Party B/Party B’s customer account, or any security loopholes in Party B/Party B’s customer account, Party B shall immediately notify Party A, and Party B shall bear the losses caused by failure to notify in time.

5. If Party B/Party B’s customers lose or forget the login information, they can apply to change or retrieve the login information according to the complaint channels provided by Party A or each platform. Party B understands and recognizes that when Party A or each platform accepts the application for changing login information or retrieving it, it will verify the information and documents provided in the application form according to the system records, and will not verify or identify whether the applicant is an authorized user of the account

6. Party B understands and agrees that if Party B’s account is closed or Party B’s customer’s account is closed, Party B’s customer’s account will be subject to restrictive measures (including but not limited to release restrictions or disabling) and cannot be used.

7. Upon recission or termination of the Agreement, Party A has the right to close all accounts and account permissions registered and opened by Party B and its customers on the data promotion platform.

Article 3 Preferential Rights and Interests

Party B confirms that the preferential rights and interests in the account of Party B’s customers shall abide by the following rules of use:

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(1) Preferential rights and interests can only be used during the cooperation period and extension period (if any) of the Agreement and under the premise that the accounts of Party B and its customers can be operated normally. If the account of Party B or its customers is closed or restricted, or Party B/Party B’s customer closes the account by itself, the preferential rights and interests cannot be used or will be cleared;

(2) Preferential rights and interests are non-withdrawable, non-refundable, non-transferable, and non-billing;

(3) Preferential rights and interests shall be used before the expiration of the period displayed on the platform. If the expiration period displayed on the platform is later than the cooperation period and/or extension period (if any), the preferential rights and interests shall be used within the cooperation period and/or extension period (if any). If they are not used within the time limit, they will be deemed to be voluntarily waived by Party B and its customers, and will be emptied when they expire;

(4) Other requirements and restrictions on the use of preferential rights and interests notified or publicized by the data promotion platform;

(5) Data promotion using preferential rights and interests shall be carried out in accordance with the Agreement.

Article 4 Data Promotion Rules, Service Applications, and Submission, Commitment and Review of Promotional Content

1. Data promotion rules

Party B understands and confirms that the data promotion platform will consider establishing and adjusting from time to time different data promotion access, review and violation handling rules based on laws and regulations, platform risk control, business strategy, user rights protection, advertising experience and material quality maintenance, and will review and manage data promotion-related qualifications, content materials, promotion products and performance behaviors on the basis of these rules, and take corresponding disposal measures for Party B, Party B’s customers, and their accounts.

2. Application for data promotion services

Based on the requirements of the data promotion rules, Party A and the data promotion platform have the right to decide whether to accept Party B’s application for data promotion. If Party B or

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its customer’s use of data promotion services does not meet the adjusted rules and requirements, Party B shall immediately modify or supplement relevant documents according to the adjusted standards and submit them to Party A and the data promotion platform for review, or immediately stop data promotion services. If Party B or its customers do not immediately stop using service or the modified and supplemented documents are still not satisfied, Party A has the right to refuse to publish or refuse to continue to publish and do not assume any responsibility for the above-mentioned adjusted promotional content and products that Party B and its customers do not meet.

3. Submission and commitment of promotional content

(1) Within the scope agreed in the Agreement, the qualifications and specific content of data promotion are subject to those submitted by Party B or its customer to Party A or uploaded to the data promotion platform and accepted after review by the data promotion platform (The qualifications and content materials submitted or provided by Party B in the Agreement include those submitted or provided by Party B on behalf of customers). In order to use better service content under the Agreement, in addition to submitting independently, Party B or its customer can also initiate an application through platform rules or guidelines, and use the relevant qualifications submitted by Party B’s customer in Party A or Party A’s affiliates for Party A and data promotion platform to review.

(2) According to the way of data promotion, Party B shall submit content materials and qualifications in advance according to the specifications and size of the data promotion platform before data promotion. If Party B wants to change the content or qualifications of data promotion, it shall also submit the changed content materials and qualifications in advance according to the requirements of the data promotion platform, otherwise Party B shall still pay the corresponding data promotion service fees in accordance with the Agreement and bear the consequences of failure to change the content materials or qualifications in time.

(3) The data promotion-related qualifications and content materials submitted by Party B must be true and legal, must not be falsified, must not deceive or mislead consumers, must not violate laws, regulations, rules and codes and public ethics, must not be suspected of or constitute unfair competition, and must not infringe on the legitimate interests of any third

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party (including but not limited to infringement of other people’s copyrights, trademark rights, patent rights and other intellectual property rights, infringement of other people’s personal rights or other legitimate rights and interests, etc.), and shall comply with relevant laws, regulations and rules and codes and have legal rights or full authorization, otherwise Party A has the right to refuse to publish, immediately lay off the content materials being released and require Party B to bear the corresponding responsibilities stipulated in the Agreement.

(4) Party B guarantees that it will not randomly add application download links, download buttons, download QR codes and other operation entrances to guide users to download applications in the content materials. If it is necessary to add an application download link or other operation entry that guides users to download, Party B shall obtain confirmation from Party A in advance and upload relevant application information through the application management center or platform designated by Party A, and add the download link in the way permitted by Party A or the data promotion platform, and expressly indicate to the user the six elements of information (application name, version information, developer and operator name, permission list, privacy policy, product function). Party B guarantees that there is no inconsistency between the content materials and relevant application information, or other misleading or inducing users to download. Otherwise, Party A has the right to refuse the data promotion needs of Party B, immediately lay off the content materials being released and require Party B to bear the corresponding responsibilities stipulated in the Agreement.

(5) If Party B uses the live broadcast attraction function for data promotion, Party B guarantees that the promotional content and live broadcast content are original or have been legally and fully authorized (including sub-authorization and the scope of authorization covers all promotion scenarios agreed in the Agreement), Party A, Party A’s affiliates and each platform do not need to obtain any third-party authorization for editing, processing, displaying, promoting, using and creative optimization of the promotional content and live broadcast content, otherwise Party A has the right to refuse Party B’s data promotion needs, immediately lay off the content materials being released and require Party B to bear the corresponding responsibilities stipulated in the Agreement. Party B and its customers shall not use or tamper with the promotional content adjusted by the creative optimization

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function outside the scope of the purpose agreed in the Agreement.

(6) Party B shall fulfill reasonable and necessary prudential security obligations to ensure the legality and security of the content it promotes, and ensure that it will not provide any content materials containing malware, spyware or any other malicious code in data promotion, and there will be no violation or circumvention of any laws, regulations, rules and regulations, national standards and platform rules.

4. Promotional content and qualification review

(1) Party B shall use the duty of high care that professionals can fulfill to review the promotional content and qualifications to be released by itself, so as to avoid any violations of laws and regulations as much as possible.

(2) Party A will review the promotional content and qualifications submitted by Party B in accordance with relevant laws, regulations and rules and codes, as well as data promotion rules. Party B understands and confirms that: 1) the data promotion rules and review results are time-sensitive, and the review results of the same promotion qualification and content may be different in different periods; 2) In order to ensure the overall compliance of the promotional content, Party A and the data promotion platform have the right to review the promotional content before and during the data promotion period, and take offline measures and corresponding restrictive measures for the promotional content and behaviors that violate laws, regulations and platform rules .

(3) Party A’s review and final delivery do not reduce Party B’s responsibility to guarantee the authenticity and legality of the promotional content, relevant qualifications, promotion products, promotion behaviors, and performance behaviors. Party B shall bear all legal responsibilities for any controversies, appeals, and disputes arising from Party B’s promotional content, promotion products, promotion behaviors, and performance. If Party A and its affiliates suffer any losses (including but not limited to any third-party claims, advance compensation, or state agency penalties, etc.), Party B shall fully compensate Party A and its affiliates for all losses suffered as a result. At that time, Party B shall not refuse to bear the liability for compensation in accordance with the Agreement because the promotional content, relevant qualifications, etc. have been reviewed, released by Party A or the data promotion platform, or provided by other third parties.

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(4) Regardless of whether it is within the scope of review responsibility of Party A or the data promotion platform, once Party A discovers that Party B and its customers, including but not limited to their content materials, promotion products, data promotion behavior, performance behavior, promotion association with Party B or Authorized cooperation accounts, relevant personnel of Party B and its customers (including but not limited to operators, executives, spokespersons), and use of relevant functions and services of the data promotion platform, etc.: 1) are offline or in other restricted states; or 2) violate relevant laws and regulations and platform rules or are likely to lead to violations of laws and regulations, or hinder the order of the platform or infringe on the rights and interests of consumers or third parties, or seriously violate social public order and good customs; or 3) have illegal, negative events or other improper acts being reported or investigated by competent authorities, Party A has the right to immediately suspend the delivery and take corresponding restrictive measures, and at the same time has the right to require Party B to compensate Party A and its affiliates for all losses; Party A reserves the right to unilaterally terminate the Agreement according to the seriousness of the foregoing circumstances.

(5) If, due to the reasons of Party B or its customers, including but not limited to content materials, promotional products, data promotion behaviors, performance behaviors, accounts related to or authorized cooperation with Party B’s promotion, personnel related to Party B and its customers (including but not limited to operators, senior management personnel, spokespersons), and the use of data promotion platform related functions and services, Party A receives investigations from competent authorities or complaints from third parties, or Party B or its customers complain to other third parties, Party B agrees that Party A will provide Party B’s information in cooperation under the Agreement, including but not limited to company entity information, data promotion information, etc., to competent authorities or third parties. At the same time, Party B shall cooperate to resolve the above-mentioned investigations, complaints, and disputes. If a third party complains that Party B, Party B’s customer and Party B’s promotional content infringe its legal rights, Party B shall provide counter-notice and preliminary evidence as required by Party A to prove that it does not constitute infringement, and Party A has the right to provide the relevant qualifications and other supporting documents provided by Party B. If Party B refuses to provide or provides

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insufficient evidence to prove that it does not constitute infringement, Party A has the right to terminate the Agreement or suspend the release and require Party B to pay 20% of the corresponding data promotion service fees or 30,000 yuan (whichever is higher) liquidated damages. If the liquidated damages are not sufficient to make up for the losses of Party A and its affiliates, Party B shall continue to compensate.

Article 5 Data Statistics

1. Party A and Party B confirm that all data under the Agreement (including but not limited to data promotion information, release time, page views, and clicks, etc.) shall be counted by Party A and used as the basis for settlement. Party A guarantees that the statistical data are objective and true. During the cooperation period of the Agreement, every data promotion period is a cycle. If Party B has any objection to Party A’s performance (including data promotion), it shall clearly submit it to Party A in written form (valid in the form of e-mail, accompanied by corresponding materials, such as webpage copying, etc.) within 5 natural days after the end of the data promotion period. If Party B fails to raise an objection in the written form within the above time limit, it shall be deemed that Party B has no objection to the data promotion, implementation and corresponding expenses.

2. Party B shall only monitor and make statistics on the data promotion services supported by Party A and the data promotion types and resources opened by Party A in accordance with the Agreement and the Order/Scheduling Agreement. Party B and the third-party statistical agency entrusted by Party B in compliance with provisions hereof shall keep strictly confidential the information acquired during data statistics and monitoring, undertake to take necessary management measures and technical means no lower than the general level of the industry to protect the information and data security, and shall not use the information acquired for any purposes other than those agreed herein.

3. In case of non-bidding data promotion:

(1) With the consent of Party A, Party B may choose to entrust a third-party statistical agency notified by Party A or data promotion platform to conduct data statistics.

(2) Based on the data issued by Party A, if the difference between the statistical data of the third-party statistical agency entrusted by Party B and the data of Party A does not exceed 10% (inclusive), the data of the third-party statistical agency shall prevail; if it exceeds 10%,

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Party A and Party B shall review the data together with the third-party statistical agency and correct the error according to the facts. If it is confirmed that Party A’s data is wrong, the data of the third-party statistical agency shall prevail; if not, Party A’s data shall prevail. If no agreement can be reached, the dispute settlement method agreed herein shall apply.

(3) Party A and the data promotion platform have the right to unilaterally adjust, reduce or change the third-party statistical agency and will notify Party B in advance. Only when Party B entrusts the relevant third-party statistical agency in accordance with the latest notice, the error of the non-bidding data promotion data shall be subject to the provisions of the preceding clause. If Party B chooses other third-party statistical agencies other than the third-party statistical agencies stipulated in the Agreement (subject to the latest notice) for monitoring and statistics, the statistical data will be invalid unless Party A agrees in writing.

(4) In the above-mentioned data review, the parties confirm that they do not recognize and support the settlement and investigation rules of “synchronous click monitoring”, “frequency”, “TA%” and “ivt” data of third-party statistical agency, and the rules of Party A shall prevail.

(5) If Party A agrees that Party B builds its own monitoring link to conduct data statistics for non-bidding data promotion, Party B confirms that all data under the Agreement are subject to Party A’s statistical data.

4. In case of bidding data promotion, Party B may choose to entrust a third-party statistical agency or build its own monitoring link to conduct data statistics with the consent of Party A, but all data hereunder shall be subject to Party A’s statistical data.

Article 6 Liability for breach of contract

1. Party B shall pay Party A the data promotion service fees (including security deposit, if any) according to the time and amount agreed in the Agreement. If Party B fails to pay the fees in full and on time as agreed, every day it is overdue, it shall pay a late fee at 3 ‰ of the total amount of outstanding fees until the arrears are paid; From the overdue day, Party A has the right to partially or completely suspend Party B’s data promotion needs, and immediately lay off the content materials that are being released, without assuming any responsibility. If Party B fails to pay the data promotion service fees in full within 15 days overdue, Party A has the right to terminate Party B’s data promotion without assuming any responsibility.

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2. If Party B commits any of the following breaches, Party B shall still pay the corresponding data promotion service fees in full in accordance with the agreement, and Party A has the right to immediately lay off the materials that are being released, take corresponding restrictive measures, and unilaterally terminate the Agreement, and at the same time require Party B to compensate Party A and/or Party A’s affiliates for all losses caused by this:

(1) Failure to pay the data promotion service fees in full within 15 days overdue without justifiable reasons;

(2) Violation of confidentiality requirements of the Agreement and/or the users’ personal information and data protection requirements, transferring, copying, disseminating, transferring, licensing or disclosing in any way, allowing, providing others to use the trade secrets, software, data and other information of Party A and/or various platforms, or engaging in any commercial or business activities;

(3) Party B and its customers, as well as their content materials, promotion products, data promotion behavior, performance behavior, promotion association with Party B or Authorized cooperation accounts, relevant personnel of Party B and its customers (including but not limited to operators, executives, spokespersons), and the use of data promotion platform-related functions and services, etc., are offline or restricted, violate relevant laws and regulations and platform rules, or will likely lead to violations of laws and regulations, or hinder platform order or infringe on consumers or third parties, or have serious violations of social order and good customs, or have illegal, negative events or other improper behaviors reported and investigated by competent authorities;

(4) After Party B’s link is reviewed or promoted online, Party B modifies the page or program content pointed to by the link, sets up website jumps, sets malicious codes, sets up viruses, maliciously uses self-seizure and suspension to release illegal content, technical confrontation, etc. to display content that violates current laws, regulations, rules and codes, and platform rules;

(5) Party B fails to add a download link in accordance with the method stipulated in the Agreement, or the added download link does not expressly indicate the six-element information to the user, or there are inconsistencies between the content material and the relevant application information, or other misleading or inducing users to download; or

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without the confirmation of Party A, Party B changes the content materials on its own, including but not limited to changing the ordinary products originally promoted to products that require special business qualifications to operate, adding or changing download links and other content;

(6) Party B conducts data promotion beyond the agency scope and agency period agreed in the Agreement;

(7) Party B and/or Party B’s affiliates conduct agency or other activities in the name of Party A, Party A’s affiliates or various platforms beyond or without the authorization of Party A and its affiliates;

(8) Party B or its customers provide any content materials containing malware, spyware or any other malicious code in data promotion, infringing on the legitimate rights and interests of Party A, Party A’s affiliates and/or users;

(9) Party B develops subordinate agents;

(10) A written contract shall be signed between Party B and its customer. Party B has not reviewed the legality and authenticity of the subject qualifications, content materials, etc. submitted by its customer. In the event that Party A notifies Party B, Party B fails to provide Party A with the cooperation contract signed with its customers;

(11) Party B has or may have any of the following circumstances:

1) Suspension of business, suspension of production, closure of business, rectification, reorganization, deadlock, liquidation, takeover or trusteeship, dissolution, revocation or cancellation of business license or bankruptcy;

2) Party B’s financial condition deteriorates, serious difficulties arise in operation, or events or circumstances that have a material adverse impact on its normal operation and financial condition occur;

3) Party B or its controlling shareholder or legal representative is involved in major litigation, arbitration, dispute, claim or other legal proceedings, or major assets are seized, sealed up, frozen, enforced or other measures with the same effect are taken, resulting in material adverse effects on Party B’s solvency and operating ability;

4) Other circumstances occur to Party B, which, according to Party A’s reasonable judgment, may or have had a material adverse impact on Party B’s ability to perform this contract or do not

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meet Party A’s requirements for agents.

(12) Other serious breaches of contract and violations make it meaningless for Party A to perform the Agreement.

3. If Party B fails to prove that it has fulfilled the review obligations stipulated in the Agreement, and the content materials uploaded/submitted or already released, or its promotional products, data promotion behavior, or performance behavior: 1) infringes on the legitimate rights of third parties; Or 2) There is evidence to prove a significant suspicion of the aforementioned infringement; Or 3) If, due to its content materials or promotional products, promotional activities, performance behaviors, etc., Party A has received genuine and reasonable complaints (including but not limited to third-party complaints, letters, media reports, etc. accusing Party A/Party A’s affiliates of infringement, filing lawsuits against Party A/Party A’s affiliates, reporting to relevant regulatory authorities, etc.); In the event of any of the aforementioned situations, Party A has the right to terminate the Agreement or suspend advertising, take restrictive measures, and require Party B to pay liquidated damages at 20% of corresponding data promotion fees for the content material/product or 30,000 yuan (whichever is higher). If the penalty is not sufficient to compensate for the losses of Party A and its affiliates, Party B shall further compensate; If the infringement or illegal behavior of Party B results in Party A/Party A’s affiliates compensating any third party or being punished by national authorities, Party B shall also fully compensate Party A and Party A’s affiliates for the losses suffered as a result.

4. During the cooperation period of the Agreement, if Party B cancels the effective order and the Data Promotion Schedule, it shall notify Party A in writing 30 days in advance and obtain written confirmation from Party A; If Party B fails to cancel in accordance with the aforementioned agreement, it will be deemed as Party B’s breach of contract (if Party B shall pay the data promotion service fees before the data promotion but fails to pay, it will be deemed as Party B’s breach of contract to cancel the order). If Party B breaches the contract, Party B shall pay Party A the promotion service fees corresponding to the actual resources input and inventory locked by Party A, and corresponding resources reserved by it. Party B shall also pay Party A liquidated damages at 30% of promotion service fees agreed in the corresponding order and Data Promotion Schedule or

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100,000 yuan (whichever is higher). If the above liquidated damages are not enough to make up for the losses of Party A, Party B shall fully compensate Party A for all the losses suffered therefrom.

5. Unless otherwise explicitly agreed in the Agreement, the data promotion resources under the Agreement can only be used to promote the corporate image, brand, products, or services of the customers (i.e. the actual providers of the promoted products or services) specified in the orders signed by the parties, the Data Promotion Schedule, and other documents. Without the prior written consent of Party A, Party B shall not resell, transfer, or use the data promotion resources under the Agreement in any other way to promote any other customers. Otherwise, Party A has the right to immediately stop publishing or refuse to publish the data promotion content, and Party B shall pay Party A liquidated damages at 20% of the publication price of the data promotion resources used for breach of contract within 5 working days from the date of written notice from Party A. At the same time, Party A has the right to terminate the Agreement in advance. If the above liquidated damages are not enough to make up for Party A’s losses, Party B shall continue to make full compensation.

6. Party B confirms that the platform rules, specifications, notices, etc. on data promotion services under the Agreement are publicized and published through the Ocean Advertising Rules Center (https://ad.oceanengine.com/support/content/root?graph Id = 514 & pageId = 297 & timestamp = 1695727420653), which are an integral part of the Agreement; Party B shall strictly abide by laws and regulations, agreements and platform rules in the process of data promotion, otherwise Party A has the right to take restrictive measures, conduct illegal disposal and/or require Party B to bear corresponding responsibilities in accordance with the agreements and platform rules. Party B shall bear the consequences and losses.

7. If Party B violates the provisions of the Management Specifications for Ocean Engine Agents issued by Party A or the data promotion platform (if the name of this specification changes, the notice from the platform shall prevail at that time), Party A and the data promotion platform have the right to follow the latest and effective Management Specifications for Ocean Engine Agents and take corresponding measures for the accounts of Party B and its customers and/or require Party B to bear

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corresponding responsibilities. The resulting disputes, consequences, and losses between Party B and its customers shall be resolved and borne by Party B.

8. If Party A suspends all or part of the data promotion cooperation with Party B or terminates the Agreement due to Party B’s violation of the Agreement, Party B understands and confirms that Party A and its affiliates have the right to suspend or cancel other cooperation with Party B and Party B’s affiliates, including but not limited to Ocean Engine Qianchuan and Ocean Engine Benditui data promotion cooperation and Ocean Engine Xingtu cooperation.

9. If Party B violates the provisions of the Agreement, in addition to the liability for breach of contract stipulated in the Agreement, Party B shall also compensate Party A and/or Party A’s affiliates for the rights protection expenses incurred in realizing their rights, including but not limited to investigation fees, travel expenses, lawyer fees, litigation costs, preservation fees and preservation guarantee fees (or preservation insurance premiums), etc. Party A has the right to directly deduct the data promotion service fees, penalty fees, late fees, compensation fees, and rights protection fees that Party B should pay from the advance payment, deposit, account balance (including cash balance, rebate amount, etc.) of Party B and its customers, rebate and incentive amount of Party B, as well as the settlement fees, balance, deposit, rebate and incentive amount generated by Party B and Party A and/or its affiliates in accordance with other relevant agreements. Party B shall continue to compensate for the shortfall.

10. If Party A delays, interrupts or terminates the data promotion service without justifiable reasons, it shall explain the reasons in writing to Party B. If the agreed data promotion is not launched or is mistakenly launched at the agreed time due to the fault of Party A, Party A shall provide resource compensation for Party B’s data promotion in accordance with the principles of “making up one for one error” and “making up one for one omission”. That is to say, Party A shall only provide equal value resource compensation to Party B for the erroneous or omitted parts in accordance with the above principles, and Party A shall not be liable for any other responsibilities.

11. If Party A has any of the following breaches, Party B has the right to unilaterally terminate the Agreement:

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(1) Fail to provide data promotion services as agreed within 30 days overdue without justifiable reasons;

(2) Violate the confidentiality requirements of the Agreement;

(3) Other serious breaches make Party B’s performance of the Agreement meaningless.

12. Limitation of liability: If Party A violates the obligations stipulated in the Agreement and causes actual losses to Party B, it shall compensate Party B for the direct calculable actual losses, but the maximum amount of liquidated damages and/or compensation paid by Party A shall not exceed 20% of the total amount of the order or data promotion plan involved in the breach of contract.

Article 7 Exemption Clauses and Special Agreements

1. Exemption clauses:

(1) Based on the consideration of the overall interests of the market and business needs, and in order to provide better data promotion services, due to laws and regulations, traffic network platform requirements, changes in data promotion rules and platform rules, Party A’s adjustment, improvement of user experience, optimization of advertising quality, standardize the transaction of goods or services after advertising and promotion conversion, protect the legitimate rights and interests of users, changes in national policies and market environment, etc., the data promotion services, service content, service methods, product functions, layout, page design, etc. under the Agreement are all reasonable changes. If the data promotion services under the Agreement cannot be provided in whole or in part due to the above adjustments, changes or downlines, Party A shall not be liable for breach of contract.

(2) When promoting specific forms of data, whether the promotion can be carried out may be affected by the requirements of the traffic network platform and the account status of the cooperative traffic network platform. If the data promotion services under the Agreement cannot be provided in whole or in part as agreed or cannot continue to be provided as a result, Party A shall not be liable for breach of contract.

(3) In order to ensure the normal operation of each platform, if necessary, Party A and its affiliates need to shut down the website and platform for maintenance on a regular or irregular basis. If the services under the Agreement cannot be provided as agreed due

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to such circumstances, Party A will not be liable for breach of contract.

(4) In the event of situations including but not limited to requests from authorized authorities, social public events, media coverage, or major time points, Party A has the right to adjust, suspend, or terminate the data promotion services under this agreement at the corresponding time points without assuming any breach of contract liability.

(5) If Party A is unable to provide data promotion services as agreed due to the above four situations, Party A shall provide data promotion services for the affected part on terms not lower than the original agreement between the parties after the affected situation ends. If Party A cannot publish or provide services based on the actual situation, the parties will settle the service fees according to the actual data promotion situation.

(6) After Party A provides data promotion services as agreed in the Agreement, due to the setting or operation of network terminal equipment, customer applications, websites, small programs, etc. by network end users such as computers and mobile phones, the promotional content of Party B cannot be displayed on the user’s network terminal or the data promotion service does not conform to the agreement due to the software and hardware equipment, network configuration and other reasons provided by Party B/the customer on behalf of Party B, it does not constitute a breach of contract by Party A, and Party A shall not bear any responsibility.

2. Party B understands and agrees that in order to optimize customer experience, the data promotion platform will continue to explore and provide differentiated product solutions to customers with different delivery experiences, and the actual product functions that Party B can use are subject to the page display. At the same time, the data promotion platform may provide estimated data services on some product pages, but such estimated data does not constitute any suggestion or commitment by Party A and the data promotion platform; The accuracy of such data is limited by the level that can be achieved by the existing technology and conditions, product conditions, Party B’s operations and changes in the external competitive environment, and is for Party B’s reference only. Party B is still obliged to make decisions based on its own business judgment, and bear the consequences, responsibilities and risks of decision-making.

3. Party A, Party A’s affiliates and each platform may cite Party B’s promotional content as

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data promotion cases to display or participate in awards for the sake of building an excellent case creative library, disseminating excellent cases and operational needs. In this case, it does not constitute a breach of contract by Party A, and Party A shall not assume any responsibility.

4. Party A and the data promotion platform may provide or display content, reference cases, etc. related to promotion content design, copywriting, advertising strategies, product selection, etc. to Party B, or aggregate high-quality creative materials through product functions for Party B’s reference (hereinafter collectively referred to as “reference content”). Party B understands and confirms that the intellectual property rights of the reference content belong to Party A or its original obligee, and Party B will not use it in any way that infringes the rights and interests of Party A or third parties. The above reference content is for Party B’s reference only, and is not regarded or shall not be understood as any license, authorization, promise and guarantee made by Party A and the data promotion platform for all or part of the reference content. Party B shall decide whether to rely on the reference content according to its own situation. Party B shall ensure that the behavior of relying on and using the reference content is legal and compliant, and shall bear the corresponding legal consequences by itself.

5. Party A and each platform have the right to review Party B’s promotional content, promotion products, data promotion behavior, performance behavior, relevant personnel of Party B and its customers (including but not limited to operators, executives, spokespersons), as well as the information published by Party B and its customers on each platform. If Party A and each platform discover or suspect any problems or (potential) risks with the aforementioned matters, entities and behaviors related to or related to the aforementioned matters, they have the right to send inquiries, request corrections to Party B and its customers, or delete information, suspend permissions, take restrictive measures, suspend/stop the services of the Agreement, and have the right to handle Party B and its customers in accordance with the platform rules (subject to platform rules). At the same time, Party A reserves the right to further pursue the relevant responsibilities of Party B and its customers.

6. Special agreement on programmatic PMP advertising: If Party A and Party B carry out

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programmatic PMP advertising cooperation, they shall also abide by the provisions of Annex IV Procedural PMP Advertising Cooperation Terms.

Article 8 Anti-commercial Bribery

In order to protect the legitimate rights and interests of the parties, ensure that the business transactions between the parties conform to the principles of integrity and fair trade, focus on establishing a long-term friendly business partnership between the parties, and promote the sound development of the relationship between the parties, after friendly consultation between the parties, the following terms have been reached:

1. Commercial bribery referred to in this article refers to the fact that in the cooperation between the parties, Party B or its employees give, promise, induce, request or accept all material and spiritual direct or indirect improper benefits to or from any person, including but not limited to Party A’s employees, or influence and/or attempt to influence any person’s behavior or decision in his or her position, or improper acquisition and retention of business.

2. Party B or its employees shall not provide, give, promise, induce, demand or accept (gift or non fair value) any direct or indirect benefits outside the scope of cooperation business to Party A’s employee, affiliated person or any third party in the name of Party B or individuals, including but not limited to: explicit discounts, hidden discounts, cash, shopping cards, physical objects, securities, tourism, shares, dividends, gifts, entertainment tickets, special discounts or samples, travel, catering, entertainment, cooperation business derivative benefits or other material and non-material benefits paid by Party B.

3. Conflicts of interest mentioned in the Agreement: including but not limited to (1) Party B or its employees shall not provide any form of borrowing to Party A’s employees and their affiliates; (2) If Party B’s shareholders, supervisors, managers, senior managers, cooperation project leaders and project members are employees of Party A or its affiliates, Party A shall be truthfully and comprehensively informed in writing before cooperation and voluntarily recuse; (3) In the course of cooperation, Party B or its employees shall not allow Party A’s employees and their spouses to hold or hold the equity of Party B by a third party on behalf of Party B (except for shares held through public stock exchanges with less than 0.1% of the outstanding equity, through direct or indirect holding of funds without actual control, or through trusts whose beneficiaries are not themselves or related personnel). Party B is

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obliged to disclose to Party A any conflicts of interest that exist or may exist in a timely manner, and cooperate with Party A to take measures to eliminate the possible impact on the cooperation between the parties.

4. Before employing subcontractors or other representatives, Party B shall conduct due diligence on its own to ensure that the other party is a legal and qualified enterprise to perform services. All agreements between Party B and any third party, including but not limited to a subcontractor (whether such subcontractor is of Party B’s own choice or appointed by Party A), supplier, service provider or other independent third party with which Party B has a cooperative relationship must contain a declaration or warranty by the third party that it will not give, promise or require, accept any improper advantage to any person for the purpose of influencing or attempting to influence the behavior or decision of any person or for the purpose of obtaining or retaining improper business or other advantages for its company. If the above-mentioned third party and its employees violate the corresponding anti-commercial bribery clauses and affect Party A, Party B will be deemed to have violated the agreement, and Party A has the right to require Party B to bear the liability for breach of contract in accordance with the agreement.

5. “Party B’s employees” in the Agreement mean: (1) any director, manager or employee of Party B’s company; (2) any director, officer and employee of any subsidiary or related party of Party B’s company; (3) any direct or indirect shareholder of the company acting in the name of Party B’s company, and/or; and (4) any employee of a direct or indirect shareholder of the company acting in the name of Party B’s company. Party B’s employees guarantee to comply with the provisions of the Agreement and relevant laws and regulations in all transactions and business conducted with Party A in accordance with the contract. Party B shall resist corruption by its employees and/or any third party. If Party B’s employees violate the Agreement, it will be regarded as a violation by Party B, and Party A has the right to require Party B to bear the liability for breach of contract.

6. Party A has the right to consult Party B’s financial records related to the transaction agreed in the contract or entrust a professional third party to collect evidence of violations, including but not limited to reviewing relevant financial account books. Audit and supervise data promotion and implementation documents such as data promotion agreements, orders,

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settlement statements, payments and related documents, monitoring reports, data promotion evaluation reports and other related data promotion and implementation documents signed with Party B, and interview relevant personnel. Party B shall maintain an internal control system to ensure that the financial statements and information are accurate and that all activities and expenses related to the contract are reflected in the financial records. Party B shall actively assist and cooperate with Party A in the audit review, and shall not refuse to audit, conceal information or provide false information. If Party A requests Party B to provide information during the investigation or audit process, Party B shall actively cooperate and be responsible for the authenticity of the information provided. Within five years after the rescission or termination of the contract, Party B shall keep complete documents of all financial records and information related to the contract, and Party A shall have the right to copy and preserve the aforesaid records or documents.

7. If Party B violates one of the above agreements or Party A has reasonable reasons to believe that Party B has the risk of violating the above agreements, including but not limited to Party B’s refusal to cooperate with audit review, inaccurate financial records, false statements or suspicion of accepting bribes, Party A has the right to unilaterally terminate part or all of the contract with Party B, and the contract will be terminated immediately when Party A sends notice to Party B. Party B shall bear the full liability for breach of contract, and Party B shall pay Party A 30% of the total contract amount involved (if relevant laws and regulations have a higher proportion, such higher proportion shall apply) as liquidated damages. If the aforementioned liquidated damages amount is less than RMB 100,000, RMB 100,000 shall be paid. Party A has the right to deduct the liquidated damages borne by Party B directly from the contract sum. Party B shall indemnify, defend and hold Party A harmless from all losses, damages, claims and fines incurred by Party A. If Party B violates the Agreement, Party A reserves the right to pursue Party B and the person directly responsible for Party B’s civil and/or criminal legal responsibilities.

8. If any violation or attempted violation of the Anti Commercial Bribery Agreement, any laws and regulations related to Anti Commercial Bribery, Anti Corruption, and Anti Corruption, as well as any behavior of Party A’s system, is found in business cooperation, and if Party A’s employees or/or their affiliated personnel engage in illegal or disciplinary activities such

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as bribery, embezzlement, asking for benefits, conflict of interest, fraud, leakage of information, dereliction of duty, abuse of power, etc. that infringe upon the legitimate rights and interests of both parties, Party B may report to Party A. Party A shall keep confidential any whistle-blowing behavior and whistle-blower; And for true and effective reporting behaviors and whistleblowers, after the reported incident is verified to be true, Party A will give the whistleblower a reward of 10,000 to 1 million yuan according to the relevant systems of Party A’s company and the specific circumstances of the reported incident.

9. Party A’s special reporting and complaint channel: https://compliance.bytedance.com/report.

Article 9 Confidentiality and Intellectual Property

1. Any information that one party knows and understands the other party as a result of the conclusion and performance of the Agreement is the exclusive information of the other party. Without the prior written consent of the other party, any proprietary information will be kept confidential by either party and shall not be disclosed to any person or entity. Except for the needs of normal performance of the obligations of the Agreement or otherwise stipulated by national laws and regulations.

2. The parties are responsible for confidentiality of the specific content of the Agreement. Without the prior written consent of the other party, neither party shall disclose the cooperation between the parties and the specific content of the Agreement to any third party.

3. Without the written permission of Party A, Party B and Party B’s affiliates and their related personnel (including but not limited to operators, legal representatives and executives, etc.) shall not use Party A and/or Party A’s affiliates and platforms in their marketing, business cards, documents, websites, external publicity and any other aspects. Otherwise, it will be deemed an infringement. In such case, Party A has the right to suspend or terminate the Agreement and require Party B to take remedial measures (including but not limited to stopping use, offline processing, etc.), announce Party B’s breach of contract and require Party B to compensate Party A and its affiliates for all losses caused by this.

4. Party B confirms that Party A, Party A’s affiliates and each platform have the right to use the business name, trademark, trade name, brand, logo, logo, domain name and website of Party B and its affiliates in marketing, business cards, documents, websites

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and external publicity.

5. Unless otherwise expressly agreed by the parties, the execution and performance of the Agreement shall not result in the transfer of the original intellectual property rights of the parties.

6. The termination, rescission, revocation or invalidity of the Agreement shall not affect the validity and binding force of this clause on the parties.

Article 10 Force Majeure and Change of Circumstances

1. Party A or Party B shall not be liable for breach of contract if part or all of its obligations are delayed or unable to perform due to force majeure or changes in circumstances, but shall take timely measures to reduce losses caused by force majeure or changes in circumstances. Force majeure includes but is not limited to government regulation, national policy adjustments, terrorist attacks, hacker attacks, natural disasters, public emergencies, wars, power outages, technological adjustments in the telecommunications sector, technical failures, and virus intrusions. If part or all of the agreement cannot be performed or is delayed due to the above-mentioned force majeure event, the parties shall not be liable for any breach of contract between themselves.

2. The following matters are changes of circumstances stipulated in the Agreement:

(1) Termination of the server. In the event of the following circumstances, Party A may suspend the provision of data promotion services without notifying Party B.

1) Irresistible situations caused by non-human factors such as maintenance and overhaul of emergency service equipment.

2) Failure of basic telecommunications services.

3) Termination of line service of the platform.

Party A shall notify Party B within 12 hours after the occurrence of the above situation.

(2) The server of Party A/Party A’s affiliates is temporarily unable to operate normally due to an illegal attack, and it cannot be restored to use after Party A/Party A’s affiliates tries its best to repair it.

(3) Other major changes in objective circumstances that have occurred after the establishment of the Agreement that are not foreseeable by the parties at the time of conclusion of the agreement and are not caused by force majeure.

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3. If the force majeure event or change of circumstances lasts for 20 days or accumulatively exceeds 30 days within the validity period of the Agreement, either party has the right to unilaterally terminate the Agreement in advance by written notice.

Article 11 Supplement, Variation and Termination of the Agreement

1. For matters not covered in the Agreement, a written supplementary agreement can be signed after mutual agreement between the parties. The written supplementary agreement sealed by the parties has the same legal effect as the Agreement. If there is any conflict between the supplementary agreement and the Agreement, the supplementary agreement shall prevail.

2. During the implementation period of the Agreement, after Party A notifies Party B in writing one month in advance, Party A has the right to terminate the Agreement and Party A does not need to bear any responsibility.

3. Regardless of whether the Agreement is terminated in advance or not, the parties must complete the financial settlement and clarify their respective responsibilities. Party B shall indemnify Party A for all losses caused by Party B’s termination of the Agreement without authorization.

4. At the expiration of the term of the Agreement, if the parties agree and sign a written agreement, the Agreement may be renewed.

5. If any provision of the Agreement is null and void or unenforceable in whole or in part by reason of a breach of law or government regulation or otherwise, such provision shall be deemed deleted. However, the deletion of this clause shall not affect the legal effect of the Agreement and other provisions.

Article 12 Commitments and Guarantees

1. Party A guarantees that it has the legal qualifications to engage in data promotion and the authority to sign the Agreement. Party B agrees that if Party A’s business scope changes, main business changes or there are other reasonable reasons, without affecting Party B’s rights and obligations, Party A has the right to transfer all of its unfulfilled rights and obligations under the Agreement at any time to Party A’s affiliated company, but Party A shall notify Party B in writing. “Party A’s affiliate(s)” means any enterprise that controls or is controlled by Party A, or is jointly controlled by Party A in the same entity. “Control” means, with respect to any party: directly or indirectly 1) holding more than 50% of such party’s

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equity, shares, registered capital or other types of relevant interests; Or 2) control the party’s management or decision-making by owning more than 50% of the party’s voting rights, or through contractual arrangements or otherwise.

2. Party B guarantees that it has the legal and valid qualification and authority to promote Party B’s products and sign the Agreement. Party B shall sign the Agreement in its own name and directly bear all legal responsibilities regardless of the ownership of Party B’s products.

3. Party B and its employees shall not cause any actual or potential damage or conflict to the interests, goodwill and brand image of Party A, Party A’s employees and Party A’s affiliates, otherwise Party A has the right to terminate the Agreement immediately after notifying Party B in writing, does not need to bear any liability for breach of contract, and Party A has the right to pursue the legal responsibility of Party B and its employees.

4. Without the written permission of Party A, Party B shall not transfer to agent, and shall not develop subordinate agents. Party B shall not rely on its relationship with any third party as a reason for non-performance of the Agreement. Regardless of whether the Agreement is terminated or terminated, the disputes between Party B and its customers shall be resolved by Party B and its customers themselves and shall bear the corresponding responsibilities. If Party B fails to properly resolve the disputes between Party B and its customers, Party A has the right to temporarily withhold Party B’s deposits, prepayments, rebates and incentive amounts, as well as the account balance of Party B and its customers (including cash balances, rebates, etc.), Party A will not directly intervene in disputes between Party B and its customers. If any losses are caused to Party A and its affiliates, Party B shall bear the liability for all losses.

5. During the validity period of the Agreement, if any employee of Party A or Party A’s affiliates becomes a shareholder or senior manager of Party B, Party B promises to notify Party A in writing immediately, otherwise Party A has the right to terminate the Agreement in advance at any time without assuming any responsibility.

6. Party B shall not directly or indirectly induce, require, persuade, or encourage employees of Party A and/or Party A’s affiliates to resign; It is not allowed to establish or attempt to establish with the employees of Party A and/or Party A’s affiliates, including but not limited to employment relationship, business cooperation relationship or any other relationship

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directly or indirectly related to the interests and business of Party A and/or Party A’s affiliates. If Party B violates this clause, Party A has the right to terminate the Agreement immediately, and Party B shall pay Party A 100,000 yuan as liquidated damages. If the liquidated damages are not enough to make up for the losses of Party A and its affiliates, Party B shall continue to compensate.

7. Party B shall maintain a fair competition environment in the market and the unified management system of Party A, and there shall be no vicious competition or other unfair competition between Party B and other agents of Party A.

8. In the process of cooperation between the parties, one party shall ensure the quality of service, and shall not damage the overall market image of the other party, nor shall it engage in other behaviors that damage the interests of the other party.

9. Party B undertakes that if the Agreement is terminated or terminated with Party A without the written consent of Party A, it shall not expressly or imply to others that it has any substantive contact with Party A, or otherwise expressly or imply that it is Party A’s agent or Ocean Engine’s agent.

Article 13 Dispute Settlement

1. The place where the Agreement is signed is Haidian District, Beijing. Any disputes arising from the Agreement shall be resolved through friendly negotiation between the parties. If the negotiation fails, either party has the right to submit the dispute to the People’s Court of Haidian District, Beijing for litigation.

2. The conclusion, performance and interpretation of the Agreement shall be governed by the laws of the People’s Republic of China.

Article 14 Notification and Service

1. Unless otherwise agreed in the agreement, the notices, documents, and materials issued by the parties due to the conclusion and performance of the Agreement (including but not limited to the “Regulations on the Management of Ocean Engine Partners Using Giant Engine and Related Brands, Management Specifications for Ocean Engine Agent, platform rules, Data Promotion Schedule, Data Promotion Order, Data Promotion Settlement Statement, third-party monitoring agency adjustment or change notice, etc., the name of the document may change, subject to the name of the document actually adopted at that time) is an integral

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part of the Agreement and has the same legal effect as the Agreement. The aforementioned notices, documents, and materials can be delivered by mail, email, WeChat, contact number, or platform site letter notification, publicity, and other instant messaging tools recognized by the parties at the address listed on the homepage. If it is delivered by mail, delivery to the postal address shall be deemed to be delivered; If it is sent by e-mail, it shall be deemed to have been delivered within 24 hours from the time of dispatch; If notices, policies, and regulations are sent through the platform, they will be deemed to be delivered and effective when the platform publicizes them, and will be binding on Party B.

2. For disputes arising from the Agreement, the parties confirm that the judiciary may use any or more of the contact information agreed in the Agreement (including but not limited to the contact address listed in the agreement by mail, email or mobile phone SMS) to serve litigation legal documents, and the time of service shall be the first to be served in the above service methods. The parties jointly confirm that the above-mentioned service methods are applicable to all judicial stages, including but not limited to first-instance, second-instance, retrial, execution and supervision procedures. At the same time, the parties guarantee that the delivery address is accurate and valid. If the provided address is inaccurate, or the changed address is not notified in time, so that the legal documents cannot be delivered or are not delivered in time, they shall bear the legal consequences that may arise therefrom.

3. For matters not covered in the Agreement, Party A and Party B can confirm through the email address of the contact person listed on the home page. If one party changes its contact person or contact information, it shall notify the other party in writing 5 working days before the change, and the changing party shall bear all the consequences of failing to notify in time.

4. If either party sends a notice to the other party in various ways, the date on which the other party receives the notice shall be the date of service of the notice.

Article 15 Entry into Force of Agreement

1. The Agreement and the annexes to the Agreement shall take effect on the date of affixing the seals of the parties.

2. The Agreement is made in triplicate, with Party A holding one copy and Party B holding two copies, all of which have equal legal effect.

(No text below)

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Party A: Xiamen Jinri Toutiao Information Technology Co., Ltd.
(Seal of Service Provider)
Date: January 1, 2024

Party B1: Beijing Baosheng Technology Co., Ltd.
(Seal of Customer 1)
Date: January 1, 2024

Party B2: Beijing Baosheng Network Technology Co., Ltd.
(Seal of Customer 2)
Date: January 1, 2024

Annexs:

Annex 1: Data Promotion Order

Annex 2: Data Promotion Settlement Statement

Annex 3: Personal Information Protection Commitment Letter

Annex 4: Procedural PMP Advertising Cooperation Terms

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Annex 1: For style reference only, at that time, it is subject to signature or email confirmation

Data Promotion Order

Agent:
Customer:
Project:
Cycle:
Data promotion service provider:
Sales:	Unit: Yuan

Traffic Network Platform

Site

Type

Promotion Info

Ad size

Rotation

Reserve Rate

Target Info

Sales Type

Spots

Unit

RMB Unit Rate Card

RMB Unit Price After D

RMB Total Rate Card

Dis%

RMB Total Net Cost

Expt. Unit Clicks

Expt. Total Clicks

Expt.CPM

Expt.CPC

Expt.CTR

Whether monitoring is supported

MM/2024

Two

Three

Four

Five

Six

27

28

29

30

31

i

No

No

No

Total of advertisement samples

Total Delivery/Replenishment

Total net price

Out-of-pocket amount

VAT

Remark

1、 2、 3、 Matters not mentioned in this order are subject to the publication of the data promotion service party and the data promotion business cooperation agreement signed by the parties.

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Annex 2: For style reference only, and sign according to this style at that time

Data Promotion Settlement Statement

Party A provides data promotion services for Party B according to the cooperation agreement with the contract number (the specific contract name is subject to the actual signed name, hereinafter referred to as the “original agreement”).

Published: 2024/mm/dd-2024/mm/dd

Project summary:

Project number	Project name	Start release time	End release time	Amount
/	/	/	/	/

Total amount of fees (tax included, in figures):/

Total amount of fees (tax included, in words):/

Total VAT amount (in figures):/

Total VAT amount (in words):/

Amount excluding tax (in figures):/

Amount excluding tax (in words):/

Note: VAT amount is subject to the amount shown in the actual invoice, and the total amount including tax remains unchanged.

Party B shall make payment based on the original agreement signed by both parties. The data promotion expenses incurred in this settlement statement shall be paid to the bank account of Party A as agreed in the original agreement. Party B has confirmed the accuracy of the data promotion information, publication time, frequency, amount, etc. related to the project involved in this settlement statement. Party A shall provide Party B with legal and valid invoices of the same amount in accordance with the content agreed by the parties.

Party B’s invoice title:/

This settlement statement has the same legal effect as the original agreement.

Party A:	Party B:
(Seal)	(Seal)
Date: MM/DD/YY	Date: MM/DD/YY

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Annex 3: Personal Information Protection Commitment Letter

Personal Information Protection Commitment Letter

In order to comply with the provisions of relevant laws and regulations on personal information protection, when Party B entrusts Party A to provide data promotion services for its agent customers, the personal information of relevant data subjects will be fully protected. Party A, Party B and the customers represented by Party B may jointly, individually or accept entrustment to process relevant personal information. In the process of processing the aforementioned personal information, Party B and Party B’s agent customers are obliged to abide by the provisions of laws, regulations, rules and national standards related to personal information protection (hereinafter referred to as “data protection requirements”), and perform personal information protection, data security and confidentiality obligations.

“Personal information” under the Commitment Letter refers to: various information related to identified or identifiable natural persons recorded electronically or in other ways, but does not include anonymized information; the “processing” of personal information includes the collection, storage, use, processing, transmission, provision, disclosure, deletion, etc. of personal information.

1. Party B hereby promises and guarantees that it will require its customers to abide by data protection requirements and fulfill obligations such as personal information protection, data security and confidentiality with the following agreements not lower than the Commitment Letter:

1) The processing of personal information by customers shall comply with the provisions of data protection requirements, strictly abide by the principles of legality, legitimacy, necessity and integrity of personal information processing, and only carry out corresponding processing activities within the scope of data promotion cooperation. In the process of processing personal information, customers shall follow the principles of openness and transparency, disclose personal information processing rules to relevant data subjects, and clearly state the purpose, method and scope of processing. The data processing shall have a clear and reasonable purpose, and shall be directly related to the processing purpose and carried out within the minimum range required to achieve the processing purpose. Data processing should be carried out within the scope of authorization of the data subject, in a way that has the least impact on the personal rights and interests of the data subject, and

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should avoid adverse effects on the rights and interests of the data subject due to inaccurate and incomplete personal information. If the relevant personal information is processed beyond the scope of authorization of the data subject, the customer shall separately obtain the authorization and consent of the relevant data subject in accordance with the provisions of the data protection requirements, unless otherwise stipulated in the data protection requirements.

2) If the customer is involved in transmitting personal information to the data promotion platform, the customer must comply with the data protection requirements before transmitting the relevant personal information. If the customer’s affiliates, partners or other third parties are involved in providing customer data to the platform, the customer shall sign an authorization agreement with its affiliates, partners or other third parties to ensure that the data sender has the legal and valid right to send data to the platform, and the platform has the right to receive relevant data. Unless otherwise stipulated in the data protection requirements, the customer has fully informed the data subject of the statutory content stipulated in the data protection requirements, such as the type, processing purpose, and processing method of the personal information involved in the personal information transmitted by the customer and the aforementioned third party to the data promotion platform, and has obtained the authorization and consent of the data subject.

3) If the customer uploads relevant personal information to the data promotion platform and uses the data promotion service, it will not violate the data protection requirements, and will not damage the legitimate rights and interests of Party A, Party A’s affiliates, relevant data subjects or subjects with relevant rights to the data, nor will it exceed the scope that the data subject or the subject with relevant rights to the data has authorized and agreed to the customer and any other relevant parties for the relevant processing matters of the customer.

4) If it is necessary for data promotion service cooperation, and the customer is involved in obtaining relevant personal information from the data promotion platform, the customer will follow the data protection requirements, within the scope of authorization of the data subject, and the security rules/policies set by Party A and the data promotion platform, process relevant personal information within the scope of data promotion cooperation and must strictly ensure the security of relevant personal information. Without the written permission

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of Party A, the customer shall not subcontract the relevant personal information processing activities to any third party for processing. Subject to the provisions of this article, the customer shall be fully responsible for the data processing activities of third parties. After the end of the personal information processing activities stipulated in this article, unless otherwise stipulated by laws and regulations, the customer shall delete the relevant personal information in a timely manner.

5) Unless the written consent of Party A is obtained and strictly limited by the data protection requirements, the scope of authorization of the data subject, and the scope of the purpose of data promotion cooperation, the customer will not share, provide, transfer or publicly disclose relevant personal information to third parties, nor will the customer further process the relevant personal information beyond the scope mentioned above. Subject to the provisions of this article, if it is really necessary to transmit relevant personal information to a third party, the customer undertakes that such processing behavior will not violate the data protection requirements, and will not damage the legitimate rights and interests of Party A, Party A’s affiliates, relevant data subjects or subjects with relevant rights to the data, nor will it exceed the scope that the data subject or the subject with relevant rights to the data has authorized and agreed to the customer and any other relevant parties for the relevant processing matters of the customer. The customer will strictly restrict the processing behavior of the third party and ensure the security of personal information.

6) In the process of data promotion cooperation, customers may use the relevant technical services of Party A or Party A’s affiliates (such as website building services). If the relevant technical services involve the collection or further processing of personal information of users/customers of Party A or Party A’s affiliates on any platform/product or other scenarios of Party A or Party A’s affiliates, the customer shall ensure that the relevant processing behavior fully complies with the provisions of the data protection requirements, including but not limited to: the customer shall provide the relevant data subject with privacy policies or similar documents in accordance with the provisions of the data protection requirements, inform them of the data type, processing purpose, method and other statutory content stipulated in the data protection requirements, and obtain the authorization and consent of the relevant data subject, and at the same time provide the real and effective

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contact information of the customer, so as to facilitate the relevant data subject to exercise the relevant rights under the data protection requirements.

7) Customers will not engage in the following behaviors or activities that violate laws and regulations and violate social good customs through the data promotion services under the Agreement and/or use the processing activities of relevant data:

a) Any act or activity related to obscenity, pornography, gambling, superstition, terror, violence, fraud, etc.

b) Any act or activity related to the expression of discrimination against nationality, race, religion, disability, sickness, etc.

c) Any use of neutral technical analysis services (including analysis reports or other services) provided by Party A or Party A’s affiliates to further create a list of audiences related to the above information or labels, produce any analysis reports or use them to promote customers’ products/services or for other purposes.

8) One of the purposes of Party A’s data promotion services is to provide appropriate advertising and promotion services for the audience, and to provide relevant customers with promotion channels for products/services, rather than improperly digging and intruding on the specific real identity of the relevant audience. Therefore, Party A does not allow to use personal information or label categories (such as names and ID numbers) that reflect the real identity of the audience. At the same time, Party A does not want customers to take advantage of the plight of the audience to obtain further commercial benefits through data promotion services. Therefore, Party A does not allow the use of personal information or label categories related to the personal plight of the data subject to infringe or unfairly treat personal rights. In addition, audiences affected by social prejudice and discrimination may be negatively affected by chain effects in obtaining information and cannot be treated fairly. Therefore, Party A is not allowed to use biased and discriminatory personal information or labels, and based on this use data promotion services for specific categories of products or services based on the above-mentioned personal information or labels.

9) Customers will not violate the provisions of data protection requirements and attempt to obtain relevant personal information in an illegal manner or in a manner that violates the security rules of Party A and the data promotion platform.

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10) In order to comply with the provisions of data protection requirements and for the purpose of protecting the security of relevant personal information, the customer shall take relevant technical measures (such as encryption technology) to ensure the security of personal information during the data transmission and processing, and the customer shall actively cooperate with Party A, processing relevant personal information in a form that meets the data protection requirements.

11) The customer has the necessary organizational management system and technical measures that meet the data protection requirements to ensure the security of personal information. If a personal information security incident occurs or may occur (referring to personal information being leaked, damaged, tampered with, lost, unauthorized access and processing, and the resulting infringement of the relevant rights and interests of the data subject), the customer shall immediately notify Party A in writing and take effective remedial measures as soon as possible. If the above-mentioned personal information security incidents are caused by the customer, the customer shall independently handle the resulting disputes (including but not limited to complaints, administrative penalties, and litigation disputes), so that Party A, Party A’s affiliates and relevant data subjects are immune from infringement and losses, and the customer shall assume full responsibility.

12) If required by Party A/data promotion platform, the customer shall provide Party A with all necessary information in a timely manner to prove that the customer complies with the data protection requirements and processes personal information within the scope agreed in the Agreement and the Commitment Letter and within the scope authorized by the data subject. The aforementioned necessary information includes but is not limited to: the customer’s data security capabilities and the processing of personal information. The information/situation provided by the customer is true and accurate, and there is no falsehood or concealment. Party A has the right to conduct security audits on the customer’s data security and data processing, and the customer will actively cooperate.

13) When the cooperation period of the Agreement expires or the data promotion service cooperation is terminated due to any other reasons, the customer promises to delete or destroy all personal information obtained from Party A/data promotion platform, including original data, backup data, etc., and guarantees that it cannot be restored through technical

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means after deletion.

2. If Party B processes personal information during the cooperation process of the Agreement, Party B understands and recognizes that the relevant obligations stipulated in the Commitment Letter will also apply to Party B, and Party B promises to strictly abide by the requirements of the Commitment Letter.

3. If Party B and/or the customer represented by Party B violates the Commitment Letter, it will be regarded as a serious breach of contract and/or infringement. Party B shall bear joint and several liabilities to Party A with Party B’s customer. Party A has the right to require Party B and/or the customer represented by Party B to compensate Party A, Party A’s affiliates, data subjects or third parties for all losses suffered, and has the right to unilaterally suspend or terminate Party B’s data promotion needs and any cooperation with Party B. Party B shall bear all legal responsibilities, and shall be responsible for eliminating the impact and properly solving it.

4. The Commitment Letter shall not be terminated or invalidated due to the invalidity, suspension or termination of the Agreement or data promotion cooperation.

Party B1: Beijing Baosheng Technology Co., Ltd.
(Seal of Customer 1)
Date: January 1, 2024

Party B2: Beijing Baosheng Network Technology Co., Ltd.
(Seal of Customer 2)
Date: January 1, 2024

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Annex 4: Procedural PMP Advertising Cooperation Terms

Procedural PMP Advertising Cooperation Terms

Party A and Party B carry out procedural PMP advertising cooperation. According to the specific cooperation situation, the following terms apply to procedural PMP advertising:

Article 1 Definition

1. Traffic transaction services: Refer to the services provided by Party A or Party A’s affiliates for traffic suppliers to demanders, which can include but are not limited to traffic access, material release, release monitoring, financial settlement, etc. The system that provides traffic transaction services is referred to as “traffic transaction system” or “traffic transaction service platform”.

2. PMP: Party A provides high-quality advertising space to a limited number of advertisers or advertising operators. The parties agree on transaction content such as unit price and advertising space through offline transactions, and use procedural docking to realize real-time intelligent advertising. The traffic transaction service system that provides this type is referred to as “PMP”, also known as Private Marketplace.

3. Demand-Side Platform: It is an online advertising platform service system that provides advertisers with promotional content delivery and optimization service systems, also known as DSP. Under the Agreement, the Demand-Side Platform is Party B or the DSP designated by Party B that conforms to the Agreement.

4. Supply-Side Platform: Refer to a media service platform that integrates media resources and provides procedural advertising allocation and screening for media owners or managers, also known as SSP. Under the Agreement, the Supply-Side Platform is Party A.

5. Audience: The target group that the promotional content hopes to reach.

6. Account: Refer to the unique digital number (“ACCOUNT ID”) that identifies Party B or the DSP identity designated by Party B when using the service in the traffic transaction system. The account name and password provided by Party B will be associated with the account.

Article 2 Content of Cooperation

1. Party B can only place procedural advertisements on the traffic transaction service platform through the DSP confirmed by Party A in writing or email and that meets Party A’s standards and requirements, and connect with Party A’s traffic transaction

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system in accordance with the technical specifications provided by Party A, Party A will provide traffic transaction services in accordance with the Agreement. Party B confirms that Party A has the right to adjust or reduce the DSP that meets Party A’s standards and requirements and will notify Party B in advance. This article shall not be deemed or constitute any guarantee provided by Party A to the DSP or any liability for its actions.

2. Party A has the right to adjust the pricing rules and fee payment methods of traffic transaction services according to the actual situation, and relevant adjustments should be communicated with Party B in advance. If Party B has any objection, Party A shall actively seek solutions with Party B. If Party B expresses in writing that it does not agree to the adjustment, Party B may choose to terminate the procedural PMP advertising cooperation.

Article 3 Consumption Requirements and Payment Methods for PMP Advertising

1. On the PMP traffic transaction service platform of Party A, for the traffic sent by the platform, Party B has the right to choose whether to return the advertisement of Party B’s customer through the DSP that complies with the Agreement according to the release method. At the same time, each natural month is a settlement cycle for the parties. In each settlement cycle, Party B must ensure that the minimum monthly consumption of its settlement cycle is RMB 100,000. If it is less than one natural month, the minimum consumption is calculated according to one natural month; if Party B fails to meet the minimum consumption standard within a settlement cycle, Party B shall still settle according to the minimum consumption standard agreed in the Agreement. If Party A adjusts the minimum consumption amount, Party B shall be notified in a timely manner. The parties confirm that they will follow the content of Party A’s latest notice.

2. The release methods include but are not limited to BPG (private procedural transaction advertisements with fixed position guarantee and no return), PDB (private procedural transaction advertisements with fixed position guarantee), PD (private procedural transaction advertisements without fixed position guarantee and self-selected volume), etc., among which the release method of BPG and PDB should be settled by the Data Promotion Order

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signed or confirmed by the parties via email; the Data Promotion Order confirmed by the parties under the PD release method is for reference only, and the final settlement is based on the actual consumption amount of Party B.

3. Unit price agreement: The unit price is subject to the current publication price of Party A.

4. Payment method:

(i) For PMP advertising promotion in procedural release, Party B shall pay Party A the data promotion fee according to the following agreed period:

Payment before data promotion (i.e. prepayment): Party B shall pay the promotion service fees to Party A before data promotion. Each natural month is a settlement period. The parties shall timely calculate the promotion service fees incurred in the previous settlement period within each settlement period. Party A shall timely provide Party B with an invoice of the same amount upon receipt of the sealed order or Data Promotion Service Fee Statement issued by Party B.

Article 4 Implementation Terms of Traffic Transaction Service Platform

1. Party B can only release the promotional content of Party B’s customers on Party A’s traffic transaction system, and shall not transfer the promotion resources in the Agreement to publish the promotional content of other platforms/systems.

2. Party B guarantees that Party B and its customers are legally qualified to publish the corresponding promotional content. The relevant goods and services in the promotional content should be legal, comply with relevant national standards and regulations, and have passed the corresponding administrative approval. They are not counterfeit and shoddy products and do not infringe any legitimate rights and interests of third parties. Party B is responsible for reviewing the relevant certification materials that its customers should provide according to law to ensure the legality of the promotional content.

3. Party B ensures that it has obtained the consent of its customers to publish promotional content through Party A’s traffic transaction system, and Party B shall review the government approval and relevant supporting documents required by customers to publish promotional content in accordance with the law.

4. Party B shall review and submit supporting documents related to the promotional content according to the requirements of Party A before launch, including but not limited to

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customer’s real information, trademark right certificate or authorization document, copyright certificate or authorization document, portrait right authorization certificate, approval document number, inspection report and other qualification certification materials to prove the authenticity, legality and validity of its promotional content.

5. Party B guarantees that the qualifications and promotional content comply with all applicable laws, regulations, rules, relevant binding policies and the regulations of Party A and Party A’s affiliates on the promotional content (including but not limited to the Management Specifications for Ocean Engine Data Promotion, Management Specifications for Ocean Engine Agents).

6. Party A will review and spot check the promotional content uploaded by Party B. If it fails to meet the specifications of Party A and Party A’s affiliates, Party A has the right to unilaterally take measures such as refusing to publish, stopping the publication of the promotional content, or suspending account transactions. Party B understands and confirms that Party A and the traffic transaction system have the right to provide the supporting documents and promotional content submitted by Party B to the cooperative platform for review in accordance with laws and regulations.

7. If the address of Party B’s promotion link is infected by a computer virus, Party A has the right to suspend the release of the promotional content, and at the same time notify Party B to carry out anti-virus activity. The promotional content can be resumed only after Party B implements the anti-virus activity for server and Party A confirms the security of promotion link. The suspension of the promotional content release during this period shall not be regarded as a breach of contract by Party A. The loss of the suspension of the promotional content shall be borne by Party B. If Party A does not supplement the release, Party B shall still pay Party A the full service fee in accordance with the contract.

8. In order to protect the rights and interests of Party B, Party A may suspend the provision of traffic transaction services and notify Party B when abnormal activities are found in Party B’s own systems and accounts.

9. Party B guarantees that the uploaded promotional content is consistent with the content of the landing page, and the overall effect will not cause consumers to misunderstand. Within the effective display time of the promotional content, the landing page shall not be changed.

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10. If the promotional content of Party B or the DSP designated by Party B violates the Agreement, Party A and the cooperative platform have the right to refuse to publish or delete it at any time after publication, and set the system not to show all the promotional contents uploaded by Party B or the DSP designated by Party B, even if Party B has successfully bid. At the same time, Party A has the right to require Party B to pay liquidated damages according to the standard of 5,000 yuan for each piece of illegal information, and Party B will pay the liquidated damages separately. If Party A and/or the cooperative platform lose more than 5,000 yuan due to Party B or Party B’s designated DSP information breach of contract, Party B shall make additional compensation within 5 working days.

11. Advertising data statistics: The same as the non-bidding data promotion data statistics in Clause 3, Article 5 of Part II “General Terms” of the Agreement.

Article 5 Rights and Obligations of the Parties

1. Party B shall carry out operations such as recharging, quoting, and uploading promotional information in accordance with the specifications published by the traffic transaction system. Any losses caused by Party B’s improper operation shall be borne by Party B. Improper operation includes but is not limited to failure to follow the instructions and prompts, failure to perform operations in time, disclosing passwords, bypassing security programs, and using malicious computer programs.

2. Party B understands and agrees that Party A and Party A’s affiliates have the right to save Party B’s information on the server of Party A/Party A’s affiliates in accordance with the law (including but not limited to the information release location selected by Party B, the information content released by Party B, etc.).

3. Party B confirms and agrees that Party A will not make any express or implied commitments to the audience visits, promotion effects, business performance, etc. that Party B can obtain by using traffic transaction services.

4. If Party B violates any guarantee or commitment of the Agreement, once Party A/cooperative platform discovers, Internet audiences file complaints against Party B, or relevant management departments investigate, in addition to handling as agreed herein, Party A has the right to unilaterally terminate Party B’s services without any responsibility.

5. Party B shall provide Party A with the true and accurate identity, address, promotion

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qualification and other information of its customers. Party B can enter the above information through the API or traffic transaction system provided by Party A or other methods required by Party A for Party A to check from time to time or provide it to cooperative platforms and regulatory authorities. If Party B fails to submit in time or the submitted materials are incomplete or inaccurate, Party A has the right to immediately offline the promotional content being launched and refuse to release all the promotional content of the customer.

6. If Party B modifies the data of its account in Party A’s traffic transaction system, it should apply to Party A and modify it after Party A verifies it.

7. The advertising content published and submitted by Party B on Party A’s traffic transaction service platform must indicate the source of the advertisement.

8. If Party A breaches its obligations stipulated in the Agreement and causes losses to Party B, the maximum amount of compensation shall be the bid price of Party B at the time of bidding (the highest budget limit). If Party B breaches its obligations stipulated in the Agreement and causes losses to Party A, Party A’s affiliates and/or cooperative platforms, and other related third parties, Party B shall bear the liability for compensation for losses and Party A has the right to immediately suspend or terminate cooperation with Party B.

9. When Party B conducts data promotion on Party A’s traffic transaction service platform, it must follow the platform rules (including but not limited to Management Specifications for Ocean Engine Agents, Management Specifications for Ocean Engine Data Promotion, operation specifications, assessment rules). When the platform rules are updated, Party B can be notified through website publicity, email, site notification, etc. If Party B violates Party A’s platform rules during its promotion and advertising, Party A and the traffic transaction service platform have the right to take corresponding restrictive measures on Party B and Party B’s accounts in accordance with the platform rules, require Party B to bear liquidated damages or compensation, or suspend and terminate cooperation with Party B and pursue Party B’s liability for breach of contract.

10. Party B shall not change the promotional content page privately during the release process. Once found, Party B shall be liable for breach of contract. Party B shall bear the liability for liquidated damages of 20,000 yuan for the first violation, 100,000 yuan for the second violation, 500,000 yuan for the third violation, and Party A shall have the right to

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permanently stop cooperation with Party B for the fourth violation. If Party B changes the promotional content page without permission, resulting in the content being investigated by relevant administrative agencies for violations of laws and regulations, Party B shall immediately cooperate with Party A to make a truthful statement about the aforementioned situation, so as to exempt Party A from liability and bear the resulting adverse consequences. If the above-mentioned liquidated damages are not enough to compensate Party A and Party A’s affiliates for losses, Party B shall continue to compensate.

11. Party B and its DSP interface service provider shall not engage in unfair competition by providing any traffic hijacking that includes malicious programs, spyware or any other form of traffic hijacking. If Party B and/or its DSP platform’s traffic hijacking behavior harms the legitimate rights and interests of Party A and/or Party A’s users/customers, Party A has the right to request Party B and its DSP to bear all legal liabilities.

12. Party B shall classify the advertisers and promotional content required by Party A, the traffic service platform and the cooperative platform (Party A, the traffic service platform and the cooperative platform have the right to make adjustments based on various factors such as business needs, market changes, laws, regulations and regulatory requirements, and Party B shall also abide by the adjusted requirements). It promises not to use customers and promotional content prohibited by the cooperative platform for advertising bids on the cooperative platform. Any loss caused to Party A, Party A’s affiliates or cooperative platforms due to violation of the agreement shall be borne by Party B.

13. During the cooperation process between the parties, the traffic transaction system and any information, materials, transaction records, data, etc. provided by Party A are Party A’s commercial secrets and all intellectual property rights belong to Party A. Party B guarantees to delete these information and data in a timely manner; unless otherwise agreed by Party A in writing, Party B shall not use the above information and data in any way other than to achieve the purpose of the Agreement, including but not limited to associating (or mapping), copying, disseminating, processing, analyzing, reusing and publishing, nor shall it be provided to a third party in any way, regardless of whether the above information and data are as a whole, separate fragments, or combined with other information and data.

14. Party B agrees that Party A shall not bear any responsibility under the following circumstances:

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(1) The failure to provide the service is not due to the intention or negligence of Party A or the traffic transaction system; (2) Party B and/or any third party suffers losses due to the intentional or negligent actions of Party B or the DPS Platform; (3) Party B violates the Agreement, or violates other agreements, contracts and/or agreements with Party A, or violates Party A’s delivery and other platform rules.

(No text below)

Party A: Xiamen Jinri Toutiao Information Technology Co., Ltd.
(Seal of Service Provider)
Date: January 1, 2024

Party B1: Beijing Baosheng Technology Co., Ltd.
(Seal of Customer 1)
Date: January 1, 2024

Party B2: Beijing Baosheng Network Technology Co., Ltd.
(Seal of Customer 2)
Date: January 1, 2024

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EX-4.4

EXHIBIT 4.4

Ocean Engine Customer Service Tel.: 400-618-1518

Ocean Engine Agent Data Promotion Business

Cooperation Agreement

Contract No.: CONT20231123616833

Party A: Xiamen Jinri Toutiao Information Technology Co., Ltd.

Address: 3F-A1176, Area C, Innovation Building, No.3 Siming Software Park, Phase I of Software Park, Torch High-tech Zone, Xiamen

Contact: He Ning

Tel.:                

Contact E-mail: hening.ivy@bytedance.com

Mailing address: 3F-A1176, Area C, Innovation Building, No.3 Siming Software Park, Phase I of Software Park, Torch High-tech Zone, Xiamen

(The E-mail address of Party A’s contact person or that with the suffix @bytedance.com stipulated herein are valid E-mail address for Party A to send and receive notices)

Party B 1: Beijing Baosheng Technology Co., Ltd.

Address:

Contact: Zhan Wentong

Tel.:

WeChat:

Contact E-mail: zwt@bsacme.com

Mailing address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

(The E-mail address of Party B’s contact person or that with the suffix @bsacme.com stipulated herein are valid E-mail address for Party B to send and receive notices)

Party B 2: Beijing Baosheng Network Technology Co., Ltd.

Address:

Contact: Zhan Wentong

Tel.:

WeChat:

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Contact E-mail:

Mailing address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

(The E-mail address of Party B’s contact person or that with the suffix @bsacme.com stipulated herein are valid E-mail address for Party B to send and receive notices)

Beijing Baosheng Technology Co., Ltd. and Beijing Baosheng Network Technology Co., Ltd. are collectively referred to as Party B hereunder, and Beijing Baosheng Technology Co., Ltd. and Beijing Baosheng Network Technology Co., Ltd. shall bear joint and several liabilities to Party A for the performance of the Agreement.

Party A and Party B have signed the Agreement after friendly negotiation in accordance with the current effective laws, regulations, rules and regulations and national standards of the People's Republic of China, regarding Party B's entrustment of Party A to provide data promotion services to customers represented by Party B. The Ocean Engine Ark Platform Service Agreement (https://lf3-cdn-tos.draftstatic.com/obj/ies-hotsoon-draft/agent_web/user_protocol.htmlweb, hereinafter referred to as the "Online Agreement") confirmed by Party B on the Ocean Engine Ark Platform and other related agreements that may be issued by the data promotion platform on the Ocean Engine data promotion service, platform rules, policies, specifications, service usage rules, notices, etc. are all part of the Agreement. The data promotion platform has the right to update the aforementioned agreements, rules, notices and content from time to time, and will notify Party B through web-page announcements, on-site letters, E-mails, telephone calls or letters. Such notices are deemed to have been delivered to Party B and become binding on Party B.

Part I Terms of Service

Article 1 Cooperation Matters and Definitions

1. Party B entrusts Party A to provide data promotion services for the customers represented by Party B in accordance with the Agreement, and therefore pays Party A the agreed data promotion fees.

2. Party A authorizes Party B to be a comprehensive agent in the country, except for the scope of local industry advantages, automobile manufacturers, automobile dealers, and real estate developers (Party A has the right to unilaterally adjust and change the scope and period of Party B's agency, and the details are subject to Party A's notice). During the agency period

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(the cooperation period of the Agreement), Party B may only act as an agent for data promotion services within the scope authorized by Party A, and may not have customer conflicts with the advantageous agents of Party A and its affiliates involved in business in this region. Regardless of any legal relationship formed or existing between Party B and the customer it represents, Party B shall sign corresponding agreements with the customer it represents in its own name and directly enjoy rights and obligations as a party hereto. Party B shall clearly agree with the customers it represent on their respective scope of work, specific service items, service standards, and other related matters. Party B shall not refuse to perform the Agreement for any reason between Party B and its customer. In case of any disputes arising from Party B's violation of the agreement signed with the customer or the unclear agreement with the customer, Party B shall resolve it with the customer by itself.

3. Data promotion platform: Refers to the Ocean Engine Ark Platform (web.: https://agent.oceanengine.com/), Ocean Advertising Platform (including customer applications and websites) legally operated by Party A or Party A's affiliates, web.: https://ad.oceanengine.com/) and platforms used to provide specific types of data promotion and related services and functions, which may provide services such as data promotion, cost statistics, data query, analysis, and material management (subject to the actual provision of the platform).

4. Ocean Engine Ark Platform: Refers to the service and management platform legally operated by Party A or Party A's affiliates, which may provide services such as contract signing, customer follow-up, business process, optimized delivery, and intelligent data analysis (specifically based on the actual situation of the platform provided), hereinafter referred to as "Ark Platform".

5. Platform rules: Refer to various normative documents that have been issued or may be issued in the future on the promotion platform, flow network platform, Ocean Engine workbench and subsequent related platforms (hereinafter referred to as "platforms"), including but not limited to the agreements, rules, specifications, notices, policies, announcements, etc. that Party B and Party B's agency customers must abide by to use the relevant services and functions hereunder. If there is any change in the name, operating entity and website/domain

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name of each platform hereunder, the notice at that time shall prevail and the change will not affect the validity of the Agreement.

6. Restrictive measures: Refer to the restrictive measures taken by each platform on part or all of the accounts of Party B and Party B's agency customers, and their related parties in accordance with the Agreement, Online Agreement, platform rules or relevant laws and regulations, including but not limited to closing accounts; restrictions on opening accounts; freezing the cash balance and preferential rights and interests in the accounts (including grants, convert payment, coupons, etc.); restrictions on participation in various activities organized by various platforms; restricting data promotion and delivery (including restricting promotional content, promotion display, promotion goals and objects, etc.); limiting the issuance of rebates and incentives; intercept refunds; other restrictions on data promotion functions and service use.

7. Party B's products or promotional products refer to the commodities, services or any other legal publicity objects (including but not limited to brands, direct broadcasting rooms, stores, websites, APP products, etc.) promoted by Party B's agency customers. Party B guarantees that Party B and its customers enjoy the legal rights or full authorizations required to perform the Agreement, including but not limited to copyrights, trademark rights, portrait rights, etc. for data promotion.

8. Performance: Refers to the business behavior related to the promotion product and the link behavior after the data promotion, specifically, after the user browses and clicks on the promotional content, Party B's customers and/or the related party of Party B's customers provides the product or service to the user.; all behaviors such as marketing, transactions and after-sales.

9. Flow network platform: Party B may make corresponding selections, settings or operations according to the platform rules and guidelines, and may also display its content materials on Party A's affiliates’ customer applications, websites, applets, and other partner network platforms, applications, etc. (hereinafter referred to as "flow network platform"), related pages, interfaces or locations through the data promotion services provided by Party A in the manner agreed herein and/or use and enjoy corresponding services and functions.

10. Data promotion services, including one or a combination of the following methods:

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(1) Publish promotional content for Party B's products in the form of text, pictures, audio, video, live broadcast, etc. on the flow network platform;

(2) Party B provides content that describes, introduces or promotes Party B's products, with text as the main form of expression, and publishes it on the flow network platform;

(3) Party B provides the network/download link address and publishes it on the flow network platform. Users of the flow network platform may click on the link to jump to the corresponding page to view information or purchase/use specific services, commodities or download APP products. Party B shall ensure the legality of the landing page targeted by the jump link and its content, products and qualifications;

(4) Paid search services for the promotion of commodities, services or other publicity objects;

(5) Other data promotion services that may be used to promote Party B's products.

Party B understands and confirms that the data promotion services hereunder, whether Party B places an order and confirms it through offline methods such as E-mails, or operates and executes it online through Party B and Party B's customer account, shall abide by the provisions of the Agreement, and Party B shall bear the responsibility and pay the corresponding fees in accordance with the Agreement.

11. Promotional content or content materials: Refer to the keyword information and website information submitted by Party B or its customers; information content which Party B or its customers design and produce by themselves or entrust others to design and produce with valid authorization to display Party B's products; information content submitted and displayed by Party B when he uses the service-related functions of the Agreement, including but not limited to text, pictures, flash, audio, video, live broadcast and other forms of content and images, portraits, names, logos, all components such as trademarks, brands, music, sound, lines, visual design, etc., and the content materials include the landing page itself.

12. Landing page: Refers to the page targeted by the link contained in the content material, that is, the page that the user jumps to or redirects after clicking the content material.

13. Creative optimization function refers to the following functions that data promotion platform provides for Party B's content materials:

(1) Live high-quality clip editing function. When promoting the direct broadcasting room, the live content (including but not limited to text, pictures, audio, live video and other forms of

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content and image, portrait, name, logo, trademark, brand, music, sound, lines, visual design and other components contained therein) may be intelligently edited (including but not limited to selection, alternation, break-up, grouping) and processed (including but not limited to adding subtitles, music, pictures, videos) to form high-quality clips for promoting the direct broadcasting room to which the live content belongs);

(2) Dynamic creative function. This function dynamically optimizes Party B's promotional content according to search keywords and population characteristics, including but not limited to adjusting promotional content, titles and genres, intelligently displaying creative components and short video interactive data, and enabling the live high-quality clip editing function;

(3) Programmatic creative functions. Intelligent splicing, combination and dynamic optimization according to Party B's titles, pictures, videos and other promotional content;

(4) Creative derivation function. According to the content materials of Party B, intelligently generate ideas to enrich the promotional content.

14. self-produced programs and specific activities: Refers to videos, micro-short dramas, film and television dramas, variety shows that are filmed, produced and produced by Party A and/or Party A's affiliates themselves or by a third party entrusted, or to which commercial content shows, sports events or live live parties, etc. may be implanted.

15. Ocean Engine account refers to account generated by Party B’s customer synchronously via authorized login method of using E-mail, mobile phone number or third-party account, on each business platform connected to the Ocean Engine account system (the list of business platforms is subject to the announcement on the Ocean Engine workbench) when they registers an account, which may be used to access and log in to various business platforms connected to the Ocean Engine account system.

16. Ocean Engine Workbench refers to a comprehensive platform that provides full-link business activity management, operation and technical service support for Ocean Engine account users (web.: https://business.oceanengine.com/). The engine workbench may be used to realize functions such as cross-account coordination, role-by-role authorization, and multi-scenario marketing; and through this workbench, you may query and configure permissions, operate assets and funds, and analyze the data of all products.

Article 2 Cooperation Period

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1. The cooperation period between Party A and Party B is: from January 1, 2024 to December 31, 2024. After the above cooperation period expires, the data promotion services hereunder will be terminated. If the Agreement is rescinded or terminated in advance, the above cooperation period ends on the date of early rescission/termination.

2. If after the expiration of the cooperation period of the Agreement, there is still a cash balance (referred to as the "cash balance") in the accounts of Party B and its customers that has been prepaid and recharged but has not been released and consumed, and Party B chooses to continue to use it, the cash balance may only be used for bidding data promotion within three natural months after the expiration of the cooperation period of the Agreement (hereinafter referred to as the “extension period"), and the data promotion during the extension period shall still follow the Agreement, unless otherwise agreed by the parties; After the extension period expires, Party A and the data promotion platform have the right to close the accounts and account permissions of Party B and its customers. After the expiration of the cooperation period of the Agreement, Party B is not allowed to renew and recharge hereunder, and may only consume the aforementioned cash balance during the extension period. The consumption incurred after the expiration of the cooperation period of the Agreement and the consumption during the extension period may not be used for rebates, incentives and other similar preferential policies.

Article 3 Data Promotion Methods

1. Non-bidding data promotion

(1) Non-bidding data promotion includes but is not limited to CPT (Cost Per Time), CPM guaranteed delivery, CPV guaranteed delivery, special project resource packages (such as: self-produced programs and specific activities data promotion) and other non-standard resources, etc. placement.

(2) For non-bidding data promotion, the Data Promotion Order (hereinafter referred to as the "Order") signed by Party A and Party B before the data promotion or confirmed through the valid mailbox and data promotion platform agreed herein shall prevail to specify the specific time, location, price and other elements of data promotion. If Party B issues an order through the mailbox or data promotion platform, this order is deemed to be Party B's true expression of intention, and has legal effect and binding force on Party B. The order will take effect

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after Party A confirms it with the valid mailbox agreed herein or place an order on the data promotion platform. Party B understands and confirms that Party A will log in to the data promotion background and Party B’ and its customers’ accounts by itself or entrust a third party to log in this platform to view and perform corresponding operations according to the order agreement, and confirm the relevant Online Agreement and rules on behalf of Party B for the use of some functions, so as to realize the promotion and delivery of non-bidding data.

(3) After the order is successfully placed, Party A has locked up the inventory for Party B and reserved corresponding resources. If there are non-data promotion platform reasons and non-Party A’s reasons that affect normal, timely and continuous delivery, the resource waste will be caused, and Party B shall still pay the corresponding data promotion fees according to the order agreement and Party A shall not bear any responsibility. The aforementioned situations include but are not limited to the following: where Party B fails to upload content materials in a timely manner; where Party B's content materials/data promotion plan fails to pass the review; where Party B's content materials/data promotion plan violates laws, regulations and platform rules, resulting in the plan being offline; where Party B’s/Party B’s customers’ account is abnormal (including but not limited to account being suspended and unable to be released, account qualification expiring, not uploaded or changed, or other abnormal situations where restrictive measures are taken according to platform rules; where the products promoted by Party B are not in normal display status; where Party B's operation leads to suspension of delivery (including re-submission triggered by mid-delivery editing, modification of accounts of flow network platform for promotion, authorization and cooperation, modification of promoted products, self-suspension, etc.), and other non-data promotion platforms and non-Party A reasons for Party B's data promotion plan to be suspended, interrupted, terminated, and unable to be launched in a timely and continuous manner.

(4) During the cooperation period of the Agreement, if Party B changes the effective order, it shall notify Party A 30 days in advance for confirmation of Party A. The parties shall sign or confirm the changed order separately; otherwise, it shall be deemed that the order has not

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been changed, and Party A and Party B shall still execute and settle according to the effective order before such change. If Party B changes the order confirmed on the data promotion platform, it shall be implemented in accordance with the rules and requirements of the data promotion platform.

2. Bidding data promotion: including but not limited to CPM (oCPM) (charged according to advertising display), CPC (charged according to advertising click) and other bidding placements, Party B shall promote data through online bidding in accordance with the data promotion platform rules and delivery operation guidelines, and once Party B's bidding meets the transaction conditions of this service, Party B's promotional content will be displayed in an independent or aggregated form in a specific location and in a specific way according to the continuously optimized delivery model of the data promotion platform.

3. Party B understands and confirms that if Party B has selected the preferred media or scenario on the data promotion platform, Party B's promotional content will be mainly released according to the media or scenario selected by Party B. If there are multiple preferred media or scenarios, due to content materials, platform rules, bidding strategies and other factors, some media or scenarios may not be released; then, to provide better data promotion services to Party B, the data promotion platform may optimize the content and format of Party B's promotional content and intelligently expand it to other flow scenarios.

4. Based on legal and regulatory requirements, platform risk control requirements, platform rule adjustments, user rights protection and experience improvement, optimization of data promotion services, etc., and based on continuously optimized delivery models and strategies, Party B confirms and authorizes the data promotion platform to adjust and optimize content materials, size and format requirements, delivery location and form, data promotion methods, etc. from time to time. The optimization includes but is not limited to adding anchors, marketing components, logos or signs, aggregating and displaying content materials with other customers, or opening all or part of creative optimization functions, and the details are subject to the actual implementation of the data promotion platform. If the content material does not have or lacks a degree of matching and/or correlation with specific data promotion service attributes, Party B

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authorizes Party A and the data promotion platform to properly edit and replace Party B's content material for adaptation and display.

5. Special agreement on the promotion of self-produced programs and specific activities data

(1) If Party B displays and promotes content materials and enjoys corresponding rights and interests in self-produced programs and specific activities, the corresponding rights and interests of Party B will be reflected in the self-produced programs and specific activities (the specific rights and interests are subject to the confirmation of the parties), and the form of rights and interests shall be based on the final form of expression in the self-produced programs and specific activities. After the expiration of the data promotion period, Party A has the right to take Party B's content materials and rights offline or replace them. Unless otherwise agreed by the parties, all intellectual property rights related to self-produced programs and specific activities belong to Party A or Party A's affiliates. Without Party A's written consent, Party B may not use the self-produced programs and specific activities or authorize or transfer to any third party; otherwise, Party A and its affiliates shall be liable for compensation for all losses caused by this.

(2) Party B has the right and hereby irrevocably authorizes Party A and its affiliates to use Party B's content materials in programs and specific activities, programs and specific activities promotion and flow network platform promotion activities on a global, non-exclusive and sub-licensable basis. Party A and its affiliates have the right to modify, reproduce, adapt, translate, compile or produce derivative products of the corresponding content. Party A shall use the content materials provided by Party B according to the purpose and use agreed by the parties, and shall not abuse or infringe on Party B's legitimate interests or belittle Party B's image.

(3) Party B understands and confirms that if any of Party B's rights and interests such as adjustment of self-produced program scheduling, inability to broadcast, suspension or postponement of specific activities and launch may not be realized due to any other reasons than Party A's reasons or factors beyond Party A's control, the above shall not be deemed as Party A's breach of the Contract, and Party A will not bear any liability for compensation to Party B (including but not limited to compensation for errors and omissions and compensation for losses, etc.), and the actual expenses incurred by the

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parties according to the part performed under the corresponding order (including but not limited to the consideration for rights and resources used by Party B, etc.) shall be settled according to the facts, and the production expenses actually invested by Party A shall be negotiated and handled by Party A and Party B by signing a supplementary agreement.

(4) Uncontrollable factors include but are not limited to: the programs, columns and specific activities involved in the project have not been approved, filed or permitted by the relevant government authorities, or the applicable laws, policies or government regulatory requirements have changed and adjusted during the cooperation period, or there is suspension or postponement of sports events and evening parties due to force majeure, social public events, government requirements or regulations, etc., causing programs, columns and specific activities may not be launched, postponed, modified or postponed, and still may not obtain administrative approval or filing review upon modification and the implementation of project content (including but not limited to hosts, actors, guests, directors, filming environment) needs to be changed; the adjustment of program and project arrangement caused by the broadcast channel of Party A or Party A's affiliates to broadcast major events or news, live programs, overall revision of equipment maintenance and other reasons.

(5) If offline activities are involved, Party B shall be responsible for the personal and property safety of its personnel, materials, equipment, etc. and cooperate with the on-site management of the event (including but not limited to property, safety, fire protection, epidemic prevention, etc.).

(6) If the data promotion cooperation of self-made programs and specific activities is suspended or terminated in advance due to Party B or its customer, including but not limited to Party B or its customer canceling all or part of the cooperation without authorization, Party B, Party B's customer and/or Party B and Party B's customer related personnel (including but not limited to operators, executives, spokespersons) have illegal, negative events or improper behaviors. If Party A judges that the continued cooperation will affect Party A and/or Party A's Affiliated company reputation, etc., Party B shall pay the promotion expenses corresponding to the rights and resources used before the suspension/termination. At the same time, all the

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production costs of self-made programs and specific activities shall be borne by Party B, and Party B shall be liable for compensation for all losses of Party A and its affiliates.

6. Party B understands and confirms that the results and effects of data promotion are affected by various factors, including but not limited to status of Party B’s Products, quality of Content Materials, Party B’s operation and performance and changes in external competitive environment. However, no matter what data promotion method and billing method are adopted, Party A and platforms do not make any express or implied commitment to Party B and its customers on the promotion effect of services hereunder and the sales volume, operating performance and investment income of Party B’s Products.

Article 4 Data Promotion Service Fees

1. In order to ensure the continuous use of relevant services under the Agreement, Party B shall renew the fees in a timely manner. If Party B's data promotional content goes offline due to Party B's failure to renew the fees in time, Party A shall not bear any responsibility and reserves the right to terminate the Agreement.

2. Billing method

According to the specific way of data promotion agreed by Party A and Party B, Party B shall settle accounts and pay fees to Party A in corresponding billing methods (including CPT, CPM, CPC and oCPM, etc.); Billing currency: RMB.

3. If there is a prepaid and unconsumed cash balance in the account of Party B and its customer before the signing of the Agreement, Party B confirms that from the cooperation start date agreed in the Agreement, the aforementioned prepaid and unconsumed cash balance will be transferred to the Agreement and shall be treated in accordance with the Agreement.

4. Payment term

(i) In case of bidding data promotion of Party B, Party B shall pay the data promotion service fees within the agreed time limit as follows:

Payment before data promotion (i.e. prepayment): Party B shall pay the promotion service fees to Party A before data promotion. Each natural month is a settlement period. The parties shall timely calculate the promotion service fees incurred in the previous settlement period within each settlement period. Party A shall timely provide Party B with an invoice of the

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same amount upon receipt of the sealed order or Data Promotion Service Fee Statement issued by Party B.

(ii) In case of non-bidding data promotion of Party B, Party B shall pay the data promotion service fees within the agreed time limit as follows:

Payment before data promotion (i.e. prepayment): Party B shall pay the promotion service fees to Party A before data promotion. Each natural month is a settlement period. The parties shall timely calculate the promotion service fees incurred in the previous settlement period within each settlement period. Party A shall timely provide Party B with an invoice of the same amount upon receipt of the sealed order or Data Promotion Service Fee Statement issued by Party B.

Party B understands and confirms that Party A has the right to adjust the payment term agreed herein for the non-bidding data promotion including Special Project Resource Package, and the adjusted payment term and method shall be subject to the supplementary agreement signed by the parties or email.

5. Party B understands and confirms that for bidding data promotion, the Cash Balance (if any) in the accounts of Party B and its agent clients will be preferentially consumed even if Party B adopts the non-prepaid payment method. After the Cash Balance is consumed out, Party B shall pay the data promotion service fees to Party A according to the above payment term. For non-bidding data promotion, Party B shall pay Party A the data promotion service fees according to the above clause of payment term.

6. Type of invoice: The items that Party A can issue include promotion fee/advertising release fee/advertising fee, and the types of invoices that Party A can issue for Party B include special VAT invoice/ordinary VAT invoice.

7. Party B shall pay to Party A by bank transfer or other methods displayed in Data Promotion Platform, and Party A does not accept other payment methods. The settlement currency is RMB. Party A’s receiving bank account information is as follows:

Account name: Xiamen Jinri Toutiao Information Technology Co., Ltd.

Bank of deposit: Beijing Fucheng Sub-branch of Shanghai Pudong Development Bank

Bank account number:

8. Upon expiration of the cooperation period of the Agreement, other non-cash amounts in the

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accounts of Party B and its customers other than preferential rights and interests shall not continue to be used for data promotion and consumption. If the non-cash amounts in the accounts of Party B and its customers are still used for data promotion and consumption, Party B agrees and guarantees to pay Party A the data promotion service fees corresponding to the non-cash amounts consumed immediately after being notified by Party A.

9. If Party B adopts the non-prepaid payment method, even if the payment term is not expired, as long as Party A has reasonable reasons to think that Party B is about to lose or has lost the ability to pay or is at risk of late payment, Party A has the right to suspend Party B’s data promotion, immediately log off the content that is being released and require Party B to pay the fees immediately, and at the same time has the right to change Party B’s payment method from “consumption before payment” to “prepayment” or require Party B to pay a certain amount of deposit.

10. Party B authorizes Party A, Party A's affiliates and the transferee the right to deduct from Party B's and its affiliates' prepaid fees, account balances, rebates and incentive amounts, and the relevant amounts generated with Party A or its affiliates in accordance with other agreements the relevant fees that Party B and its affiliates shall pay, return or compensate to Party A, Party A's affiliates and transferee or to make up for the deposit. At the same time, if Party B or its affiliates use other third-party services and products in the process of using data promotion services and shall pay the agreed fees to the third party, Party B authorizes Party A, Party A's affiliates and the transferee to directly deduct the relevant fees that Party B and its affiliates shall pay to the third party from the above-mentioned funds.

Article 5 Cooperation Policy

1. Party B confirms that during the cooperation period of the Agreement, Party A has the right to set an assessment cycle and set relevant assessment indicators for Party B's data promotion within the assessment cycle (subject to further notice by Party A). At the beginning of each assessment cycle, Party A assesses the completion and cumulative completion of Party B's previous assessment cycle and previous relevant assessment indicators. If any assessment indicator of Party B is not completed, Party A has the right to terminate the Agreement immediately and does not need to bear any liability

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for breach of contract/compensation.

2. During the cooperation period of the Agreement, if Party B applies to Party A for and confirms the data promotion and delivery policy or return policy recognized by Party A through the contact information agreed in the Agreement or through Party B's account (hereinafter collectively referred to as the "Framework Policy", including but not limited to policy content, actual policy implementation, security deposit and other related content), the content of the Framework Policy confirmed by Party B in the aforementioned way is the true intention of Party B, and has legal effect and binding force on Party B. If a separate written agreement is signed for the Framework Policy, it shall be implemented in accordance with the written agreement.

Part II General Provisions

Article 1 Users' Personal Information and Data Protection

1. For the purpose of the Agreement, the parties shall handle the users’ personal information in accordance with relevant laws and regulations. The data provider undertakes that the data it provides to the receiver complies with laws and regulations and has obtained the authorization and consent of the relevant personal information owner, and does not infringe upon the legitimate rights and interests of any third party. The data receiver undertakes to protect the security of personal information in a manner consistent with relevant laws and regulations and by taking necessary measures, and to handle relevant personal information in accordance with laws and regulations, the aforementioned authorization and consent of the personal information owner and provisions of the Agreement.

2. Party A, Party A's affiliates and each platform shall have the right to view the content and data related to the data promotion and placement of Party B and its agents customers, and to collect information related to the exposure and display of Party B's promotional content for the purposes of data promotion compliance investigation, violation identification and processing, data promotion analysis and optimization, service provision, problem solving, risk control and internal audit.

3. In order to optimize and provide data promotion services that better meet market demand, Party B authorizes Party A or its affiliates to have the right to migrate the accounts of each platform and/or relevant data in the accounts between platforms, so as to provide and

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optimize data promotion services.

4. For the purpose of verifying and ensuring the quality of services provided by Party B to its customers, Party B authorizes Party A to have the right to provide Party B's subject identity, operation and information related to data promotion to Party A's affiliates and each platform for viewing and analysis.

Article 2 Platform Account

1. The accounts registered and opened by Party B and its customers on each platform (including but not limited to data promotion platform accounts and Ocean Engine accounts) are limited to the use of Party B, Party B's customers and corresponding authorized entities. It is forbidden to donate, borrow, rent, transfer, or sell in any form without the written consent of Party A. In order to protect the security of the login account and password ("login information") and the legitimate rights and interests of Party B and its customers, if the accounts of Party B and its customers have not been logged in and not used for a certain period of time, Party A has the right to re-verify the login identity of Party B and its customers in accordance with the operation procedures of each platform.

2. Party B shall bear full legal responsibility for the activities and behaviors of logging in, accessing and operating accounts of Party B and its customers (including but not limited to signing/confirming agreements online, configuring and operating accounts, or conducting data promotion, etc.), including but not limited to bear responsibility, pay data promotion service fees, etc. as stipulated in the Agreement.

3. Party B understands and confirms that if Party B or its customers operate their accounts according to the guidelines and rules of various platforms and the agreements confirmed by Party B or its agent clients, including but not limited to authorizing to bind other platform accounts, providing/receiving data, materials, etc., Party B confirms that the aforesaid operations have sufficient authorization and authority, and the platform prompts, instructions, rules and agreements made during operation have full legal effect and binding force for Party B and/or its agent clients, and Party B bears all legal responsibilities for the aforesaid operations. Any disputes arising from the aforesaid operations and related matters shall be handled and resolved by Party B itself with its agent clients or other relevant third parties, and have nothing to do with

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Party A and its affiliates and each platform.

4. Party B and its customers shall properly keep their login information and ensure the security and confidentiality of accounts, and shall not share, resell, rent or lend the login information or related resources in the accounts of Party B and its customers to any third party. Party A only judges whether the logger has account access and use authority based on the login information, and presumes that the person who uses the login information to log in, access and operate the accounts of Party B and its customers is Party B/Party B's customers or authorized subject of Party B/Party B's customers. In the event of any improper use or misoperation of any account, including but not limited to login information leakage, embezzlement, or operation page in an unsafe environment by Party B/Party B's customers or authorized subject of Party B/Party B's customers after logging, etc., Party B shall bear the corresponding responsibilities and consequences. If Party B learns of any illegal use of Party B/Party B's customer account, or any security loopholes in Party B/Party B's customer account, Party B shall immediately notify Party A, and Party B shall bear the losses caused by failure to notify in time.

5. If Party B/Party B's customers lose or forget the login information, they can apply to change or retrieve the login information according to the complaint channels provided by Party A or each platform. Party B understands and recognizes that when Party A or each platform accepts the application for changing login information or retrieving it, it will verify the information and documents provided in the application form according to the system records, and will not verify or identify whether the applicant is an authorized user of the account

6. Party B understands and agrees that if Party B's account is closed or Party B's customer's account is closed, Party B's customer's account will be subject to restrictive measures (including but not limited to release restrictions or disabling) and cannot be used.

7. Upon recission or termination of the Agreement, Party A has the right to close all accounts and account permissions registered and opened by Party B and its customers on the data promotion platform.

Article 3 Preferential Rights and Interests

Party B confirms that the preferential rights and interests in the account of Party B's customers shall abide by the following rules of use:

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(1) Preferential rights and interests can only be used during the cooperation period and extension period (if any) of the Agreement and under the premise that the accounts of Party B and its customers can be operated normally. If the account of Party B or its customers is closed or restricted, or Party B/Party B's customer closes the account by itself, the preferential rights and interests cannot be used or will be cleared;

(2) Preferential rights and interests are non-withdrawable, non-refundable, non-transferable, and non-billing;

(3) Preferential rights and interests shall be used before the expiration of the period displayed on the platform. If the expiration period displayed on the platform is later than the cooperation period and/or extension period (if any), the preferential rights and interests shall be used within the cooperation period and/or extension period (if any). If they are not used within the time limit, they will be deemed to be voluntarily waived by Party B and its customers, and will be emptied when they expire;

(4) Other requirements and restrictions on the use of preferential rights and interests notified or publicized by the data promotion platform;

(5) Data promotion using preferential rights and interests shall be carried out in accordance with the Agreement.

Article 4 Data Promotion Rules, Service Applications, and Submission, Commitment and Review of Promotional Content

1. Data promotion rules

Party B understands and confirms that the data promotion platform will consider establishing and adjusting from time to time different data promotion access, review and violation handling rules based on laws and regulations, platform risk control, business strategy, user rights protection, advertising experience and material quality maintenance, and will review and manage data promotion-related qualifications, content materials, promotion products and performance behaviors on the basis of these rules, and take corresponding disposal measures for Party B, Party B's customers, and their accounts.

2. Application for data promotion services

Based on the requirements of the data promotion rules, Party A and the data promotion platform have the right to decide whether to accept Party B's application for data promotion. If Party B or

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its customer's use of data promotion services does not meet the adjusted rules and requirements, Party B shall immediately modify or supplement relevant documents according to the adjusted standards and submit them to Party A and the data promotion platform for review, or immediately stop data promotion services. If Party B or its customers do not immediately stop using service or the modified and supplemented documents are still not satisfied, Party A has the right to refuse to publish or refuse to continue to publish and do not assume any responsibility for the above-mentioned adjusted promotional content and products that Party B and its customers do not meet.

3. Submission and commitment of promotional content

(1) Within the scope agreed in the Agreement, the qualifications and specific content of data promotion are subject to those submitted by Party B or its customer to Party A or uploaded to the data promotion platform and accepted after review by the data promotion platform (The qualifications and content materials submitted or provided by Party B in the Agreement include those submitted or provided by Party B on behalf of customers). In order to use better service content under the Agreement, in addition to submitting independently, Party B or its customer can also initiate an application through platform rules or guidelines, and use the relevant qualifications submitted by Party B's customer in Party A or Party A's affiliates for Party A and data promotion platform to review.

(2) According to the way of data promotion, Party B shall submit content materials and qualifications in advance according to the specifications and size of the data promotion platform before data promotion. If Party B wants to change the content or qualifications of data promotion, it shall also submit the changed content materials and qualifications in advance according to the requirements of the data promotion platform, otherwise Party B shall still pay the corresponding data promotion service fees in accordance with the Agreement and bear the consequences of failure to change the content materials or qualifications in time.

(3) The data promotion-related qualifications and content materials submitted by Party B must be true and legal, must not be falsified, must not deceive or mislead consumers, must not violate laws, regulations, rules and codes and public ethics, must not be suspected of or constitute unfair competition, and must not infringe on the legitimate interests of any third

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party (including but not limited to infringement of other people's copyrights, trademark rights, patent rights and other intellectual property rights, infringement of other people's personal rights or other legitimate rights and interests, etc.), and shall comply with relevant laws, regulations and rules and codes and have legal rights or full authorization, otherwise Party A has the right to refuse to publish, immediately lay off the content materials being released and require Party B to bear the corresponding responsibilities stipulated in the Agreement.

(4) Party B guarantees that it will not randomly add application download links, download buttons, download QR codes and other operation entrances to guide users to download applications in the content materials. If it is necessary to add an application download link or other operation entry that guides users to download, Party B shall obtain confirmation from Party A in advance and upload relevant application information through the application management center or platform designated by Party A, and add the download link in the way permitted by Party A or the data promotion platform, and expressly indicate to the user the six elements of information (application name, version information, developer and operator name, permission list, privacy policy, product function). Party B guarantees that there is no inconsistency between the content materials and relevant application information, or other misleading or inducing users to download. Otherwise, Party A has the right to refuse the data promotion needs of Party B, immediately lay off the content materials being released and require Party B to bear the corresponding responsibilities stipulated in the Agreement.

(5) If Party B uses the live broadcast attraction function for data promotion, Party B guarantees that the promotional content and live broadcast content are original or have been legally and fully authorized (including sub-authorization and the scope of authorization covers all promotion scenarios agreed in the Agreement), Party A, Party A's affiliates and each platform do not need to obtain any third-party authorization for editing, processing, displaying, promoting, using and creative optimization of the promotional content and live broadcast content, otherwise Party A has the right to refuse Party B's data promotion needs, immediately lay off the content materials being released and require Party B to bear the corresponding responsibilities stipulated in the Agreement. Party B and its customers shall not use or tamper with the promotional content adjusted by the creative optimization

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function outside the scope of the purpose agreed in the Agreement.

(6) Party B shall fulfill reasonable and necessary prudential security obligations to ensure the legality and security of the content it promotes, and ensure that it will not provide any content materials containing malware, spyware or any other malicious code in data promotion, and there will be no violation or circumvention of any laws, regulations, rules and regulations, national standards and platform rules.

4. Promotional content and qualification review

(1) Party B shall use the duty of high care that professionals can fulfill to review the promotional content and qualifications to be released by itself, so as to avoid any violations of laws and regulations as much as possible.

(2) Party A will review the promotional content and qualifications submitted by Party B in accordance with relevant laws, regulations and rules and codes, as well as data promotion rules. Party B understands and confirms that: 1) the data promotion rules and review results are time-sensitive, and the review results of the same promotion qualification and content may be different in different periods; 2) In order to ensure the overall compliance of the promotional content, Party A and the data promotion platform have the right to review the promotional content before and during the data promotion period, and take offline measures and corresponding restrictive measures for the promotional content and behaviors that violate laws, regulations and platform rules .

(3) Party A's review and final delivery do not reduce Party B's responsibility to guarantee the authenticity and legality of the promotional content, relevant qualifications, promotion products, promotion behaviors, and performance behaviors. Party B shall bear all legal responsibilities for any controversies, appeals, and disputes arising from Party B's promotional content, promotion products, promotion behaviors, and performance. If Party A and its affiliates suffer any losses (including but not limited to any third-party claims, advance compensation, or state agency penalties, etc.), Party B shall fully compensate Party A and its affiliates for all losses suffered as a result. At that time, Party B shall not refuse to bear the liability for compensation in accordance with the Agreement because the promotional content, relevant qualifications, etc. have been reviewed, released by Party A or the data promotion platform, or provided by other third parties.

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(4) Regardless of whether it is within the scope of review responsibility of Party A or the data promotion platform, once Party A discovers that Party B and its customers, including but not limited to their content materials, promotion products, data promotion behavior, performance behavior, promotion association with Party B or Authorized cooperation accounts, relevant personnel of Party B and its customers (including but not limited to operators, executives, spokespersons), and use of relevant functions and services of the data promotion platform, etc.: 1) are offline or in other restricted states; or 2) violate relevant laws and regulations and platform rules or are likely to lead to violations of laws and regulations, or hinder the order of the platform or infringe on the rights and interests of consumers or third parties, or seriously violate social public order and good customs; or 3) have illegal, negative events or other improper acts being reported or investigated by competent authorities, Party A has the right to immediately suspend the delivery and take corresponding restrictive measures, and at the same time has the right to require Party B to compensate Party A and its affiliates for all losses; Party A reserves the right to unilaterally terminate the Agreement according to the seriousness of the foregoing circumstances.

(5) If, due to the reasons of Party B or its customers, including but not limited to content materials, promotional products, data promotion behaviors, performance behaviors, accounts related to or authorized cooperation with Party B's promotion, personnel related to Party B and its customers (including but not limited to operators, senior management personnel, spokespersons), and the use of data promotion platform related functions and services, Party A receives investigations from competent authorities or complaints from third parties, or Party B or its customers complain to other third parties, Party B agrees that Party A will provide Party B's information in cooperation under the Agreement, including but not limited to company entity information, data promotion information, etc., to competent authorities or third parties. At the same time, Party B shall cooperate to resolve the above-mentioned investigations, complaints, and disputes. If a third party complains that Party B, Party B's customer and Party B's promotional content infringe its legal rights, Party B shall provide counter-notice and preliminary evidence as required by Party A to prove that it does not constitute infringement, and Party A has the right to provide the relevant qualifications and other supporting documents provided by Party B. If Party B refuses to provide or provides

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insufficient evidence to prove that it does not constitute infringement, Party A has the right to terminate the Agreement or suspend the release and require Party B to pay 20% of the corresponding data promotion service fees or 30,000 yuan (whichever is higher) liquidated damages. If the liquidated damages are not sufficient to make up for the losses of Party A and its affiliates, Party B shall continue to compensate.

Article 5 Data Statistics

1. Party A and Party B confirm that all data under the Agreement (including but not limited to data promotion information, release time, page views, and clicks, etc.) shall be counted by Party A and used as the basis for settlement. Party A guarantees that the statistical data are objective and true. During the cooperation period of the Agreement, every data promotion period is a cycle. If Party B has any objection to Party A’s performance (including data promotion), it shall clearly submit it to Party A in written form (valid in the form of e-mail, accompanied by corresponding materials, such as webpage copying, etc.) within 5 natural days after the end of the data promotion period. If Party B fails to raise an objection in the written form within the above time limit, it shall be deemed that Party B has no objection to the data promotion, implementation and corresponding expenses.

2. Party B shall only monitor and make statistics on the data promotion services supported by Party A and the data promotion types and resources opened by Party A in accordance with the Agreement and the Order/Scheduling Agreement. Party B and the third-party statistical agency entrusted by Party B in compliance with provisions hereof shall keep strictly confidential the information acquired during data statistics and monitoring, undertake to take necessary management measures and technical means no lower than the general level of the industry to protect the information and data security, and shall not use the information acquired for any purposes other than those agreed herein.

3. In case of non-bidding data promotion:

(1) With the consent of Party A, Party B may choose to entrust a third-party statistical agency notified by Party A or data promotion platform to conduct data statistics.

(2) Based on the data issued by Party A, if the difference between the statistical data of the third-party statistical agency entrusted by Party B and the data of Party A does not exceed 10% (inclusive), the data of the third-party statistical agency shall prevail; if it exceeds 10%,

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Party A and Party B shall review the data together with the third-party statistical agency and correct the error according to the facts. If it is confirmed that Party A’s data is wrong, the data of the third-party statistical agency shall prevail; if not, Party A’s data shall prevail. If no agreement can be reached, the dispute settlement method agreed herein shall apply.

(3) Party A and the data promotion platform have the right to unilaterally adjust, reduce or change the third-party statistical agency and will notify Party B in advance. Only when Party B entrusts the relevant third-party statistical agency in accordance with the latest notice, the error of the non-bidding data promotion data shall be subject to the provisions of the preceding clause. If Party B chooses other third-party statistical agencies other than the third-party statistical agencies stipulated in the Agreement (subject to the latest notice) for monitoring and statistics, the statistical data will be invalid unless Party A agrees in writing.

(4) In the above-mentioned data review, the parties confirm that they do not recognize and support the settlement and investigation rules of “synchronous click monitoring”, “frequency”, “TA%” and “ivt” data of third-party statistical agency, and the rules of Party A shall prevail.

(5) If Party A agrees that Party B builds its own monitoring link to conduct data statistics for non-bidding data promotion, Party B confirms that all data under the Agreement are subject to Party A's statistical data.

4. In case of bidding data promotion, Party B may choose to entrust a third-party statistical agency or build its own monitoring link to conduct data statistics with the consent of Party A, but all data hereunder shall be subject to Party A’s statistical data.

Article 6 Liability for breach of contract

1. Party B shall pay Party A the data promotion service fees (including security deposit, if any) according to the time and amount agreed in the Agreement. If Party B fails to pay the fees in full and on time as agreed, every day it is overdue, it shall pay a late fee at 3 ‰ of the total amount of outstanding fees until the arrears are paid; From the overdue day, Party A has the right to partially or completely suspend Party B's data promotion needs, and immediately lay off the content materials that are being released, without assuming any responsibility. If Party B fails to pay the data promotion service fees in full within 15 days overdue, Party A has the right to terminate Party B's data promotion without assuming any responsibility.

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2. If Party B commits any of the following breaches, Party B shall still pay the corresponding data promotion service fees in full in accordance with the agreement, and Party A has the right to immediately lay off the materials that are being released, take corresponding restrictive measures, and unilaterally terminate the Agreement, and at the same time require Party B to compensate Party A and/or Party A's affiliates for all losses caused by this:

(1) Failure to pay the data promotion service fees in full within 15 days overdue without justifiable reasons;

(2) Violation of confidentiality requirements of the Agreement and/or the users' personal information and data protection requirements, transferring, copying, disseminating, transferring, licensing or disclosing in any way, allowing, providing others to use the trade secrets, software, data and other information of Party A and/or various platforms, or engaging in any commercial or business activities;

(3) Party B and its customers, as well as  their content materials, promotion products, data promotion behavior, performance behavior, promotion association with Party B or Authorized cooperation accounts, relevant personnel of Party B and its customers (including but not limited to operators, executives, spokespersons), and the use of data promotion platform-related functions and services, etc., are offline or restricted, violate relevant laws and regulations and platform rules, or will likely lead to violations of laws and regulations, or hinder platform order or infringe on consumers or third parties, or have serious violations of social order and good customs, or have illegal, negative events or other improper behaviors reported and investigated by competent authorities;

(4) After Party B's link is reviewed or promoted online, Party B modifies the page or program content pointed to by the link, sets up website jumps, sets malicious codes, sets up viruses, maliciously uses self-seizure and suspension to release illegal content, technical confrontation, etc. to display content that violates current laws, regulations, rules and codes, and platform rules;

(5) Party B fails to add a download link in accordance with the method stipulated in the Agreement, or the added download link does not expressly indicate the six-element information to the user, or there are inconsistencies between the content material and the relevant application information, or other misleading or inducing users to download; or

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without the confirmation of Party A, Party B changes the content materials on its own, including but not limited to changing the ordinary products originally promoted to products that require special business qualifications to operate, adding or changing download links and other content;

(6) Party B conducts data promotion beyond the agency scope and agency period agreed in the Agreement;

(7) Party B and/or Party B's affiliates conduct agency or other activities in the name of Party A, Party A's affiliates or various platforms beyond or without the authorization of Party A and its affiliates;

(8) Party B or its customers provide any content materials containing malware, spyware or any other malicious code in data promotion, infringing on the legitimate rights and interests of Party A, Party A's affiliates and/or users;

(9) Party B develops subordinate agents;

(10) A written contract shall be signed between Party B and its customer. Party B has not reviewed the legality and authenticity of the subject qualifications, content materials, etc. submitted by its customer. In the event that Party A notifies Party B, Party B fails to provide Party A with the cooperation contract signed with its customers;

(11) Party B has or may have any of the following circumstances:

1) Suspension of business, suspension of production, closure of business, rectification, reorganization, deadlock, liquidation, takeover or trusteeship, dissolution, revocation or cancellation of business license or bankruptcy;

2) Party B's financial condition deteriorates, serious difficulties arise in operation, or events or circumstances that have a material adverse impact on its normal operation and financial condition occur;

3) Party B or its controlling shareholder or legal representative is involved in major litigation, arbitration, dispute, claim or other legal proceedings, or major assets are seized, sealed up, frozen, enforced or other measures with the same effect are taken, resulting in material adverse effects on Party B's solvency and operating ability;

4) Other circumstances occur to Party B, which, according to Party A's reasonable judgment, may or have had a material adverse impact on Party B's ability to perform this contract or do not

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meet Party A's requirements for agents.

(12) Other serious breaches of contract and violations make it meaningless for Party A to perform the Agreement.

3. If Party B fails to prove that it has fulfilled the review obligations stipulated in the Agreement, and the content materials uploaded/submitted or already released, or its promotional products, data promotion behavior, or performance behavior: 1) infringes on the legitimate rights of third parties; Or 2) There is evidence to prove a significant suspicion of the aforementioned infringement; Or 3) If, due to its content materials or promotional products, promotional activities, performance behaviors, etc., Party A has received genuine and reasonable complaints (including but not limited to third-party complaints, letters, media reports, etc. accusing Party A/Party A's affiliates of infringement, filing lawsuits against Party A/Party A's affiliates, reporting to relevant regulatory authorities, etc.); In the event of any of the aforementioned situations, Party A has the right to terminate the Agreement or suspend advertising, take restrictive measures, and require Party B to pay liquidated damages at 20% of corresponding data promotion fees for the content material/product or 30,000 yuan (whichever is higher). If the penalty is not sufficient to compensate for the losses of Party A and its affiliates, Party B shall further compensate; If the infringement or illegal behavior of Party B results in Party A/Party A's affiliates compensating any third party or being punished by national authorities, Party B shall also fully compensate Party A and Party A's affiliates for the losses suffered as a result.

4. During the cooperation period of the Agreement, if Party B cancels the effective order and the Data Promotion Schedule, it shall notify Party A in writing 30 days in advance and obtain written confirmation from Party A; If Party B fails to cancel in accordance with the aforementioned agreement, it will be deemed as Party B's breach of contract (if Party B shall pay the data promotion service fees before the data promotion but fails to pay, it will be deemed as Party B's breach of contract to cancel the order). If Party B breaches the contract, Party B shall pay Party A the promotion service fees corresponding to the actual resources input and inventory locked by Party A, and corresponding resources  reserved by it. Party B shall also pay Party A liquidated damages at 30% of promotion service fees agreed in the corresponding order and Data Promotion Schedule or

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100,000 yuan (whichever is higher). If the above liquidated damages are not enough to make up for the losses of Party A, Party B shall fully compensate Party A for all the losses suffered therefrom.

5. Unless otherwise explicitly agreed in the Agreement, the data promotion resources under the Agreement can only be used to promote the corporate image, brand, products, or services of the customers (i.e. the actual providers of the promoted products or services) specified in the orders signed by the parties, the Data Promotion Schedule, and other documents. Without the prior written consent of Party A, Party B shall not resell, transfer, or use the data promotion resources under the Agreement in any other way to promote any other customers. Otherwise, Party A has the right to immediately stop publishing or refuse to publish the data promotion content, and Party B shall pay Party A liquidated damages at 20% of the publication price of the data promotion resources used for breach of contract within 5 working days from the date of written notice from Party A. At the same time, Party A has the right to terminate the Agreement in advance. If the above liquidated damages are not enough to make up for Party A's losses, Party B shall continue to make full compensation.

6. Party B confirms that the platform rules, specifications, notices, etc. on data promotion services under the Agreement are publicized and published through the Ocean Advertising Rules Center (https://ad.oceanengine.com/support/content/root?graph Id = 514 & pageId = 297 & timestamp = 1695727420653), which are an integral part of the Agreement; Party B shall strictly abide by laws and regulations, agreements and platform rules in the process of data promotion, otherwise Party A has the right to take restrictive measures, conduct illegal disposal and/or require Party B to bear corresponding responsibilities in accordance with the agreements and platform rules. Party B shall bear the consequences and losses.

7. If Party B violates the provisions of the Management Specifications for Ocean Engine Agents issued by Party A or the data promotion platform (if the name of this specification changes, the notice from the platform shall prevail at that time), Party A and the data promotion platform have the right to follow the latest and effective Management Specifications for Ocean Engine Agents and take corresponding measures for the accounts of Party B and its customers and/or require Party B to bear

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corresponding responsibilities. The resulting disputes, consequences, and losses between Party B and its customers shall be resolved and borne by Party B.

8. If Party A suspends all or part of the data promotion cooperation with Party B or terminates the Agreement due to Party B's violation of the Agreement, Party B understands and confirms that Party A and its affiliates have the right to suspend or cancel other cooperation with Party B and Party B's affiliates, including but not limited to Ocean Engine Qianchuan and Ocean Engine Benditui data promotion cooperation and Ocean Engine Xingtu cooperation.

9. If Party B violates the provisions of the Agreement, in addition to the liability for breach of contract stipulated in the Agreement, Party B shall also compensate Party A and/or Party A's affiliates for the rights protection expenses incurred in realizing their rights, including but not limited to investigation fees, travel expenses, lawyer fees, litigation costs, preservation fees and preservation guarantee fees (or preservation insurance premiums), etc. Party A has the right to directly deduct the data promotion service fees, penalty fees, late fees, compensation fees, and rights protection fees that Party B should pay from the advance payment, deposit, account balance (including cash balance, rebate amount, etc.) of Party B and its customers, rebate and incentive amount of Party B, as well as the settlement fees, balance, deposit, rebate and incentive amount generated by Party B and Party A and/or its affiliates in accordance with other relevant agreements. Party B shall continue to compensate for the shortfall.

10. If Party A delays, interrupts or terminates the data promotion service without justifiable reasons, it shall explain the reasons in writing to Party B. If the agreed data promotion is not launched or is mistakenly launched at the agreed time due to the fault of Party A, Party A shall provide resource compensation for Party B's data promotion in accordance with the principles of "making up one for one error" and "making up one for one omission". That is to say, Party A shall only provide equal value resource compensation to Party B for the erroneous or omitted parts in accordance with the above principles, and Party A shall not be liable for any other responsibilities.

11. If Party A has any of the following breaches, Party B has the right to unilaterally terminate the Agreement:

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(1) Fail to provide data promotion services as agreed within 30 days overdue without justifiable reasons;

(2) Violate the confidentiality requirements of the Agreement;

(3) Other serious breaches make Party B's performance of the Agreement meaningless.

12. Limitation of liability: If Party A violates the obligations stipulated in the Agreement and causes actual losses to Party B, it shall compensate Party B for the direct calculable actual losses, but the maximum amount of liquidated damages and/or compensation paid by Party A shall not exceed 20% of the total amount of the order or data promotion plan involved in the breach of contract.

Article 7 Exemption Clauses and Special Agreements

1. Exemption clauses:

(1) Based on the consideration of the overall interests of the market and business needs, and in order to provide better data promotion services, due to laws and regulations, traffic network platform requirements, changes in data promotion rules and platform rules, Party A's adjustment, improvement of user experience, optimization of advertising quality, standardize the transaction of goods or services after advertising and promotion conversion, protect the legitimate rights and interests of users, changes in national policies and market environment, etc., the data promotion services, service content, service methods, product functions, layout, page design, etc. under the Agreement are all reasonable changes. If the data promotion services under the Agreement cannot be provided in whole or in part due to the above adjustments, changes or downlines, Party A shall not be liable for breach of contract.

(2) When promoting specific forms of data, whether the promotion can be carried out may be affected by the requirements of the traffic network platform and the account status of the cooperative traffic network platform. If the data promotion services under the Agreement cannot be provided in whole or in part as agreed or cannot continue to be provided as a result, Party A shall not be liable for breach of contract.

(3) In order to ensure the normal operation of each platform, if necessary, Party A and its affiliates need to shut down the website and platform for maintenance on a regular or irregular basis. If the services under the Agreement cannot be provided as agreed due

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to such circumstances, Party A will not be liable for breach of contract.

(4) In the event of situations including but not limited to requests from authorized authorities, social public events, media coverage, or major time points, Party A has the right to adjust, suspend, or terminate the data promotion services under this agreement at the corresponding time points without assuming any breach of contract liability.

(5) If Party A is unable to provide data promotion services as agreed due to the above four situations, Party A shall provide data promotion services for the affected part on terms not lower than the original agreement between the parties after the affected situation ends. If Party A cannot publish or provide services based on the actual situation, the parties will settle the service fees according to the actual data promotion situation.

(6) After Party A provides data promotion services as agreed in the Agreement, due to the setting or operation of network terminal equipment, customer applications, websites, small programs, etc. by network end users such as computers and mobile phones, the promotional content of Party B cannot be displayed on the user's network terminal or the data promotion service does not conform to the agreement due to the software and hardware equipment, network configuration and other reasons provided by Party B/the customer on behalf of Party B,  it does not constitute a breach of contract by Party A, and Party A shall not bear any responsibility.

2. Party B understands and agrees that in order to optimize customer experience, the data promotion platform will continue to explore and provide differentiated product solutions to customers with different delivery experiences, and the actual product functions that Party B can use are subject to the page display. At the same time, the data promotion platform may provide estimated data services on some product pages, but such estimated data does not constitute any suggestion or commitment by Party A and the data promotion platform; The accuracy of such data is limited by the level that can be achieved by the existing technology and conditions, product conditions, Party B's operations and changes in the external competitive environment, and is for Party B's reference only. Party B is still obliged to make decisions based on its own business judgment, and bear the consequences, responsibilities and risks of decision-making.

3. Party A, Party A's affiliates and each platform may cite Party B's promotional content as

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data promotion cases to display or participate in awards for the sake of building an excellent case creative library, disseminating excellent cases and operational needs. In this case, it does not constitute a breach of contract by Party A, and Party A shall not assume any responsibility.

4. Party A and the data promotion platform may provide or display content, reference cases, etc. related to promotion content design, copywriting, advertising strategies, product selection, etc. to Party B, or aggregate high-quality creative materials through product functions for Party B's reference (hereinafter collectively referred to as "reference content"). Party B understands and confirms that the intellectual property rights of the reference content belong to Party A or its original obligee, and Party B will not use it in any way that infringes the rights and interests of Party A or third parties. The above reference content is for Party B's reference only, and is not regarded or shall not be understood as any license, authorization, promise and guarantee made by Party A and the data promotion platform for all or part of the reference content. Party B shall decide whether to rely on the reference content according to its own situation. Party B shall ensure that the behavior of relying on and using the reference content is legal and compliant, and shall bear the corresponding legal consequences by itself.

5. Party A and each platform have the right to review Party B's promotional content, promotion products, data promotion behavior, performance behavior, relevant personnel of Party B and its customers (including but not limited to operators, executives, spokespersons), as well as the information published by Party B and its customers on each platform. If Party A and each platform discover or suspect any problems or (potential) risks with the aforementioned matters, entities and behaviors related to or related to the aforementioned matters, they have the right to send inquiries, request corrections to Party B and its customers, or delete information, suspend permissions, take restrictive measures, suspend/stop the services of the Agreement, and have the right to handle Party B and its customers in accordance with the platform rules (subject to platform rules). At the same time, Party A reserves the right to further pursue the relevant responsibilities of Party B and its customers.

6. Special agreement on programmatic PMP advertising: If Party A and Party B carry out

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programmatic PMP advertising cooperation, they shall also abide by the provisions of Annex IV Procedural PMP Advertising Cooperation Terms.

Article 8 Anti-commercial Bribery

In order to protect the legitimate rights and interests of the parties, ensure that the business transactions between the parties conform to the principles of integrity and fair trade, focus on establishing a long-term friendly business partnership between the parties, and promote the sound development of the relationship between the parties, after friendly consultation between the parties, the following terms have been reached:

1. Commercial bribery referred to in this article refers to the fact that in the cooperation between the parties, Party B or its employees give, promise, induce, request or accept  all material and spiritual direct or indirect improper benefits to or from any person, including but not limited to Party A's employees, or influence and/or attempt to influence any person's behavior or decision in his or her position, or improper acquisition and retention of business.

2. Party B or its employees shall not provide, give, promise, induce, demand or accept (gift or non fair value) any direct or indirect benefits outside the scope of cooperation business to Party A's employee, affiliated person or any third party in the name of Party B or individuals, including but not limited to: explicit discounts, hidden discounts, cash, shopping cards, physical objects, securities, tourism, shares, dividends, gifts, entertainment tickets, special discounts or samples, travel, catering, entertainment, cooperation business derivative benefits or other material and non-material benefits paid by Party B.

3. Conflicts of interest mentioned in the Agreement: including but not limited to (1) Party B or its employees shall not provide any form of borrowing to Party A's employees and their affiliates; (2) If Party B's shareholders, supervisors, managers, senior managers, cooperation project leaders and project members are employees of Party A or its affiliates, Party A shall be truthfully and comprehensively informed in writing before cooperation and voluntarily recuse; (3) In the course of cooperation, Party B or its employees shall not allow Party A's employees and their spouses to hold or hold the equity of Party B by a third party on behalf of Party B (except for shares held through public stock exchanges with less than 0.1% of the outstanding equity, through direct or indirect holding of funds without actual control, or through trusts whose beneficiaries are not themselves or related personnel). Party B is

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obliged to disclose to Party A any conflicts of interest that exist or may exist in a timely manner, and cooperate with Party A to take measures to eliminate the possible impact on the cooperation between the parties.

4. Before employing subcontractors or other representatives, Party B shall conduct due diligence on its own to ensure that the other party is a legal and qualified enterprise to perform services. All agreements between Party B and any third party, including but not limited to a subcontractor (whether such subcontractor is of Party B's own choice or appointed by Party A), supplier, service provider or other independent third party with which Party B has a cooperative relationship must contain a declaration or warranty by the third party that it will not give, promise or require, accept any improper advantage to any person for the purpose of influencing or attempting to influence the behavior or decision of any person or for the purpose of obtaining or retaining improper business or other advantages for its company. If the above-mentioned third party and its employees violate the corresponding anti-commercial bribery clauses and affect Party A, Party B will be deemed to have violated the agreement, and Party A has the right to require Party B to bear the liability for breach of contract in accordance with the agreement.

5. "Party B's employees" in the Agreement mean: (1) any director, manager or employee of Party B's company; (2) any director, officer and employee of any subsidiary or related party of Party B's company; (3) any direct or indirect shareholder of the company acting in the name of Party B's company, and/or; and (4) any employee of a direct or indirect shareholder of the company acting in the name of Party B's company. Party B's employees guarantee to comply with the provisions of the Agreement and relevant laws and regulations in all transactions and business conducted with Party A in accordance with the contract. Party B shall resist corruption by its employees and/or any third party. If Party B's employees violate the Agreement, it will be regarded as a violation by Party B, and Party A has the right to require Party B to bear the liability for breach of contract.

6. Party A has the right to consult Party B's financial records related to the transaction agreed in the contract or entrust a professional third party to collect evidence of violations, including but not limited to reviewing relevant financial account books. Audit and supervise data promotion and implementation documents such as data promotion agreements, orders,

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settlement statements, payments and related documents, monitoring reports, data promotion evaluation reports and other related data promotion and implementation documents signed with Party B, and interview relevant personnel. Party B shall maintain an internal control system to ensure that the financial statements and information are accurate and that all activities and expenses related to the contract are reflected in the financial records. Party B shall actively assist and cooperate with Party A in the audit review, and shall not refuse to audit, conceal information or provide false information. If Party A requests Party B to provide information during the investigation or audit process, Party B shall actively cooperate and be responsible for the authenticity of the information provided. Within five years after the rescission or termination of the contract, Party B shall keep complete documents of all financial records and information related to the contract, and Party A shall have the right to copy and preserve the aforesaid records or documents.

7. If Party B violates one of the above agreements or Party A has reasonable reasons to believe that Party B has the risk of violating the above agreements, including but not limited to Party B's refusal to cooperate with audit review, inaccurate financial records, false statements or suspicion of accepting bribes, Party A has the right to unilaterally terminate part or all of the contract with Party B, and the contract will be terminated immediately when Party A sends notice to Party B. Party B shall bear the full liability for breach of contract, and Party B shall pay Party A 30% of the total contract amount involved (if relevant laws and regulations have a higher proportion, such higher proportion shall apply) as liquidated damages. If the aforementioned liquidated damages amount is less than RMB100,000, RMB100,000 shall be paid. Party A has the right to deduct the liquidated damages borne by Party B directly from the contract sum. Party B shall indemnify, defend and hold Party A harmless from all losses, damages, claims and fines incurred by Party A. If Party B violates the Agreement, Party A reserves the right to pursue Party B and the person directly responsible for Party B's civil and/or criminal legal responsibilities.

8.  If any violation or attempted violation of the Anti-Commercial Bribery Agreement, any laws and regulations related to Anti Commercial Bribery, Anti-Corruption, and Anti-Corruption, as well as any behavior of Party A's system, is found in business cooperation, and if Party A's employees or/or their affiliated personnel engage in illegal or disciplinary activities such

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as bribery, embezzlement, asking for benefits, conflict of interest, fraud, leakage of information, dereliction of duty, abuse of power, etc. that infringe upon the legitimate rights and interests of both parties, Party B may report to Party A. Party A shall keep confidential any whistle-blowing behavior and whistle-blower; And for true and effective reporting behaviors and whistleblowers, after the reported incident is verified to be true, Party A will give the whistleblower a reward of 10,000 to 1 million yuan according to the relevant systems of Party A's company and the specific circumstances of the reported incident.

9. Party A's special reporting and complaint channel: https://compliance.bytedance.com/report.

Article 9 Confidentiality and Intellectual Property

1. Any information that one party knows and understands the other party as a result of the conclusion and performance of the Agreement is the exclusive information of the other party. Without the prior written consent of the other party, any proprietary information will be kept confidential by either party and shall not be disclosed to any person or entity. Except for the needs of normal performance of the obligations of the Agreement or otherwise stipulated by national laws and regulations.

2. The parties are responsible for confidentiality of the specific content of the Agreement. Without the prior written consent of the other party, neither party shall disclose the cooperation between the parties and the specific content of the Agreement to any third party.

3. Without the written permission of Party A, Party B and Party B's affiliates and their related personnel (including but not limited to operators, legal representatives and executives, etc.) shall not use Party A and/or Party A's affiliates and platforms in their marketing, business cards, documents, websites, external publicity and any other aspects. Otherwise, it will be deemed an infringement. In such case, Party A has the right to suspend or terminate the Agreement and require Party B to take remedial measures (including but not limited to stopping use, offline processing, etc.), announce Party B's breach of contract and require Party B to compensate Party A and its affiliates for all losses caused by this.

4. Party B confirms that Party A, Party A's affiliates and each platform have the right to use the business name, trademark, trade name, brand, logo, logo, domain name and website of Party B and its affiliates in marketing, business cards, documents, websites

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and external publicity.

5. Unless otherwise expressly agreed by the parties, the execution and performance of the Agreement shall not result in the transfer of the original intellectual property rights of the parties.

6. The termination, rescission, revocation or invalidity of the Agreement shall not affect the validity and binding force of this clause on the parties.

Article 10 Force Majeure and Change of Circumstances

1. Party A or Party B shall not be liable for breach of contract if part or all of its obligations are delayed or unable to perform due to force majeure or changes in circumstances, but shall take timely measures to reduce losses caused by force majeure or changes in circumstances. Force majeure includes but is not limited to government regulation, national policy adjustments, terrorist attacks, hacker attacks, natural disasters, public emergencies, wars, power outages, technological adjustments in the telecommunications sector, technical failures, and virus intrusions. If part or all of the agreement cannot be performed or is delayed due to the above-mentioned force majeure event, the parties shall not be liable for any breach of contract between themselves.

2. The following matters are changes of circumstances stipulated in the Agreement:

(1) Termination of the server. In the event of the following circumstances, Party A may suspend the provision of data promotion services without notifying Party B.

1) Irresistible situations caused by non-human factors such as maintenance and overhaul of emergency service equipment.

2) Failure of basic telecommunications services.

3) Termination of line service of the platform.

Party A shall notify Party B within 12 hours after the occurrence of the above situation.

(2) The server of Party A/Party A's affiliates is temporarily unable to operate normally due to an illegal attack, and it cannot be restored to use after Party A/Party A's affiliates tries its best to repair it.

(3) Other major changes in objective circumstances that have occurred after the establishment of the Agreement that are not foreseeable by the parties at the time of conclusion of the agreement and are not caused by force majeure.

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3. If the force majeure event or change of circumstances lasts for 20 days or accumulatively exceeds 30 days within the validity period of the Agreement, either party has the right to unilaterally terminate the Agreement in advance by written notice.

Article 11 Supplement, Variation and Termination of the Agreement

1. For matters not covered in the Agreement, a written supplementary agreement can be signed after mutual agreement between the parties. The written supplementary agreement sealed by the parties has the same legal effect as the Agreement. If there is any conflict between the supplementary agreement and the Agreement, the supplementary agreement shall prevail.

2. During the implementation period of the Agreement, after Party A notifies Party B in writing one month in advance, Party A has the right to terminate the Agreement and Party A does not need to bear any responsibility.

3. Regardless of whether the Agreement is terminated in advance or not, the parties must complete the financial settlement and clarify their respective responsibilities. Party B shall indemnify Party A for all losses caused by Party B's termination of the Agreement without authorization.

4. At the expiration of the term of the Agreement, if the parties agree and sign a written agreement, the Agreement may be renewed.

5. If any provision of the Agreement is null and void or unenforceable in whole or in part by reason of a breach of law or government regulation or otherwise, such provision shall be deemed deleted. However, the deletion of this clause shall not affect the legal effect of the Agreement and other provisions.

Article 12 Commitments and Guarantees

1. Party A guarantees that it has the legal qualifications to engage in data promotion and the authority to sign the Agreement. Party B agrees that if Party A's business scope changes, main business changes or there are other reasonable reasons, without affecting Party B's rights and obligations, Party A has the right to transfer all of its unfulfilled rights and obligations under the Agreement at any time to Party A's affiliated company, but Party A shall notify Party B in writing. "Party A's affiliate(s)" means any enterprise that controls or is controlled by Party A, or is jointly controlled by Party A in the same entity. "Control" means, with respect to any party: directly or indirectly 1) holding more than 50% of such party's

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equity, shares, registered capital or other types of relevant interests; Or 2) control the party's management or decision-making by owning more than 50% of the party's voting rights, or through contractual arrangements or otherwise.

2. Party B guarantees that it has the legal and valid qualification and authority to promote Party B's products and sign the Agreement. Party B shall sign the Agreement in its own name and directly bear all legal responsibilities regardless of the ownership of Party B's products.

3. Party B and its employees shall not cause any actual or potential damage or conflict to the interests, goodwill and brand image of Party A, Party A's employees and Party A's affiliates, otherwise Party A has the right to terminate the Agreement immediately after notifying Party B in writing, does not need to bear any liability for breach of contract, and Party A has the right to pursue the legal responsibility of Party B and its employees.

4. Without the written permission of Party A, Party B shall not transfer to agent, and shall not develop subordinate agents. Party B shall not rely on its relationship with any third party as a reason for non-performance of the Agreement. Regardless of whether the Agreement is terminated or terminated, the disputes between Party B and its customers shall be resolved by Party B and its customers themselves and shall bear the corresponding responsibilities. If Party B fails to properly resolve the disputes between Party B and its customers, Party A has the right to temporarily withhold Party B's deposits, prepayments, rebates and incentive amounts, as well as the account balance of Party B and its customers (including cash balances, rebates, etc.), Party A will not directly intervene in disputes between Party B and its customers. If any losses are caused to Party A and its affiliates, Party B shall bear the liability for all losses.

5. During the validity period of the Agreement, if any employee of Party A or Party A's affiliates becomes a shareholder or senior manager of Party B, Party B promises to notify Party A in writing immediately, otherwise Party A has the right to terminate the Agreement in advance at any time without assuming any responsibility.

6. Party B shall not directly or indirectly induce, require, persuade, or encourage employees of Party A and/or Party A's affiliates to resign; It is not allowed to establish or attempt to establish with the employees of Party A and/or Party A's affiliates, including but not limited to employment relationship, business cooperation relationship or any other relationship

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directly or indirectly related to the interests and business of Party A and/or Party A's affiliates. If Party B violates this clause, Party A has the right to terminate the Agreement immediately, and Party B shall pay Party A 100,000 yuan as liquidated damages. If the liquidated damages are not enough to make up for the losses of Party A and its affiliates, Party B shall continue to compensate.

7. Party B shall maintain a fair competition environment in the market and the unified management system of Party A, and there shall be no vicious competition or other unfair competition between Party B and other agents of Party A.

8. In the process of cooperation between the parties, one party shall ensure the quality of service, and shall not damage the overall market image of the other party, nor shall it engage in other behaviors that damage the interests of the other party.

9. Party B undertakes that if the Agreement is terminated or terminated with Party A without the written consent of Party A, it shall not expressly or imply to others that it has any substantive contact with Party A, or otherwise expressly or imply that it is Party A's agent or Ocean Engine's agent.

Article 13 Dispute Settlement

1. The place where the Agreement is signed is Haidian District, Beijing. Any disputes arising from the Agreement shall be resolved through friendly negotiation between the parties. If the negotiation fails, either party has the right to submit the dispute to the People's Court of Haidian District, Beijing for litigation.

2. The conclusion, performance and interpretation of the Agreement shall be governed by the laws of the People's Republic of China.

Article 14 Notification and Service

1. Unless otherwise agreed in the agreement, the notices, documents, and materials issued by the parties due to the conclusion and performance of the Agreement (including but not limited to the "Regulations on the Management of Ocean Engine Partners Using Giant Engine and Related Brands, Management Specifications for Ocean Engine Agent, platform rules, Data Promotion Schedule, Data Promotion Order, Data Promotion Settlement Statement, third-party monitoring agency adjustment or change notice, etc., the name of the document may change, subject to the name of the document actually adopted at that time) is an integral

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part of the Agreement and has the same legal effect as the Agreement. The aforementioned notices, documents, and materials can be delivered by mail, email, WeChat, contact number, or platform site letter notification, publicity, and other instant messaging tools recognized by the parties at the address listed on the homepage. If it is delivered by mail, delivery to the postal address shall be deemed to be delivered; If it is sent by e-mail, it shall be deemed to have been delivered within 24 hours from the time of dispatch; If notices, policies, and regulations are sent through the platform, they will be deemed to be delivered and effective when the platform publicizes them, and will be binding on Party B.

2. For disputes arising from the Agreement, the parties confirm that the judiciary may use any or more of the contact information agreed in the Agreement (including but not limited to the contact address listed in the agreement by mail, email or mobile phone SMS) to serve litigation legal documents, and the time of service shall be the first to be served in the above service methods. The parties jointly confirm that the above-mentioned service methods are applicable to all judicial stages, including but not limited to first-instance, second-instance, retrial, execution and supervision procedures. At the same time, the parties guarantee that the delivery address is accurate and valid. If the provided address is inaccurate, or the changed address is not notified in time, so that the legal documents cannot be delivered or are not delivered in time, they shall bear the legal consequences that may arise therefrom.

3. For matters not covered in the Agreement, Party A and Party B can confirm through the email address of the contact person listed on the home page. If one party changes its contact person or contact information, it shall notify the other party in writing 5 working days before the change, and the changing party shall bear all the consequences of failing to notify in time.

4. If either party sends a notice to the other party in various ways, the date on which the other party receives the notice shall be the date of service of the notice.

Article 15 Entry into Force of Agreement

1. The Agreement and the annexes to the Agreement shall take effect on the date of affixing the seals of the parties.

2. The Agreement is made in triplicate, with Party A holding one copy and Party B holding two copies, all of which have equal legal effect.

(No text below)

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Party A: Xiamen Jinri Toutiao Information Technology Co., Ltd.
(Seal of Service Provider)
Date: January 1, 2024

Party B1: Beijing Baosheng Technology Co., Ltd.
(Seal of Customer 1)
Date: January 1, 2024

Party B2: Beijing Baosheng Network Technology Co., Ltd.
(Seal of Customer 2)
Date: January 1, 2024

Annexs:

Annex 1: Data Promotion Order

Annex 2: Data Promotion Settlement Statement

Annex 3: Personal Information Protection Commitment Letter

Annex 4: Procedural PMP Advertising Cooperation Terms

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Annex 1: For style reference only, at that time, it is subject to signature or email confirmation

Data Promotion Order

Agent:
Customer:
Project:
Cycle:
Data promotion service provider:
Sales:	Unit: Yuan

Traffic Network Platform

Site

Type

Promotion Info

Ad size

Rotation

Reserve Rate

Target Info

Sales Type

Spots

Unit

RMB Unit Rate Card

RMB Unit Price After D

RMB Total Rate Card

Dis%

RMB Total Net Cost

Expt. Unit Clicks

Expt. Total Clicks

Expt.CPM

Expt.CPC

Expt.CTR

Whether monitoring is supported

MM/2024

Two

Three

Four

Five

Six

27

28

29

30

31

i

No

No

No

Total of advertisement samples

Total Delivery/Replenishment

Total net price

Out-of-pocket amount

VAT

Remark

1、 2、 3、 Matters not mentioned in this order are subject to the publication of the data promotion service party and the data promotion business cooperation agreement signed by the parties.

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Annex 2:  For style reference only, and sign according to this style at that time

Data Promotion Settlement Statement

Party A provides data promotion services for Party B according to the cooperation agreement with the contract number (the specific contract name is subject to the actual signed name, hereinafter referred to as the "original agreement").

Published: 2024/mm/dd-2024/mm/dd

Project summary:

Project number	Project name	Start release time	End release time	Amount
/	/	/	/	/

Total amount of fees (tax included, in figures):/

Total amount of fees (tax included, in words):/

Total VAT amount (in figures):/

Total VAT amount (in words):/

Amount excluding tax (in figures):/

Amount excluding tax (in words):/

Note: VAT amount is subject to the amount shown in the actual invoice, and the total amount including tax remains unchanged.

Party B shall make payment based on the original agreement signed by both parties. The data promotion expenses incurred in this settlement statement shall be paid to the bank account of Party A as agreed in the original agreement. Party B has confirmed the accuracy of the data promotion information, publication time, frequency, amount, etc. related to the project involved in this settlement statement. Party A shall provide Party B with legal and valid invoices of the same amount in accordance with the content agreed by the parties.

Party B's invoice title:/

This settlement statement has the same legal effect as the original agreement.

Party A:	Party B:
(Seal)	(Seal)
Date: MM/DD/YY	Date: MM/DD/YY

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Annex 3: Personal Information Protection Commitment Letter

Personal Information Protection Commitment Letter

In order to comply with the provisions of relevant laws and regulations on personal information protection, when Party B entrusts Party A to provide data promotion services for its agent customers, the personal information of relevant data subjects will be fully protected. Party A, Party B and the customers represented by Party B may jointly, individually or accept entrustment to process relevant personal information. In the process of processing the aforementioned personal information, Party B and Party B's agent customers are obliged to abide by the provisions of laws, regulations, rules and national standards related to personal information protection (hereinafter referred to as "data protection requirements"), and perform personal information protection, data security and confidentiality obligations.

"Personal information" under the Commitment Letter refers to: various information related to identified or identifiable natural persons recorded electronically or in other ways, but does not include anonymized information; the "processing" of personal information includes the collection, storage, use, processing, transmission, provision, disclosure, deletion, etc. of personal information.

1. Party B hereby promises and guarantees that it will require its customers to abide by data protection requirements and fulfill obligations such as personal information protection, data security and confidentiality with the following agreements not lower than the Commitment Letter:

1) The processing of personal information by customers shall comply with the provisions of data protection requirements, strictly abide by the principles of legality, legitimacy, necessity and integrity of personal information processing, and only carry out corresponding processing activities within the scope of data promotion cooperation. In the process of processing personal information, customers shall follow the principles of openness and transparency, disclose personal information processing rules to relevant data subjects, and clearly state the purpose, method and scope of processing. The data processing shall have a clear and reasonable purpose, and shall be directly related to the processing purpose and carried out within the minimum range required to achieve the processing purpose. Data processing should be carried out within the scope of authorization of the data subject, in a way that has the least impact on the personal rights and interests of the data subject, and

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should avoid adverse effects on the rights and interests of the data subject due to inaccurate and incomplete personal information. If the relevant personal information is processed beyond the scope of authorization of the data subject, the customer shall separately obtain the authorization and consent of the relevant data subject in accordance with the provisions of the data protection requirements, unless otherwise stipulated in the data protection requirements.

2) If the customer is involved in transmitting personal information to the data promotion platform, the customer must comply with the data protection requirements before transmitting the relevant personal information. If the customer's affiliates, partners or other third parties are involved in providing customer data to the platform, the customer shall sign an authorization agreement with its affiliates, partners or other third parties to ensure that the data sender has the legal and valid right to send data to the platform, and the platform has the right to receive relevant data. Unless otherwise stipulated in the data protection requirements, the customer has fully informed the data subject of the statutory content stipulated in the data protection requirements, such as the type, processing purpose, and processing method of the personal information involved in the personal information transmitted by the customer and the aforementioned third party to the data promotion platform, and has obtained the authorization and consent of the data subject.

3) If the customer uploads relevant personal information to the data promotion platform and uses the data promotion service, it will not violate the data protection requirements, and will not damage the legitimate rights and interests of Party A, Party A's affiliates, relevant data subjects or subjects with relevant rights to the data, nor will it exceed the scope that the data subject or the subject with relevant rights to the data has authorized and agreed to the customer and any other relevant parties for the relevant processing matters of the customer.

4) If it is necessary for data promotion service cooperation, and the customer is involved in obtaining relevant personal information from the data promotion platform, the customer will follow the data protection requirements, within the scope of authorization of the data subject, and the security rules/policies set by Party A and the data promotion platform, process relevant personal information within the scope of data promotion cooperation and must strictly ensure the security of relevant personal information. Without the written permission

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of Party A, the customer shall not subcontract the relevant personal information processing activities to any third party for processing. Subject to the provisions of this article, the customer shall be fully responsible for the data processing activities of third parties. After the end of the personal information processing activities stipulated in this article, unless otherwise stipulated by laws and regulations, the customer shall delete the relevant personal information in a timely manner.

5) Unless the written consent of Party A is obtained and strictly limited by the data protection requirements, the scope of authorization of the data subject, and the scope of the purpose of data promotion cooperation, the customer will not share, provide, transfer or publicly disclose relevant personal information to third parties, nor will the customer further process the relevant personal information beyond the scope mentioned above. Subject to the provisions of this article, if it is really necessary to transmit relevant personal information to a third party, the customer undertakes that such processing behavior will not violate the data protection requirements, and will not damage the legitimate rights and interests of Party A, Party A's affiliates, relevant data subjects or subjects with relevant rights to the data, nor will it exceed the scope that the data subject or the subject with relevant rights to the data has authorized and agreed to the customer and any other relevant parties for the relevant processing matters of the customer. The customer will strictly restrict the processing behavior of the third party and ensure the security of personal information.

6) In the process of data promotion cooperation, customers may use the relevant technical services of Party A or Party A's affiliates (such as website building services). If the relevant technical services involve the collection or further processing of personal information of users/customers of Party A or Party A's affiliates on  any platform/product or other scenarios of Party A or Party A's affiliates, the customer shall ensure that the relevant processing behavior fully complies with the provisions of the data protection requirements, including but not limited to: the customer shall provide the relevant data subject with privacy policies or similar documents in accordance with the provisions of the data protection requirements, inform them of the data type, processing purpose, method and other statutory content stipulated in the data protection requirements, and obtain the authorization and consent of the relevant data subject, and at the same time provide the real and effective

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contact information of the customer, so as to facilitate the relevant data subject to exercise the relevant rights under the data protection requirements.

7) Customers will not engage in the following behaviors or activities that violate laws and regulations and violate social good customs through the data promotion services under the Agreement and/or use the processing activities of relevant data:

a) Any act or activity related to obscenity, pornography, gambling, superstition, terror, violence, fraud, etc.

b) Any act or activity related to the expression of discrimination against nationality, race, religion, disability, sickness, etc.

c) Any use of neutral technical analysis services (including analysis reports or other services) provided by Party A or Party A's affiliates to further create a list of audiences related to the above information or labels, produce any analysis reports or use them to promote customers' products/services or for other purposes.

8) One of the purposes of Party A's data promotion services is to provide appropriate advertising and promotion services for the audience, and to provide relevant customers with promotion channels for products/services, rather than improperly digging and intruding on the specific real identity of the relevant audience. Therefore, Party A does not allow to use personal information or label categories (such as names and ID numbers) that reflect the real identity of the audience. At the same time, Party A does not want customers to take advantage of the plight of the audience to obtain further commercial benefits through data promotion services. Therefore, Party A does not allow the use of personal information or label categories related to the personal plight of the data subject to infringe or unfairly treat personal rights. In addition, audiences affected by social prejudice and discrimination may be negatively affected by chain effects in obtaining information and cannot be treated fairly. Therefore, Party A is not allowed to use biased and discriminatory personal information or labels, and based on this use data promotion services for specific categories of products or services based on the above-mentioned personal information or labels.

9) Customers will not violate the provisions of data protection requirements and attempt to obtain relevant personal information in an illegal manner or in a manner that violates the security rules of Party A and the data promotion platform.

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10) In order to comply with the provisions of data protection requirements and for the purpose of protecting the security of relevant personal information, the customer shall take relevant technical measures (such as encryption technology) to ensure the security of personal information during the data transmission and processing, and the customer shall actively cooperate with Party A, processing relevant personal information in a form that meets the data protection requirements.

11) The customer has the necessary organizational management system and technical measures that meet the data protection requirements to ensure the security of personal information. If a personal information security incident occurs or may occur (referring to personal information being leaked, damaged, tampered with, lost, unauthorized access and processing, and the resulting infringement of the relevant rights and interests of the data subject), the customer shall immediately notify Party A in writing and take effective remedial measures as soon as possible. If the above-mentioned personal information security incidents are caused by the customer, the customer shall independently handle the resulting disputes (including but not limited to complaints, administrative penalties, and litigation disputes), so that Party A, Party A's affiliates and relevant data subjects are immune from infringement and losses, and the customer shall assume full responsibility.

12) If required by Party A/data promotion platform, the customer shall provide Party A with all necessary information in a timely manner to prove that the customer complies with the data protection requirements and processes personal information within the scope agreed in the Agreement and the Commitment Letter and within the scope authorized by the data subject. The aforementioned necessary information includes but is not limited to: the customer's data security capabilities and the processing of personal information. The information/situation provided by the customer is true and accurate, and there is no falsehood or concealment. Party A has the right to conduct security audits on the customer's data security and data processing, and the customer will actively cooperate.

13) When the cooperation period of the Agreement expires or the data promotion service cooperation is terminated due to any other reasons, the customer promises to delete or destroy all personal information obtained from Party A/data promotion platform, including original data, backup data, etc., and guarantees that it cannot be restored through technical

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means after deletion.

2. If Party B processes personal information during the cooperation process of the Agreement, Party B understands and recognizes that the relevant obligations stipulated in the Commitment Letter will also apply to Party B, and Party B promises to strictly abide by the requirements of the Commitment Letter.

3. If Party B and/or the customer represented by Party B violates the Commitment Letter, it will be regarded as a serious breach of contract and/or infringement. Party B shall bear joint and several liabilities to Party A with Party B's customer. Party A has the right to require Party B and/or the customer represented by Party B to compensate Party A, Party A's affiliates, data subjects or third parties for all losses suffered, and has the right to unilaterally suspend or terminate Party B's data promotion needs and any cooperation with Party B. Party B shall bear all legal responsibilities, and shall be responsible for eliminating the impact and properly solving it.

4. The Commitment Letter shall not be terminated or invalidated due to the invalidity, suspension or termination of the Agreement or data promotion cooperation.

Party B1: Beijing Baosheng Technology Co., Ltd.
(Seal of Customer 1)
Date: January 1, 2024

Party B2: Beijing Baosheng Network Technology Co., Ltd.
(Seal of Customer 2)
Date: January 1, 2024

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Annex 4: Procedural PMP Advertising Cooperation Terms

Procedural PMP Advertising Cooperation Terms

Party A and Party B carry out procedural PMP advertising cooperation. According to the specific cooperation situation, the following terms apply to procedural PMP advertising:

Article 1 Definition

1. Traffic transaction services: Refer to the services provided by Party A or Party A's affiliates for traffic suppliers to demanders, which can include but are not limited to traffic access, material release, release monitoring, financial settlement, etc. The system that provides traffic transaction services is referred to as "traffic transaction system" or "traffic transaction service platform".

2. PMP: Party A provides high-quality advertising space to a limited number of advertisers or advertising operators. The parties agree on transaction content such as unit price and advertising space through offline transactions, and use procedural docking to realize real-time intelligent advertising. The traffic transaction service system that provides this type is referred to as "PMP", also known as Private Marketplace.

3. Demand-Side Platform: It is an online advertising platform service system that provides advertisers with promotional content delivery and optimization service systems, also known as DSP. Under the Agreement, the Demand-Side Platform is Party B or the DSP designated by Party B that conforms to the Agreement.

4. Supply-Side Platform: Refer to a media service platform that integrates media resources and provides procedural advertising allocation and screening for media owners or managers, also known as SSP. Under the Agreement, the Supply-Side Platform is Party A.

5. Audience: The target group that the promotional content hopes to reach.

6. Account: Refer to the unique digital number ("ACCOUNT ID") that identifies Party B or the DSP identity designated by Party B when using the service in the traffic transaction system. The account name and password provided by Party B will be associated with the account.

Article 2 Content of Cooperation

1. Party B can only place procedural advertisements on the traffic transaction service platform through the DSP confirmed by Party A in writing or email and that meets Party A's standards and requirements, and connect with Party A's traffic transaction

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system in accordance with the technical specifications provided by Party A, Party A will provide traffic transaction services in accordance with the Agreement. Party B confirms that Party A has the right to adjust or reduce the DSP that meets Party A's standards and requirements and will notify Party B in advance. This article shall not be deemed or constitute any guarantee provided by Party A to the DSP or any liability for its actions.

2. Party A has the right to adjust the pricing rules and fee payment methods of traffic transaction services according to the actual situation, and relevant adjustments should be communicated with Party B in advance. If Party B has any objection, Party A shall actively seek solutions with Party B. If Party B expresses in writing that it does not agree to the adjustment, Party B may choose to terminate the procedural PMP advertising cooperation.

Article 3 Consumption Requirements and Payment Methods for PMP Advertising

1. On the PMP traffic transaction service platform of Party A, for the traffic sent by the platform, Party B has the right to choose whether to return the advertisement of Party B's customer through the DSP that complies with the Agreement according to the release method. At the same time, each natural month is a settlement cycle for the parties. In each settlement cycle, Party B must ensure that the minimum monthly consumption of its settlement cycle is RMB 100,000. If it is less than one natural month, the minimum consumption is calculated according to one natural month; if Party B fails to meet the minimum consumption standard within a settlement cycle, Party B shall still settle according to the minimum consumption standard agreed in the Agreement. If Party A adjusts the minimum consumption amount, Party B shall be notified in a timely manner. The parties confirm that they will follow the content of Party A's latest notice.

2. The release methods include but are not limited to BPG (private procedural transaction advertisements with fixed position guarantee and no return), PDB (private procedural transaction advertisements with fixed position guarantee), PD (private procedural transaction advertisements without fixed position guarantee and self-selected volume), etc., among which the release method of BPG and PDB should be settled by the Data Promotion Order

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signed or confirmed by the parties via email; the Data Promotion Order confirmed by the parties under the PD release method is for reference only, and the final settlement is based on the actual consumption amount of Party B.

3. Unit price agreement: The unit price is subject to the current publication price of Party A.

4. Payment method:

(i) For PMP advertising promotion in procedural release, Party B shall pay Party A the data promotion fee according to the following agreed period:

Payment before data promotion (i.e. prepayment): Party B shall pay the promotion service fees to Party A before data promotion. Each natural month is a settlement period. The parties shall timely calculate the promotion service fees incurred in the previous settlement period within each settlement period. Party A shall timely provide Party B with an invoice of the same amount upon receipt of the sealed order or Data Promotion Service Fee Statement issued by Party B.

Article 4 Implementation Terms of Traffic Transaction Service Platform

1. Party B can only release the promotional content of Party B's customers on Party A's traffic transaction system, and shall not transfer the promotion resources in the Agreement to publish the promotional content of other platforms/systems.

2. Party B guarantees that Party B and its customers are legally qualified to publish the corresponding promotional content. The relevant goods and services in the promotional content should be legal, comply with relevant national standards and regulations, and have passed the corresponding administrative approval. They are not counterfeit and shoddy products and do not infringe any legitimate rights and interests of third parties. Party B is responsible for reviewing the relevant certification materials that its customers should provide according to law to ensure the legality of the promotional content.

3. Party B ensures that it has obtained the consent of its customers to publish promotional content through Party A's traffic transaction system, and Party B shall review the government approval and relevant supporting documents required by customers to publish promotional content in accordance with the law.

4. Party B shall review and submit supporting documents related to the promotional content according to the requirements of Party A before launch, including but not limited to

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customer's real information, trademark right certificate or authorization document, copyright certificate or authorization document, portrait right authorization certificate, approval document number, inspection report and other qualification certification materials to prove the authenticity, legality and validity of its promotional content.

5. Party B guarantees that the qualifications and promotional content comply with all applicable laws, regulations, rules, relevant binding policies and the regulations of Party A and Party A's affiliates on the promotional content (including but not limited to the Management Specifications for Ocean Engine Data Promotion, Management Specifications for Ocean Engine Agents).

6. Party A will review and spot check the promotional content uploaded by Party B. If it fails to meet the specifications of Party A and Party A's affiliates, Party A has the right to unilaterally take measures such as refusing to publish, stopping the publication of the promotional content, or suspending account transactions. Party B understands and confirms that Party A and the traffic transaction system have the right to provide the supporting documents and promotional content submitted by Party B to the cooperative platform for review in accordance with laws and regulations.

7. If the address of Party B's promotion link is infected by a computer virus, Party A has the right to suspend the release of the promotional content, and at the same time notify Party B to carry out anti-virus activity. The promotional content can be resumed only after Party B implements the anti-virus activity for server and Party A confirms the security of promotion link. The suspension of the promotional content release during this period shall not be regarded as a breach of contract by Party A. The loss of the suspension of the promotional content shall be borne by Party B. If Party A does not supplement the release, Party B shall still pay Party A the full service fee in accordance with the contract.

8. In order to protect the rights and interests of Party B, Party A may suspend the provision of traffic transaction services and notify Party B when abnormal activities are found in Party B's own systems and accounts.

9. Party B guarantees that the uploaded promotional content is consistent with the content of the landing page, and the overall effect will not cause consumers to misunderstand. Within the effective display time of the promotional content, the landing page shall not be changed.

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10. If the promotional content of Party B or the DSP designated by Party B violates the Agreement, Party A and the cooperative platform have the right to refuse to publish or delete it at any time after publication, and set the system not to show all the promotional contents uploaded by Party B or the DSP designated by Party B, even if Party B has successfully bid. At the same time, Party A has the right to require Party B to pay liquidated damages according to the standard of 5,000 yuan for each piece of illegal information, and Party B will pay the liquidated damages separately. If Party A and/or the cooperative platform lose more than 5,000 yuan due to Party B or Party B's designated DSP information breach of contract, Party B shall make additional compensation within 5 working days.

11. Advertising data statistics: The same as the non-bidding data promotion data statistics in Clause 3, Article 5 of Part II "General Terms" of the Agreement.

Article 5 Rights and Obligations of the Parties

1. Party B shall carry out operations such as recharging, quoting, and uploading promotional information in accordance with the specifications published by the traffic transaction system. Any losses caused by Party B's improper operation shall be borne by Party B. Improper operation includes but is not limited to failure to follow the instructions and prompts, failure to perform operations in time, disclosing passwords, bypassing security programs, and using malicious computer programs.

2. Party B understands and agrees that Party A and Party A's affiliates have the right to save Party B's information on the server of Party A/Party A's affiliates in accordance with the law (including but not limited to the information release location selected by Party B, the information content released by Party B, etc.).

3. Party B confirms and agrees that Party A will not make any express or implied commitments to the audience visits, promotion effects, business performance, etc. that Party B can obtain by using traffic transaction services.

4. If Party B violates any guarantee or commitment of the Agreement, once Party A/cooperative platform discovers, Internet audiences file complaints against Party B, or relevant management departments investigate, in addition to handling as agreed herein, Party A has the right to unilaterally terminate Party B's services without any responsibility.

5. Party B shall provide Party A with the true and accurate identity, address, promotion

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qualification and other information of its customers. Party B can enter the above information through the API or traffic transaction system provided by Party A or other methods required by Party A for Party A to check from time to time or provide it to cooperative platforms and regulatory authorities. If Party B fails to submit in time or the submitted materials are incomplete or inaccurate, Party A has the right to immediately offline the promotional content being launched and refuse to release all the promotional content of the customer.

6. If Party B modifies the data of its account in Party A's traffic transaction system, it should apply to Party A and modify it after Party A verifies it.

7. The advertising content published and submitted by Party B on Party A's traffic transaction service platform must indicate the source of the advertisement.

8. If Party A breaches its obligations stipulated in the Agreement and causes losses to Party B, the maximum amount of compensation shall be the bid price of Party B at the time of bidding (the highest budget limit). If Party B breaches its obligations stipulated in the Agreement and causes losses to Party A, Party A's affiliates and/or cooperative platforms, and other related third parties, Party B shall bear the liability for compensation for losses and Party A has the right to immediately suspend or terminate cooperation with Party B.

9. When Party B conducts data promotion on Party A's traffic transaction service platform, it must follow the platform rules (including but not limited to Management Specifications for Ocean Engine Agents, Management Specifications for Ocean Engine Data Promotion, operation specifications, assessment rules). When the platform rules are updated, Party B can be notified through website publicity, email, site notification, etc. If Party B violates Party A's platform rules during its promotion and advertising, Party A and the traffic transaction service platform have the right to take corresponding restrictive measures on Party B and Party B's accounts in accordance with the platform rules, require Party B to bear liquidated damages or compensation, or suspend and terminate cooperation with Party B and pursue Party B's liability for breach of contract.

10. Party B shall not change the promotional content page privately during the release process. Once found, Party B shall be liable for breach of contract. Party B shall bear the liability for liquidated damages of 20,000 yuan for the first violation, 100,000 yuan for the second violation, 500,000 yuan for the third violation, and Party A shall have the right to

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permanently stop cooperation with Party B for the fourth violation. If Party B changes the promotional content page without permission, resulting in the content being investigated by relevant administrative agencies for violations of laws and regulations, Party B shall immediately cooperate with Party A to make a truthful statement about the aforementioned situation, so as to exempt Party A from liability and bear the resulting adverse consequences. If the above-mentioned liquidated damages are not enough to compensate Party A and Party A's affiliates for losses, Party B shall continue to compensate.

11. Party B and its DSP interface service provider shall not engage in unfair competition by providing any traffic hijacking that includes malicious programs, spyware or any other form of traffic hijacking. If Party B and/or its DSP platform's traffic hijacking behavior harms the legitimate rights and interests of Party A and/or Party A's users/customers, Party A has the right to request Party B and its DSP to bear all legal liabilities.

12. Party B shall classify the advertisers and promotional content required by Party A, the traffic service platform and the cooperative platform (Party A, the traffic service platform and the cooperative platform have the right to make adjustments based on various factors such as business needs, market changes, laws, regulations and regulatory requirements, and Party B shall also abide by the adjusted requirements). It promises not to use customers and promotional content prohibited by the cooperative platform for advertising bids on the cooperative platform. Any loss caused to Party A, Party A's affiliates or cooperative platforms due to violation of the agreement shall be borne by Party B.

13. During the cooperation process between the parties, the traffic transaction system and any information, materials, transaction records, data, etc. provided by Party A are Party A's commercial secrets and all intellectual property rights belong to Party A. Party B guarantees to delete these information and data in a timely manner; unless otherwise agreed by Party A in writing, Party B shall not use the above information and data in any way other than to achieve the purpose of the Agreement, including but not limited to associating (or mapping), copying, disseminating, processing, analyzing, reusing and publishing, nor shall it be provided to a third party in any way, regardless of whether the above information and data are as a whole, separate fragments, or combined with other information and data.

14. Party B agrees that Party A shall not bear any responsibility under the following circumstances:

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(1) The failure to provide the service is not due to the intention or negligence of Party A or the traffic transaction system; (2) Party B and/or any third party suffers losses due to the intentional or negligent actions of Party B or the DPS Platform; (3) Party B violates the Agreement, or violates other agreements, contracts and/or agreements with Party A, or violates Party A's delivery and other platform rules.

(No text below)

Party A: Xiamen Jinri Toutiao Information Technology Co., Ltd.
(Seal of Service Provider)
Date: January 1, 2024
Party B1: Beijing Baosheng Technology Co., Ltd.
(Seal of Customer 1)
Date: January 1, 2024
Party B2: Beijing Baosheng Network Technology Co., Ltd.
(Seal of Customer 2)
Date: January 1, 2024

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EX-4.5

Exhibit 4.5

System Technology Services Agreement

Party A: Guangzhou Juyao Information Technology Co., Ltd. (hereinafter referred to as “Super Inovance Platform”)

Contact: Hu Zhihao

Tel:

Contact email:

Contract mailing address: Small Post Office, 1F, South Tower, Guangzhou Ali Center, No. 88 Dingxin Road, Haizhu District, Guangzhou

Contract recipient: Guangzhou Legal Seal Service Center

Contract mailing tel:

Party B: Beijing Baosheng Technology Co., Ltd. (hereinafter referred to as “DSP”)

Contact: Li Cheng

Tel:

Contact email:

Contract mailing address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

Contract recipient: Li Cheng

Contract mailing tel:

The validity period of the Agreement is from January 1, 2024 to December 31, 2024. Within 30 working days before the expiration of the cooperation period, if either party proposes to terminate the Agreement in writing (including mail), the agreement will be automatically terminated upon expiration. If neither party proposes to terminate the Agreement, the validity period of the Agreement will be automatically extended for one year. The validity period of the Agreement can only be extended once during the cooperation period. After friendly negotiation,

the parties reached the following agreement on the release of DSP-designated network information by DSP using Inovance ADX bidding trading system:

Article 1: Service Introduction and Definition

1.1. All terms not specifically defined in the Agreement shall have the following meanings:

(1) Inovance ADX bidding trading system: Refer to the technical service system developed and operated by Super Inovance Platform and Super Inovance Platform affiliates, which provides DSP with technical services such as network information release management and information maintenance. The network address used by the system is integrated in Inovance e.uc.cn and other addresses enabled by the Super Inovance Platform from time to time. The Super Inovance Platform may adjust the system name, function and network address.

(2) Services/technical services: Refer to the services provided by the Super Inovance Platform to DSP through the Inovance ADX bidding trading system, and support DSP to self-publish network information on relevant network pages of websites provided by the Inovance System according to the conditions selected by it (including but not limited to websites operated or cooperated by Party A and Party A's affiliates, hereinafter referred to as “Inovance Website”).

(3) DSP: Refer to the subject that uses Inovance ADX bidding trading system and Super Inovance Platform technology services. DSP gathers a single customer or a certain number of customers through its own service products, and DSP connects its product system with Inovance ADX bidding trading system to realize the release and management of DSP customers' network information in Inovance ADX bidding trading system and Inovance Website. The types of DSP in the Agreement include customer DSP and three-party DSP, where the customer of the customer DSP is the DSP operator, and the customer of the three-party DSP is the third party other than the DSP operator.

The DSP access method is (d):

a) The customer DSP is directly connected to Inovance ADX, and the customer directly signs a contract with Inovance (that is, DSP direct signing);

b) The customer DSP accesses Inovance ADX through the agent, and the agent signs a contract with Inovance;

c) The three-party DSP is directly connected to Inovance ADX, and the DSP operator directly

signs a contract with Inovance (that is, DSP direct signing);

d) The three-party DSP connects to Inovance ADX through the agent, and the agent signs a contract with Inovance.

When DSP accesses Inovance ADX through an agent, Party B of the Agreement is the agent, and Party B clearly undertakes all legal responsibilities that DSP should bear as the counterparty of the contract, and is directly responsible to Party A of the Agreement, that is, Super Inovance Platform.

(4) Technical service fee: Refer to the service fee that DSP needs to pay to the Super Inovance Platform for using technical services, which can be referred to as “service fee” in the Agreement.

(5) Advance payment for technical service fees: Refer to the fees pre-deposited by DSP in its Inovance ADX bidding trading system account for its future use of technical services. DSP can make payment to the Super Inovance Platform and then the Super Inovance Platform will credit the corresponding amount to its Inovance ADX bidding trading system account. The relevant payment rules are stipulated in the relevant terms in other agreements signed between customers and Super Inovance Platform.

(6) CPM: Refer to the service fee paid by DSP for every 1000 displays of network information. The number of displays means that after the DSP network information is published on the Inovance website page according to the corresponding rules, once the Internet user opens the page, it is a display of the DSP network information (not limited to the same user).

(7) Inovance ADX bidding trading system account: Refer to the unique digital number (“user ID”) that identifies DSP when it uses the service of Inovance system. The username and password provided by the DSP will be associated with the account. The same account can be associated with multiple login user names in the future (the specific time provided is subject to the notification from the Super Inovance Platform). If a DSP customer already has an Inovance account in the Inovance system, he/she still needs to create a new Inovance ADX bidding trading system account.

1.2. All titles used in the Agreement are for convenience of wording only and should not be used to interpret the rights and obligations of the parties under the Agreement.

Article 2: Service Content

2.1. DSP will connect DSP's own product system with Inovance ADX bidding trading system in accordance with the corresponding technical specifications, and the Super Inovance Platform will provide technical services in accordance with the Agreement.

2.2. After the connection between the parties' systems is established, information such as the information release bit of Inovance website will be transmitted to the DSP system in real time. DSP can set conditions such as the time period and bid for information release through its own system. At the same time, DSP can set its network information not to appear in certain information bit ranges and other exclusion conditions.

2.3. Inovance ADX bidding trading system will automatically arrange bidding according to the price set by DSP according to the operation and setting of DSP. If the DSP bids successfully, the network information produced by the DSP (that is, the information materials of the DSP, including text, pictures, etc.) will be displayed in the selected network information bit first.

2.4. The network information of DSP will be priced and charged according to CPM, and the Inovance ADX bidding trading system will automatically calculate the corresponding technical service fee from the Inovance ADX bidding trading system account of DSP according to the pricing rules published by the Super Inovance Platform (see the annex of the Agreement). If any information has not been released, the corresponding fee will still be retained in the Inovance ADX bidding trading system account of DSP.

2.5. DSP can query its Inovance ADX bidding trading system account at any time, including querying the latest information display times, information fee balance, etc., and viewing the data reports of information releases that have been carried out.

2.6. The technical services agreed in the Agreement are charged according to the number of times the information is displayed, and the information release is automatically realized through the service system. Therefore, the Super Inovance Platform does not guarantee that within the time period confirmed by the DSP, the network information of the DSP must be displayed or must be displayed until the budget limit of the DSP is consumed. The Super Inovance Platform will not charge a service fee for the DSP network information that has not been displayed.

Article 3: Pricing and Payment of Services

3.1. DSP understands and agrees that the starting price of the service fee for thousands of dispalys may be different at different locations of different pages of Inovance website, at different

locations of the same page, or at different time periods of the same location, and the budget limit for each time may also be different. The starting price of the specific price is adjusted by the Inovance ADX bidding trading system at any time according to the display situation.

3.2. When creating an information release plan, DSP should ensure that there is a sufficient balance in its account and the balance is not lower than the limit stipulated by the Super Inovance Platform, otherwise DSP will not be able to conduct bidding and other operations.

3.3. The Super Inovance Platform has the right to adjust the service charging standards and fee payment methods according to the actual situation, and will announce or revise the rules after the adjustment, and the relevant adjustments will take effect from the date of announcement or rule revision. If DSP does not agree to the adjustment, DSP has the right to terminate the Agreement, otherwise it will be deemed that DSP agrees to implement the Agreement in accordance with the updated plan.

3.4. DSP authorizes the Super Inovance Platform to deduct the service fee payable to the Super Inovance Platform from DSP's account. After Party B submits an invoice application, the Super Inovance Platform issues an official value-added tax invoice to Party B that meets the requirements of the tax authority.

3.5. DSP can log in to its account to view the effect of information release and service fee expenditure. If the difference between the information release data recorded by DSP and the data recorded by the Inovance ADX bidding trading system does not exceed 15%, the parties agree to follow the data recorded by Inovance ADX bidding trading system.

If the data difference is greater than 15%, the DSP has the right to raise a written objection to the Super Inovance Platform within 15 working days after the information is released, and the Super Inovance Platform shall provide relevant information to assist in the investigation within 30 days. After the joint investigation of the parties confirms that the data difference is caused by the fault of the Super Inovance Platform, the parties negotiate to confirm the release of the data and complete the settlement, and the parties negotiate to confirm that the Super Inovance Platform needs to refund, if Party A has issued an invoice to Party B, Party B needs to cooperate with Party A to complete the issuance of the value-added tax red letter invoice, the Super Inovance Platform will complete the refund within 30 days. If DSP has no objection within 15 working days after the information is released or raises an objection after the deadline, it is deemed that DSP has

approved the data recorded by Inovance ADX bidding trading system.

3.6. If the service fee after the actual implementation of the information release plan created by DSP exceeds the account balance, DSP will incur service fee arrears. Any arrears must be paid in full within 30 days from the date of arrears or within the repayment period notified by the Super Inovance Platform (whichever is the shorter of the two), otherwise DSP shall pay liquidated damages for overdue payments at the rate of three thousandths of arrears per day.

3.7. After the expiration of the Agreement, if DSP is still using the Inovance ADX bidding trading system to publish network information and accept the services of the Super Inovance Platform, the terms of the Agreement will still be valid, and DSP must continue to pay service fees to the Super Inovance Platform in accordance with the method agreed in the Agreement..

3.8. The information of Party A's collection account is subject to the information shown by Party B in the “Super Inovance Delivery Platform Finance Center”.

3.9. If the DSP customer has other cooperation agreements with the Super Inovance Platform (hereinafter referred to as the “affiliated agreement”) and the specific settlement terms in the affiliated agreement are different from the Agreement. After the parties have clarified the relevant affiliated agreement, they can separately confirm in writing that the cooperation between the parties will settle the payment in accordance with the prevailing rules of DSP or settle the payment in accordance with other forms of cooperation between the parties.

3.10. Party B shall pay Party A technical service fees and other payables in strict accordance with the time agreed by the parties. Otherwise, for every day of delay, Party B shall pay Party A liquidated damages of three thousandths of the payable fees. If the delay exceeds 15 days, Party A shall have the right to unilaterally terminate the Agreement and pursue Party B's liability for breach of contract.

Article 4: Special Agreement on Network Information

4.1. DSP guarantees that the network information it publishes and submits to the Inovance ADX bidding trading system does not contain any content that violates relevant national laws and regulations and international treaties recognized or acceded to by the People's Republic of China, including but not limited to endangering national security, obscenity, pornography, falsehood, fraud, insult, slander, intimidation or harassment, infringement of other people's intellectual property rights, personal rights or other legitimate rights and interests, and content that violates

social order and good customs, etc., the consequences caused by this shall be borne by DSP itself. If Party A is complained, sued or punished by the competent department due to network information or DSP customer product or service problems, Party B shall bear all expenses incurred by Party A (including but not limited to attorney fees, litigation fees, compensation paid to users by reconciliation or mediation, liquidated damages ordered by the court, compensation, administrative agency punishment, etc.), and cause other losses to Party A, it shall also be liable to Party A.

4.2. DSP promises that the target associated with the network information, such as the carrier to which the information points (such as the target page) and the redirection target (such as the website), shall comply with the provisions of Clause 4.1. DSP ensures that the uploaded network information is consistent with the target content provided by the DSP independently, and the target cannot be changed during the effective bidding period of the information (that is, the display period after the successful bidding).

4.3. DSP ensures that it is legally qualified to publish network information. The relevant goods and services in the network information should be legal, comply with relevant national standards and regulations, are not counterfeit and shoddy products, and do not infringe on the legitimate rights and interests of any third party.

4.4. DSP ensures that it has obtained the consent of its customers to release information through Super Inovance Platform's technical services, and DSP shall review the government approval and relevant supporting documents required by customers to release information in accordance with the law to ensure the legality of information and corresponding products/services. DSP shall retain the above materials for verification by the Super Inovance Platform.

4.5. DSP guarantees that the network information displayed by the Inovance ADX bidding trading system and the associated target of network information that it publishes and submits comply with the requirements of the relevant specifications for the use of Inovance services and ADX services and other relevant rules signed by the parties (if any).

4.6. For the information rejected by the Inovance website (the type of information rejected by the Inovance website will be transmitted to the DSP system by the Super Inovance Platform system), DSP ensures that the rejected information will not be transmitted to the Inovance

website through technical services.

4.7. The page displaying information on the Inovance website and its position, form, size, etc. may be adjusted. DSP recognizes that adjustment does not require DSP's consent or prior notification to DSP.

4.8. DSP shall abide by the normative policies of Super Inovance Platform (the normative policies include but are not limited to pricing rules, settlement methods, technical service processes, customer-related qualifications, upload information and material requirements) and DSP management specifications (the specifications include but are not limited to the management specifications, penalty rules, notices, etc. of relevant partners issued by Inovance Platform or signed and confirmed by the parties separately), Super Inovance Platform has the right to adjust the technical service policies and DSP management specifications according to the actual situation, and the relevant adjustments will take effect from the date of publication or revision of the rules. If DSP does not agree to the adjustment, it has the right to terminate the contract, otherwise it will be deemed that the DSP agrees to implement the new technical service policy or DSP management specification. If the adjustment of technical service policy affects the performance of the Agreement, DSP shall express its understanding for the termination or suspension of cooperation of Super Inovance Platform, and shall not pursue Party A's liability for breach of contract.

4.9. If the behavior of DSP or the network information submitted by DSP or the target associated with the network information violates regulations, policies or the Agreement, the Super Inovance Platform and the Inovance website have the right to refuse to publish or delete at any time after publication, and impose penalties on DSP according to the latest penalty rules of Super Inovance Platform. See Annex 2 for the penalty rules of Super Inovance. If the Super Inovance Platform makes any amendments and updates to the penalty rules, it can notify DSP in writing or email, and the new penalty rules will be implemented after the penalty rules are updated.

4.10. If a third party complains about DSP's information under the Agreement, the content of the link page and the products/services corresponding to the information, Super Inovance Platform has the right to decide whether to immediately stop the service to DSP based on the general judgment of ordinary people. The consequences caused by this are borne by DSP itself.

Article 5: Special Agreement on Technical Services

5.1. DSP can use technical services according to the Agreement, and DSP shall perform operations such as recharge, quotation, and information transmission in accordance with the specifications published by the Super Inovance Platform. Any losses caused by DSP improper operation shall be borne by DSP, including but not limited to failure to follow instructions, failure to operate in time, disclosing passwords, bypassing security programs, using malicious computer programs, etc.

5.2. DSP understands and agrees that the Super Inovance Platform has the right to save DSP information on the Super Inovance Platform server in accordance with the law (including but not limited to the information release bit selected by DSP, the information content released by DSP, etc.).

5.3. DSP understands and agrees that the information display time provided by Super Inovance Platform to DSP is only available for prediction, and Super Inovance Platform does not guarantee that DSP information can be displayed within the listed time, even if DSP has successfully bid.

5.4. DSP confirms and agrees that the Super Inovance Platform does not make any express or implied promises about the number of visits to the information that DSP can obtain by using technical services, business performance, etc.

5.5. DSP understands and agrees that the Super Inovance Platform and its affiliates may also use the Inovance ADX bidding trading system and participate in bidding in accordance with the pricing rules agreed in the Agreement.

5.6. If DSP voluntarily applies for cancellation or termination of technical services, or the amount of DSP account is insufficient and the arrears cannot be repaid in time as agreed, the obligations of Super Inovance Platform under the Agreement will be terminated.

5.7. If DSP violates any guarantee or promise of the Agreement, once the Super Inovance Platform/Inovance website discovers, Internet users file a complaint against DSP, or the relevant management department requests corrections, etc., in addition to handling according to the Agreement, the Super Inovance Platform has the right to decide whether to unilaterally terminate the service to DSP immediately based on the general judgment of ordinary people.

5.8. The services provided by the Super Inovance Platform allow DSP to make personalized

choices and settings through its own system. DSP can choose the information content, information release site, release time, price, etc. Therefore, DSP agrees that it will not object to the information release behavior that the system performs according to DSP's choice, and will not hold the Super Inovance Platform and Inovance website liable for this.

5.9. DSP shall bear full liability for losses caused by DSP's violation of the Agreement on the Super Inovance Platform and/or Inovance website and other relevant third parties (including but not limited to the compensation, litigation fees, attorney fees, notarization fees that must be paid according to law). DSP agrees that Super Inovance Platform has the right to deduct the above compensation amount from DSP's Inovance ADX bidding trading system account, and DSP shall pay the shortfall separately.

5.10. In order to protect the rights and interests of DSP, the Super Inovance Platform can suspend the provision of technical services when abnormal activities are found in DSP's own systems and accounts.

5.11. If required by the Super Inovance Platform, DSP shall provide the Super Inovance Platform with real and accurate identity, address and other information about DSP and DSP customers. DSP can enter the above information by itself through the Inovance ADX bidding trading system, and the Super Inovance Platform can also obtain relevant information through the connection between the parties' systems, or deliver and obtain it in other ways agreed by the parties. When DSP modifies the basic data of its Inovance ADX bidding trading system account, it shall apply to the Super Inovance Platform and modify it after verification by the Super Inovance Platform.

Article 6: Limitation of Liability

6.1. Super Inovance Platform will provide corresponding security measures according to the existing technology to ensure the safe and normal provision of technical services. However, due to possible computer viruses, network communication failures, system maintenance and other factors, as well as possible force majeure events, the Super Inovance Platform cannot guarantee the absolute security of the service and can provide services normally under any conditions. DSP should understand that and the Super Inovance Platform should not be required to bear responsibility under the following circumstances: (1) The system is shut down for maintenance; (2) Service equipment, communication or any equipment fails to carry out data transmission or

delays, inaccuracies, errors, omissions, etc.; (3) Due to force majeure factors such as typhoons, earthquakes, tsunamis, floods, power outages, wars, terrorist attacks, the system is unable to perform business due to system obstacles; (4) Service interruption or delay caused by hacker attacks, technical adjustments or failures of telecommunications departments, website upgrades, third-party issues, etc.; (5) Inability to serve or delay in service caused by government actions or orders of international and domestic courts.

6.2. Inovance ADX bidding trading system is a service system for self-publishing network information. The behavior of DSP publishing network information, downloading or obtaining any data is based on the independent judgment of DSP and needs to bear its own risk. DSP should bear the possible losses caused by the loss of its computer system or data. Any notice by Super Inovance Platform to DSP, whether oral or written, does not mean that Super Inovance Platform has made any commitment other than that stipulated in the Agreement.

6.3. DSP agrees that the Super Inovance Platform shall not bear any responsibility for the following circumstances: (1) The failure to provide services is not due to the intention or negligence of the Super Inovance Platform; (2) DSP and/or any third party suffers losses due to DSP's intentional or negligent actions; (3) DSP violates the Agreement, or violates other agreements, contracts and/or agreements with Super Inovance Platform or Alipay (China) Network Technology Co., Ltd. (“Alipay”), or violates the rules of Super Inovance Platform and Alipay.

6.4. If the Super Inovance Platform violates the obligations stipulated in the Agreement and causes losses to DSP, the maximum amount of compensation is the bid price of DSP at the time of bidding (that is, the highest budget limit).

6.5. DSP is fully responsible for the authenticity, legality, and accuracy of network information, target content, and goods/services corresponding to the information. For this reason, DSP should independently assume the responsibility for reviewing the above matters. DSP shall be fully responsible for any disputes, complaints or government penalties arising from the above matters. If the Super Inovance Platform first pays the compensation or fine, etc., DSP shall fully compensate the Super Inovance Platform for the losses (including but not limited to the compensation, litigation fees, attorney fees, notarization fees that must be paid according to law).

6.6. DSP shall not provide any form of improper benefits to the employees and consultants of Super Inovance Platform and its affiliated enterprises. If any, DSP agrees that Super Inovance Platform has the right to terminate the Contract immediately, and DSP shall pay (a) 30% of the total price of the Agreement; or (b) the aggregate amount of any form of improper benefit provided, whichever is higher, to the Super Inovance Platform.

Article 7: Confidentiality and System Security

7.1. The parties shall perform their confidentiality obligations, and shall not disclose any trade secrets that may be involved under the content of the Agreement to any third party. If the Agreement is terminated or no longer performed for any reason, the parties shall not disclose any relevant information to any third party. However, Inovance ADX bidding trading system is not restricted from transmitting the network information and related data provided by DSP to Inovance website.

7.2. DSP agrees that without the prior written consent of the Super Inovance Platform, it shall not use the materials, transaction records, display data, third-party data, etc. displayed on the Inovance ADX bidding trading system in any way such as copying and dissemination, and shall not attack or directly obtain any third-party user data on the Inovance ADX bidding trading system and related third-party services (if any) or the data of the Super Inovance Platform by any means.

7.3. DSP should ensure the security of the operation of its own product system, and the information data transmitted through the connection interface of the parties' systems does not contain any malicious code, which will not affect the normal operation of Inovance ADX bidding trading system.

Article 8: Other Agreements

8.1. The Super Inovance Platform will release and update relevant rules on technical services from time to time through the Inovance ADX bidding trading system and Inovance system, including but not limited to Inovance services and ADX service usage related specifications, network information upload, bidding, management, complaints and other rules, DSP agrees to abide by these rules.

8.2. The laws of the mainland of the People's Republic of China shall apply to the entry into force, interpretation, enforcement, jurisdiction and settlement of disputes of the Agreement. Any

dispute arising out of or in connection with the Agreement shall be under the jurisdiction of the people's court where Party A is located.

8.3. DSP shall not hand over its Inovance ADX bidding trading system account to a third party for use. Super Inovance Platform has the right to transfer the rights and obligations under the Agreement to its affiliates, and DSP agrees to cooperate in signing the relevant transfer documents.

8.4. Super Inovance Platform has the right to revoke or adjust the content of technical services according to its independent decision-making. At this time, Super Inovance Platform has the right to notify Party B in writing 15 days in advance to terminate the Agreement without bearing liability for breach of contract. The Agreement will be terminated on the 15th day after the written notice of Super Inovance Platform is issued.

8.5. Party B and its related parties understand and agree that Party A has the right to adjust the platform name. The current platform name is “Super Inovance Platform”. If Party A adjusts the platform name, Party A does not need to notify Party B and its related parties separately. Party A's platform name shall be subject to Party A's public announcement or notification. The change of Party A's platform name does not affect the rights and obligations of the parties under the original platform name. Party B shall still abide by the original platform management system and rules.

8.6. The Agreement will take effect after being sealed by the parties, and will continue to be valid during the period when DSP uses Inovance ADX bidding trading system and technical services. The Agreement is in quadruplicate, two copies for each party.

8.7. As a valid part, the annexes to the Agreement have the same legal effect as the Agreement.

Annex 1: Pricing Rules for Technical Services

Annex 2: Super Inovance Penalty Rules

Annex 3: Personal Information Entrusted Processing Agreement

(No text below)

Party A: Guangzhou Juyao Information	Party B: Beijing Baosheng Technology Co., Ltd.
Technology Co., Ltd. (Seal)	(Seal)
Date: January 1, 2024	Date: January 1, 2024

Annex 1: Pricing Rules for Technical Services

Note: The following are the technical service pricing rules announced by the Super Inovance Platform when the Agreement was signed. The pricing rules that DSP understands to be actually implemented shall be subject to the latest version announced by the Super Inovance Platform, and the Super Inovance Platform has the right to adjust the pricing rules according to the provisions of Clause 3.3.

For all the information bit flows participating in the transaction in the Inovance ADX bidding trading system, Inovance ADX bidding trading system server will send them to the cooperative DSP in real time through the API, and the DSP will use the information provided by the API of the Inovance ADX bidding trading system (including the cookie mapping service provided by Inovance ADX bidding trading system) to call the data and algorithm tools collected by itself to judge whether to participate in the bidding and at what price to participate in the bidding of this traffic.

DSP needs to notify the Inovance ADX bidding trading system server of the bidding result of the traffic within the specified time through the API of the Inovance ADX bidding trading system, and the price of the traffic is settled through the CPM price. Inovance ADX bidding trading system server selects the highest bidder among the DSPs participating in the bidding transaction, and it will be displayed on the network information location it chooses first.

Annex 2: Super Inovance Penalty Rules

I. Description of types of violations

1. First-level violations - serious violations Politics-related

Publishing and disseminating illegal and harmful information in promotional content, including but not limited to:

1) Violating the basic principles established by the Constitution;

2) Endangering national security, disclosing state secrets, subverting state power, and undermining national unity;

3) Damaging the honor and interests of the state;

4) Inciting ethnic hatred, ethnic discrimination, and undermining ethnic unity;

5) Undermining the state's religious policy and promoting cults;

6) Advocating terrorism or extremism, or inciting terrorist or extremist activities;

7) Contain other content prohibited by laws and administrative regulations, and the circumstances are serious.

Pornography

Using the Inovance Platform for pornographic promotion, or behaviors with similar intentions, including but not limited to pornographic dating transactions, sales of pornographic items, promotion of related software tools, prostitution, whoring, etc.

Gambling

Use the Inovance Platform to open casinos and publish gambling-related content, including but not limited to: Mark Six, horse racing, online betting on sports events, handicap, odds, bile codes, illegal gambling information including bets or changes.

Swindle

Using illegal means such as fictitious facts to defraud users of private property to cause disputes or negative public opinion, including but not limited to:

1) Initiate disputes, lawsuits or arbitrations between Inovance Platform and related party users/third parties;

2) Cause users' concentrated, multiple negative feedbacks, etc.;

3) Trigger investigation or punishment by regulatory authorities, etc.;

4) Generate public opinion and cause negative impact;

5) It is necessary to make compensation to a third party;

6) There are other high-risk scenarios reasonably judged by the Inovance Platform.

Fighting against the supervision of Inovance Platform

During the promotion process, confront the Inovance Platform and circumvent the review and management system of the Inovance Platform, including but not limited to tampering with the promotional content, tampering with the downloaded application/promoted goods or services, or other use of the ability to confront the Inovance Platform to release illegal content, seek improper benefits, violation of Inovance Platform rules, etc.

2. Second-level violations - serious violations

Political sensitivity

1) Politically sensitive topics that arouse public opinion: The promotional content involves sensitive events and figures under regulatory control, content produced by illegal media, promote misoriented content that violates socialist core values, or spread vicious negative content;

2) The promotional content involves political elements, such as the national flag, national emblem, national logo, but this element is only displayed objectively, and it does not belong to the politics-related behavior in the first-level violation.

Vulgarity

1) Disseminating vulgar and bad information, including but not limited to displaying or imitating sexual behavior or provocative behavior with sexual hints, displaying sexual objects, vulgar pictures, naked artworks, using cover titles and other forms to display indecent information and gain attention;

2) Engage in vulgar and kitsch activities, including but not limited to performances involving three vulgarities, PK, bad jokes, and vulgar games;

3) Promotional content is easy to make people associate with gender relations, but it does not directly point to sexual behavior descriptions and does not involve pornographic content, such as deliberately emphasizing identities that may involve gender relations or ethical issues, and promoting partnerships that do not conform to public perception.

Damage public order and good customs

1) The promotional content violates the socialist core values;

2) The promotional content involves ethnic/racial/religious discrimination;

3) Use social hot events and characters to promote;

4) The promotional content seriously affects the physical and mental health of users.

Harm the interests of minors

Promotion involves situations that are not conducive to the physical and mental health of minors, including using minors under the age of ten as spokespersons, persuading minors to ask their parents to purchase promoted goods or services, and alcohol involving minors.

High risk behavior

1) Disseminating speech and articles related to feudal superstition;

2) Maliciously grab attention, hype hot spots, and attract attention, including but not limited to spoofing, hype, and revealing secrets through novelty hunting, weirdness, exaggeration, or other methods for publicity and promotion;

3) The promotional content involves hindering social stability, affecting social public order, destroying the environment, natural resources, cultural heritage, etc.

Public opinion topic

a) Bad-mouthing the economy, people's livelihood, education, medical policies, etc., and spreading group anxiety;

b) Conveying bad values and advocating content that challenges ethics and morality, including displaying bad lifestyles, exaggerating decadent and negative emotions and unhealthy concepts, advocating flaunting wealth and money worship, etc.;

c) Content that causes users to compare, such as showing off wealth, sadfishing, objectively mentioning social hot events, and publishing content that is likely to cause users' money/appearance anxiety;

d) Other sensitive social topics.

False advertising

The promotional content contains false or misleading content, including but not limited to:

1) Non-existent contents of goods or services;

2) The performance, function, place of origin, use, quality, specification, composition, price, producer, expiration date, sales status, honors and other information of goods, or the content, provider, form, quality, price, sales status, honors and other information of services, as well as

information such as promises related to goods or services, are inconsistent with the actual situation and have a substantial impact on the purchase behavior;

3) Using fictitious, forged or unverifiable scientific research results, statistical data, survey results, abstracts, quotations and other information as supporting materials;

4) Fabricating the effect of using goods or receiving services;

5) Other situations of deceiving or misleading consumers with false or misleading content.

Exaggerated advertising

Content that exaggerates the efficacy of goods or services in violation of the Advertising Law; publishing bad promotional content, providing risky financial services, maliciously inducing risky consumption behavior

Effect commitment

The promotional content involves express or implied guarantee commitments for the effect of goods or services prohibited by law, or recommendations and certificates in the name or image of scientific research institutions, academic institutions, educational institutions, industry associations, professionals, and beneficiaries. The promotional content includes but is not limited to: medical treatment/drugs/medical devices, education/training, investment income, crop seeds/forest seeds/grass seeds/breeding, livestock and poultry/aquatic products and breeding, etc.

Illegal and controlled commodities

1) Display and sell prohibited items and controlled equipment, including but not limited to guns, ammunition and parts, imitation guns, controlled knives, military and police equipment, flammable and explosive materials;

2) Display and sell drugs or drug use tools, or perform and disseminate smoking methods and injection methods;

3) Display acts such as poaching, hunting, trafficking, smuggling, processing, eating, killing, and privately raising protected animals or wild animals;

4) Display illegal mining, selling, smuggling, processing, eating protected plants, etc.;

5) Provide illegal medical services: intermediary services for the sale of human organs and remains; surrogacy; illegal paternity testing, fetal identification and other services;

6) Sell prohibited drugs;

7) Other illegal products and services expressly prohibited by the state.

Induced click

1) Deceptively induce users to click on promotional content, including but not limited to:

2) Induce the user to click with a false close flag;

3) Induce users to click with false system information, such as displaying “Click to clean memory, APP update/upgrade”, and jump to the promotion page after clicking;

4) Induce users to click with false discounts, winning prizes, red envelopes and other information, such as promoting free XXX, but there is no corresponding discount/activity;

5) Induce users to click by purchasing keywords to deliver promotional content, such as purchasing keywords from other brands, and when users search for keywords, customer goods/services appear.

Damage the interests of Inovance Platform

1) Any actual or potential damage or conflict to the interests, goodwill and brand image of Inovance Platform and its affiliates during the promotion process;

2) Failure to cooperate with the management measures of the Inovance Platform during the promotion process, use various technical or human means to repeatedly release illegal materials, affect the normal order of the Inovance Platform, and cause risks to the Inovance Platform.

App download violation

Circumstances in which application downloads violate regulatory regulations and instructions, including but not limited to seven elements (application name, version information, developer and operator name, permission list, privacy policy, product functions, update time) non-compliance, wrong goods, mandatory downloads/unable to uninstall, malicious software deduction, spreading virus software, inducing clicks.

Release first and then review the prohibited industry

It involves industries or categories that are prohibited from releasing first and then reviewing. For example, information flow first releasing and then reviewing involves medical care, novels, virtual products, etc.

3. Third-level violations - general violations

Non-standard writing of promotional content

It involves poor writing of promotional content, or spreading verbal violence. Including but not

limited to the promotional content involving a large number of meaningless characters, uncivilized language, provoking gender conflicts, occupational discrimination, slander and abuse, etc.;

Lack of industry tips

The promotional content lacks prompts that must be added as required by laws and regulations and Inovance Platform rules. For example, the investment promotion content does not clearly indicate the reminder of “investment is risky”, and the promotional content of health food, medicine, and medical device does not add the advertisement approval number/logo/suitable crowd/advice, etc.

Tort

1) The promoted goods or services involve trademarks, logos, appearances, styles, etc. that are consistent with well-known brands, and there is no legal authorization from a third party;

2) During the promotion, the promoted products, services, mobile applications, etc. infringe on users' personal information, user privacy, etc.;

3) without legal rights or without the legal authorization of a third party, promote content or products that involve infringement of other people's intellectual property rights, including infringement of copyrights, trademark rights, and patent rights;

4) Promote content or products that damage the name, reputation/goodwill, and portrait rights of others without the legal authorization of a third party;

5) The promoted goods or services involve trademarks, logos, appearances, styles, etc. that are similar to well-known brands, which will lead to misunderstandings that they are related to well-known brands.

Unfair competition

1) Promotion involves comparing with goods or services provided by other producers and operators, or highlighting the obvious advantages of its own products by belittling others;

2) Illegal diversion: Without the permission of the Inovance Platform, promote information involving personal private domains or conduct private domain diversion in violation of regulations;

3) Release before review without approval: If the application for release before review is not approved, or if the application for release before review is not submitted, the materials are

directly released.

Other violations have been reasonably judged by the Inovance Platform, and there are other promotion scenarios that violate the security regulations of the Inovance Platform and do not involve serious violations.

II. Explanation of penalty rules

1. First-level violation-serious violation penalty rules

1 to 2 times are found in the sampling review within the quarter: the relevant promotion content will be offline, and the qualification of illegal customers to place on the Inovance website will be permanently cancelled;

3-5 times (including) are found in the sampling review within the quarter: the relevant promotion content will be offline, and the industry involved in violations under the DSP will be shut down, and the partner would conduct self-inspection and rectification;

More than 5 times are found in the sampling review within the quarter: related promotion content will be offline, and it has the right to terminate the cooperation with DSP.

2. Second-level violation-serious violation penalty rules

Fewer than 7 times (including) are found in the sampling review within the quarter: related promotion content will be offline, and the qualification of illegal customers to launch on the Huichuan website will be cancelled, and relevant contents will be re-launched after rectification;

8-15 times (including 15 times) are found in the sampling review within the quarter: the related promotion content will be offline, and the industry launch involving violations under the DSP will be shut down, and the traffic will be reopened after the partner rectified;

More than 15 times were found in the sampling review within the quarter: the related promotion content will be offline, and customers involved in violations under the DSP will be permanently disqualified from investing first and reviewing later, and DSP traffic will be restricted.

3. Third-level violations-general violation penalty rules

Less than 7 times (including 7 times) are found in the sampling review within the quarter: the illegal materials will be offline by the partner synchronously;

More than 7 times are found in the sampling review within the quarter: related promotion content will be offline, and the qualification of illegal customers to launch on the Inovance website will be cancelled, and relevant contents will be relaunched after rectification by partner.

Annex 3: Personal Information Entrusted Processing Agreement

Entrusted Processing Agreement of Personal Information

Number:

This Entrusted Processing Agreement of Personal Information (hereinafter referred to as “the Agreement”) is signed by the following parties on January 1, 2024 (“effective date”) at the place where the agreement is signed.

Data Provider: Guangzhou Juyao Information Technology Co., Ltd.

Address: Guangzhou Ali Center, No. 88 Dingxin Road, Haizhu District, Guangzhou

Data Receiver: Beijing Baosheng Technology Co., Ltd.

Address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

The Data Provider and the Data Receiver in the Agreement are referred to as the “Party” and collectively as the “Parties”.

Whereas the Data Provider agrees to provide it to the Data Receiver, the Data Receiver agrees to receive the Personal Information from the Data Provider in order to enable the Data Receiver to process the Personal Information in accordance with the requirements of the Data Provider. To regulate the aforementioned entrusted processing of personal information, safeguard the legitimate rights and interests of personal information subjects, and ensure the security of personal information applications, the parties have reached a cost agreement through negotiation in accordance with the requirements of Chinese laws and regulations.

1. Definitions

1.1 “Processing” refers to any operation or series of operations on personal information, including but not limited to: access, collection, storage, use, processing, transmission, provision, disclosure, deletion.

1.2 “Processor” means an entity that, individually or jointly with other parties, determines the purpose and manner of processing personal information.

1.3 “Shared data” refers to the personal information provided by the Data Provider to the Data Receiver in accordance with the Agreement.

1.4 “Applicable data protection laws” mainly refer to the laws and regulations related to personal information protection, Cybersecurity, and data security promulgated and effective from time to time before and after the entry into force of the Agreement in China,

including but not limited to the Cybersecurity Law, Consumer Protection Law, Data Security Law, and Personal Information Protection Law (for the purpose of the Agreement only, for the avoidance of doubt, excluding the laws of the Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan).

1.5 “Data Provider” means the party who provides personal information to the other party in accordance with the Agreement.

1.6 “Data Receiver” means the party that receives personal information from the other party in accordance with the Agreement.

1.7 In the Agreement, “personal information subject” and “personal information” shall have definitions under applicable data protection laws.

2. Relationship between the parties

2.1 The Data Provider provides the personal information it processes to the Data Receiver based on the “processor-to-trustee” model.

2.2 The Data Receiver only processes personal information on behalf of the Data Provider. See Annex 1-1 for written instructions on the purpose, method, and scope of the Data Provider's processing of personal information (including the personal information involved in the processing and the types of personal information subjects, etc.);

3. Obligations of Data Receiver

3.1 The Data Receiver undertakes and guarantees that:

(a) will process the personal information it receives from the Data Provider in accordance with the written instructions of the Data Provider and the requirements of applicable data protection law;

(b) Shared data received from the Data Provider shall not be made available to any third party unless the Data Provider agrees in writing, unless otherwise provided by applicable data protection law;

(c) not to process shared data in a manner that would cause the Data Provider to violate applicable data protection laws;

(d) inform the Data Provider immediately when it becomes aware that the written instructions of the Data Provider violate applicable data protection laws;

(e) will provide necessary assistance to Data Provider in fulfilling their obligations

under applicable data protection laws in relation to shared data;

(f) will provide the Data Provider with all reasonable information necessary to demonstrate that the Data Receiver complies with the Agreement;

(g) upon receipt of any request or complaint from the subject of personal information related to the personal information it processes, the Data Provider shall be notified in a timely manner, and such request or complaint shall not be responded to unless expressly authorized by the Data Provider;

(h) will implement relevant and organizational measures to enable Data Provider or relevant controllers to fulfill their obligations under applicable data protection laws to respond to exercise requests from personal information subjects; And

(i) ensure that any person (including employees, etc.) authorized by it to process the shared data shall be subject to strict confidentiality obligations, and shall not allow any person not subject to such confidentiality obligations to process the shared data.

4. Data security

4.1 Data Receiver shall, in accordance with the requirements of applicable data protection laws, regulations and national standards, establish appropriate data security capabilities, implement necessary management and technical measures, provide sufficient security guarantees for shared data, and prevent shared data from being unauthorized use, leakage, damage, loss. The state of the art, the cost of implementation, the nature, scope, context and purpose of the processing shall be considered in these measures, and the possibility of creating a risk of harm to the rights and freedoms of the subject of personal information shall be also considered. Including but not limited to:

(a) authority control of premises and facilities. Measures must be taken to prevent unauthorized physical access to places and devices where personal information is stored, such as access control systems, identification card readers, magnetic and chip cards, monitoring devices, facility exit/entry records, etc.

And (b) access restrictions. Implement the principle of minimizing the number of people with access rights and the amount of access information, and only provide access to employees who really need it and are authorized. Unauthorized personnel

may not access shared data acquired by Data processor and their processing systems, whether by physical contact or logical access.

And (c) availability control. Measures to ensure that shared data is protected from accidental destruction or loss shall include, as a minimum, the following: ensuring that installed systems are able to recover after interruption, ensuring that systems function properly and report failures, ensuring that stored personal information is not damaged due to system failures, business continuity procedures, remote storage and anti-virus/firewall systems.

And (d) password, encryption and anonymization. Data processor shall use reasonable commercial physical security technologies and electronic security technologies to create and protect passwords, as well as adopt anonymization. If personal sensitive information, information related to critical information infrastructure, and important data are stored, data processor shall use industry-standard encryption tools to implement encryption measures.

And (e) employee training and confidentiality obligations. Data processor shall train relevant employees on their security obligations to at least understand data classification, physical security controls, security operations, and security incident reporting. Before authorizing employees to process and share data, they shall sign corresponding confidentiality agreements, requiring employees to keep the whole process of data processing activities and the information itself confidential.

And (f) data compliance and security assurance systems. Data compliance and security guarantee system that complies with the requirements of relevant laws, regulations and national standards on data protection shall be established for data processing method.

(g) Others. Other security protection measures necessary to perform the purpose of this data agreement or confirmed by the parties in writing, especially the requirements of the Data Provider or the requirements of Chinese laws, regulations, and national standards for the processing of information and important data related to critical information infrastructure information protection and security requirements.

4.2 The requirements of the Data Provider for special security measures for shared data are subject to those agreed in Annex 1 (but only apply to the data sharing matters agreed in the Annex).

5. Security incidents

5.1 The Data Receiver shall implement the necessary monitoring and response measures, and in particular, when aware of a security incident, the Data Receiver shall:

(a) notify the Data Provider without delay and provide all such timely information and cooperation to the Data Provider when required by the Data Provider to comply with its security incident reporting obligations under applicable data protection laws;

(b) Take remedial measures to mitigate the impact of the security incident as required by applicable data protection law, and the Data Provider shall be kept informed of developments related to the security incident; And

And (c) maintain a record containing a list of security incidents, relevant circumstances, consequences, and remedial actions taken, and provide such record to the Data Provider at the request of the Data Provider.

6. Obligation of cooperation

6.1 The Data Receiver shall, at the request of the Data Provider, cooperate with the supervisory authority and provide the Data Provider with the necessary information required for relevant purposes such as proving that the Data Provider complies with applicable data protection laws. The Data Receiver shall immediately submit any request, notice or other communication received from the supervisory authority regarding the processing of shared data to the Data Provider for processing, unless laws and regulations provide to the contrary.

6.2 The Data Receiver shall provide reasonable and timely assistance to the Data Provider so that the Data Provider can respond to (1) the request of the personal information subject to exercise any of its rights under the applicable data protection law; And (2) any other communications, inquiries, or complaints received from the subject of personal information or other third parties related to the processing of shared data. If such communications, inquiries or complaints are made directly to the Data Receiver, the Data Receiver shall notify the Data Provider and provide details of all such

communications, inquiries or complaints.

7. Subcontracting

7.1 The Data Receiver shall not delegate the processing of shared data to sub-processors without the prior written consent of the Data Provider.

7.2 Where the Data Receiver is authorized by the Data Provider to entrust the sub-processor, the Data Receiver shall:

(a) ensure by agreement or other written means that the sub-processor assumes obligations no lower than the Agreement and/or other relevant agreements signed by the Data Provider and the Data Receiver, and is responsible for all acts of the sub-processor (including but Not limited to illegal acts, faults or intentional acts);

(b) Immediately provide the Data Provider with information such as a list of sub-processors it uses, the scope and time of subcontracting, as requested by the Data Provider; And

And (c) promptly notify the Data Provider of the appointment or replacement of the sub-processor, including a detailed description of the processing activities that the sub-processor may be required to carry out, so as to enable the Data Provider to challenge such appointment or replacement.

8. Audit

8.1 As agreed by The parties in advance, the Data Receiver shall allow the Data Provider or a third-party audit agency appointed by the Data Provider to audit the Data Receiver to confirm whether the Data Receiver's processing of shared data complies with applicable data protection laws and the requirements of the Agreement. The Data Receiver shall provide the authorized representative of the Data Provider or a third party entrusted by the Data Provider with the necessary assistance in conducting such audits.

9. Cross-border transmission of personal information

9.1 The Data Receiver shall not provide the shared data to countries and regions other than the People's Republic of China without the written consent of the Data Provider. For the avoidance of ambiguity, under the Agreement, the provision of shared data to organizations or individuals in Hong Kong, Macau or Taiwan is also deemed to be a

cross-border transmission. With the consent of the Data Provider, if the Data Receiver transmits and shares data overseas, it shall follow the applicable laws and regulations, as well as the contractual agreement between the parties (if any). If the evaluation is required by the laws and regulations to be conducted by the designated department, the evaluation shall be completed before cross-border transmission.

10. Beginning and termination

10.1 The Agreement shall take effect from the Effective Date and shall remain in force until the completion of the last data sharing between the parties.

10.2 Notwithstanding the above-mentioned provisions of Article 10.1:

(a) the Parties may terminate the Agreement at any time by agreement in writing;

(b) The Data Provider may terminate the Agreement by giving three months' written notice to the Data Receiver;

(c) The Data Receiver may terminate the Agreement by giving three months' written notice to the Data Provider;

(d) If the Data Receiver violates the Agreement and the attachments, the Data Provider has the right to unilaterally notify the Data Receiver in writing to terminate the Agreement; And

10.3 If the Agreement is terminated earlier as described in Clause 10.2, then:

And (a) the rights and obligations of the Parties herein shall terminate on the expiry date of the Agreement.

And (b) any such termination shall not affect the rights and/or obligations of the Parties under the Agreement with respect to any Shared Data received or provided prior to the date of termination.

10.4 Upon termination of the Agreement, the Data Receiver shall immediately stop processing the shared data and return the relevant information in the manner and format reasonably required by the Data Provider; Alternatively, with the express instructions of the Data Provider, the Data Receiver shall destroy some or all of the information in its possession or control, and provide the Data Provider with proof of destruction. This requirement does not apply to the extent that applicable data protection laws require Data Receiver to retain some or all of the information. In such cases, the Data

Receiver shall only use the shared data that it has been entrusted to process by the Data Provider for the purposes required by applicable data protection laws.

11. Other articles

11.1 Any notice given by either party to the other as required by the Agreement shall be in writing.

11.2 In the event that any part of the terms of the Agreement is deemed by the regulatory agency to be invalid or unenforceable, in whole or in part, the validity of the other terms of the Agreement and the remainder of the terms involved shall not be affected.

11.3 The parties agree and confirm that the Agreement is signed online in the form of an electronic signature that complies with the law, and the agreement signed online in the form of an electronic signature is deemed to be a written agreement, which has the same legal effect as the document signed in paper form, and The parties shall abide by it equally.

11.4 If the Data Receiver violates the Agreement, the Data Receiver shall compensate the Data Provider for all economic losses caused by its breach of contract, including but not limited to administrative fines, third-party civil compensation, attorney fees, arbitration fees, other costs and losses incurred in reducing damages and negative impacts of data processing party .

The Agreement shall be governed by and construed in accordance with the laws and regulations of the People's Republic In the event of any dispute between the parties arising from the Agreement and its annexes, the parties shall settle the dispute through friendly negotiation. If no negotiation fails, either party may submit the dispute to the Beijing Arbitration Commission for arbitration. The award shall be final and binding on the parties.

EX-4.6

Exhibit 4.6

Super Inovance Platform Inovance ADX Bidding Transaction

System Technology Services Agreement

Agreement No.: [UCU74WGZ4240104 JY-20240217-H0001-2024-1]

Party A: Guangzhou Juyao Information Technology Co., Ltd. (hereinafter referred to as “Super Inovance Platform”)

Contact: Hu Zhihao

Tel:

Contact email:

Contract mailing address: Small Post Office, 1F, South Tower, Guangzhou Ali Center, No. 88 Dingxin Road, Haizhu District, Guangzhou

Contract recipient: Guangzhou Legal Seal Service Center

Contract mailing tel:

Party B: Beijing Baosheng network Technology Co., Ltd. (hereinafter referred to as “DSP”)

Contact: Li Cheng

Tel:

Contact email:

Contract mailing address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

Contract recipient: Li Cheng

Contract mailing tel:

The validity period of the Agreement is from January 1, 2024 to December 31, 2024. Within 30 working days before the expiration of the cooperation period, if either party proposes to terminate the Agreement in writing (including mail), the agreement will be automatically terminated upon expiration. If neither party proposes to terminate the Agreement, the validity period of the Agreement will be automatically extended for one year. The validity period of the Agreement can only be extended once during the cooperation period. After friendly negotiation, the parties reached the following agreement on the release of DSP-designated network

information by DSP using Inovance ADX bidding trading system:

Article 1: Service Introduction and Definition

1.1. All terms not specifically defined in the Agreement shall have the following meanings:

(1) Inovance ADX bidding trading system: Refer to the technical service system developed and operated by Super Inovance Platform and Super Inovance Platform affiliates, which provides DSP with technical services such as network information release management and information maintenance. The network address used by the system is integrated in Inovance e.uc.cn and other addresses enabled by the Super Inovance Platform from time to time. The Super Inovance Platform may adjust the system name, function and network address.

(2) Services/technical services: Refer to the services provided by the Super Inovance Platform to DSP through the Inovance ADX bidding trading system, and support DSP to self-publish network information on relevant network pages of websites provided by the Inovance System according to the conditions selected by it (including but not limited to websites operated or cooperated by Party A and Party A’s affiliates, hereinafter referred to as “Inovance Website”).

(3) DSP: Refer to the subject that uses Inovance ADX bidding trading system and Super Inovance Platform technology services. DSP gathers a single customer or a certain number of customers through its own service products, and DSP connects its product system with Inovance ADX bidding trading system to realize the release and management of DSP customers’ network information in Inovance ADX bidding trading system and Inovance Website. The types of DSP in the Agreement include customer DSP and three-party DSP, where the customer of the customer DSP is the DSP operator, and the customer of the three-party DSP is the third party other than the DSP operator.

The DSP access method is (d):

a) The customer DSP is directly connected to Inovance ADX, and the customer directly signs a contract with Inovance (that is, DSP direct signing);

b) The customer DSP accesses Inovance ADX through the agent, and the agent signs a contract with Inovance;

c) The three-party DSP is directly connected to Inovance ADX, and the DSP operator directly signs a contract with Inovance (that is, DSP direct signing);

d) The three-party DSP connects to Inovance ADX through the agent, and the agent signs a contract with Inovance.

When DSP accesses Inovance ADX through an agent, Party B of the Agreement is the agent, and Party B clearly undertakes all legal responsibilities that DSP should bear as the counterparty of the contract, and is directly responsible to Party A of the Agreement, that is, Super Inovance Platform.

(4) Technical service fee: Refer to the service fee that DSP needs to pay to the Super Inovance Platform for using technical services, which can be referred to as “service fee” in the Agreement.

(5) Advance payment for technical service fees: Refer to the fees pre-deposited by DSP in its Inovance ADX bidding trading system account for its future use of technical services. DSP can make payment to the Super Inovance Platform and then the Super Inovance Platform will credit the corresponding amount to its Inovance ADX bidding trading system account. The relevant payment rules are stipulated in the relevant terms in other agreements signed between customers and Super Inovance Platform.

(6) CPM: Refer to the service fee paid by DSP for every 1000 displays of network information. The number of displays means that after the DSP network information is published on the Inovance website page according to the corresponding rules, once the Internet user opens the page, it is a display of the DSP network information (not limited to the same user).

(7) Inovance ADX bidding trading system account: Refer to the unique digital number (“user ID”) that identifies DSP when it uses the service of Inovance system. The username and password provided by the DSP will be associated with the account. The same account can be associated with multiple login user names in the future (the specific time provided is subject to the notification from the Super Inovance Platform). If a DSP customer already has an Inovance account in the Inovance system, he/she still needs to create a new Inovance ADX bidding trading system account.

1.2. All titles used in the Agreement are for convenience of wording only and should not be used to interpret the rights and obligations of the parties under the Agreement.

Article 2: Service Content

2.1. DSP will connect DSP’s own product system with Inovance ADX bidding trading system

in accordance with the corresponding technical specifications, and the Super Inovance Platform will provide technical services in accordance with the Agreement.

2.2. After the connection between the parties’ systems is established, information such as the information release bit of Inovance website will be transmitted to the DSP system in real time. DSP can set conditions such as the time period and bid for information release through its own system. At the same time, DSP can set its network information not to appear in certain information bit ranges and other exclusion conditions.

2.3. Inovance ADX bidding trading system will automatically arrange bidding according to the price set by DSP according to the operation and setting of DSP. If the DSP bids successfully, the network information produced by the DSP (that is, the information materials of the DSP, including text, pictures, etc.) will be displayed in the selected network information bit first.

2.4. The network information of DSP will be priced and charged according to CPM, and the Inovance ADX bidding trading system will automatically calculate the corresponding technical service fee from the Inovance ADX bidding trading system account of DSP according to the pricing rules published by the Super Inovance Platform (see the annex of the Agreement). If any information has not been released, the corresponding fee will still be retained in the Inovance ADX bidding trading system account of DSP.

2.5. DSP can query its Inovance ADX bidding trading system account at any time, including querying the latest information display times, information fee balance, etc., and viewing the data reports of information releases that have been carried out.

2.6. The technical services agreed in the Agreement are charged according to the number of times the information is displayed, and the information release is automatically realized through the service system. Therefore, the Super Inovance Platform does not guarantee that within the time period confirmed by the DSP, the network information of the DSP must be displayed or must be displayed until the budget limit of the DSP is consumed. The Super Inovance Platform will not charge a service fee for the DSP network information that has not been displayed.

Article 3: Pricing and Payment of Services

3.1. DSP understands and agrees that the starting price of the service fee for thousands of dispalys may be different at different locations of different pages of Inovance website, at different locations of the same page, or at different time periods of the same location, and the budget

limit for each time may also be different. The starting price of the specific price is adjusted by the Inovance ADX bidding trading system at any time according to the display situation.

3.2. When creating an information release plan, DSP should ensure that there is a sufficient balance in its account and the balance is not lower than the limit stipulated by the Super Inovance Platform, otherwise DSP will not be able to conduct bidding and other operations.

3.3. The Super Inovance Platform has the right to adjust the service charging standards and fee payment methods according to the actual situation, and will announce or revise the rules after the adjustment, and the relevant adjustments will take effect from the date of announcement or rule revision. If DSP does not agree to the adjustment, DSP has the right to terminate the Agreement, otherwise it will be deemed that DSP agrees to implement the Agreement in accordance with the updated plan.

3.4. DSP authorizes the Super Inovance Platform to deduct the service fee payable to the Super Inovance Platform from DSP’s account. After Party B submits an invoice application, the Super Inovance Platform issues an official value-added tax invoice to Party B that meets the requirements of the tax authority.

3.5. DSP can log in to its account to view the effect of information release and service fee expenditure. If the difference between the information release data recorded by DSP and the data recorded by the Inovance ADX bidding trading system does not exceed 15%, the parties agree to follow the data recorded by Inovance ADX bidding trading system.

If the data difference is greater than 15%, the DSP has the right to raise a written objection to the Super Inovance Platform within 15 working days after the information is released, and the Super Inovance Platform shall provide relevant information to assist in the investigation within 30 days. After the joint investigation of the parties confirms that the data difference is caused by the fault of the Super Inovance Platform, the parties negotiate to confirm the release of the data and complete the settlement, and the parties negotiate to confirm that the Super Inovance Platform needs to refund, if Party A has issued an invoice to Party B, Party B needs to cooperate with Party A to complete the issuance of the value-added tax red letter invoice, the Super Inovance Platform will complete the refund within 30 days. If DSP has no objection within 15 working days after the information is released or raises an objection after the deadline, it is deemed that DSP has approved the data recorded by Inovance ADX bidding trading system.

3.6. If the service fee after the actual implementation of the information release plan created by DSP exceeds the account balance, DSP will incur service fee arrears. Any arrears must be paid in full within 30 days from the date of arrears or within the repayment period notified by the Super Inovance Platform (whichever is the shorter of the two), otherwise DSP shall pay liquidated damages for overdue payments at the rate of three thousandths of arrears per day.

3.7. After the expiration of the Agreement, if DSP is still using the Inovance ADX bidding trading system to publish network information and accept the services of the Super Inovance Platform, the terms of the Agreement will still be valid, and DSP must continue to pay service fees to the Super Inovance Platform in accordance with the method agreed in the Agreement..

3.8. The information of Party A’s collection account is subject to the information shown by Party B in the “Super Inovance Delivery Platform Finance Center”.

3.9. If the DSP customer has other cooperation agreements with the Super Inovance Platform (hereinafter referred to as the “affiliated agreement”) and the specific settlement terms in the affiliated agreement are different from the Agreement. After the parties have clarified the relevant affiliated agreement, they can separately confirm in writing that the cooperation between the parties will settle the payment in accordance with the prevailing rules of DSP or settle the payment in accordance with other forms of cooperation between the parties.

3.10. Party B shall pay Party A technical service fees and other payables in strict accordance with the time agreed by the parties. Otherwise, for every day of delay, Party B shall pay Party A liquidated damages of three thousandths of the payable fees. If the delay exceeds 15 days, Party A shall have the right to unilaterally terminate the Agreement and pursue Party B’s liability for breach of contract.

Article 4: Special Agreement on Network Information

4.1. DSP guarantees that the network information it publishes and submits to the Inovance ADX bidding trading system does not contain any content that violates relevant national laws and regulations and international treaties recognized or acceded to by the People’s Republic of China, including but not limited to endangering national security, obscenity, pornography, falsehood, fraud, insult, slander, intimidation or harassment, infringement of other people’s intellectual property rights, personal rights or other legitimate rights and interests, and content that violates social order and good customs, etc., the consequences caused by this shall be borne by DSP itself.

If Party A is complained, sued or punished by the competent department due to network information or DSP customer product or service problems, Party B shall bear all expenses incurred by Party A (including but not limited to attorney fees, litigation fees, compensation paid to users by reconciliation or mediation, liquidated damages ordered by the court, compensation, administrative agency punishment, etc.), and cause other losses to Party A, it shall also be liable to Party A.

4.2. DSP promises that the target associated with the network information, such as the carrier to which the information points (such as the target page) and the redirection target (such as the website), shall comply with the provisions of Clause 4.1. DSP ensures that the uploaded network information is consistent with the target content provided by the DSP independently, and the target cannot be changed during the effective bidding period of the information (that is, the display period after the successful bidding).

4.3. DSP ensures that it is legally qualified to publish network information. The relevant goods and services in the network information should be legal, comply with relevant national standards and regulations, are not counterfeit and shoddy products, and do not infringe on the legitimate rights and interests of any third party.

4.4. DSP ensures that it has obtained the consent of its customers to release information through Super Inovance Platform’s technical services, and DSP shall review the government approval and relevant supporting documents required by customers to release information in accordance with the law to ensure the legality of information and corresponding products/services. DSP shall retain the above materials for verification by the Super Inovance Platform.

4.5. DSP guarantees that the network information displayed by the Inovance ADX bidding trading system and the associated target of network information that it publishes and submits comply with the requirements of the relevant specifications for the use of Inovance services and ADX services and other relevant rules signed by the parties (if any).

4.6. For the information rejected by the Inovance website (the type of information rejected by the Inovance website will be transmitted to the DSP system by the Super Inovance Platform system), DSP ensures that the rejected information will not be transmitted to the Inovance website through technical services.

4.7. The page displaying information on the Inovance website and its position, form, size, etc. may be adjusted. DSP recognizes that adjustment does not require DSP’s consent or prior notification to DSP.

4.8. DSP shall abide by the normative policies of Super Inovance Platform (the normative policies include but are not limited to pricing rules, settlement methods, technical service processes, customer-related qualifications, upload information and material requirements) and DSP management specifications (the specifications include but are not limited to the management specifications, penalty rules, notices, etc. of relevant partners issued by Inovance Platform or signed and confirmed by the parties separately), Super Inovance Platform has the right to adjust the technical service policies and DSP management specifications according to the actual situation, and the relevant adjustments will take effect from the date of publication or revision of the rules. If DSP does not agree to the adjustment, it has the right to terminate the contract, otherwise it will be deemed that the DSP agrees to implement the new technical service policy or DSP management specification. If the adjustment of technical service policy affects the performance of the Agreement, DSP shall express its understanding for the termination or suspension of cooperation of Super Inovance Platform, and shall not pursue Party A’s liability for breach of contract.

4.9. If the behavior of DSP or the network information submitted by DSP or the target associated with the network information violates regulations, policies or the Agreement, the Super Inovance Platform and the Inovance website have the right to refuse to publish or delete at any time after publication, and impose penalties on DSP according to the latest penalty rules of Super Inovance Platform. See Annex 2 for the penalty rules of Super Inovance. If the Super Inovance Platform makes any amendments and updates to the penalty rules, it can notify DSP in writing or email, and the new penalty rules will be implemented after the penalty rules are updated.

4.10. If a third party complains about DSP’s information under the Agreement, the content of the link page and the products/services corresponding to the information, Super Inovance Platform has the right to decide whether to immediately stop the service to DSP based on the general judgment of ordinary people. The consequences caused by this are borne by DSP itself.

Article 5: Special Agreement on Technical Services

5.1. DSP can use technical services according to the Agreement, and DSP shall perform operations such as recharge, quotation, and information transmission in accordance with the specifications published by the Super Inovance Platform. Any losses caused by DSP improper operation shall be borne by DSP, including but not limited to failure to follow instructions, failure to operate in time, disclosing passwords, bypassing security programs, using malicious computer programs, etc.

5.2. DSP understands and agrees that the Super Inovance Platform has the right to save DSP information on the Super Inovance Platform server in accordance with the law (including but not limited to the information release bit selected by DSP, the information content released by DSP, etc.).

5.3. DSP understands and agrees that the information display time provided by Super Inovance Platform to DSP is only available for prediction, and Super Inovance Platform does not guarantee that DSP information can be displayed within the listed time, even if DSP has successfully bid.

5.4. DSP confirms and agrees that the Super Inovance Platform does not make any express or implied promises about the number of visits to the information that DSP can obtain by using technical services, business performance, etc.

5.5. DSP understands and agrees that the Super Inovance Platform and its affiliates may also use the Inovance ADX bidding trading system and participate in bidding in accordance with the pricing rules agreed in the Agreement.

5.6. If DSP voluntarily applies for cancellation or termination of technical services, or the amount of DSP account is insufficient and the arrears cannot be repaid in time as agreed, the obligations of Super Inovance Platform under the Agreement will be terminated.

5.7. If DSP violates any guarantee or promise of the Agreement, once the Super Inovance Platform/Inovance website discovers, Internet users file a complaint against DSP, or the relevant management department requests corrections, etc., in addition to handling according to the Agreement, the Super Inovance Platform has the right to decide whether to unilaterally terminate the service to DSP immediately based on the general judgment of ordinary people.

5.8. The services provided by the Super Inovance Platform allow DSP to make personalized choices and settings through its own system. DSP can choose the information content,

information release site, release time, price, etc. Therefore, DSP agrees that it will not object to the information release behavior that the system performs according to DSP’s choice, and will not hold the Super Inovance Platform and Inovance website liable for this.

5.9. DSP shall bear full liability for losses caused by DSP’s violation of the Agreement on the Super Inovance Platform and/or Inovance website and other relevant third parties (including but not limited to the compensation, litigation fees, attorney fees, notarization fees that must be paid according to law). DSP agrees that Super Inovance Platform has the right to deduct the above compensation amount from DSP’s Inovance ADX bidding trading system account, and DSP shall pay the shortfall separately.

5.10. In order to protect the rights and interests of DSP, the Super Inovance Platform can suspend the provision of technical services when abnormal activities are found in DSP’s own systems and accounts.

5.11. If required by the Super Inovance Platform, DSP shall provide the Super Inovance Platform with real and accurate identity, address and other information about DSP and DSP customers. DSP can enter the above information by itself through the Inovance ADX bidding trading system, and the Super Inovance Platform can also obtain relevant information through the connection between the parties’ systems, or deliver and obtain it in other ways agreed by the parties. When DSP modifies the basic data of its Inovance ADX bidding trading system account, it shall apply to the Super Inovance Platform and modify it after verification by the Super Inovance Platform.

Article 6: Limitation of Liability

6.1. Super Inovance Platform will provide corresponding security measures according to the existing technology to ensure the safe and normal provision of technical services. However, due to possible computer viruses, network communication failures, system maintenance and other factors, as well as possible force majeure events, the Super Inovance Platform cannot guarantee the absolute security of the service and can provide services normally under any conditions. DSP should understand that and the Super Inovance Platform should not be required to bear responsibility under the following circumstances: (1) The system is shut down for maintenance; (2) Service equipment, communication or any equipment fails to carry out data transmission or delays, inaccuracies, errors, omissions, etc.; (3) Due to force majeure factors such as typhoons,

earthquakes, tsunamis, floods, power outages, wars, terrorist attacks, the system is unable to perform business due to system obstacles; (4) Service interruption or delay caused by hacker attacks, technical adjustments or failures of telecommunications departments, website upgrades, third-party issues, etc.; (5) Inability to serve or delay in service caused by government actions or orders of international and domestic courts.

6.2. Inovance ADX bidding trading system is a service system for self-publishing network information. The behavior of DSP publishing network information, downloading or obtaining any data is based on the independent judgment of DSP and needs to bear its own risk. DSP should bear the possible losses caused by the loss of its computer system or data. Any notice by Super Inovance Platform to DSP, whether oral or written, does not mean that Super Inovance Platform has made any commitment other than that stipulated in the Agreement.

6.3. DSP agrees that the Super Inovance Platform shall not bear any responsibility for the following circumstances: (1) The failure to provide services is not due to the intention or negligence of the Super Inovance Platform; (2) DSP and/or any third party suffers losses due to DSP’s intentional or negligent actions; (3) DSP violates the Agreement, or violates other agreements, contracts and/or agreements with Super Inovance Platform or Alipay (China) Network Technology Co., Ltd. (“Alipay”), or violates the rules of Super Inovance Platform and Alipay.

6.4. If the Super Inovance Platform violates the obligations stipulated in the Agreement and causes losses to DSP, the maximum amount of compensation is the bid price of DSP at the time of bidding (that is, the highest budget limit).

6.5. DSP is fully responsible for the authenticity, legality, and accuracy of network information, target content, and goods/services corresponding to the information. For this reason, DSP should independently assume the responsibility for reviewing the above matters. DSP shall be fully responsible for any disputes, complaints or government penalties arising from the above matters. If the Super Inovance Platform first pays the compensation or fine, etc., DSP shall fully compensate the Super Inovance Platform for the losses (including but not limited to the compensation, litigation fees, attorney fees, notarization fees that must be paid according to law).

6.6. DSP shall not provide any form of improper benefits to the employees and consultants

of Super Inovance Platform and its affiliated enterprises. If any, DSP agrees that Super Inovance Platform has the right to terminate the Contract immediately, and DSP shall pay (a) 30% of the total price of the Agreement; or (b) the aggregate amount of any form of improper benefit provided, whichever is higher, to the Super Inovance Platform.

Article 7: Confidentiality and System Security

7.1. The parties shall perform their confidentiality obligations, and shall not disclose any trade secrets that may be involved under the content of the Agreement to any third party. If the Agreement is terminated or no longer performed for any reason, the parties shall not disclose any relevant information to any third party. However, Inovance ADX bidding trading system is not restricted from transmitting the network information and related data provided by DSP to Inovance website.

7.2. DSP agrees that without the prior written consent of the Super Inovance Platform, it shall not use the materials, transaction records, display data, third-party data, etc. displayed on the Inovance ADX bidding trading system in any way such as copying and dissemination, and shall not attack or directly obtain any third-party user data on the Inovance ADX bidding trading system and related third-party services (if any) or the data of the Super Inovance Platform by any means.

7.3. DSP should ensure the security of the operation of its own product system, and the information data transmitted through the connection interface of the parties’ systems does not contain any malicious code, which will not affect the normal operation of Inovance ADX bidding trading system.

Article 8: Other Agreements

8.1. The Super Inovance Platform will release and update relevant rules on technical services from time to time through the Inovance ADX bidding trading system and Inovance system, including but not limited to Inovance services and ADX service usage related specifications, network information upload, bidding, management, complaints and other rules, DSP agrees to abide by these rules.

8.2. The laws of the mainland of the People’s Republic of China shall apply to the entry into force, interpretation, enforcement, jurisdiction and settlement of disputes of the Agreement. Any dispute arising out of or in connection with the Agreement shall be under the jurisdiction of the

people’s court where Party A is located.

8.3. DSP shall not hand over its Inovance ADX bidding trading system account to a third party for use. Super Inovance Platform has the right to transfer the rights and obligations under the Agreement to its affiliates, and DSP agrees to cooperate in signing the relevant transfer documents.

8.4. Super Inovance Platform has the right to revoke or adjust the content of technical services according to its independent decision-making. At this time, Super Inovance Platform has the right to notify Party B in writing 15 days in advance to terminate the Agreement without bearing liability for breach of contract. The Agreement will be terminated on the 15th day after the written notice of Super Inovance Platform is issued.

8.5. Party B and its related parties understand and agree that Party A has the right to adjust the platform name. The current platform name is “Super Inovance Platform”. If Party A adjusts the platform name, Party A does not need to notify Party B and its related parties separately. Party A’s platform name shall be subject to Party A’s public announcement or notification. The change of Party A’s platform name does not affect the rights and obligations of the parties under the original platform name. Party B shall still abide by the original platform management system and rules.

8.6. The Agreement will take effect after being sealed by the parties, and will continue to be valid during the period when DSP uses Inovance ADX bidding trading system and technical services. The Agreement is in quadruplicate, two copies for each party.

8.7. As a valid part, the annexes to the Agreement have the same legal effect as the Agreement.

Annex 1: Pricing Rules for Technical Services

Annex 2: Super Inovance Penalty Rules

Annex 3: Personal Information Entrusted Processing Agreement

(No text below)

Party A: Guangzhou Juyao Information	Party B: Beijing Baosheng network Technology Co., Ltd.
Technology Co., Ltd. (Seal)	(Seal)
Date: January 1, 2024	Date: January 1, 2024

Annex 1: Pricing Rules for Technical Services

Note: The following are the technical service pricing rules announced by the Super Inovance Platform when the Agreement was signed. The pricing rules that DSP understands to be actually implemented shall be subject to the latest version announced by the Super Inovance Platform, and the Super Inovance Platform has the right to adjust the pricing rules according to the provisions of Clause 3.3.

For all the information bit flows participating in the transaction in the Inovance ADX bidding trading system, Inovance ADX bidding trading system server will send them to the cooperative DSP in real time through the API, and the DSP will use the information provided by the API of the Inovance ADX bidding trading system (including the cookie mapping service provided by Inovance ADX bidding trading system) to call the data and algorithm tools collected by itself to judge whether to participate in the bidding and at what price to participate in the bidding of this traffic.

DSP needs to notify the Inovance ADX bidding trading system server of the bidding result of the traffic within the specified time through the API of the Inovance ADX bidding trading system, and the price of the traffic is settled through the CPM price. Inovance ADX bidding trading system server selects the highest bidder among the DSPs participating in the bidding transaction, and it will be displayed on the network information location it chooses first.

Annex 2: Super Inovance Penalty Rules

I. Description of types of violations

1. First-level violations - serious violations Politics-related

Publishing and disseminating illegal and harmful information in promotional content, including but not limited to:

1) Violating the basic principles established by the Constitution;

2) Endangering national security, disclosing state secrets, subverting state power, and undermining national unity;

3) Damaging the honor and interests of the state;

4) Inciting ethnic hatred, ethnic discrimination, and undermining ethnic unity;

5) Undermining the state’s religious policy and promoting cults;

6) Advocating terrorism or extremism, or inciting terrorist or extremist activities;

7) Contain other content prohibited by laws and administrative regulations, and the circumstances are serious.

Pornography

Using the Inovance Platform for pornographic promotion, or behaviors with similar intentions, including but not limited to pornographic dating transactions, sales of pornographic items, promotion of related software tools, prostitution, whoring, etc.

Gambling

Use the Inovance Platform to open casinos and publish gambling-related content, including but not limited to: Mark Six, horse racing, online betting on sports events, handicap, odds, bile codes, illegal gambling information including bets or changes.

Swindle

Using illegal means such as fictitious facts to defraud users of private property to cause disputes or negative public opinion, including but not limited to:

1) Initiate disputes, lawsuits or arbitrations between Inovance Platform and related party users/third parties;

2) Cause users’ concentrated, multiple negative feedbacks, etc.;

3) Trigger investigation or punishment by regulatory authorities, etc.;

4) Generate public opinion and cause negative impact;

5) It is necessary to make compensation to a third party;

6) There are other high-risk scenarios reasonably judged by the Inovance Platform.

Fighting against the supervision of Inovance Platform

During the promotion process, confront the Inovance Platform and circumvent the review and management system of the Inovance Platform, including but not limited to tampering with the promotional content, tampering with the downloaded application/promoted goods or services, or other use of the ability to confront the Inovance Platform to release illegal content, seek improper benefits, violation of Inovance Platform rules, etc.

2. Second-level violations - serious violations

Political sensitivity

1) Politically sensitive topics that arouse public opinion: The promotional content involves sensitive events and figures under regulatory control, content produced by illegal media, promote misoriented content that violates socialist core values, or spread vicious negative content;

2) The promotional content involves political elements, such as the national flag, national emblem, national logo, but this element is only displayed objectively, and it does not belong to the politics-related behavior in the first-level violation.

Vulgarity

1) Disseminating vulgar and bad information, including but not limited to displaying or imitating sexual behavior or provocative behavior with sexual hints, displaying sexual objects, vulgar pictures, naked artworks, using cover titles and other forms to display indecent information and gain attention;

2) Engage in vulgar and kitsch activities, including but not limited to performances involving three vulgarities, PK, bad jokes, and vulgar games;

3) Promotional content is easy to make people associate with gender relations, but it does not directly point to sexual behavior descriptions and does not involve pornographic content, such as deliberately emphasizing identities that may involve gender relations or ethical issues, and promoting partnerships that do not conform to public perception.

Damage public order and good customs

1) The promotional content violates the socialist core values;

2) The promotional content involves ethnic/racial/religious discrimination;

3) Use social hot events and characters to promote;

4) The promotional content seriously affects the physical and mental health of users.

Harm the interests of minors

Promotion involves situations that are not conducive to the physical and mental health of minors, including using minors under the age of ten as spokespersons, persuading minors to ask their parents to purchase promoted goods or services, and alcohol involving minors.

High risk behavior

1) Disseminating speech and articles related to feudal superstition;

2) Maliciously grab attention, hype hot spots, and attract attention, including but not limited to spoofing, hype, and revealing secrets through novelty hunting, weirdness, exaggeration, or other methods for publicity and promotion;

3) The promotional content involves hindering social stability, affecting social public order, destroying the environment, natural resources, cultural heritage, etc.

Public opinion topic

a) Bad-mouthing the economy, people’s livelihood, education, medical policies, etc., and spreading group anxiety;

b) Conveying bad values and advocating content that challenges ethics and morality, including displaying bad lifestyles, exaggerating decadent and negative emotions and unhealthy concepts, advocating flaunting wealth and money worship, etc.;

c) Content that causes users to compare, such as showing off wealth, sadfishing, objectively mentioning social hot events, and publishing content that is likely to cause users’ money/appearance anxiety;

d) Other sensitive social topics.

False advertising

The promotional content contains false or misleading content, including but not limited to:

1) Non-existent contents of goods or services;

2) The performance, function, place of origin, use, quality, specification, composition, price, producer, expiration date, sales status, honors and other information of goods, or the content, provider, form, quality, price, sales status, honors and other information of services, as well as

information such as promises related to goods or services, are inconsistent with the actual situation and have a substantial impact on the purchase behavior;

3) Using fictitious, forged or unverifiable scientific research results, statistical data, survey results, abstracts, quotations and other information as supporting materials;

4) Fabricating the effect of using goods or receiving services;

5) Other situations of deceiving or misleading consumers with false or misleading content.

Exaggerated advertising

Content that exaggerates the efficacy of goods or services in violation of the Advertising Law; publishing bad promotional content, providing risky financial services, maliciously inducing risky consumption behavior

Effect commitment

The promotional content involves express or implied guarantee commitments for the effect of goods or services prohibited by law, or recommendations and certificates in the name or image of scientific research institutions, academic institutions, educational institutions, industry associations, professionals, and beneficiaries. The promotional content includes but is not limited to: medical treatment/drugs/medical devices, education/training, investment income, crop seeds/forest seeds/grass seeds/breeding, livestock and poultry/aquatic products and breeding, etc.

Illegal and controlled commodities

1) Display and sell prohibited items and controlled equipment, including but not limited to guns, ammunition and parts, imitation guns, controlled knives, military and police equipment, flammable and explosive materials;

2) Display and sell drugs or drug use tools, or perform and disseminate smoking methods and injection methods;

3) Display acts such as poaching, hunting, trafficking, smuggling, processing, eating, killing, and privately raising protected animals or wild animals;

4) Display illegal mining, selling, smuggling, processing, eating protected plants, etc.;

5) Provide illegal medical services: intermediary services for the sale of human organs and remains; surrogacy; illegal paternity testing, fetal identification and other services;

6) Sell prohibited drugs;

7) Other illegal products and services expressly prohibited by the state.

Induced click

1) Deceptively induce users to click on promotional content, including but not limited to:

2) Induce the user to click with a false close flag;

3) Induce users to click with false system information, such as displaying “Click to clean memory, APP update/upgrade”, and jump to the promotion page after clicking;

4) Induce users to click with false discounts, winning prizes, red envelopes and other information, such as promoting free XXX, but there is no corresponding discount/activity;

5) Induce users to click by purchasing keywords to deliver promotional content, such as purchasing keywords from other brands, and when users search for keywords, customer goods/services appear.

Damage the interests of Inovance Platform

1) Any actual or potential damage or conflict to the interests, goodwill and brand image of Inovance Platform and its affiliates during the promotion process;

2) Failure to cooperate with the management measures of the Inovance Platform during the promotion process, use various technical or human means to repeatedly release illegal materials, affect the normal order of the Inovance Platform, and cause risks to the Inovance Platform.

App download violation

Circumstances in which application downloads violate regulatory regulations and instructions, including but not limited to seven elements (application name, version information, developer and operator name, permission list, privacy policy, product functions, update time) non-compliance, wrong goods, mandatory downloads/unable to uninstall, malicious software deduction, spreading virus software, inducing clicks.

Release first and then review the prohibited industry

It involves industries or categories that are prohibited from releasing first and then reviewing. For example, information flow first releasing and then reviewing involves medical care, novels, virtual products, etc.

3. Third-level violations - general violations

Non-standard writing of promotional content

It involves poor writing of promotional content, or spreading verbal violence. Including but not

limited to the promotional content involving a large number of meaningless characters, uncivilized language, provoking gender conflicts, occupational discrimination, slander and abuse, etc.;

Lack of industry tips

The promotional content lacks prompts that must be added as required by laws and regulations and Inovance Platform rules. For example, the investment promotion content does not clearly indicate the reminder of “investment is risky”, and the promotional content of health food, medicine, and medical device does not add the advertisement approval number/logo/suitable crowd/advice, etc.

Tort

1) The promoted goods or services involve trademarks, logos, appearances, styles, etc. that are consistent with well-known brands, and there is no legal authorization from a third party;

2) During the promotion, the promoted products, services, mobile applications, etc. infringe on users’ personal information, user privacy, etc.;

3) without legal rights or without the legal authorization of a third party, promote content or products that involve infringement of other people’s intellectual property rights, including infringement of copyrights, trademark rights, and patent rights;

4) Promote content or products that damage the name, reputation/goodwill, and portrait rights of others without the legal authorization of a third party;

5) The promoted goods or services involve trademarks, logos, appearances, styles, etc. that are similar to well-known brands, which will lead to misunderstandings that they are related to well-known brands.

Unfair competition

1) Promotion involves comparing with goods or services provided by other producers and operators, or highlighting the obvious advantages of its own products by belittling others;

2) Illegal diversion: Without the permission of the Inovance Platform, promote information involving personal private domains or conduct private domain diversion in violation of regulations;

3) Release before review without approval: If the application for release before review is not approved, or if the application for release before review is not submitted, the materials are

directly released.

Other violations have been reasonably judged by the Inovance Platform, and there are other promotion scenarios that violate the security regulations of the Inovance Platform and do not involve serious violations.

II. Explanation of penalty rules

1. First-level violation-serious violation penalty rules

1 to 2 times are found in the sampling review within the quarter: the relevant promotion content will be offline, and the qualification of illegal customers to place on the Inovance website will be permanently cancelled;

3-5 times (including) are found in the sampling review within the quarter: the relevant promotion content will be offline, and the industry involved in violations under the DSP will be shut down, and the partner would conduct self-inspection and rectification;

More than 5 times are found in the sampling review within the quarter: related promotion content will be offline, and it has the right to terminate the cooperation with DSP.

2. Second-level violation-serious violation penalty rules

Fewer than 7 times (including) are found in the sampling review within the quarter: related promotion content will be offline, and the qualification of illegal customers to launch on the Huichuan website will be cancelled, and relevant contents will be re-launched after rectification;

8-15 times (including 15 times) are found in the sampling review within the quarter: the related promotion content will be offline, and the industry launch involving violations under the DSP will be shut down, and the traffic will be reopened after the partner rectified;

More than 15 times were found in the sampling review within the quarter: the related promotion content will be offline, and customers involved in violations under the DSP will be permanently disqualified from investing first and reviewing later, and DSP traffic will be restricted.

3. Third-level violations-general violation penalty rules

Less than 7 times (including 7 times) are found in the sampling review within the quarter: the illegal materials will be offline by the partner synchronously;

More than 7 times are found in the sampling review within the quarter: related promotion content will be offline, and the qualification of illegal customers to launch on the Inovance website will be cancelled, and relevant contents will be relaunched after rectification by partner.

Annex 3: Personal Information Entrusted Processing Agreement

Entrusted Processing Agreement of Personal Information

Number:

This Entrusted Processing Agreement of Personal Information (hereinafter referred to as “the Agreement”) is signed by the following parties on January 1, 2024 (“effective date”) at the place where the agreement is signed.

Data Provider: Guangzhou Juyao Information Technology Co., Ltd.

Address: Guangzhou Ali Center, No. 88 Dingxin Road, Haizhu District, Guangzhou

Data Receiver: Beijing Baosheng network Technology Co., Ltd.

Address: 5F East, Building 8, Xishanhui, Shijingshan District, Beijing

The Data Provider and the Data Receiver in the Agreement are referred to as the “Party” and collectively as the “Parties”.

Whereas the Data Provider agrees to provide it to the Data Receiver, the Data Receiver agrees to receive the Personal Information from the Data Provider in order to enable the Data Receiver to process the Personal Information in accordance with the requirements of the Data Provider. To regulate the aforementioned entrusted processing of personal information, safeguard the legitimate rights and interests of personal information subjects, and ensure the security of personal information applications, the parties have reached a cost agreement through negotiation in accordance with the requirements of Chinese laws and regulations.

1. Definitions

1.1 “Processing” refers to any operation or series of operations on personal information, including but not limited to: access, collection, storage, use, processing, transmission, provision, disclosure, deletion.

1.2 “Processor” means an entity that, individually or jointly with other parties, determines the purpose and manner of processing personal information.

1.3 “Shared data” refers to the personal information provided by the Data Provider to the Data Receiver in accordance with the Agreement.

1.4 “Applicable data protection laws” mainly refer to the laws and regulations related to personal information protection, Cybersecurity, and data security promulgated and effective from time to time before and after the entry into force of the Agreement in China,

including but not limited to the Cybersecurity Law, Consumer Protection Law, Data Security Law, and Personal Information Protection Law (for the purpose of the Agreement only, for the avoidance of doubt, excluding the laws of the Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan).

1.5 “Data Provider” means the party who provides personal information to the other party in accordance with the Agreement.

1.6 “Data Receiver” means the party that receives personal information from the other party in accordance with the Agreement.

1.7 In the Agreement, “personal information subject” and “personal information” shall have definitions under applicable data protection laws.

2. Relationship between the parties

2.1 The Data Provider provides the personal information it processes to the Data Receiver based on the “processor-to-trustee” model.

2.2 The Data Receiver only processes personal information on behalf of the Data Provider. See Annex 1-1 for written instructions on the purpose, method, and scope of the Data Provider’s processing of personal information (including the personal information involved in the processing and the types of personal information subjects, etc.);

3. Obligations of Data Receiver

3.1The Data Receiver undertakes and guarantees that:

(a) will process the personal information it receives from the Data Provider in accordance with the written instructions of the Data Provider and the requirements of applicable data protection law;

(b) Shared data received from the Data Provider shall not be made available to any third party unless the Data Provider agrees in writing, unless otherwise provided by applicable data protection law;

(c) not to process shared data in a manner that would cause the Data Provider to violate applicable data protection laws;

(d) inform the Data Provider immediately when it becomes aware that the written instructions of the Data Provider violate applicable data protection laws;

(e) will provide necessary assistance to Data Provider in fulfilling their obligations

under applicable data protection laws in relation to shared data;

(f) will provide the Data Provider with all reasonable information necessary to demonstrate that the Data Receiver complies with the Agreement;

(g) upon receipt of any request or complaint from the subject of personal information related to the personal information it processes, the Data Provider shall be notified in a timely manner, and such request or complaint shall not be responded to unless expressly authorized by the Data Provider;

(h) will implement relevant and organizational measures to enable Data Provider or relevant controllers to fulfill their obligations under applicable data protection laws to respond to exercise requests from personal information subjects; And

(i) ensure that any person (including employees, etc.) authorized by it to process the shared data shall be subject to strict confidentiality obligations, and shall not allow any person not subject to such confidentiality obligations to process the shared data.

4. Data security

4.1 Data Receiver shall, in accordance with the requirements of applicable data protection laws, regulations and national standards, establish appropriate data security capabilities, implement necessary management and technical measures, provide sufficient security guarantees for shared data, and prevent shared data from being unauthorized use, leakage, damage, loss. The state of the art, the cost of implementation, the nature, scope, context and purpose of the processing shall be considered in these measures, and the possibility of creating a risk of harm to the rights and freedoms of the subject of personal information shall be also considered. Including but not limited to:

(a) authority control of premises and facilities. Measures must be taken to prevent unauthorized physical access to places and devices where personal information is stored, such as access control systems, identification card readers, magnetic and chip cards, monitoring devices, facility exit/entry records, etc.

And (b) access restrictions. Implement the principle of minimizing the number of people with access rights and the amount of access information, and only provide access to employees who really need it and are authorized. Unauthorized personnel

may not access shared data acquired by Data processor and their processing systems, whether by physical contact or logical access.

And (c) availability control. Measures to ensure that shared data is protected from accidental destruction or loss shall include, as a minimum, the following: ensuring that installed systems are able to recover after interruption, ensuring that systems function properly and report failures, ensuring that stored personal information is not damaged due to system failures, business continuity procedures, remote storage and anti-virus/firewall systems.

And (d) password, encryption and anonymization. Data processor shall use reasonable commercial physical security technologies and electronic security technologies to create and protect passwords, as well as adopt anonymization. If personal sensitive information, information related to critical information infrastructure, and important data are stored, data processor shall use industry-standard encryption tools to implement encryption measures.

And (e) employee training and confidentiality obligations. Data processor shall train relevant employees on their security obligations to at least understand data classification, physical security controls, security operations, and security incident reporting. Before authorizing employees to process and share data, they shall sign corresponding confidentiality agreements, requiring employees to keep the whole process of data processing activities and the information itself confidential.

And (f) data compliance and security assurance systems. Data compliance and security guarantee system that complies with the requirements of relevant laws, regulations and national standards on data protection shall be established for data processing method.

(g) Others. Other security protection measures necessary to perform the purpose of this data agreement or confirmed by the parties in writing, especially the requirements of the Data Provider or the requirements of Chinese laws, regulations, and national standards for the processing of information and important data related to critical information infrastructure information protection and security requirements.

4.2 The requirements of the Data Provider for special security measures for shared data are subject to those agreed in Annex 1 (but only apply to the data sharing matters agreed in the Annex).

5. Security incidents

5.1 The Data Receiver shall implement the necessary monitoring and response measures, and in particular, when aware of a security incident, the Data Receiver shall:

(a) notify the Data Provider without delay and provide all such timely information and cooperation to the Data Provider when required by the Data Provider to comply with its security incident reporting obligations under applicable data protection laws;

(b) Take remedial measures to mitigate the impact of the security incident as required by applicable data protection law, and the Data Provider shall be kept informed of developments related to the security incident; And

And (c) maintain a record containing a list of security incidents, relevant circumstances, consequences, and remedial actions taken, and provide such record to the Data Provider at the request of the Data Provider.

6. Obligation of cooperation

6.1 The Data Receiver shall, at the request of the Data Provider, cooperate with the supervisory authority and provide the Data Provider with the necessary information required for relevant purposes such as proving that the Data Provider complies with applicable data protection laws. The Data Receiver shall immediately submit any request, notice or other communication received from the supervisory authority regarding the processing of shared data to the Data Provider for processing, unless laws and regulations provide to the contrary.

6.2 The Data Receiver shall provide reasonable and timely assistance to the Data Provider so that the Data Provider can respond to (1) the request of the personal information subject to exercise any of its rights under the applicable data protection law; And (2) any other communications, inquiries, or complaints received from the subject of personal information or other third parties related to the processing of shared data. If such communications, inquiries or complaints are made directly to the Data Receiver, the Data Receiver shall notify the Data Provider and provide details of all such

communications, inquiries or complaints.

7. Subcontracting

7.1 The Data Receiver shall not delegate the processing of shared data to sub-processors without the prior written consent of the Data Provider.

7.2Where the Data Receiver is authorized by the Data Provider to entrust the sub-processor, the Data Receiver shall:

(a) ensure by agreement or other written means that the sub-processor assumes obligations no lower than the Agreement and/or other relevant agreements signed by the Data Provider and the Data Receiver, and is responsible for all acts of the sub-processor (including but Not limited to illegal acts, faults or intentional acts);

(b) Immediately provide the Data Provider with information such as a list of sub-processors it uses, the scope and time of subcontracting, as requested by the Data Provider; And

And (c) promptly notify the Data Provider of the appointment or replacement of the sub-processor, including a detailed description of the processing activities that the sub-processor may be required to carry out, so as to enable the Data Provider to challenge such appointment or replacement.

8. Audit

8.1 As agreed by The parties in advance, the Data Receiver shall allow the Data Provider or a third-party audit agency appointed by the Data Provider to audit the Data Receiver to confirm whether the Data Receiver’s processing of shared data complies with applicable data protection laws and the requirements of the Agreement. The Data Receiver shall provide the authorized representative of the Data Provider or a third party entrusted by the Data Provider with the necessary assistance in conducting such audits.

9. Cross-border transmission of personal information

9.1 The Data Receiver shall not provide the shared data to countries and regions other than the People’s Republic of China without the written consent of the Data Provider. For the avoidance of ambiguity, under the Agreement, the provision of shared data to organizations or individuals in Hong Kong, Macau or Taiwan is also deemed to be a

cross-border transmission. With the consent of the Data Provider, if the Data Receiver transmits and shares data overseas, it shall follow the applicable laws and regulations, as well as the contractual agreement between the parties (if any). If the evaluation is required by the laws and regulations to be conducted by the designated department, the evaluation shall be completed before cross-border transmission.

10. Beginning and termination

10.1 The Agreement shall take effect from the Effective Date and shall remain in force until the completion of the last data sharing between the parties.

10.2 Notwithstanding the above-mentioned provisions of Article 10.1:

(a) the Parties may terminate the Agreement at any time by agreement in writing;

(b) The Data Provider may terminate the Agreement by giving three months’ written notice to the Data Receiver;

(c) The Data Receiver may terminate the Agreement by giving three months’ written notice to the Data Provider;

(d) If the Data Receiver violates the Agreement and the attachments, the Data Provider has the right to unilaterally notify the Data Receiver in writing to terminate the Agreement; And

10.3 If the Agreement is terminated earlier as described in Clause 10.2, then:

And (a) the rights and obligations of the Parties herein shall terminate on the expiry date of the Agreement.

And (b) any such termination shall not affect the rights and/or obligations of the Parties under the Agreement with respect to any Shared Data received or provided prior to the date of termination.

10.4 Upon termination of the Agreement, the Data Receiver shall immediately stop processing the shared data and return the relevant information in the manner and format reasonably required by the Data Provider; Alternatively, with the express instructions of the Data Provider, the Data Receiver shall destroy some or all of the information in its possession or control, and provide the Data Provider with proof of destruction. This requirement does not apply to the extent that applicable data protection laws require Data Receiver to retain some or all of the information. In such cases, the Data

Receiver shall only use the shared data that it has been entrusted to process by the Data Provider for the purposes required by applicable data protection laws.

11. Other articles

11.1 Any notice given by either party to the other as required by the Agreement shall be in writing.

11.2 In the event that any part of the terms of the Agreement is deemed by the regulatory agency to be invalid or unenforceable, in whole or in part, the validity of the other terms of the Agreement and the remainder of the terms involved shall not be affected.

11.3 The parties agree and confirm that the Agreement is signed online in the form of an electronic signature that complies with the law, and the agreement signed online in the form of an electronic signature is deemed to be a written agreement, which has the same legal effect as the document signed in paper form, and The parties shall abide by it equally.

11.4 If the Data Receiver violates the Agreement, the Data Receiver shall compensate the Data Provider for all economic losses caused by its breach of contract, including but not limited to administrative fines, third-party civil compensation, attorney fees, arbitration fees, other costs and losses incurred in reducing damages and negative impacts of data processing party .

The Agreement shall be governed by and construed in accordance with the laws and regulations of the People’s Republic In the event of any dispute between the parties arising from the Agreement and its annexes, the parties shall settle the dispute through friendly negotiation. If no negotiation fails, either party may submit the dispute to the Beijing Arbitration Commission for arbitration. The award shall be final and binding on the parties.

EX-4.7

EXHIBIT 4.7

Asset Merger and Acquisition Security Deposit Agreement

Party A: Beijing Baosheng Network Technology Co., Ltd.

Address: 5/F E Building 8, Xishanhui, Shijingshan District, Beijing

Legal Representative: Gong Sheng

Party B: Nanjing Yunbei E-Commerce Co., Ltd.

Address: 017 8/F Building 133, Technology Innovation Park, 34 Dazhou Road, Yuhuatai District, Nanjing

Legal Representative: Yang Ao

Party A and Party B, with mutual respect for equality, voluntary participation, and consensus, have reached the following Agreement on November 2, 2023, in Shijingshan District, Beijing, China. Both parties commit to adhering to the terms herein:

Article 1 Cooperation Scope

Party A will deposit the funds intended for various purposes in the future (hereinafter referred to as "Security Deposit") into the Custody Account of Party B's company, for which Party B is responsible for Party A's Security Deposit.

Article 2 Rights and Obligations of Both Parties

2.1 Party A shall, within 45 working days from the signing of this Agreement, transfer the Security Deposit of RMB 30 million (in words: thirty million yuan) into the account specially opened by Party B for this Security Deposit ("Custody Account"). The details of the Custody Account is as follows:

Custody Account:

Account name: Nanjing Yunbei E-Commerce Co., Ltd.

Bank of deposit: Nanjing Miaosuyuan Sub-Branch of Industrial Bank

Bank account:

2.2 Both parties confirm that, in accordance with the provisions of this Agreement, Party A shall transfer the Security Deposit to Party B's Custody Account, and Party B shall manage the Security Deposit. Party A's funds shall not accrue interest during the period managed by Party B.

Article 3 Commitments and Guarantees by Both Parties

3.1 Party A's Commitments and Guarantees

(1) Party A fully understands and agrees to all the terms of this Agreement, and all representations made under this Agreement are true and accurate.

(2) Party A shall transfer the Security Deposit to the Custody Account in accordance with the Agreement.

(3) Party A warrants that Party B has obtained all necessary and legal internal and external approvals and authorizations required for Party B to fulfill its obligations under this Agreement.

(4) Party A shall ensure the legality and efficiency of the source of funds in the Custody Account.

3.2 Party B's Commitments and Guarantees

(1) Party B is a legal entity with full capacity for civil conduct, possessing the necessary civil rights and capabilities to enter into and perform this Agreement.

(2) Party B fully understands and agrees to all the terms of this Agreement, and all representations of intention under this Agreement are true.

(3) Party B agrees that Party A will deposit the Security Deposit in the Custody Account in accordance with the provisions of this Agreement, and no operations shall be conducted on the Custody Account without Party A's instructions..

(4) Party B undertakes and guarantees that the Custody Account will be independently managed and will not be mixed with any other accounts or funds.

(5) Party B does not make any commitment to the legality and validity of the funds in the Custody Account.

Article 4 Use of Security Deposit

4.1 Party B shall operate on the Custody Account based on instructions from Party A's authorized personnel.

4.2 Party A shall supervise the Custody Account.

4.3 Party A has the right to inquire about the use of the deposit and the status of the Custody Account from Party B, and Party B shall provide accurate and truthful reports.

4.4 Should this Agreement be terminated for any reason, upon the expiration of the custody period, or for any other cause leading to the termination of this Agreement (hereinafter referred to as "Termination Reasons"), Party B shall, within 3 working days after the occurrence of the Termination Reasons, transfer all funds in the Custody Account in full to the account designated by Party A. The specific account information shall be issued by the authorized personnel of Party A as stipulated in this Agreement. Should Party A intend to engage Party B for other services after the occurrence of the termination reasons, both parties may enter into a separate agreement for such services.

Article 5 Period of Custody

The custody period is from the day Party A deposits the security deposit into Party B's account

until the one-year period expires. If there is still a balance in the Custody Account at the end of the custody period, Party A has the right to require Party B to transfer such funds out as stipulated in Article 4.4 of this Agreement.

Article 6 Liability for Breach of Agreement

6.1 Either party, in the event of a violation of the warranties, declarations, and obligations stipulated in this Agreement, shall bear corresponding liability for breach of Agreement and compensate the other party for all direct economic losses caused thereby (including but not limited to reasonable litigation fees, notarial fees, preservation fees, attorney fees, travel expenses, and all other costs incurred in resolving disputes).

6.2 If Party B or Party B's staff fails to operate the Custody Account in accordance with Party A's instructions, including but not limited to unauthorized misappropriation and transfer of Security Deposits, Party B shall make up for the loss of Party A's funds caused by unauthorized operation (including but not limited to misappropriation or the funds transferred out, the expected income of the funds, the litigation fees paid for this, notarization fees, preservation fees, attorney fees, travel expenses and all expenses incurred in handling disputes), and bear the liquidated damages of 20% of the amount misappropriated without authorization.

6.3 If any party to this Agreement is obliged to make a payment and fails to do so on time, they shall be liable for a late payment penalty of 0.03% of the overdue amount per day. The cumulative penalty shall not exceed 20% of the payable amount.

6.4 Either party shall have the right to unilaterally terminate this Agreement if:

(1) Any party breaches any of its obligations, provisions or representations and warranties under this Agreement and fails to rectify the breach within 30 days from the date of the breach;

(2) There is a significant adverse change in either party's business, assets, or prospects for cooperation, which may impair the other party's ability to fulfill its obligations under this Agreement, and clear evidence exists to substantiate such change;

(3) Any party has or is involved in major litigation, arbitration or criminal cases that may affect the cooperation.

Article 7 Confidentiality

Both parties agree not to disclose this Agreement and all work involved in it to any third party or the public without the written consent of the other party, unless required by laws and regulations.

Article 8 Dispute Resolution

8.1 This Agreement shall be governed by the laws of the People's Republic of China.

8.2 Any dispute arising out of or in connection with this Agreement shall be submitted by either party to the Beijing International Arbitration Commission for settlement by arbitration in

accordance with the rules of arbitration then in force. The arbitral award shall be final and binding on all parties to the Agreement.

Article 9 Other

9.1 This Agreement will take effect after being signed by the legal representatives or authorized representatives of both parties and affixed with the official seals, and the validity period is specified in Article 5.

9.2 If any provision of this Agreement are found to be invalid, illegal, unenforceable, or incapable of performance for any reason, the remaining provisions shall remain in full force and effect.

9.3 Matters not covered in this Agreement shall be negotiated and agreed upon separately by both parties. Any changes to this Agreement shall require both parties to sign a supplementary agreement.

9.4 This original agreement is made in duplicate, with each party holding one copy, with equal legal effect.

Below is the sign page and there is no main text.

Party A: Beijing Baosheng Network Technology Co., Ltd. [Stamp]
Legal representative (or authorized representative)
[signature] Gong Sheng
Party B: Nanjing Yunbei E-Commerce Co., Ltd. [Stamp]
Legal representative (or authorized representative)
[Signature]

EX-12.1

EXHIBIT 12.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Shasha Mi, certify that:

1. I have reviewed this annual report on Form 20-F of Baosheng Media Group Holdings Limited (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: May 15, 2024

By:	/s/ Shasha Mi
	Name: Shasha Mi
	Title: Chief Executive Officer

EX-12.2

EXHIBIT 12.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Yue Jin, certify that:

1. I have reviewed this annual report on Form 20-F of Baosheng Media Group Holdings Limited (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: May 15, 2024

By:	/s/ Yue Jin
	Name: Yue Jin
	Title: Chief Financial Officer

EX-13.1

EXHIBIT 13.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Baosheng Media Group Holdings Limited (the “Company”) on Form 20-F for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shasha Mi, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2024

By:	/s/ Shasha Mi
	Name: Shasha Mi
	Title: Chief Executive Officer

EX-13.2

EXHIBIT 13.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Baosheng Media Group Holdings Limited (the “Company”) on Form 20-F for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Yue Jin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2024

By:	/s/ Yue Jin
	Name: Yue Jin
	Title: Chief Financial Officer

EX-15.1

Exhibit 15.1

May 15, 2024

To: Baosheng Media Group Holdings Limited

East Floor 5 Building No. 8, Xishanhui Shijingshan District, Beijing 100041

+86- 010-82088021

Dear Sir or Madam,

We hereby consent to the reference of our name under the following headings in the Annual Report on Form 20-F for the fiscal year ended December 31, 2023 (the “Annual Report”) of Baosheng Media Group Holdings Limited, which will be filed with the Securities and Exchange Commission (the “SEC”) in May 2024:

A. “Item 3. Key Information—D. Risk Factors— Risks Related to Our Business and Industry”;

B. “Item 3. Key Information—D. Risk Factors— Risks Related to Doing Business in China”;

C. “Item 4. Information on the Company—A. History and Development of the Company — Risks Related to Doing Business in China”;

D. “Item 4. Information on the Company—A. History and Development of the Company — Permissions Required from PRC Authorities”;

E. “Item 4. Information on the Company—B. Business Overview—Legal Proceedings”;

F. “Item 4. Information on the Company—B. Business Overview—Regulation”;

G. “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings”; and

H. “Item 10. Additional Information—E. Taxation—People’s Republic of China Taxation”.

We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7of the Securities Act of 1933 or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully,

/s/ Huang Xinmian

Beijing Dacheng Law Offices, LLP

Attorney: Huang Xinmian

EX-15.2

Exhibit 15.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the inclusion in the Registration Statement on Form F-3, as amended (File No. 333-273720) of Baosheng Media Group Holdings Limited of our report dated May 15, 2024, with respect to the consolidated balance sheet of Baosheng Media Group Holdings and its subsidiaries as of December 31, 2023 and 2022, and related consolidated statements of operations and comprehensive income (loss), change in shareholders’ equity, and cash flows for the year ended December 31, 2023, 2022, and 2021, appearing in this annual report on Form 20-F of the Company for the fiscal year ended December 31, 2023. We also consent to the reference to our firm under the heading “Experts” in the Registration Statement.

/s/ YCM CPA, Inc.

PCAOB ID 6781

Irvine, California

May 15, 2024

EX-97.1

EXHIBIT 97.1

BAOSHENG MEDIA GROUP HOLDINGS LIMITED

COMPENSATION RECOVERY POLICY

Effective November 29, 2023

In accordance with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Exchange Act Rule 10D-1, and the listing standards of the national securities exchange (the “Exchange”) on which the securities of Baosheng Media Group Holdings Limited (the “Company”) are listed, the Company’s Board of Directors (the “Board”) has adopted this Compensation Recovery Policy (the “Policy”).

Capitalized terms used in the Policy are defined in Section I below. The application of the Policy to Executive Officers is not discretionary, except to the limited extent provided in Section G below, and applies without regard to whether an Executive Officer was at fault.

A. Persons Covered by the Policy

The Policy is binding and enforceable against all Executive Officers. Each Executive Officer will be required to sign and return to the Company an acknowledgement that such Executive Officer will be bound by the terms and comply with the Policy. The failure to obtain such acknowledgement will have no impact on the applicability or enforceability of the Policy.

B. Administration of the Policy

The Compensation Committee of the Board (the “Committee”) has full-delegated authority to administer the Policy. The Committee is authorized to interpret and construe the Policy and to make all determinations necessary, appropriate, or advisable for the administration of the Policy. In addition, if determined in the discretion of the Board, the Policy may be administered by the independent members of the Board or another committee of the Board made up of independent members of the Board, in which case all references to the Committee will be deemed to refer to such independent members of the Board or such other Board committee. All determinations of the Committee will be final and binding and will be given the maximum deference permitted by law.

C. Accounting Restatements Requiring Application of the Policy

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (an “Accounting Restatement”), then the Committee must determine the excess compensation, if any, that must be recovered (the “Excess Compensation”). The Company’s obligation to recover Excess Compensation is not dependent on if or when the restated financial statements are filed.

D. Compensation Covered by the Policy

The Policy applies to all Incentive-Based Compensation Received by an Executive Officer:

(a) after beginning service as an Executive Officer;

(b) who served as an Executive Officer at any time during the performance period for that Incentive-Based Compensation;

(c) while the Company has a class of securities listed on the Exchange;

(d) during the three completed fiscal years immediately preceding the Accounting Restatement Determination Date. In addition to these last three completed fiscal years, the Policy must apply to any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years. However, a transition period between the last day of the Company’s previous fiscal year end and the first day of the Company’s new fiscal year that comprises a period of nine to 12 months would be deemed a completed fiscal year; and

(e) on or after October 2, 2023.

E. Excess Compensation Subject to Recovery of the Policy

Excess Compensation is the amount of Incentive-Based Compensation Received that exceeds the amount of Incentive-Based Compensation that otherwise would have been Received had such Incentive-Based Compensation been determined based on the restated amounts (this is referred to in the listings standards as “erroneously awarded incentive-based compensation”) and must be computed without regard to any taxes paid.

To determine the amount of Excess Compensation for Incentive-Based Compensation based on stock price or total shareholder return, where it is not subject to mathematical recalculation directly from the information in an Accounting Restatement, the amount must be based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was Received and the Company must maintain documentation of the determination of that reasonable estimate and provide the documentation to the Exchange.

F. Repayment of Excess Compensation

The Company must recover Excess Compensation reasonably promptly and Executive Officers are required to repay Excess Compensation to the Company. Subject to applicable law, the Company may recover Excess Compensation by requiring the Executive Officer to repay such amount to the Company by direct payment to the Company or such other means or combination of means as the Committee determines to be appropriate (these determinations do not need to be identical as to each Executive Officer). These means may include:

(a) requiring reimbursement of cash Incentive-Based Compensation previously paid;

(b) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;

(c) offsetting the amount to be recovered from any unpaid or future compensation to be paid by the Company or any affiliate of the Company to the Executive Officer;

(d) cancelling outstanding vested or unvested equity awards; and/or

(e) taking any other remedial and recovery action permitted by law, as determined by the Committee.

The repayment of Excess Compensation must be made by an Executive Officer notwithstanding any Executive Officer’s belief (whether or not legitimate) that the Excess Compensation had been previously earned under applicable law and therefore is not subject to recovery.

In addition to its rights to recovery under the Policy, the Company or any affiliate of the Company may take any legal actions it determines appropriate to enforce an Executive Officer’s obligations to the Company or its affiliate or to discipline an Executive Officer, including (without limitation) termination of employment, institution of civil proceedings, reporting of misconduct to appropriate governmental authorities, reduction of future compensation opportunities, or change in role. The decision to take any actions described in the preceding sentence will not be subject to the approval of the Committee and can be made by the Board, any committee of the Board, or any duly authorized officer of the Company or of any applicable affiliate of the Company.

G. Limited Exceptions to the Policy

The Company must recover Excess Compensation in accordance with the Policy except to the limited extent that any of the conditions set forth below are met, and the Committee determines that recovery of the Excess Compensation would be impracticable:

(a) The direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. Before reaching this conclusion, the Company must make a reasonable attempt to recover the Excess Compensation, document the reasonable attempt(s) taken to so recover, and provide that documentation to the Exchange;

(b) Recovery would violate home country law where that law was adopted prior to November 28, 2022. Before reaching this conclusion, the Company must obtain an opinion of home country counsel, acceptable to the Exchange, that recovery would result in such a violation, and must provide such opinion to the Exchange; or

(c) Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the legal requirements as such.

H. Other Important Information in the Policy

Notwithstanding the terms of any of the Company’s organizational documents (including, but not limited to, the Company’s bylaws), any corporate policy or any contract (including, but not limited to, any indemnification agreement), neither the Company nor any affiliate of the Company will indemnify or provide advancement for any Executive Officer against any loss of Excess Compensation, or any claims relating to the Company’s enforcement of its rights under the Policy. Neither the Company nor any affiliate of the Company will pay for or reimburse insurance premiums for an insurance policy that covers potential recovery obligations. In the event that pursuant to the Policy the Company is required to recover Excess Compensation from an Executive Officer who is no longer an employee, the Company will be entitled to seek recovery in order to comply with applicable law, regardless of the terms of any release of claims or separation agreement such individual may have signed. Neither the Company nor any affiliate of the Company will enter into any agreement that exempts any Incentive-Based Compensation that is granted, paid, or awarded to an Executive Officer from the application of the Policy or that waives the Company’s right to recovery of any Excess Compensation, and the Policy shall supersede any such agreement (whether entered into before, on, or after the adoption of the Policy).

The Committee or Board may review and modify the Policy from time to time.

If any provision of the Policy or the application of any such provision to any Executive Officer is adjudicated to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not affect any other provisions of the Policy or the

application of such provision to another Executive Officer, and the invalid, illegal or unenforceable provisions will be deemed amended to the minimum extent necessary to render any such provision or application enforceable.

The Policy will terminate and no longer be enforceable when the Company ceases to be a listed issuer within the meaning of Section 10D of the Exchange Act.

I. Definitions

“Accounting Restatement Determination Date” means the earlier to occur of: (a) the date the Board, a committee of the Board, or one or more of the officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement; and (b) the date a court, regulator, or other legally authorized body directs the Company to prepare an Accounting Restatement.

“Executive Officer” means each individual who is or was ever designated as an “officer” by the Board in accordance with Exchange Act Rule 16a-1(f).

“Financial Reporting Measures” means measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures. Stock price and total shareholder return are also Financial Reporting Measures. A Financial Reporting Measure need not be presented within the financial statements or included in a filing with the Securities and Exchange Commission.

“Incentive-Based Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure (for the avoidance of doubt, no compensation that is potentially subject to recovery under the Policy will be earned until the Company’s right to recover under the Policy has lapsed) and excludes the following: salaries, bonuses paid solely at the discretion of the Committee or Board that are not paid from a bonus pool that is determined by satisfying a Financial Reporting Measure, bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period, non-equity incentive plan awards earned solely upon satisfying one or more strategic measures or operational measures, and equity awards for which the grant is not contingent upon achieving any Financial Reporting Measure performance goal and vesting is contingent solely upon completion of a specified employment period (e.g., time-based vesting equity awards) and/or attaining one or more non-Financial Reporting Measures.

“Received” means, with respect to any Incentive-based Compensation, actual or deemed receipt, and Incentive-Based Compensation is “Received” under the Policy in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-Based Compensation award is attained, even if the payment or grant of the Incentive-Based Compensation occurs after the end of that period. For the avoidance of doubt, the Policy does not apply to Incentive-Based Compensation for which the Financial Reporting Measure is attained prior to October 2, 2023.

ACKNOWLEDGEMENT

I acknowledge that I have received and read the Compensation Recovery Policy (the “Policy”) of Baosheng Media Group Holdings Limited (the “Company”).

I understand and acknowledge that the Policy applies to me, and all of my beneficiaries, heirs, executors, administrators, or other legal representatives and that the Company’s right to recovery in order to comply with applicable law will apply, regardless of the terms of any release of claims or separation agreement I have signed or will sign in the future.

I agree to be bound by and to comply with the Policy and understand that determinations of the Committee (as such term is used in the Policy) will be final and binding and will be given the maximum deference permitted by law.

I understand and agree that my current indemnification rights, whether in an individual agreement or the Company’s organizational documents, exclude the right to be indemnified for amounts required to be recovered under the Policy.

I understand that my failure to comply in all respects with the Policy is a basis for termination of my employment with the Company and any affiliate of the Company, as well as any other appropriate discipline.

I understand that neither the Policy, nor the application of the Policy to me, gives rise to a resignation for good reason (or similar concept) by me under any applicable employment agreement or arrangement.

I acknowledge that if I have questions concerning the meaning or application of the Policy, it is my responsibility to seek guidance from the Company’s legal department or my own personal advisers.

I acknowledge that neither this Acknowledgement nor the Policy is meant to constitute an employment contract.

Please review, sign, and return this form to the Company.

, 2023

(print name and title)

(signature)

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2023 shares
Document and Entity Information
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Period End Date	Dec. 31, 2023
Entity File Number	001-39977
Entity Registrant Name	Baosheng Media Group Holdings Ltd
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	East Floor 5
Entity Address, Address Line Two	Building No. 8, Xishanhui
Entity Address, Address Line Three	Shijingshan District
Entity Address, City or Town	Beijing
Entity Address, Postal Zip Code	100041
Entity Address, Country	CN
Title of 12(b) Security	Ordinary Shares, par value $0.0096 per share
Trading Symbol	BAOS
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Document Accounting Standard	U.S. GAAP
Entity Shell Company	false
Document Financial Statement Error Correction [Flag]	false
Entity Common Stock, Shares Outstanding	1,534,487
Entity Central Index Key	0001811216
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	YCM CPA, Inc.
Auditor Location	Irvine, California
Auditor Firm ID	6781
Business Contact
Document and Entity Information
Contact Personnel Name	Shasha Mi,
Entity Address, Address Line One	East Floor 5
Entity Address, Address Line Two	Building No. 8, Xishanhui
Entity Address, Address Line Three	Shijingshan District
Entity Address, City or Town	Beijing
Entity Address, Postal Zip Code	100041
Entity Address, Country	CN
City Area Code	86
Local Phone Number	010-82088021

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Current Assets
Cash and cash equivalents	$ 3,316,062	$ 6,679,077
Short-term investments	2,554,319	3,082,990
Accounts receivable, net	26,082,773	32,101,818
Prepayments - third parties	959,135	803,956
Prepayments - a related party	215,689	3,314,744
Media deposits - third parties	713,938	1,281,434
Media deposits - a related party		104,390
Due from related parties	30,075	28,667
Deposit due from a third party	2,816,941
Other current assets	2,831,873	2,742,406
Total Current Assets	39,520,805	50,139,482
Long-term investment	6,848,964	2,261,787
Property and equipment, net	2,056,424	2,351,328
Intangible assets, net	401,549	558,226
Othe non-current assets		2,735,592
Total Assets	48,827,742	58,046,415
Current Liabilities
Short-term bank borrowings	2,253,553	1,449,864
Accounts payable	2,292,871	8,853,669
Advance from advertisers	841,250	748,039
Advertiser deposits	90,065	541,444
Income tax payable	249,917	257,262
Due to related parties	12,176	14,499
Warrant liabilities		832
Accrued expenses and other liabilities	727,799	744,181
Total Current Liabilities	6,467,631	12,609,790
Total Liabilities	6,467,631	12,609,790
Shareholders' Equity
Ordinary Share (par value $0.0096 per share, 100,000,000 shares authorized; 1,534,487 shares issued and outstanding at December 31, 2023 and 2022, respectively)*	14,731	14,731
Additional paid-in capital	41,564,418	41,564,418
Statutory reserve	898,133	898,133
Retained earnings	3,412,457	5,257,627
Accumulated other comprehensive loss	(3,529,628)	(2,298,284)
Total Shareholders' Equity	42,360,111	45,436,625
Total Liabilities and Shareholders' Equity	$ 48,827,742	$ 58,046,415

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical)	Mar. 21, 2023 USD ($) $ / shares shares	May 24, 2022 USD ($)	May 23, 2022	May 11, 2022 $ / shares	Dec. 31, 2023 $ / shares shares	Sep. 29, 2023 USD ($) $ / shares shares	Sep. 28, 2023 USD ($) $ / shares shares	Mar. 20, 2023 USD ($) $ / shares shares	Mar. 06, 2023 USD ($) $ / shares shares	Mar. 05, 2023 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	May 25, 2022 USD ($) $ / shares shares
CONSOLIDATED BALANCE SHEETS
Ordinary shares, par value (in dollars per share) | $ / shares	$ 0.0016			$ 0.0005	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0016	$ 0.0016	$ 0.0096	$ 0.0016
Ordinary shares, shares authorized	1,000,000,000				1,000,000,000	1,000,000,000	6,250,000	6,250,000	37,500,000	31,250,000	1,000,000,000	31,250,000
Ordinary shares, shares issued					1,534,487						1,534,487
Ordinary shares, shares outstanding					1,534,487						1,534,487
Share consolidation ratio	6	3.2	50,000	3.2
Authorized capital | $	$ 60,000	$ 60,000				$ 9,600,000	$ 60,000	$ 50,000	$ 60,000	$ 50,000		$ 50,000
Common stock, shares authorized	1,000,000,000				1,000,000,000	1,000,000,000	6,250,000	6,250,000	37,500,000	31,250,000	1,000,000,000	31,250,000

XML

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS	12 Months Ended
	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
Revenues	$ 921,834	$ 2,415,098	$ 3,911,560
Cost of revenues	(308,395)	(2,446,941)	(2,077,516)
Gross profit (loss)	613,439	(31,843)	1,834,044
Operating Expenses
Selling and marketing expenses	(381,635)	(764,258)	(1,086,078)
General and administrative expenses	(1,845,064)	(2,811,215)	(2,856,789)
Provision for doubtful accounts	(726,294)	(20,460,667)	(6,880,008)
Impairment of long-term investments	(128,204)	0	0
Impairment of property and equipment			(434,878)
Total Operating Expenses	(3,081,197)	(24,036,140)	(11,257,753)
Loss from Operations	(2,467,758)	(24,067,983)	(9,423,709)
Other Income (Expenses)
Interest (expense) income, net	(14,492)	16,397	(57,109)
Changes in fair value of warrant liabilities	832	1,912	2,367,632
Changes in fair value of short-term investments	596,796	17,335
Subsidy income	9,876	3,089	574,878
Other income (expenses), net	29,576	290,413	(209,145)
Total Other Income, Net	622,588	329,146	2,676,256
Loss Before Income Taxes	(1,845,170)	(23,738,837)	(6,747,453)
Net Loss	(1,845,170)	(23,738,837)	(6,747,453)
Other Comprehensive (Loss) Income
Foreign currency translation adjustment	(1,231,344)	(4,885,827)	1,393,597
Comprehensive Loss	$ (3,076,514)	$ (28,624,664)	$ (5,353,856)
Weighted average number of ordinary share outstanding
Weighted average number of ordinary share outstanding, Basic | shares	1,534,487	1,534,487	1,459,390
Weighted average number of ordinary share outstanding, Diluted | shares	1,534,487	1,534,487	1,459,390
Loss per share
Loss per share, Basic | $ / shares	$ (1.20)	$ (15.47)	$ (4.62)
Loss per share, Diluted | $ / shares	$ (1.20)	$ (15.47)	$ (4.62)

XML

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Parenthetical)	Mar. 21, 2023	May 24, 2022	May 23, 2022	May 11, 2022
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
Share consolidation ratio	6	3.2	50,000	3.2

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)	IPO [Member] Ordinary Shares	IPO [Member] Additional Paid-in Capital	IPO [Member]	Over-Allotment Option [Member] Ordinary Shares	Over-Allotment Option [Member] Additional Paid-in Capital	Over-Allotment Option [Member]	Private Placement Ordinary Shares	Private Placement Additional Paid-in Capital	Private Placement	Ordinary Shares	Additional Paid-in Capital	Statutory Reserves	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Total
Balance at the beginning at Dec. 31, 2020										$ 10,200	$ 3,814,665	$ 898,133	$ 35,743,917	$ 1,193,946	$ 41,660,861
Balance at the beginning (in shares) at Dec. 31, 2020										1,062,502
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss													(6,747,453)		(6,747,453)
Foreign currency translation adjustments														1,393,597	1,393,597
Number of shares issued during period	312,500			46,875			112,610
Value of shares issued during period	$ 3,000	$ 26,079,224	$ 26,082,224	$ 450	$ 4,154,537	$ 4,154,987	$ 1,081	$ 7,515,992	$ 7,517,073
Balance at the end at Dec. 31, 2021										$ 14,731	41,564,418	898,133	28,996,464	2,587,543	74,061,289
Balance at the end (in shares) at Dec. 31, 2021										1,534,487
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss													(23,738,837)		(23,738,837)
Foreign currency translation adjustments														(4,885,827)	(4,885,827)
Balance at the end at Dec. 31, 2022										$ 14,731	41,564,418	898,133	5,257,627	(2,298,284)	$ 45,436,625
Balance at the end (in shares) at Dec. 31, 2022										1,534,487					1,534,487
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss													(1,845,170)		$ (1,845,170)
Foreign currency translation adjustments														(1,231,344)	(1,231,344)
Balance at the end at Dec. 31, 2023										$ 14,731	$ 41,564,418	$ 898,133	$ 3,412,457	$ (3,529,628)	$ 42,360,111
Balance at the end (in shares) at Dec. 31, 2023										1,534,487					1,534,487

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash Flows from Operating Activities:
Net loss	$ (1,845,170)	$ (23,738,837)	$ (6,747,453)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expenses	392,619	387,020	286,874
Amortization of right-of-use assets		513,218	731,923
Loss from disposal of property and equipment	6,991	1,275	14,810
Impairment of property and equipment			434,878
Provision for doubtful accounts of accounts receivables	(702,156)	19,276,587	4,155,246
Provision for doubtful accounts of prepayments	(1,243,233)	1,196,563	2,668,421
Provision for doubtful accounts of other current assets	7,061	(12,483)	56,341
Impairment prepayments for licensed copyrights	2,664,622
Changes in fair value of short-term investments	(596,796)	(17,335)
Changes in fair value of warrant liabilities	(832)	(1,912)	(2,367,632)
Share of equity loss in one equity investee	(9,214)
Impairment Of Long Term Investments	128,204	0	0
Issuance cost in connection with warrant liabilities			34,927
Changes in operating assets and liabilities:
Accounts receivable	5,818,395	1,197,088	6,069,121
Prepayments - third parties	1,064,623	6,859,021	(5,802,836)
Prepayments - a related party	3,012,482	(1,160,912)	(2,333,148)
Media deposits - third parties	532,336	(134,687)	5,686,916
Media deposits - a related party	101,682	1,243,870	(1,409,128)
Other current assets	(445,227)	1,745,634	(1,353,409)
Accounts payable	(6,324,955)	(2,442,824)	(23,769,006)
Advance from advertisers	114,874	(769,787)	(1,722,679)
Advertiser deposits	(437,091)	(313,009)	(5,029,471)
Income tax payable			(302,038)
Accrued expenses and other liabilities	(6,830)	(1,848,320)	354,692
Due to related parties	8,653
Operating lease liabilities		(378,689)	(870,548)
Net Cash Provided by (Used in) Operating Activities	2,259,466	1,601,481	(31,213,199)
Cash Flows from Investing Activities:
Purchases of property and equipment	(7,412)	(1,514,414)	(1,101,948)
Purchases of intangible assets	(22,696)	(13,463)	(837,299)
Proceeds from disposal of property and equipment		222,916
Prepayments for licensed copyrights			(2,924,897)
Purchases of short-term investments	(1,285,147)	(5,215,262)
Redemption of short-term investments	2,359,920	1,931,936
Purchase of long-term investments	(4,801,650)	(832,219)	(1,550,195)
Deposits made to a third party for future business combination	2,554,539
Loans made to a related part	1,412
Repayment of loans from related parties		1,642,724
Net Cash Used in Investing Activities	(6,312,936)	(3,777,782)	(6,414,339)
Cash Flows from Financing Activities:
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs			26,507,760
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs			4,154,987
Issuance of units pursuant to a private placement, net of issuance costs			9,852,486
Proceeds from bank borrowings	2,259,600	1,486,105	7,750,977
Repayment of bank borrowings	(1,412,250)		(9,301,172)
Repayment of borrowings to third parties		1,456
Repayment of borrowings to related parties			(709,021)
Payments of dividends to shareholders		(1,188,884)	(2,170,273)
Net Cash Provided by Financing Activities	847,350	295,765	36,085,744
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(156,895)	(323,238)	152,389
Net decrease in cash, cash equivalents and restricted cash	(3,363,015)	(2,203,774)	(1,389,405)
Cash, cash equivalents and restricted cash at beginning of year	6,679,077	8,882,851	10,272,256
Cash, cash equivalents and restricted cash at end of year	3,316,062	6,679,077	8,882,851
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets
Cash and cash equivalents	3,316,062	6,679,077	4,751,538
Total cash, cash equivalents and restricted cash	$ 3,316,062	6,679,077	8,882,851
Supplemental Cash Flow Information
Cash paid for interest expense			88,518
Cash paid for income tax		2,158	4,131,313
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
Right of use assets obtained in exchange for operating lease obligations		$ 4,299	$ 1,574,311

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ORGANIZATION AND BUSINESS DESCRIPTION

12 Months Ended

Dec. 31, 2023

ORGANIZATION AND BUSINESS DESCRIPTION

ORGANIZATION AND BUSINESS DESCRIPTION

1.ORGANIZATION AND BUSINESS DESCRIPTION

Baosheng Media Group Holdings Limited (“Baosheng Group”) was incorporated on December 4, 2018 under the laws of the Cayman Islands as an exempted company with limited liability.

Baosheng Group owns 100% of the equity interests of Baosheng Media Group Limited (“Baosheng BVI”), an entity incorporated under the laws of British Virgin Islands (“BVI”) on December 14, 2018.

Baosheng BVI owns 100% of the equity interests of Baosheng Media Group (Hong Kong) Holdings Limited (“Baosheng HK”), a business company incorporated in accordance with the laws and regulations of Hong Kong on January 7, 2019. On March 21, 2021, Baosheng HK established Beijing Baosheng Network Technology Co., Ltd. (“Baosheng Network”), a wholly owned subsidiary in China. On April 2, 2022, Baosheng Network set up a wholly owned subsidiary, Beijing Xunhuo E-commerce Co., Ltd. (“Beijing Xunhuo”).

Beijing Baosheng Technology Company Limited (“Beijing Baosheng”) was established on October 17, 2014 under the laws of the People’s Republic of China (“China” or the “PRC”) with a registered capital of $289,540 (RMB 2,000,000). Beijing Baosheng has three wholly-owned subsidiaries, Horgos Baosheng Advertising Co., Ltd. (“Horgos Baosheng”), Kashi Baosheng Information Technology Co., Ltd. (“Kashi Baosheng”), and Baosheng Technology (Horgos) Co., Ltd. (“Baosheng Technology”), which were established on August 30, 2016, May 15, 2018 and January 2, 2020 in China, respectively.

On January 21, 2019, Baosheng HK entered into an equity transfer agreement with Beijing Baosheng and the shareholders of Beijing Baosheng. Pursuant to the equity transfer agreement, each of the shareholders of Beijing Baosheng transferred to Baosheng HK their respective equity interests in Beijing Baosheng at a consideration aggregating $13,844,895 (RMB94,045,600), determined by reference to the evaluation of the equity interest of Beijing Baosheng as of June 30, 2018 (the “reorganization”). Upon completion of such transfers, Beijing Baosheng became a direct wholly-owned subsidiary of Baosheng HK and an indirect-wholly owned subsidiary of the Company.

On June 4, 2019, Baosheng Group completed the reorganization of entities under common control of its then existing shareholders, who collectively owned 100% of the equity interests of Beijing Baosheng prior to the reorganization. Baosheng Group, Baosheng BVI and Baosheng HK were established as holding companies of Beijing Baosheng and its subsidiaries, and all of these entities are under common control which results in the consolidation of Beijing Baosheng and its subsidiaries, which have been accounted for as a reorganization of entities under common control at carrying value.

The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the consolidated financial statements.

Baosheng Group, Baosheng BVI, Baosheng HK, Beijing Baosheng and its subsidiaries (herein collectively referred to as the “Company”) are engaged in providing online marketing channels to advertisers for them to manage their online marketing activities.

Share consolidation and increase in authorized share capital

On May 11, 2022, the Company’s Board of Directors resolved to approve a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares with a par value of US$0.0005 each in the Company’s issued and unissued share capital into one ordinary share with a par value of US$0.0016 (“2022 Share Consolidation”), for which the Company obtained shareholder approval on April 28, 2023. Immediately following the 2022 Share Consolidation, the authorized share capital of the Company was US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each. The 2022 Share Consolidation became effective on May 24, 2022.

1.ORGANIZATION AND BUSINESS DESCRIPTION (CONTINUED)

On March 6, 2023, the Company effected an increase in its authorized share capital from US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each to US$60,000 divided into 37,500,000 ordinary shares of a par value US$0.0016 each(the “Increase in Share Capital”), and on March 21, 2023, the Company effected a share consolidation at a ratio of one-for-six, such that each (6) ordinary shares with a par value of US$0.0016 each in the Company’s issued and unissued share capital were consolidated into one ordinary share with a par value of US$0.0096 (“2023 Share Consolidation”). Effective on September 29, 2023, the Company increased the authorized share capital of the Company from US$60,000 divided into 6,250,000 Ordinary Shares of par value US$0.0096 each, to US$9,600,000 divided into 1,000,000,000 Ordinary Shares of a par value of US$0.0096 each (the “2023 Share Capital Increase”). Immediately following the Increase in Share Capital, 2023 Share Consolidation, and the 2023 Share Capital Increase, the authorized share capital of the Company increased from US$50,000 to US$60,000, divided into 6,250,000 ordinary shares of a par value US$0.0096 each. The Company believes it is appropriate to reflect the Increase in Share Capital, 2022 Share Consolidation and 2023 Share Consolidation on a retroactive basis pursuant to ASC 260. The Company has retroactively restated all shares and per share data for all periods presented. As a result, the Company had 1,000,000,000 authorized shares, par value of US$0.0096, of which 1,534,487 shares were issued and outstanding as of December 31, 2023 and 2022, respectively.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities Exchange Commission (“SEC”).

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for doubtful accounts, valuation allowance for deferred tax assets, fair value of warrant liabilities, revenue recognition, and other provisions and contingencies.

Cash and cash equivalents

Cash and cash equivalents primarily consist of bank deposits, as well as highly liquid investments, with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains most of the bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.

Short-term investments

Short-term investments consist of US Treasury Bills and investments in trading securities.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

US Treasury Bills

The Company purchased US Treasury Bills with variable interest rates during the year of 2022. US Treasury bills were redeemable within a period of three through six months. In accordance with ASC 825, Financial Instruments, for financial products with variable interest rates referenced to performance of underlying assets, the Company elected the fair value method at the date of initial recognition and carries these investments at fair value with fair value change gains or losses recorded in the investment income in the consolidated statements of loss and comprehensive loss. As of December 31, 2023 and 2022, the Company had US Treasury Bills of $nil and $987,600, respectively. For the years ended December 31, 2023 and 2022, the Company recorded gross unrealized gains of $nil and $7,135. For the years ended December 31, 2023 and 2022, the Company recorded realized gains of $3,188 and $nil, respectively.

Investments in trading securities

Trading securities are investments in publicly-listed equity securities through various open market transactions. During the year ended December 31, 2023 and 2022, the Company purchased certain publicly-listed equity securities through various open market transactions and accounted for such investments as “short-term investments” and subsequently measure the investments at fair value. The Company made a gain of $593,608 and $10,200 in investment in trading securities for the years ended December 31, 2023 and 2022, respectively.

Accounts receivable, net of provision for doubtful accounts

Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from the advertisers for the acquisition of ad inventory and other advertising services on their behalf. Accounts receivable do not bear interest.

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. Upon the adoption of the guidance, the Company reversed allowance for expected credit losses of $702,156 for accounts receivable for the year ended December 31, 2023.

Prior to the Company’s adoption of ASU 2016-13, the Company applied ASC 310, Receivables (“ASC 310”) to recognize and measure accounts receivable. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when necessary. An allowance for doubtful accounts is made and recorded into general and administrative expenses based on any specifically identified accounts receivable that may become uncollectible. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

After the adoption of ASU 2016-13, the Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “provision for doubtful accounts” in the consolidated statements of loss and comprehensive loss. The Company assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable were primarily consisted of accounts due from the advertisers for the acquisition of ad inventory and other advertising services on their behalf. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit loss after management has determined that the likelihood of collection is not probable.

For the year ended December 31, 2023, the Company reversed allowance for expected credit losses of $702,156 for accounts receivable. For the years ended December 31, 2022 and 2021, the Company provided allowance of $19,276,587 and $4,155,246 against the accounts receivable, respectively.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Prepayments

Prepayments represent amounts advanced to media or their authorized agencies (collectively “publishers”) for running of advertising campaigns of the advertisers. The publishers usually require advance payments when the Company orders advertising campaign services on behalf of its advertisers, and the prepayments will be utilized to offset the Company’s future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature, which are reviewed periodically to determine whether their carrying value has become impaired. For the year ended December 31, 2023, the Company reversed allowances of doubtful accounts of $1,243,233 against prepayments. For the years ended December 31, 2022 and 2021, the Company accrued allowances of doubtful accounts of $1,196,563 and $2,668,421, respectively, against prepayments.

Media deposits

Media deposits represent performance security deposit upon becoming an authorized agency of the relevant media (platforms where online advertisement is delivered) as a guarantee of performance and obligations and deposit associated with committed advertising spend on behalf of selected advertisers as required by certain media before running their advertising campaigns, which are paid to media pursuant to the terms of the framework agreements and contracts.

In the event that the advertisers or their advertising agencies on behalf of their advertising clients (collectively the “advertisers”) commit to spending a guaranteed minimum amount on a particular media with the Company, the Company enters into a back-to-back framework agreement with the relevant publishers committing the same level of guaranteed minimum spend and securing a preferential rebate policy applicable to the advertising spend of that advertiser. With the committed minimum spend, the Company is entitled to enjoy certain rebates and discounts and usually be required to pay a deposit of up to 10% of the guaranteed minimum spend. If the Company fails to fulfil the committed minimum spend, the Company would not be entitled to the additional rebates and discounts, and any deposit that has been paid may be forfeited or deducted to pay up the additional amount without the benefit of the additional rebates and discounts.

The media may deduct damages from performance security deposit if the Company has breached the agency agreement or authorized agency management rules and conditions formulated by media.

As of December 31, 2023 and 2022, the balances of media deposits paid to third parties were $713,938 and $1,281,434, respectively. As of December 31, 2023 and 2022, the balances of media deposits paid to a related party were $nil and $104,390, respectively.

Property and equipment, net

Property and equipment primarily consist of property, leasehold improvement, office equipment and electronic equipment, which is stated at cost less accumulated depreciation and impairment losses. Depreciation is provided using the straight-line method based on the estimated useful life. The useful lives of property and equipment as follows:

Property	20 years
Office equipment	5 years
Electronic equipment	3 years
Vehicle	4 years
Leasehold improvement	Shorter of useful life or lease term

Expenditures for repairs and maintenance, which do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the account of “other income or expenses” in the consolidated statement of loss and comprehensive loss.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Intangible assets, net

Purchased intangible assets primarily consist of copyrights and software, which are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method based on their estimated useful lives as. The estimated useful lives of copyrights and software range from 3 to 10 years.

Long-term investment

Long-term investments consist of the following types of investments.

Equity investment without readily determinable fair value measured at Measurement Alternative

The Company elects to record the equity investment in a privately held company, over which the Company had no control or significant influence, using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. Suh equity investment accounted for using the measurement alternative is subject to periodic impairment review. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity investment. For the years ended December 31, 2023, 2022 and 2021, the Company recorded impairment loss of $128,204, $nil, and $nil against the long-term investment, respectively.

Equity investment accounted for using the equity method

For the year ended December 31, 2023, the Company acquired one equity investment which was accounted for using equity method.

In accordance with ASC 323 “Investments - Equity Method and Joint Ventures,”, the Company accounts for the investment using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee.

Under the equity method, the Company initially records its investment at cost. The Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of loss and comprehensive loss and its share of post-acquisition movements in accumulated other comprehensive income (loss) is recognized in other comprehensive income (loss). The Company records its share of the results of the equity investees on a one quarter in arrears basis. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.

The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. For the year ended December 31, 2023, the Company did not recognize impairment against investment in an equity investee.

Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Impairment of $nil $nil, and $434,878 was recognized on property and equipment for the years ended December 31, 2023, 2022 and 2021, respectively.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Advertiser deposits

The advertiser deposits represented deposits made by the advertisers who undertake a minimum total advertising spend as a condition for enjoying rebates and discounts. The Company generally requires these advertisers to place deposits with the Company at a percentage (usually up to 10%) of the committed spend, which usually equals to the amount of deposit payable to the media under the corresponding framework agreement with the media specific to such advertiser (see note 2 – media deposits). If the advertiser fails to reach the committed minimum spend upon expiry or termination of the framework agreement; (i) the advertiser would not be entitled to the rebates and discounts under the preferential pricing policy, if any; (ii) the advertiser’s deposit may be forfeited or deducted to pay up the additional amount it should pay without the benefits of rebates or discounts.

As of December 31, 2023 and 2022, the balances of advertiser deposits were $90,065 and $541,444, respectively.

Warrant Liabilities

The Company evaluates the stock purchase warrants under Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of common stock warrant liability in the consolidated statement of loss and comprehensive loss.

Revenue recognition

The Company early adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018, using the modified retrospective approach for contracts that were not completed as of December 31, 2017. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

The Company identified each distinct service, or each series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, as a performance obligation. Transaction price is allocated among different performance obligations identified in one contract, by using expected cost plus margin approach, if the standalone selling price of each performance obligation is not observable.

The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company has no material incremental costs of obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year, which need to be recognized as assets.

The Company has advertising agency revenues from search engine marketing (‘SEM”, a form of online marketing that involves the promotion of websites by increasing their visibility in search engine results pages and search-related products and services) services and non-SEM services, including deployment of in-feed and mobile app ads on other media and social media marketing services in relation to running advertising campaigns on selected social media accounts. The Company acts as an agent between media or their authorized agencies (collectively “publishers”) and advertisers by helping publishers procure advertisers and facilitate ad deployment on their advertising channels, and purchasing ad inventories and advertising services from publishers for advertisers. The Company places orders with publishers as per request from advertisers. Each order is materialized by a contract and explicitly quotes one agency service to arrange for the advertising service to be provided by a third party publisher for a period of ad term. The Company provides advices and services on advertising strategies and ad optimization to advertisers to improve the effectiveness of their ads, all of which are highly interrelated and not separately identifiable. The Company’s overall promise represents a combined output that is a single performance obligation; there is no multiple performance obligations.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company evaluated its advertising agency contracts and determined that it was not acting as principal in these arrangements with publishers and advertisers since it never takes control of the ad inventories at any time. The Company collects the costs of purchasing ad inventories and advertising services from advertisers on behalf of publishers. The Company generates advertising agency revenues either by charging additional fees to advertisers or receiving rebates and incentives offered by publishers. Accordingly, both advertisers and publishers can be identified as customers, depending on the revenue model applicable to the relevant services.

The Company recognizes revenues on a net basis, which equal to: (i) rebates and incentives offered by publishers, netting the rebates to advertises (if any); and (ii) net fees from advertisers.

Rebates and incentives offered by publishers

Rebates and incentives offered by publishers are determined based on the contract terms with publishers and their applicable rebate policies, which typically in the form of across-the-board standard-rate rebates, differential standard-rate rebates and progressive-rate rebates. Rebates and incentives offered by publishers are accounted for as variable consideration. The Company accrues and recognizes revenues in the form of rebates and incentives based on its evaluation as to whether the contractually stipulated thresholds of advertising spend are likely to being reached, or other benchmarks or certain prescribed classification are likely to being qualified (e.g. the number of new advertisers secured, growth in actual advertising spend), and to the extent that a significant reversal of cumulative revenue would not occur in future periods. These evaluations are based on the past experience and regularly monitoring of various performance factors set within the rebate policies (e.g. accumulated advertising spend, number of new advertisers). At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving such advertising spend volume and any related constraint, and if necessary, adjusts the estimate of the amount of rebates and incentives. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. The rebates and incentives are generally ascertained and settled on a quarterly or annual basis. Historically, adjustments to the estimations for the actual amounts have been immaterial. These rebates and incentives take the form of cash which, when paid, are applied to set off accounts payable with the relevant publishers or settled separately; or can be in the form of ad currency units which will be deposited in the account in the back-end platform of the media, and can then be utilized to acquire their ad inventory.

The Company may offer rebates to advertisers on a case by case basis, generally with reference to the rebates and incentives offered by publishers, the advertiser’s committed total spend, and the business relationships with such advertiser. The rebates offered by the Company to advertisers are in the form of cash discounts or ad currency units that can be utilized to acquire ad inventory from relevant media, both of which are account for as a deduction of revenues.

Net fees from advertisers

Net fees from advertisers are the difference between the gross billing amount charged to the advertisers and the costs of purchasing ad inventories and advertising services on their behalf.

The publishers do not receive the benefits from the Company’s facilitation services until the publishers deliver advertising services to the advertisers. The Company recognizes advertising agency revenues when it transfers the control of the facilitation service commitments, i.e., when the publishers deliver advertising services to the advertisers. Under the CPC and CPA pricing model of media, the Company recognizes revenues at the point of time as the publishers deliver advertising services at the point in time. Under the CPT pricing model of media, the publishers deliver advertising services over time when the advertising links are displayed over the contract periods, and therefore the Company recognizes revenue on a straight-line basis over the contracted display period. During the years ended December 31, 2023, 2022 and 2021, revenues from the advertising services under CPT pricing model that the Company arranged are immaterial.

The Company records revenues and costs on a net basis and the related accounts receivable and payable amounts on a gross basis.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The gross billing amounts charged to the advertisers are collected either in advance to provision of services or after the services. Accounts receivable represent the gross billing charged to advertisers that the Company has an unconditional right to consideration (including billed and unbilled amount) when the Company has satisfied its performance obligation. Payment terms and conditions of accounts receivables vary by customers, and terms typically include a requirement for payment within a period from three to six months. The Company has determined that all the contracts generally do not include a significant financing component. The Company does not have any contract assets since revenue is recognized when control of the promised services is transferred and the payment from customers is not contingent on a future event. In cases where the gross billing amounts are collected in advance, the amounts are recorded as “advance from advertisers” in the consolidated balance sheets. Advance from advertisers related to unsatisfied performance obligations at the end of the year is recognized as revenue when the Company delivers the services to its advertisers. The fees are non-refundable. In cases where amounts are collected after the services, accounts receivable are recognized upon delivery of ad inventories and advertising services to the advertisers. The gross billing amounts are determinable at the inception of the services.

The cost of purchasing ad inventories and advertising services are recorded as accounts payable or a deduction against prepayments in cases where prepayments are required by the publishers.

The following table identifies the disaggregation of our revenue for the years ended December 31, 2023, 2022, and 2021, respectively.

	For the Years Ended
	December 31,
	2023		2022		2021
Nature of Revenue:
Rebates and incentives offered by publishers	$	887,038	$	1,930,188	$	3,663,168
Net fees from advertisers		34,796		484,910		248,392
Total	$	921,834	$	2,415,098	$	3,911,560
Category of Revenue:
SEM services	$	559,307	$	321,363	$	2,449,120
Non-SEM services		362,527		2,093,735		1,462,440
Total	$	921,834	$	2,415,098	$	3,911,560

Value added taxes

The Company’s PRC subsidiaries are subject to value added tax (“VAT”) and related surcharges based on gross service price depending on the type of services provided in the PRC (“output VAT”), and the VAT may be offset by VAT paid by the Company on service purchases (“input VAT”). The applicable rate of output VAT or input VAT for the Company is 6%. Gross billing charged to advertisers, which is reflected as accounts receivable on gross basis in the consolidated balance sheet, is subject to output VAT at a rate of 6% and subsequently paid to PRC tax authorities after netting input VAT on purchases incurred during the period. The Company’s revenues are presented net of costs of purchasing ad inventories and services paid on behalf of advertisers, VAT collected on behalf of PRC tax authorities and its related surcharges; the VAT is not included in the consolidated statements of loss and comprehensive loss.

Cost of revenues

Cost of revenues related to advertising agency is primarily personnel related costs and business taxes. These costs are expensed as incurred.

Income Taxes

The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forwards. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company does not believe that there was any uncertain tax position as of December 31, 2023 and 2022. As of December 31, 2023, income tax returns for the tax years ended December 31, 2018 through December 31, 2022 remain open for statutory examination.

Loss per share

Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is computed by dividing net income attributable to ordinary shareholders by the sum of the weighted average number of ordinary share outstanding and of potential ordinary share (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary share that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted loss per share. For the years ended December 31, 2023, 2022 and 2021, the Company had no dilutive shares.

Foreign currency translation

The reporting currency of the Company is U.S. dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into the reporting currency U.S. Dollars (“US$” or “$”). Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations.

The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

	December 31,	December 31,
	2023	2022
Year-end spot rate	7.0999	6.8972

	For the Years Ended
	December 31,
	2023	2022	2021
Average rate	7.0809	6.7290	6.4508

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy are described below:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value.

Financial instruments of the Company primarily comprised current assets and current liabilities including cash and cash equivalents, restricted cash, short-term investments, accounts receivable, third party and related party media deposits, other receivables, accounts payables, advertiser deposits, dividend payable, tax payable, other payables, due to related parties and warrant liabilities.

Fair value of investment in trading securities and US Treasury Bills are based on quoted prices in active markets, and were categorized in Level 1 of the fair value hierarchy.

Warrant liabilities were measured at fair value using unobservable inputs and categorized in Level 3 of the fair value hierarchy. See Note 13.

As of December 31, 2023 and 2022, the carrying values of other financial instruments approximated to their fair values because of the short-term nature of these instruments.

Concentration and credit risk

Substantially all of the Company’s operating activities are transacted into RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

The Company maintains certain bank accounts in the PRC, Hong Kong and Cayman Islands, which are not insured by Federal Deposit Insurance Corporation (“FDIC”) insurance or other insurance. As of December 31, 2023 and 2022, $3,094,310 and $5,921,461 of the Company’s cash were on deposit at financial institutions in the PRC, respectively, where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure.

Accounts receivable are typically unsecured and derived from services rendered to advertisers that are located primarily in China, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of advertisers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its receivables with specific advertisers. As of December 31, 2023, four advertisers accounted for 22.1%, 17.7%, 16.2% and 12.0% of accounts receivable, respectively. As of December 31, 2022, three advertisers accounted for 18.1%, 14.4% and 13.2% of accounts receivable, respectively.

For the year ended December 31, 2023, two publishers accounted for approximately 49.1% and 40.1% of the total revenue, respectively. For the year ended December 31, 2022, three publishers accounted for approximately 36.8%, 13.3% and 10.7% of the total revenue, respectively. For the year ended December 31, 2021, three publishers accounted for approximately 41.8%, 28.1%  and 16.5% of the total revenue, respectively.

As of December 31, 2023, one publisher accounted for 81.4% of the total accounts payable balance, respectively. As of December 31, 2022, two publishers accounted for 43.5% and 27.7% of the total accounts payable balance, respectively.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal.

In March 2023, the FASB issued new accounting guidance, ASU 2023-01, for leasehold improvements associated with common control leases, which is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. The new guidance introduced two issues: terms and conditions to be considered with leases between related parties under common control and accounting for leasehold improvements. The goals for the new issues are to reduce the cost associated with implementing and applying Topic 842 and to promote diversity in practice by entities within the scope when applying lease accounting requirements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of loss and cash flows.

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GOING CONCERN

12 Months Ended

Dec. 31, 2023

GOING CONCERN

GOING CONCERN

3.GOING CONCERN

As reflected in the Company’s consolidated financial statements, the Company had a net loss of $1,845,170, $23,738,837 and $6,747,453 for the years ended December 31, 2023, 2022 and 2021, and reported a cash inflow of $2,259,466 and $1,601,481 for the years ended December 31, 2023 and 2022, respectively, while cash outflow of $31,213,199 from operating activities for the year ended December 31, 2021. These factors raise a substantial doubt about the Company’s ability to continue as a going concern.

As of December 31, 2023, the Company had cash and cash equivalent of $3,316,062 and short-term investments of $2,554,319. On the other hand, the balance of current liabilities of $6,467,631, among which advance from customers of $841,250 were not required to be settled in cash. The current assets are sufficient to cover the current liabilities which were expected to get paid in the year ending December 31, 2024. The Company also obtained a one-year bank borrowing during the year ended December 31, 2023. The Company expected to renew the bank borrowing upon its maturity. The Company intends to meet the cash requirements for the next 12 months from the issuance date of this report through a combination of application of credit terms, bank loans, and principal shareholder’s financial support. Given the factors mentioned above, the Company assesses current working capital is sufficient to meet its obligations for the next 12 months from the issuance date of this report. Accordingly, management continues to prepare the Company’s consolidated financial statements on going concern basis.

3GOING CONCERN (CONTINUED)

However, future financing requirements will depend on many factors, including the scale and pace of the expansion of the Company’s advertising business, the expansion of the Group’s sales and marketing activities, and potential investments in, or acquisitions of, businesses or technologies. Inability to obtain credit terms from medias or access to financing on favorable terms in a timely manner or at all would materially and adversely affect the Company’s business, results of operations, financial condition, and growth prospects.

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ACCOUNTS RECEIVABLE, NET

12 Months Ended

Dec. 31, 2023

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET

4.ACCOUNTS RECEIVABLE, NET

The Company records revenues and costs on a net basis and the related accounts receivable and payable amounts on a gross basis. Accounts receivable, net of provision for doubtful accounts consist of the following:

	December 31,		December 31,
	2023		2022
Accounts receivable	$	39,500,254	$	49,783,610
Less: provision for doubtful accounts		(13,417,481)		(17,681,792)
Accounts receivable, net of provision for doubtful accounts	$	26,082,773	$	32,101,818

Reversal of expected credit losses of accounts receivable were $702,156 for the year ended December 31, 2023. Provisions for doubtful accounts of accounts receivable were $19,276,587 and $4,155,246 for the years ended December 31, 2022 and 2021, respectively. Movement of allowance for doubtful accounts was as follows:

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	17,681,792	$	6,426,781
Charge to expenses		—		19,276,587
Reversal of expenses		(702,156)		—
Writing off of accounts receivable		(3,067,433)		(7,239,204)
Foreign exchange loss		(494,722)		(782,372)
Balance at end of the year	$	13,417,481	$	17,681,792

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PREPAYMENTS - THIRD PARTIES

12 Months Ended

Dec. 31, 2023

PREPAYMENTS - THIRD PARTIES

PREPAYMENTS - THIRD PARTIES

5.PREPAYMENTS – THIRD PARTIES

Prepayments – third parties consist of the following:

	December 31,		December 31,
	2023		2022
Prepayments to third party medias	$	1,540,597	$	2,957,346
Less: provision for doubtful accounts		(581,462)		(2,153,390)
	$	959,135	$	803,956

Reversal of provisions for doubtful accounts of prepayments were $1,243,233 for the year ended December 31, 2023. Provisions for doubtful accounts of prepayments were $1,196,563 and $2,668,421 for the years ended December 31, 2022 and 2021, respectively. Movement of allowance for doubtful prepayments was as follows:

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	2,153,390	$	2,701,166
Charge to expenses		—		1,196,563
Reversal of expenses		(1,243,233)		—
Writing off of accounts receivable		(271,269)		(1,547,445)
Foreign exchange loss		(57,426)		(196,894)
Balance at end of the year	$	581,462	$	2,153,390

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OTHER CURRENT ASSETS

12 Months Ended

Dec. 31, 2023

OTHER CURRENT ASSETS

OTHER CURRENT ASSETS

6.OTHER CURRENT ASSETS

Other current assets consist of the following:

	December 31,		December 31,
	2023		2022
Recoverable value-added taxes	$	2,603,043	$	2,689,170
Others		235,508		60,110
Less: provision for doubtful accounts		(6,678)		(6,874)
	$	2,831,873	$	2,742,406

For the years ended December 31, 2023, 2022, and 2021, provisions for doubtful accounts of other current assets were $7,061, $nil, and $56,341, respectively, among which the Company wrote off other current assets of $7,061, $nil, and $35,976. For the year ended December 31, 2022, the Company reversed provision for doubtful accounts of $12,483. Movement of allowance for doubtful accounts was as follows:

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	6,874	$	20,621
Charge to expenses		7,061		—
Reversal of charges		—		(12,483)
Writing off of accounts receivable		(7,061)		—
Foreign exchange loss		(196)		(1,264)
Balance at end of the year	$	6,678	$	6,874

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PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

7.PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	December 31,		December 31,
	2023		2022
Property	$	1,958,723	$	2,016,287
Leasehold improvement		477,349		367,235
Office equipment		147,734		161,997
Vehicles		141,649		144,986
Electronic equipment		129,162		133,850
Less: accumulated depreciation		(798,193)		(473,027)
	$	2,056,424	$	2,351,328

Depreciation expense was $228,806, $211,213, and $210,208 for the years ended December 31, 2023, 2022 and 2021, respectively. During the year ended December 31, 2021, the Company recognized impairment loss of $434,878 on electronic equipment.

During the year ended December 31, 2023, the Company disposed of office equipment and electronic equipment, and recorded loss from disposal of property and equipment of $6,991. On the date of disposal, the cost and accumulated depreciation of electronic equipment was $9,638 and $3,052, respectively. On the date of disposal, the cost and accumulated depreciation of office equipment was $866 and $480, respectively.

During the year ended December 31, 2022, the Company disposed of electronic equipment at consideration of $222,916, and recorded loss from disposal of property and equipment of $1,275. On the date of disposal, the cost and accumulated depreciation of electronic equipment was $217,341 and $23,637, respectively.

7.PROPERTY AND EQUIPMENT, NET (CONTINIED)

During the year ended December 31, 2021, the Company disposed of leasehold improvement, office equipment and electronic equipment, and recorded loss from disposal of property and equipment of $14,810. On the date of disposal, the cost and accumulated depreciation of leasehold improvement was $382,909 and $382,909, respectively, the cost and accumulated depreciation of office equipment was $27,071 and $13,436, respectively, and the cost and accumulated depreciation of office equipment was $27,156 and $25,798, respectively.

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INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS, NET

8.INTANGIBLE ASSETS, NET

Intangible assets consisted of the following:

	December 31,		December 31,
	2023		2022
Copyrights	$	730,810	$	752,288
Software		65,335		43,954
Less: accumulated amortization		(394,596)		(238,016)
	$	401,549	$	558,226

Amortization expense was $163,813, $175,807, and $76,666 for the years ended December 31, 2023, 2022, and 2021, respectively.

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PREPAYMENTS FOR LICENSED COPYRIGHTS

12 Months Ended

Dec. 31, 2023

PREPAYMENTS FOR LICENSED COPYRIGHTS

PREPAYMENTS FOR LICENSED COPYRIGHTS

9.PREPAYMENTS FOR LICENSED COPYRIGHTS

Prepayments for licensed copyrights consisted of the following:

	December 31,		December 31,
	2023		2022
Prepayments for licensed copyrights	$	—	$	2,735,592

As of December 31, 2022, the balance of prepayments for licensed copyrights represented prepayments made to two third party entities, with which the Company entered into cooperation agreements. Pursuant to the cooperation agreements, the Company would have the right to use the licensed copyrights of two games developed by such third party entity for a three-year term, and the games were expected to be launched in November 2023.

As of December 31, 2023, the two games have not been launched. For the year ended December 31, 2023, the Company provided full impairment of $2,664,622 against the prepayments for licensed copyrights.

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DEPOSITS DUE FROM A THIRD PARTY

12 Months Ended

Dec. 31, 2023

DEPOSITS DUE FROM A THIRD PARTY

DEPOSITS DUE FROM A THIRD PARTY

10.DEPOSITS DUE FROM A THIRD PARTY

In November 2023, Baosheng Network and Nanjing Yunbei E-commerce Co., Ltd. entered into an Asset Merger Margin Custodian Agreement, pursuant to which the Company deposited RMB30,000,000, or $2,554,539 (the “Deposit”) into the custodian account under the name of Nanjing Yunbei to support the Company’s future business combination. The deposit would be deposited in custody account of Nanjing Yunbei for twelve months. The deposit is interest-free during the custody period. As of December 31, 2023, the Company made a deposit of $2,816,941 due from Nanjing Yunbei.

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LONG-TERM INVESTMENTS

12 Months Ended

Dec. 31, 2023

LONG-TERM INVESTMENTS

LONG-TERM INVESTMENTS

11.LONG-TERM INVESTMENTS

As of December 31, 2023 and 2022, long-term investments consisted of the following:

	December 31,		December 31,
	2023		2022
Equity investment without readily determinable fair value measured at Measurement Alternative (a)	$	2,632,742	$	2,261,787
Equity investment accounted for using the equity method (b)		4,216,222		—
	$	6,848,964	$	2,261,787

(a) As of December 31, 2023 and 2022, the movement of equity investment without readily determinable fair value measured at Measurement Alternative consisted of the following:

	December 31,		December 31,
	2023		2022
Opening balance	$	2,261,787	$	1,569,218
Investment in Beijing Qucheng Technology Co., Ltd. (“Qucheng”)		564,900		832,219
Impairment against investment in Qucheng		(128,204)		—
Foreign exchange adjustments		(65,741)		(139,650)
Ending balance	$	2,632,742	$	2,261,787

In January 2023, Beijing Baosheng closed an acquisition of 12% equity interest in Qucheng at cash consideration of RMB9,600,000, or $1,397,119. The Company made cash consideration of $564,900 and $832,219, respectively, in January 2023 and December 2022.

The Company accounted for the transaction as an investment in privately held investment using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As of December 31, 2023, the Company did not identify orderly transactions for similar investments of the investees and the Company did not record upward or downward adjustments. As of December 31, 2023, the Company reviewed the financial position and financial performance of Qucheng, and assessed that the Company’s share of fair value was below the investment. For the year ended December 31, 2023, the Company provided impairment of $128,204 against investment in Qucheng.

In February 2021, the Company acquired 10% equity interest in Bejing Xinrong Fanxing Technology Co., Ltd. (“Xinrong Fanxing”) at cash consideration of RMB 10,000,000, or $1,550,195. The Company accounted for the transaction as an investment in privately held investment using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As of December 31, 2023 and 2022, the Company did not identify orderly transactions for similar investments, or impairment indicators of the investees, and the Company did not record upward or downward adjustments or impairment against the investment in Xinrong Fanxing.

(b) As of December 31, 2023 and 2022, the movement of equity investment accounted for using the equity method consisted of the following:

	December 31,		December 31,
	2023		2022
Opening balance	$	—	$	—
Investment in Guangzhou Shanxingzhe Technology Investment LLP (“Shanxingzhe”)		4,236,750		—
Share of equity loss		(9,214)		—
Foreign exchange adjustments		(11,314)		—
Ending balance	$	4,216,222	$	—

In June 2023, Beijing Xunhuo closed acquisition of 42.85% equity interest in Shanxingzhe, at cash consideration of RMB30,000,000, or $4,236,750. In May 2023, Beijing Xunhuo fully paid the cash consideration.

11.LONG-TERM INVESTMENTS (CONTINUED)

Shanxingzhe is primarily engaged in investment in advertisement entities. The investment in Shanxingzhe is to diversify the Company’s advertising business. Beijing Xunhuo is able to exercise significant influence over Shanxingzhe, and accounted for the equity investment using equity method. For the year ended December 31, 2023, equity investment loss of $9,214 was recognized in the account of “other income, net” in the consolidated statements of loss and comprehensive loss. As of December 31, 2023, the Company did not note other-than-temporary decline in fair value below the carrying value of the investment and did not accrue impairment against the investment in Shanxingzhe.

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BANK BORROWING

12 Months Ended

Dec. 31, 2023

BANK BORROWING

BANK BORROWING

12.BANK BORROWING

	December 31,		December 31,
	2023		2022
Bank borrowing	$	2,253,553	$	1,449,864

In December 2023, Baosheng Network entered into a bank loan agreement with Bank of Beijing under which under which Baosheng Network borrowed a one-year loan of RMB10,000,000, or $1,449,846. The interest rate for the borrowing was fixed at 3.65% per annum. In December 2023, the borrowing was renewed for one year through December 2024. The loan is guaranteed by two third parties, for whom the Company involved a third-party counter-guarantor. In addition, the Company pledged its properties with the counter guarantor.

In July 2023, Beijing Baosheng entered into a bank loan agreement with Bank of Communication under which under which Beijing Baosheng borrowed a one-year loan of RMB6,000,000, or $847,350. The interest rate for the borrowing was fixed at 3.55% per annum. The loan is guaranteed by Mr. Gong Sheng, the Company’s managing director and his spouse, and one third party. Beijing Baosheng also involved Baosheng Network as counter-guarantor for the third-party guarantor. In addition, Mr. Gong Sheng and his spouse pledged their property with the counter guarantor.

For the year ended December 31, 2023, 2022, and 2021, interest expense arising from the bank borrowing amounted to $73,406, $nil, and $88,518, respectively.

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WARRANT LIABILITIES

12 Months Ended

Dec. 31, 2023

WARRANT LIABILITIES

WARRANT LIABILITIES

13. WARRANT LIABILITIES

In connection with the private placement on March 18, 2021 (Note 16), the Company sold an aggregate of 112,610 warrants (giving effect to a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares effective on May 24, 2022 and a share consolidation at a ratio of one-for-six (6) ordinary shares effective on March 21, 2023) with each warrant entitling the holder thereof to purchase one half of one ordinary share at an exercise price of $107.71 per ordinary share (giving effect to a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares effective on May 24, 2022, and a share consolidation at a ratio of one-for-six (6) ordinary shares effective on March 21, 2023). A warrant may be exercised at any time on or after March 18, 2021 and on or prior to 5:00 p.m. (New York City time) on September 18, 2026 but not thereafter.

The holders of warrants are granted with registration rights. If at any time after the six-month anniversary of March 18, 2021, there is no effective registration statement registering, or no current prospectus available for the issuance of the warrant shares to the holder and the resale of the warrant shares, then this warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise”. The warrants are subject to adjustments in the event of 1) stock dividends and splits, 2) subsequent right offerings, 3) pro rata dilutions and 4) fundamental transactions. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the warrants.

13.WARRANT LIABILITIES (CONTINUED)

In the event of a fundamental transaction, the Company or any successor entity shall, at the holder’s option, purchase this warrant from the holder by paying to the holder an amount of cash equal to the value of the remaining unexercised portion of the warrant, using Black-Scholes model, on the date of the consummation of such fundamental transaction; provided, however, that, if the fundamental transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, holder shall only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion), at the value of the unexercised portion of the warrant, that is being offered and paid to the holders of ordinary shares of the Company in connection with the fundamental transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of ordinary shares are given the choice to receive from among alternative forms of consideration in connection with the fundamental transaction.

If the Company fails for any reason to deliver to the holders the warrant shares subject to a notice of exercise by the warrant share delivery date, the Company shall pay to the holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of warrant shares subject to such exercise (based on the volume weighted average price of the ordinary shares on the date of the applicable Notice of Exercise), $10 per trading day (increasing to $20 per trading day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each trading day after such warrant share delivery date until such warrant shares are delivered or holder rescinds such exercise. In addition, cash payment is required as a compensation for buy-in on failure of delivery warrant shares.

The above mentioned cash-settled make-whole provisions led the warrants classified as a derivative warrant liability. The derivative warrant liability was initially recorded at fair value on the closing date of the private placement and were subsequently remeasured at fair value at each reporting dates. The changes in the fair value of derivative warrant liability were charged to the account of “Changes in fair value of warrant liabilities” in the consolidated statements of loss and comprehensive loss.

As of December 31, 2023 and 2022, the Company had 112,610 of private placement warrants outstanding. The warrant liability related to such warrants was remeasured to its fair value at each reporting period. The change in fair value was recognized in the consolidated statements of loss. The change in the fair value of the warrant liabilities is summarized as follows:

Estimated fair value as of January 1, 2021	$	—
Issuance of warrants		2,370,376
Changes in estimated fair value		(2,367,632)
Estimated fair value as of December 31, 2021		2,744
Changes in estimated fair value		(1,912)
Estimated fair value as of December 31, 2022		832
Changes in estimated fair value		(832)
Estimated fair value as of December 31, 2023	$	—

The fair value of the warrant liabilities was estimated using Black-Scholes model. Inherent in these valuations are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical and implied volatilities of selected peer companies as well as its own that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

13.WARRANT LIABILITIES (CONTINUED)

The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company’s warrants at their measurement dates:

	As of December 31,		As of December 31,		As of December 31,		As of March 18,
	2023		2022		2021		2021
Volatility	28.63	%	35.77	%	32.52	%	31.26	%
Stock price	3.61		5.16		17.28		126.34
Expected life of the warrants to convert	2.72		3.72		4.72		5.50
Risk free rate	4.20	%	4.17	%	1.27	%	1.09	%
Dividend yield	0.0	%	0.0	%	0.0	%	0.0	%

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INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

14.INCOME TAXES

Cayman Islands

Under the current and applicable laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

British Virgin Islands

Under the current and applicable laws of BVI, Baosheng BVI is not subject to tax on income or capital gains.

Hong Kong

Baosheng HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax laws, Baosheng HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

PRC

Beijing Baosheng, Horgos Baosheng, Kashi Baosheng, Baosheng Technology, Baosheng Network and Beijing Xunhuo were incorporated in the PRC and are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. On March 16, 2007, the National People’s Congress enacted a new enterprise income tax law, which took effect on January 1, 2008. The law applies a uniform 25% enterprise income tax rate to both foreign invested enterprises and domestic enterprises.

Horgos Baosheng, Kashi Baosheng, and Baosheng Technology are subject to a preferential income tax rate of 0% CIT for a period since generating revenues, as they were incorporated in the Horgos and Kashi Economic District, Xinjiang province. The five-year preferential income tax treatment ends on December 31, 2025 for Baosheng Technology. Kashi Baosheng was entitled to the five-year preferential income tax treatment for ended on December 31, 2022 and is entitled to an extension of five-year preferential income tax treatment ended on December 31, 2027. Horgos Baosheng was entitled to the five-year preferential income tax treatment for ended on December 31, 2020 and is entitled to an extension of five-year preferential income tax treatment ended on December 31, 2025.

14.INCOME TAXES (CONTINUED)

Income tax expense consist of the following:

	For the Years Ended
	December 31,
	2023		2022		2021
Current income tax expense	$	—	$	—	$	—
Deferred income tax expense		—		—		—
Income tax expense	$	—	$	—	$	—

Below is a reconciliation of the statutory tax rate to the effective tax rate:

	For the Years Ended
	December 31,
	2023		2022		2021
PRC statutory income tax rate	25	%	25	%	25	%
Impact of different income tax rates in other jurisdictions	(4.7)	%	(0.8)	%	5.9	%
Effect of preferential tax rate(a)	(20.2)	%	(18.0)	%	(23.6)	%
Effect of non-deductible expenses	(1.9)	%	(0.2)	%	(0.7)	%
Effect of change in valuation allowance	1.8	%	(6.0)	%	(6.6)	%
Effective tax rate	0.0	%	0.0	%	0.0	%

(a) The Company’s subsidiaries, Horgos Baosheng, Kashi Baosheng and Baosheng Technology are subject to a favorable tax rate of 0%. For the years ended December 31, 2023, 2022, and 2021, no tax saving was resulted from the favorable tax rate.

Deferred tax assets as of December 31, 2023 and 2022 consist of the following:

	December 31,		December 31,
	2023		2022
Deferred tax assets:
Net operating losses carryforwards	$	2,903,728	$	1,190,713
Allowance for doubtful accounts of accounts receivable		193,032		27,745
Allowance for doubtful accounts of prepayments		3,971		70,207
Allowance for doubtful accounts of other current assets		1,668		1,717
Less: allowance on deferred tax assets		(3,102,399)		(1,290,382)
	$	—	$	—

The Company evaluates its valuation allowance requirements at end of each reporting period by reviewing all available evidence, both positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a change in management’s judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under applicable tax law.

As of December 31, 2023 and 2022, due to uncertainties surrounding future utilization on Beijing Baosheng, Baosheng Network, the Beijing branch of Horgos Baosheng and Baosheng HK, the Company accrued full valuation allowance of $3,102,399 and 1,290,381, respectively, against the deferred tax assets based upon management’s assessment as to their realization.

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EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2023

EARNINGS PER SHARE

LOSS PER SHARE

15.EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted loss per common share for the years ended December 31, 2023, 2022, and 2021, respectively:

	For the Years Ended
	December 31,
	2023		2022		2021
Net Loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Weighted average number of ordinary share outstanding
Basic and Diluted		1,534,487		1,534,487		1,459,390
Loss per share
Basic and Diluted	$	(1.20)	$	(15.47)	$	(4.62)

For the years ended December 31, 2023, 2022, and 2021, the Company had no dilutive shares.

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EQUITY

12 Months Ended

Dec. 31, 2023

EQUITY

EQUITY

16.EQUITY

Ordinary shares

Effective on September 29, 2023, the Company increased the authorized share capital of the Company from US$60,000 divided into 6,250,000 Ordinary Shares of par value US$0.0096 each, to US$9,600,000 divided into 1,000,000,000 Ordinary Shares of a par value of US$0.0096 each.

On February 10, 2021, the Company closed its initial public offering (“IPO”) of 6,000,000 ordinary shares at a public offering price of US$5.00 per ordinary share. On March 2, 2021, Univest Securities, LLC, the representative of the underwriters in the IPO exercised in full its option to purchase an additional 900,000 ordinary shares at a price of $5.00. Gross proceeds of the Company’s IPO, including the proceeds from the sale of the over-allotment shares, totaled $34.5 million, before deducting underwriting discounts and other related expenses.

On March 18, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two investors, including a wholly-owned subsidiary of Ebang International Holdings Inc. (Nasdaq: EBON) for an investment of US$10 million. Pursuant to the Securities Purchase Agreement and an exemption from registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) contained in Regulation S promulgated under the Securities Act, the Company issued an aggregate of 1,960,784 units to the investors, with each unit consisting of one ordinary share of the Company, par value $0.0005 per share (the “Ordinary Shares”) and a warrant to purchase one half of one Ordinary Share at an exercise price of $5.61 per Ordinary Share (subject to adjustment).

16.EQUITY (CONTINUED)

On May 11, 2022, the Board of Directors resolved to approve a share consolidation at a ratio of one-for-three and one fifth (3.2) ordinary shares with a par value of US$0.0005 each in the Company’s issued and unissued share capital into one ordinary share with a par value of US$0.0016 (“2022 Share Consolidation”), for which the Company obtained shareholder approval on April 28, 2023. Immediately following the 2022 Share Consolidation, the authorized share capital of the Company will be US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each. The 2022 Share Consolidation became effective on May 24, 2022.

On March 6, 2023, the Company effected an increase in authorized share capital from US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each to US$60,000 divided into 37,500,000 ordinary shares of a par value US$0.0016 each (the “Increase in Share Capital”), and on March 21, 2023, the Company effected a share consolidation at a ratio of one-for-six, such that each (6) ordinary shares with a par value of US$0.0016 each in the Company’s issued and unissued share capital were consolidated into one ordinary share with a par value of US$0.0096 (“2023 Share Consolidation”). Immediately following the Increase in Share Capital and 2023 Share Consolidation, the authorized share capital of the Company will be increased from US$50,000 to US$60,000, divided into 6,250,000 ordinary shares of a par value US$0.0096 each. The Company believes it is appropriate to reflect the Increase in Share Capital, 2022 Share Consolidation and 2023 Share Consolidation on a retroactive basis pursuant to ASC 260. The Company has retroactively restated all shares and per share data for all periods presented. As a result, the Company had 1,000,000,000 authorized shares, par value of US$0.0096, of which 1,534,487 shares of ordinary shares were issued and outstanding as of December 31, 2023 and 2022, respectively.

Cash dividends

On December 31, 2018, the Company’s Board of Directors approved a resolution to declare cash dividends of $7,269,978 (RMB 50,000,000) to its shareholders.

During the year ended December 31, 2023, 2022 and 2021, the Company paid dividends of $nil, $1,188,884 and $2,170,273 to its shareholders. As of December 31, 2023 and 2022, the Company had no dividends payable.

Restricted net assets

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after they have met the PRC requirements for appropriation to statutory reserves. Paid in capital of the PRC subsidiaries included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. The Company is required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the Company may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.

As of December 31, 2023 and 2022, the Company’s PRC profit generating subsidiaries accrued statutory reserve funds of $898,133, respectively.

As of December 31, 2023 and 2022, the Company had net assets restricted in the aggregate, which include paid-in capital and statutory reserve of the Company’s PRC subsidiaries of $33,718,654.

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RELATED PARTY TRANSACTIONS AND BALANCES

12 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS AND BALANCES

RELATED PARTY TRANSACTIONS AND BALANCES

17.RELATED PARTY TRANSACTIONS AND BALANCES

1)Nature of relationships with related parties

Name	Relationship with the Company
Horgos Zhijiantiancheng	Controlled by EJAM Group, which indirectly hold a 6.8% equity interest in the Company
Guangzhou Yijiantiancheng Technology Co., Ltd. (“Guangzhou Yijiantiancheng”)	Controlled by EJAM Group
Anruitai Investment Limited (“Anruitai”)	90% owned by Ms. Wenxiu Zhong and 10% owned by Mr. Sheng Gong, the Director and indirect equity shareholder of the Company

2)Transactions with related parties

	For the Years Ended
	December 31,
	2023		2022		2021
Gross billing from a related party
Horgos Zhijiantiancheng	$	—	$	—	$	83,909
Guangzhou Yijiantiancheng		—		—		8,743
	$	—	$	—	$	92,652
Services purchased from related parties
Horgos Zhijiantiancheng	$	161,264	$	4,464,919	$	11,298,397

3)Balances with related parties

As of December 31, 2023 and 2022, the balances due from related parties were as follows:

	December 31,		December 31,
	2023		2022
Media deposits
Horgos Zhijiantiancheng (a)	$	—	$	104,390
Prepayments
Horgos Zhijiantiancheng (a)	$	215,689	$	3,314,744
Due from related parties
Anruitai Investment Limited	$	28,667	$	28,667
Others		1,408		—
	$	30,075	$	28,667

(a) Horgos Zhijiantiancheng is both a media and advertiser with the Company. For the years ended December 31, 2023 and 2022, the Company provided services to Horgos Zhijiantiancheng and paid media deposits with Horgos Zhijiantiancheng.

17.RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

As of December 31, 2023 and 2022, the balances due to related parties were as follows:

	December 31,		December 31,
	2023		2022
Other payable
Wenxiu Zhong	$	3,546	$	14,499
Others		8,630		—
	$	12,176	$	14,499

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CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2023

CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIALSTATEMENTS

CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

18. CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subsequent to the issuance of the Company’s unaudited condensed consolidated financial statements for the six months ended June 30, 2023, the Company identified a misstatement in reclassification of $1,361,656 from reversal of provision for prepayments to revenues.

The misstatement of reclassification had no impact on items of unaudited condensed consolidated balance sheets as of June 30, 2023, or on net loss for the six months ended June 30, 2023. The misstatement of reclassification had no impact on net cash flows from operating, investing or financing activities for the six months ended June 30, 2023.

	For the Six Months Ended June 30, 2023
	As Previously
	Reported		Adjustment		As Revised
Statements of operations
Revenues	$	1,470,439	$	(1,361,656)	$	108,783
Gross profit (loss)	$	1,175,844	$	(1,361,656)	$	(185,812)
Provision for (reversal of provisions) for doubtful accounts	$	(563,896)	$	1,361,656	$	797,760
Total operating expenses	$	(1,812,649)	$	1,361,656	$	(450,993)

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CONTINGENCIES

12 Months Ended

Dec. 31, 2023

CONTINGENCIES

CONTINGENCIES

19.CONTINGENCIES

In the normal course of business, the Company is subject to loss contingencies, such as certain legal proceedings, claims and disputes. The Company records a liability for such loss contingencies when the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.

On March 14, 2023, Shenzhen Pusi Technology Co., Ltd. (“Shenzhen Pusi”) filed a lawsuit in a court in Shenzhen, Guangdong against Baosheng Network, requesting to be repaid service fee of $23,338 (RMB 160,965) and penalty expenses of $364. The services were rendered in the year of 2022. As of December 31, 2022, the Company recorded RMB 160,965 as a component of accounts payable. As of the date of this report, the case was still in progress.

19.CONTINGENCIES (CONTINUED)

In addition, in June 2019, Ms. Chen Chen filed another lawsuit in a court in Beijing against Beijing Baosheng (the “Contractual Dispute”), seeking to terminate the Equity Ownership Agreement compensation in the amount of RMB47.65 million ($6,838,404), representing the fair market value of the 5% equity interest in Beijing Baosheng to which she claimed title, and for any litigation related expenses. On July 30, 2021, the court issued a judgment ruling that the Equity Ownership Agreement was terminated on October 16, 2020 and requiring Beijing Baosheng to compensate Ms. Chen Chen RMB). 10,739,877 (approximately $1,685,321). Both parties have appealed the ruling to an intermediate court. On January 12, 2022, Beijing Baosheng received a final judgment from the intermediate court, upholding the original judgment issued on July 30, 2021. According to the original judgment, Beijing Baosheng is required to pay the plaintiff RMB10,739,877 (approximately $1,685,321) and court expenses of RMB71,421 (approximately $11,207). Through a guarantee letter dated April 2, 2020 (the “Guarantee Letter”), Ms. Wenxiu Zhong, the former Chairperson of the Board of Directors and CEO, promised to unconditionally, irrevocably and personally bear all the potential economic expenses and losses arising from the Equity Ownership Dispute and the Contract Dispute. On February 8, 2022, the final judgment was enforced by the court with a total of RMB10,917,701 (approximately $1,713,225) being withdrawn from one of the frozen bank accounts of Beijing Baosheng, the bank account at Bank of Hangzhou, which was unfrozen afterwards, and which amount was applied to the satisfaction of such judgment and the payment in full of the related fees and expenses. Accordingly, Beijing Baosheng requested Ms. Wenxiu Zhong to perform her obligations under the Guarantee Letter by reimbursing Beijing Baosheng’s litigation costs, including, but not limited to, the amount of damages imposed by the courts, court expenses, and attorney fees. As of March 7, 2022, as promised by the Guarantee Letter, Ms. Wenxiu Zhong has made the payment in cash of RMB11,053,940 (approximately $1,734,604) to Beijing Baosheng. Such payment made by Ms. Wenxiu Zhong includes the amount paid to Ms. Chen Chen as ordered by the courts plus interest as well as the court expense, attorney fee, and court enforcement fee.

With the final judgement enforced by the Court on February 8, 2022, the Freezing Order (including the freezing of Beijing Baosheng’s equity interests in Horgos Baosheng and Kashi Baosheng) was reversed and all of the impacted assets were unfrozen, accordingly. As of December 31, 2022, all of Beijing Baosheng’s frozen accounts, together with Beijing Baosheng’s equity interests in Horgos Baosheng and Kashi Baosheng had been unfrozen.

On April 6, 2023, the Longhua District People’s Court of Shenzhen City, Guangdong Province accepted a case filed by Shenzhen Pusi Technology Co., Ltd (“Shenzhen Pusi”), as the complainant, and Beijing Baosheng, as the defendant. In this case, Shenzhen Pusi sought recovery of outstanding service fee RMB160,965 (approximately $23,292) and related liquidated damages from Beijing Baosheng and other expenses (i.e., attorney’s fee, court expense and property reservation fee). The court made a ruling in favor of the complainant. Beijing Baosheng appealed to Shenzhen Intermediate People’s Court against the trial court’s judgement. The appellate court made a final ruling on April 29, 2024, affirming the trial court’s judgement. A bank account of Baosheng with bank deposit balance of RMB 171,478 has been reserved by the court on July 2, 2023, following Shenzhen Pusi’s application. The case is now under enforcement procedures.

On March 1, 2024, the Company was served a complaint regarding a lawsuit brought by three institutional investors (the “Plaintiffs”) against the Company and certain other parties, filed with the United States District Court of the Southern District of New York, alleging that the Company violated Section 11 and Section 12 of the Securities Act of 1933, as amended, by including untrue statements of material facts and omitting to state material facts required to make the statements therein not misleading, in its registration statement on Form F-1, as amended (File No. 333-239800), which was declared effective by the SEC on February 5, 2021. On March 17, 2021, two institutional investors, which are also two of the Plaintiffs, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. On March 5, 2024, the Plaintiffs filed an amended complaint and served the Company on March 6, 2024. The Company extended the deadline to respond to May 22, 2024 in order to coordinate with other defendants in the matter. As of the date of this annual report, there is no anticipated court dates of this lawsuit. The Company believes that the complaint is without any merit and intends to defend the matter vigorously.

19.CONTINGENCIES (CONTINUED)

On April 10, 2024, the Company was served with a copy of the winding up petition (the “Petition”), filed by Orient Plus International Limited (the “Petitioner”) with the Grand Court of the Cayman Islands, seeking an order that the Company be wound up pursuant to Section 92(e) of the Cayman Islands Companies Act (2023 Revision), claiming that the management of the Company have acted unfairly and/or oppressively towards the Petitioner and other minority shareholders, and/or the affairs of the Company have been conducted with a lack of probity, and the Petitioner and the other investors have justifiably lost confidence in the management of the Company. On March 17, 2021, two institutional investors, one of which is the Petitioner, purchased 1,960,784 units from the Company pursuant to a securities purchase agreement, with each unit consisting of one ordinary share of the Company and one warrant to purchase one half of one ordinary share of the Company, for an aggregate purchase price of US$10 million. The Company believes that the Petition is without any merit and intends to defend the matter vigorously.

As of this annual report, there is no other legal proceedings, claims and disputes that might cause the Company to be subject to loss contingencies.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

20.SUBSEQUENT EVENTS

These consolidated financial statements were approved by management and available for issuance on May 15, 2024, and the Company has evaluated subsequent events through this date.

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY

12 Months Ended

Dec. 31, 2023

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY

21.CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY

The subsidiaries did not pay any dividend to the parent company for the periods presented. For the purpose of presenting parent only financial information, the parent company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the parent company as “Investment in subsidiaries” and the income or loss of the subsidiaries is presented as “Equity in (loss) gain of subsidiaries”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted.

The parent company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2023 and 2022.

The following is the condensed financial information of the Company on a parent company only basis.

Condensed balance sheets

	December 31,		December 31,
	2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	96,182	$	378,987
Due from related parties		57,661		57,661
Other current assets		1,251		—
Total Current Assets		155,094		436,648
Investments in subsidiaries		4,411,762		5,526,988
Amounts due from subsidiaries		37,806,599		39,515,899
Total Assets	$	42,373,455	$	45,479,535
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Due to related parties	$	—	$	8,170
Warrant liabilities		—		2,744
Accrued expenses and other liabilities		13,344		31,996
Total Liabilities		13,344		42,910
Commitments and Contingencies
Shareholders’ Equity
Ordinary Share (par value $0.0096 per share, 1,000,000,000 shares authorized; 1,534,487 shares issued and outstanding at December 31, 2023 and 2022, respectively)		14,731		14,731
Additional paid-in capital		41,564,418		41,564,418
Retained earnings		4,310,590		6,155,760
Accumulated other comprehensive loss		(3,529,628)		(2,298,284)
Total Shareholders’ Equity		42,360,111		45,436,625
Total Liabilities and Shareholders’ Equity	$	42,373,455	$	45,479,535

21.CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY (CONTINUED)

Condensed statements of comprehensive loss

	For the Years Ended
	December 31,
	2023		2022		2021
Revenues	$	—	$	—	$	—
Cost of revenues		—		—		—
Gross profit		—		—		—
Operating Expenses
General and administrative expenses		(736,646)		(769,017)		(787,744)
Loss from Operations		(736,646)		(769,017)		(787,744)
Equity in loss of subsidiaries	$	(1,110,118)	$	(22,990,360)	$	(8,327,398)
Interest income		771		837		57
Changes in fair value of warrant liabilities		823		19,703		2,367,632
Net Loss Before Income Taxes	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Income tax expense		—		—		—
Net Loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Other Comprehensive (Loss) Income
Foreign currency translation adjustment		(1,231,344)		(4,885,827)		1,393,597
Comprehensive Loss	$	(3,076,514)	$	(28,624,664)	$	(5,353,856)

Condensed statements of cash flows

	For the Years Ended
	December 31,
	2023		2022		2021
Cash Flows from Operating Activities:
Net Cash Used in Operating Activities	$	(755,736)	$	(706,913)	$	(824,929)
Cash Flows from Investing Activities:
Loans made to subsidiaries		—		(500,000)		(38,300,000)
Collection of loans from subsidiaries		503,854		—		—
Net Cash Provided by (Used in) Investing Activities		503,854		(500,000)		(38,300,000)
Cash Flows from Financing Activities:
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs		—		—		26,597,919
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs		—		—		4,154,987
Issuance of units pursuant to a private placement, net of issuance costs		—		—		9,852,486
Net Cash Provided by Financing Activities		—		—		40,605,392
Effect of exchange rate changes on cash and cash equivalents		(30,923)		(21,907)		127,317
Net (decrease) increase in cash and cash equivalents		(282,805)		(1,228,820)		1,607,780
Cash and cash equivalents at beginning of year		378,987		1,607,807		27
Cash and cash equivalents at end of year	$	96,182	$	378,987	$	1,607,807

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities Exchange Commission (“SEC”).

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for doubtful accounts, valuation allowance for deferred tax assets, fair value of warrant liabilities, revenue recognition, and other provisions and contingencies.

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents primarily consist of bank deposits, as well as highly liquid investments, with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains most of the bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.

Short-term investments

Short-term investments

Short-term investments consist of US Treasury Bills and investments in trading securities.

US Treasury Bills

The Company purchased US Treasury Bills with variable interest rates during the year of 2022. US Treasury bills were redeemable within a period of three through six months. In accordance with ASC 825, Financial Instruments, for financial products with variable interest rates referenced to performance of underlying assets, the Company elected the fair value method at the date of initial recognition and carries these investments at fair value with fair value change gains or losses recorded in the investment income in the consolidated statements of loss and comprehensive loss. As of December 31, 2023 and 2022, the Company had US Treasury Bills of $nil and $987,600, respectively. For the years ended December 31, 2023 and 2022, the Company recorded gross unrealized gains of $nil and $7,135. For the years ended December 31, 2023 and 2022, the Company recorded realized gains of $3,188 and $nil, respectively.

Investments in trading securities

Trading securities are investments in publicly-listed equity securities through various open market transactions. During the year ended December 31, 2023 and 2022, the Company purchased certain publicly-listed equity securities through various open market transactions and accounted for such investments as “short-term investments” and subsequently measure the investments at fair value. The Company made a gain of $593,608 and $10,200 in investment in trading securities for the years ended December 31, 2023 and 2022, respectively.

Accounts receivable, net of provision for doubtful accounts

Accounts receivable, net of provision for doubtful accounts

Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from the advertisers for the acquisition of ad inventory and other advertising services on their behalf. Accounts receivable do not bear interest.

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. Upon the adoption of the guidance, the Company reversed allowance for expected credit losses of $702,156 for accounts receivable for the year ended December 31, 2023.

Prior to the Company’s adoption of ASU 2016-13, the Company applied ASC 310, Receivables (“ASC 310”) to recognize and measure accounts receivable. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when necessary. An allowance for doubtful accounts is made and recorded into general and administrative expenses based on any specifically identified accounts receivable that may become uncollectible. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

After the adoption of ASU 2016-13, the Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “provision for doubtful accounts” in the consolidated statements of loss and comprehensive loss. The Company assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable were primarily consisted of accounts due from the advertisers for the acquisition of ad inventory and other advertising services on their behalf. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit loss after management has determined that the likelihood of collection is not probable.

For the year ended December 31, 2023, the Company reversed allowance for expected credit losses of $702,156 for accounts receivable. For the years ended December 31, 2022 and 2021, the Company provided allowance of $19,276,587 and $4,155,246 against the accounts receivable, respectively.

Prepayments

Prepayments

Prepayments represent amounts advanced to media or their authorized agencies (collectively “publishers”) for running of advertising campaigns of the advertisers. The publishers usually require advance payments when the Company orders advertising campaign services on behalf of its advertisers, and the prepayments will be utilized to offset the Company’s future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature, which are reviewed periodically to determine whether their carrying value has become impaired. For the year ended December 31, 2023, the Company reversed allowances of doubtful accounts of $1,243,233 against prepayments. For the years ended December 31, 2022 and 2021, the Company accrued allowances of doubtful accounts of $1,196,563 and $2,668,421, respectively, against prepayments.

Media deposits

Media deposits

Media deposits represent performance security deposit upon becoming an authorized agency of the relevant media (platforms where online advertisement is delivered) as a guarantee of performance and obligations and deposit associated with committed advertising spend on behalf of selected advertisers as required by certain media before running their advertising campaigns, which are paid to media pursuant to the terms of the framework agreements and contracts.

In the event that the advertisers or their advertising agencies on behalf of their advertising clients (collectively the “advertisers”) commit to spending a guaranteed minimum amount on a particular media with the Company, the Company enters into a back-to-back framework agreement with the relevant publishers committing the same level of guaranteed minimum spend and securing a preferential rebate policy applicable to the advertising spend of that advertiser. With the committed minimum spend, the Company is entitled to enjoy certain rebates and discounts and usually be required to pay a deposit of up to 10% of the guaranteed minimum spend. If the Company fails to fulfil the committed minimum spend, the Company would not be entitled to the additional rebates and discounts, and any deposit that has been paid may be forfeited or deducted to pay up the additional amount without the benefit of the additional rebates and discounts.

The media may deduct damages from performance security deposit if the Company has breached the agency agreement or authorized agency management rules and conditions formulated by media.

As of December 31, 2023 and 2022, the balances of media deposits paid to third parties were $713,938 and $1,281,434, respectively. As of December 31, 2023 and 2022, the balances of media deposits paid to a related party were $nil and $104,390, respectively.

Property and equipment, net

Property and equipment, net

Property and equipment primarily consist of property, leasehold improvement, office equipment and electronic equipment, which is stated at cost less accumulated depreciation and impairment losses. Depreciation is provided using the straight-line method based on the estimated useful life. The useful lives of property and equipment as follows:

Property	20 years
Office equipment	5 years
Electronic equipment	3 years
Vehicle	4 years
Leasehold improvement	Shorter of useful life or lease term

Expenditures for repairs and maintenance, which do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the account of “other income or expenses” in the consolidated statement of loss and comprehensive loss.

Intangible assets, net

Intangible assets, net

Purchased intangible assets primarily consist of copyrights and software, which are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method based on their estimated useful lives as. The estimated useful lives of copyrights and software range from 3 to 10 years.

Long-term investment

Long-term investment

Long-term investments consist of the following types of investments.

Equity investment without readily determinable fair value measured at Measurement Alternative

The Company elects to record the equity investment in a privately held company, over which the Company had no control or significant influence, using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. Suh equity investment accounted for using the measurement alternative is subject to periodic impairment review. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity investment. For the years ended December 31, 2023, 2022 and 2021, the Company recorded impairment loss of $128,204, $nil, and $nil against the long-term investment, respectively.

Equity investment accounted for using the equity method

For the year ended December 31, 2023, the Company acquired one equity investment which was accounted for using equity method.

In accordance with ASC 323 “Investments - Equity Method and Joint Ventures,”, the Company accounts for the investment using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee.

Under the equity method, the Company initially records its investment at cost. The Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of loss and comprehensive loss and its share of post-acquisition movements in accumulated other comprehensive income (loss) is recognized in other comprehensive income (loss). The Company records its share of the results of the equity investees on a one quarter in arrears basis. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee.

The Company continually reviews its investment in the equity investee to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. For the year ended December 31, 2023, the Company did not recognize impairment against investment in an equity investee.

Impairment of long-lived assets

Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Impairment of $nil $nil, and $434,878 was recognized on property and equipment for the years ended December 31, 2023, 2022 and 2021, respectively.

Advertiser deposits

Advertiser deposits

The advertiser deposits represented deposits made by the advertisers who undertake a minimum total advertising spend as a condition for enjoying rebates and discounts. The Company generally requires these advertisers to place deposits with the Company at a percentage (usually up to 10%) of the committed spend, which usually equals to the amount of deposit payable to the media under the corresponding framework agreement with the media specific to such advertiser (see note 2 – media deposits). If the advertiser fails to reach the committed minimum spend upon expiry or termination of the framework agreement; (i) the advertiser would not be entitled to the rebates and discounts under the preferential pricing policy, if any; (ii) the advertiser’s deposit may be forfeited or deducted to pay up the additional amount it should pay without the benefits of rebates or discounts.

As of December 31, 2023 and 2022, the balances of advertiser deposits were $90,065 and $541,444, respectively.

Warrant Liabilities

Warrant Liabilities

The Company evaluates the stock purchase warrants under Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of common stock warrant liability in the consolidated statement of loss and comprehensive loss.

Revenue recognition

Revenue recognition

The Company early adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018, using the modified retrospective approach for contracts that were not completed as of December 31, 2017. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

The Company identified each distinct service, or each series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, as a performance obligation. Transaction price is allocated among different performance obligations identified in one contract, by using expected cost plus margin approach, if the standalone selling price of each performance obligation is not observable.

The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company has no material incremental costs of obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year, which need to be recognized as assets.

The Company has advertising agency revenues from search engine marketing (‘SEM”, a form of online marketing that involves the promotion of websites by increasing their visibility in search engine results pages and search-related products and services) services and non-SEM services, including deployment of in-feed and mobile app ads on other media and social media marketing services in relation to running advertising campaigns on selected social media accounts. The Company acts as an agent between media or their authorized agencies (collectively “publishers”) and advertisers by helping publishers procure advertisers and facilitate ad deployment on their advertising channels, and purchasing ad inventories and advertising services from publishers for advertisers. The Company places orders with publishers as per request from advertisers. Each order is materialized by a contract and explicitly quotes one agency service to arrange for the advertising service to be provided by a third party publisher for a period of ad term. The Company provides advices and services on advertising strategies and ad optimization to advertisers to improve the effectiveness of their ads, all of which are highly interrelated and not separately identifiable. The Company’s overall promise represents a combined output that is a single performance obligation; there is no multiple performance obligations.

The Company evaluated its advertising agency contracts and determined that it was not acting as principal in these arrangements with publishers and advertisers since it never takes control of the ad inventories at any time. The Company collects the costs of purchasing ad inventories and advertising services from advertisers on behalf of publishers. The Company generates advertising agency revenues either by charging additional fees to advertisers or receiving rebates and incentives offered by publishers. Accordingly, both advertisers and publishers can be identified as customers, depending on the revenue model applicable to the relevant services.

The Company recognizes revenues on a net basis, which equal to: (i) rebates and incentives offered by publishers, netting the rebates to advertises (if any); and (ii) net fees from advertisers.

Rebates and incentives offered by publishers

Rebates and incentives offered by publishers are determined based on the contract terms with publishers and their applicable rebate policies, which typically in the form of across-the-board standard-rate rebates, differential standard-rate rebates and progressive-rate rebates. Rebates and incentives offered by publishers are accounted for as variable consideration. The Company accrues and recognizes revenues in the form of rebates and incentives based on its evaluation as to whether the contractually stipulated thresholds of advertising spend are likely to being reached, or other benchmarks or certain prescribed classification are likely to being qualified (e.g. the number of new advertisers secured, growth in actual advertising spend), and to the extent that a significant reversal of cumulative revenue would not occur in future periods. These evaluations are based on the past experience and regularly monitoring of various performance factors set within the rebate policies (e.g. accumulated advertising spend, number of new advertisers). At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving such advertising spend volume and any related constraint, and if necessary, adjusts the estimate of the amount of rebates and incentives. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. The rebates and incentives are generally ascertained and settled on a quarterly or annual basis. Historically, adjustments to the estimations for the actual amounts have been immaterial. These rebates and incentives take the form of cash which, when paid, are applied to set off accounts payable with the relevant publishers or settled separately; or can be in the form of ad currency units which will be deposited in the account in the back-end platform of the media, and can then be utilized to acquire their ad inventory.

The Company may offer rebates to advertisers on a case by case basis, generally with reference to the rebates and incentives offered by publishers, the advertiser’s committed total spend, and the business relationships with such advertiser. The rebates offered by the Company to advertisers are in the form of cash discounts or ad currency units that can be utilized to acquire ad inventory from relevant media, both of which are account for as a deduction of revenues.

Net fees from advertisers

Net fees from advertisers are the difference between the gross billing amount charged to the advertisers and the costs of purchasing ad inventories and advertising services on their behalf.

The publishers do not receive the benefits from the Company’s facilitation services until the publishers deliver advertising services to the advertisers. The Company recognizes advertising agency revenues when it transfers the control of the facilitation service commitments, i.e., when the publishers deliver advertising services to the advertisers. Under the CPC and CPA pricing model of media, the Company recognizes revenues at the point of time as the publishers deliver advertising services at the point in time. Under the CPT pricing model of media, the publishers deliver advertising services over time when the advertising links are displayed over the contract periods, and therefore the Company recognizes revenue on a straight-line basis over the contracted display period. During the years ended December 31, 2023, 2022 and 2021, revenues from the advertising services under CPT pricing model that the Company arranged are immaterial.

The Company records revenues and costs on a net basis and the related accounts receivable and payable amounts on a gross basis.

The gross billing amounts charged to the advertisers are collected either in advance to provision of services or after the services. Accounts receivable represent the gross billing charged to advertisers that the Company has an unconditional right to consideration (including billed and unbilled amount) when the Company has satisfied its performance obligation. Payment terms and conditions of accounts receivables vary by customers, and terms typically include a requirement for payment within a period from three to six months. The Company has determined that all the contracts generally do not include a significant financing component. The Company does not have any contract assets since revenue is recognized when control of the promised services is transferred and the payment from customers is not contingent on a future event. In cases where the gross billing amounts are collected in advance, the amounts are recorded as “advance from advertisers” in the consolidated balance sheets. Advance from advertisers related to unsatisfied performance obligations at the end of the year is recognized as revenue when the Company delivers the services to its advertisers. The fees are non-refundable. In cases where amounts are collected after the services, accounts receivable are recognized upon delivery of ad inventories and advertising services to the advertisers. The gross billing amounts are determinable at the inception of the services.

The cost of purchasing ad inventories and advertising services are recorded as accounts payable or a deduction against prepayments in cases where prepayments are required by the publishers.

The following table identifies the disaggregation of our revenue for the years ended December 31, 2023, 2022, and 2021, respectively.

	For the Years Ended
	December 31,
	2023		2022		2021
Nature of Revenue:
Rebates and incentives offered by publishers	$	887,038	$	1,930,188	$	3,663,168
Net fees from advertisers		34,796		484,910		248,392
Total	$	921,834	$	2,415,098	$	3,911,560
Category of Revenue:
SEM services	$	559,307	$	321,363	$	2,449,120
Non-SEM services		362,527		2,093,735		1,462,440
Total	$	921,834	$	2,415,098	$	3,911,560

Value added taxes

Value added taxes

The Company’s PRC subsidiaries are subject to value added tax (“VAT”) and related surcharges based on gross service price depending on the type of services provided in the PRC (“output VAT”), and the VAT may be offset by VAT paid by the Company on service purchases (“input VAT”). The applicable rate of output VAT or input VAT for the Company is 6%. Gross billing charged to advertisers, which is reflected as accounts receivable on gross basis in the consolidated balance sheet, is subject to output VAT at a rate of 6% and subsequently paid to PRC tax authorities after netting input VAT on purchases incurred during the period. The Company’s revenues are presented net of costs of purchasing ad inventories and services paid on behalf of advertisers, VAT collected on behalf of PRC tax authorities and its related surcharges; the VAT is not included in the consolidated statements of loss and comprehensive loss.

Cost of revenues

Cost of revenues

Cost of revenues related to advertising agency is primarily personnel related costs and business taxes. These costs are expensed as incurred.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes.

The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forwards. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company does not believe that there was any uncertain tax position as of December 31, 2023 and 2022. As of December 31, 2023, income tax returns for the tax years ended December 31, 2018 through December 31, 2022 remain open for statutory examination.

Loss per share

Loss per share

Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is computed by dividing net income attributable to ordinary shareholders by the sum of the weighted average number of ordinary share outstanding and of potential ordinary share (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary share that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted loss per share. For the years ended December 31, 2023, 2022 and 2021, the Company had no dilutive shares.

Foreign currency translation

Foreign currency translation

The reporting currency of the Company is U.S. dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into the reporting currency U.S. Dollars (“US$” or “$”). Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations.

The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

	December 31,	December 31,
	2023	2022
Year-end spot rate	7.0999	6.8972

	For the Years Ended
	December 31,
	2023	2022	2021
Average rate	7.0809	6.7290	6.4508

Fair value of financial instruments

Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy are described below:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value.

Financial instruments of the Company primarily comprised current assets and current liabilities including cash and cash equivalents, restricted cash, short-term investments, accounts receivable, third party and related party media deposits, other receivables, accounts payables, advertiser deposits, dividend payable, tax payable, other payables, due to related parties and warrant liabilities.

Fair value of investment in trading securities and US Treasury Bills are based on quoted prices in active markets, and were categorized in Level 1 of the fair value hierarchy.

Warrant liabilities were measured at fair value using unobservable inputs and categorized in Level 3 of the fair value hierarchy. See Note 13.

As of December 31, 2023 and 2022, the carrying values of other financial instruments approximated to their fair values because of the short-term nature of these instruments.

Concentration and credit risk

Concentration and credit risk

Substantially all of the Company’s operating activities are transacted into RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

The Company maintains certain bank accounts in the PRC, Hong Kong and Cayman Islands, which are not insured by Federal Deposit Insurance Corporation (“FDIC”) insurance or other insurance. As of December 31, 2023 and 2022, $3,094,310 and $5,921,461 of the Company’s cash were on deposit at financial institutions in the PRC, respectively, where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure.

Accounts receivable are typically unsecured and derived from services rendered to advertisers that are located primarily in China, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of advertisers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its receivables with specific advertisers. As of December 31, 2023, four advertisers accounted for 22.1%, 17.7%, 16.2% and 12.0% of accounts receivable, respectively. As of December 31, 2022, three advertisers accounted for 18.1%, 14.4% and 13.2% of accounts receivable, respectively.

For the year ended December 31, 2023, two publishers accounted for approximately 49.1% and 40.1% of the total revenue, respectively. For the year ended December 31, 2022, three publishers accounted for approximately 36.8%, 13.3% and 10.7% of the total revenue, respectively. For the year ended December 31, 2021, three publishers accounted for approximately 41.8%, 28.1%  and 16.5% of the total revenue, respectively.

As of December 31, 2023, one publisher accounted for 81.4% of the total accounts payable balance, respectively. As of December 31, 2022, two publishers accounted for 43.5% and 27.7% of the total accounts payable balance, respectively.

Recently issued accounting pronouncements

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal.

In March 2023, the FASB issued new accounting guidance, ASU 2023-01, for leasehold improvements associated with common control leases, which is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. The new guidance introduced two issues: terms and conditions to be considered with leases between related parties under common control and accounting for leasehold improvements. The goals for the new issues are to reduce the cost associated with implementing and applying Topic 842 and to promote diversity in practice by entities within the scope when applying lease accounting requirements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of loss and cash flows.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of useful lives of property and equipment

Property	20 years
Office equipment	5 years
Electronic equipment	3 years
Vehicle	4 years
Leasehold improvement	Shorter of useful life or lease term

Summary of disaggregation of revenue

	For the Years Ended
	December 31,
	2023		2022		2021
Nature of Revenue:
Rebates and incentives offered by publishers	$	887,038	$	1,930,188	$	3,663,168
Net fees from advertisers		34,796		484,910		248,392
Total	$	921,834	$	2,415,098	$	3,911,560
Category of Revenue:
SEM services	$	559,307	$	321,363	$	2,449,120
Non-SEM services		362,527		2,093,735		1,462,440
Total	$	921,834	$	2,415,098	$	3,911,560

Summary of currency exchange rates

	December 31,	December 31,
	2023	2022
Year-end spot rate	7.0999	6.8972

	For the Years Ended
	December 31,
	2023	2022	2021
Average rate	7.0809	6.7290	6.4508

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ACCOUNTS RECEIVABLE, NET (Tables)

12 Months Ended

Dec. 31, 2023

ACCOUNTS RECEIVABLE, NET

schedule of accounts receivable, net of provision for doubtful accounts

	December 31,		December 31,
	2023		2022
Accounts receivable	$	39,500,254	$	49,783,610
Less: provision for doubtful accounts		(13,417,481)		(17,681,792)
Accounts receivable, net of provision for doubtful accounts	$	26,082,773	$	32,101,818

Schedule of movement of allowance for doubtful accounts

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	17,681,792	$	6,426,781
Charge to expenses		—		19,276,587
Reversal of expenses		(702,156)		—
Writing off of accounts receivable		(3,067,433)		(7,239,204)
Foreign exchange loss		(494,722)		(782,372)
Balance at end of the year	$	13,417,481	$	17,681,792

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PREPAYMENTS - THIRD PARTIES (Tables)

12 Months Ended

Dec. 31, 2023

PREPAYMENTS - THIRD PARTIES

Schedule of prepayments relating to third parties

	December 31,		December 31,
	2023		2022
Prepayments to third party medias	$	1,540,597	$	2,957,346
Less: provision for doubtful accounts		(581,462)		(2,153,390)
	$	959,135	$	803,956

Schedule of movement of allowance for doubtful prepayments

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	2,153,390	$	2,701,166
Charge to expenses		—		1,196,563
Reversal of expenses		(1,243,233)		—
Writing off of accounts receivable		(271,269)		(1,547,445)
Foreign exchange loss		(57,426)		(196,894)
Balance at end of the year	$	581,462	$	2,153,390

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OTHER CURRENT ASSETS (Tables)

12 Months Ended

Dec. 31, 2023

OTHER CURRENT ASSETS

Schedule of other current assets

	December 31,		December 31,
	2023		2022
Recoverable value-added taxes	$	2,603,043	$	2,689,170
Others		235,508		60,110
Less: provision for doubtful accounts		(6,678)		(6,874)
	$	2,831,873	$	2,742,406

Movement of allowance for doubtful accounts

	December 31,		December 31,
	2023		2022
Balance at beginning of the year	$	6,874	$	20,621
Charge to expenses		7,061		—
Reversal of charges		—		(12,483)
Writing off of accounts receivable		(7,061)		—
Foreign exchange loss		(196)		(1,264)
Balance at end of the year	$	6,678	$	6,874

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PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT, NET

Summary of property and equipment, net

	December 31,		December 31,
	2023		2022
Property	$	1,958,723	$	2,016,287
Leasehold improvement		477,349		367,235
Office equipment		147,734		161,997
Vehicles		141,649		144,986
Electronic equipment		129,162		133,850
Less: accumulated depreciation		(798,193)		(473,027)
	$	2,056,424	$	2,351,328

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INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS, NET

Summary of intangible assets

	December 31,		December 31,
	2023		2022
Copyrights	$	730,810	$	752,288
Software		65,335		43,954
Less: accumulated amortization		(394,596)		(238,016)
	$	401,549	$	558,226

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PREPAYMENTS FOR LICENSED COPYRIGHTS (Tables)

12 Months Ended

Dec. 31, 2023

PREPAYMENTS FOR LICENSED COPYRIGHTS

Summary of prepayments for licensed copyrights

	December 31,		December 31,
	2023		2022
Prepayments for licensed copyrights	$	—	$	2,735,592

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LONG-TERM INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2023

LONG-TERM INVESTMENTS

Schedule of components of long-term investments

	December 31,		December 31,
	2023		2022
Equity investment without readily determinable fair value measured at Measurement Alternative (a)	$	2,632,742	$	2,261,787
Equity investment accounted for using the equity method (b)		4,216,222		—
	$	6,848,964	$	2,261,787

Schedule of movement of equity investment without readily determinable fair value measured at Measurement Alternative

	December 31,		December 31,
	2023		2022
Opening balance	$	2,261,787	$	1,569,218
Investment in Beijing Qucheng Technology Co., Ltd. (“Qucheng”)		564,900		832,219
Impairment against investment in Qucheng		(128,204)		—
Foreign exchange adjustments		(65,741)		(139,650)
Ending balance	$	2,632,742	$	2,261,787

Schedule of movement of equity investment accounted using Equity method

	December 31,		December 31,
	2023		2022
Opening balance	$	—	$	—
Investment in Guangzhou Shanxingzhe Technology Investment LLP (“Shanxingzhe”)		4,236,750		—
Share of equity loss		(9,214)		—
Foreign exchange adjustments		(11,314)		—
Ending balance	$	4,216,222	$	—

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BANK BORROWING (Tables)

12 Months Ended

Dec. 31, 2023

BANK BORROWING

Summary of bank borrowings

	December 31,		December 31,
	2023		2022
Bank borrowing	$	2,253,553	$	1,449,864

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WARRANT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2023

WARRANT LIABILITIES

Summary of change in the fair value of the warrant liabilities

Estimated fair value as of January 1, 2021	$	—
Issuance of warrants		2,370,376
Changes in estimated fair value		(2,367,632)
Estimated fair value as of December 31, 2021		2,744
Changes in estimated fair value		(1,912)
Estimated fair value as of December 31, 2022		832
Changes in estimated fair value		(832)
Estimated fair value as of December 31, 2023	$	—

Summary of quantitative information regarding Level 3 fair value measurements inputs for the Company's warrants

	As of December 31,		As of December 31,		As of December 31,		As of March 18,
	2023		2022		2021		2021
Volatility	28.63	%	35.77	%	32.52	%	31.26	%
Stock price	3.61		5.16		17.28		126.34
Expected life of the warrants to convert	2.72		3.72		4.72		5.50
Risk free rate	4.20	%	4.17	%	1.27	%	1.09	%
Dividend yield	0.0	%	0.0	%	0.0	%	0.0	%

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

INCOME TAXES

Summary of income tax expense

	For the Years Ended
	December 31,
	2023		2022		2021
Current income tax expense	$	—	$	—	$	—
Deferred income tax expense		—		—		—
Income tax expense	$	—	$	—	$	—

Summary of reconciliation of the statutory tax rate to the effective tax rate

	For the Years Ended
	December 31,
	2023		2022		2021
PRC statutory income tax rate	25	%	25	%	25	%
Impact of different income tax rates in other jurisdictions	(4.7)	%	(0.8)	%	5.9	%
Effect of preferential tax rate(a)	(20.2)	%	(18.0)	%	(23.6)	%
Effect of non-deductible expenses	(1.9)	%	(0.2)	%	(0.7)	%
Effect of change in valuation allowance	1.8	%	(6.0)	%	(6.6)	%
Effective tax rate	0.0	%	0.0	%	0.0	%

(a) The Company’s subsidiaries, Horgos Baosheng, Kashi Baosheng and Baosheng Technology are subject to a favorable tax rate of 0%. For the years ended December 31, 2023, 2022, and 2021, no tax saving was resulted from the favorable tax rate.

Summary of deferred tax assets

	December 31,		December 31,
	2023		2022
Deferred tax assets:
Net operating losses carryforwards	$	2,903,728	$	1,190,713
Allowance for doubtful accounts of accounts receivable		193,032		27,745
Allowance for doubtful accounts of prepayments		3,971		70,207
Allowance for doubtful accounts of other current assets		1,668		1,717
Less: allowance on deferred tax assets		(3,102,399)		(1,290,382)
	$	—	$	—

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EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

EARNINGS PER SHARE

Schedule of computation of basic and diluted loss per common share

	For the Years Ended
	December 31,
	2023		2022		2021
Net Loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Weighted average number of ordinary share outstanding
Basic and Diluted		1,534,487		1,534,487		1,459,390
Loss per share
Basic and Diluted	$	(1.20)	$	(15.47)	$	(4.62)

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RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

12 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS AND BALANCES

Schedule of nature of relationships with related parties

Name	Relationship with the Company
Horgos Zhijiantiancheng	Controlled by EJAM Group, which indirectly hold a 6.8% equity interest in the Company
Guangzhou Yijiantiancheng Technology Co., Ltd. (“Guangzhou Yijiantiancheng”)	Controlled by EJAM Group
Anruitai Investment Limited (“Anruitai”)	90% owned by Ms. Wenxiu Zhong and 10% owned by Mr. Sheng Gong, the Director and indirect equity shareholder of the Company

Schedule of transactions with related parties

	For the Years Ended
	December 31,
	2023		2022		2021
Gross billing from a related party
Horgos Zhijiantiancheng	$	—	$	—	$	83,909
Guangzhou Yijiantiancheng		—		—		8,743
	$	—	$	—	$	92,652
Services purchased from related parties
Horgos Zhijiantiancheng	$	161,264	$	4,464,919	$	11,298,397

Schedule of balances due from related parties

	December 31,		December 31,
	2023		2022
Media deposits
Horgos Zhijiantiancheng (a)	$	—	$	104,390
Prepayments
Horgos Zhijiantiancheng (a)	$	215,689	$	3,314,744
Due from related parties
Anruitai Investment Limited	$	28,667	$	28,667
Others		1,408		—
	$	30,075	$	28,667

(a) Horgos Zhijiantiancheng is both a media and advertiser with the Company. For the years ended December 31, 2023 and 2022, the Company provided services to Horgos Zhijiantiancheng and paid media deposits with Horgos Zhijiantiancheng.

Schedule of balances due to related parties

	December 31,		December 31,
	2023		2022
Other payable
Wenxiu Zhong	$	3,546	$	14,499
Others		8,630		—
	$	12,176	$	14,499

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CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2023

CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIALSTATEMENTS

Schedule of Correction of previously issued misstated unaudited condensed consolidated financial statements

	For the Six Months Ended June 30, 2023
	As Previously
	Reported		Adjustment		As Revised
Statements of operations
Revenues	$	1,470,439	$	(1,361,656)	$	108,783
Gross profit (loss)	$	1,175,844	$	(1,361,656)	$	(185,812)
Provision for (reversal of provisions) for doubtful accounts	$	(563,896)	$	1,361,656	$	797,760
Total operating expenses	$	(1,812,649)	$	1,361,656	$	(450,993)

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY (Tables) - Parent Company

12 Months Ended

Dec. 31, 2023

Condensed balance sheets

	December 31,		December 31,
	2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	96,182	$	378,987
Due from related parties		57,661		57,661
Other current assets		1,251		—
Total Current Assets		155,094		436,648
Investments in subsidiaries		4,411,762		5,526,988
Amounts due from subsidiaries		37,806,599		39,515,899
Total Assets	$	42,373,455	$	45,479,535
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Due to related parties	$	—	$	8,170
Warrant liabilities		—		2,744
Accrued expenses and other liabilities		13,344		31,996
Total Liabilities		13,344		42,910
Commitments and Contingencies
Shareholders’ Equity
Ordinary Share (par value $0.0096 per share, 1,000,000,000 shares authorized; 1,534,487 shares issued and outstanding at December 31, 2023 and 2022, respectively)		14,731		14,731
Additional paid-in capital		41,564,418		41,564,418
Retained earnings		4,310,590		6,155,760
Accumulated other comprehensive loss		(3,529,628)		(2,298,284)
Total Shareholders’ Equity		42,360,111		45,436,625
Total Liabilities and Shareholders’ Equity	$	42,373,455	$	45,479,535

Condensed statements of comprehensive loss

	For the Years Ended
	December 31,
	2023		2022		2021
Revenues	$	—	$	—	$	—
Cost of revenues		—		—		—
Gross profit		—		—		—
Operating Expenses
General and administrative expenses		(736,646)		(769,017)		(787,744)
Loss from Operations		(736,646)		(769,017)		(787,744)
Equity in loss of subsidiaries	$	(1,110,118)	$	(22,990,360)	$	(8,327,398)
Interest income		771		837		57
Changes in fair value of warrant liabilities		823		19,703		2,367,632
Net Loss Before Income Taxes	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Income tax expense		—		—		—
Net Loss	$	(1,845,170)	$	(23,738,837)	$	(6,747,453)
Other Comprehensive (Loss) Income
Foreign currency translation adjustment		(1,231,344)		(4,885,827)		1,393,597
Comprehensive Loss	$	(3,076,514)	$	(28,624,664)	$	(5,353,856)

Condensed statements of cash flows

	For the Years Ended
	December 31,
	2023		2022		2021
Cash Flows from Operating Activities:
Net Cash Used in Operating Activities	$	(755,736)	$	(706,913)	$	(824,929)
Cash Flows from Investing Activities:
Loans made to subsidiaries		—		(500,000)		(38,300,000)
Collection of loans from subsidiaries		503,854		—		—
Net Cash Provided by (Used in) Investing Activities		503,854		(500,000)		(38,300,000)
Cash Flows from Financing Activities:
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs		—		—		26,597,919
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs		—		—		4,154,987
Issuance of units pursuant to a private placement, net of issuance costs		—		—		9,852,486
Net Cash Provided by Financing Activities		—		—		40,605,392
Effect of exchange rate changes on cash and cash equivalents		(30,923)		(21,907)		127,317
Net (decrease) increase in cash and cash equivalents		(282,805)		(1,228,820)		1,607,780
Cash and cash equivalents at beginning of year		378,987		1,607,807		27
Cash and cash equivalents at end of year	$	96,182	$	378,987	$	1,607,807

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ORGANIZATION AND BUSINESS DESCRIPTION (Details)	Mar. 21, 2023 USD ($) $ / shares shares	May 24, 2022 USD ($)	May 23, 2022	May 11, 2022 $ / shares	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CNY (¥)	Oct. 17, 2014 USD ($) subsidiary	Dec. 31, 2023 $ / shares shares	Sep. 29, 2023 USD ($) $ / shares shares	Sep. 28, 2023 USD ($) $ / shares shares	Mar. 20, 2023 USD ($) $ / shares shares	Mar. 06, 2023 USD ($) $ / shares shares	Mar. 05, 2023 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	May 25, 2022 USD ($) $ / shares shares	Jun. 04, 2019	Jan. 07, 2019	Dec. 14, 2018	Oct. 17, 2014 CNY (¥)
ORGANIZATION AND BUSINESS DESCRIPTION
Share consolidation ratio	6	3.2	50,000	3.2
Common stock, par value per share | $ / shares	$ 0.0016			$ 0.0005				$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0016	$ 0.0016	$ 0.0096	$ 0.0016
Authorized capital | $	$ 60,000	$ 60,000							$ 9,600,000	$ 60,000	$ 50,000	$ 60,000	$ 50,000		$ 50,000
Common stock, shares authorized | shares	1,000,000,000							1,000,000,000	1,000,000,000	6,250,000	6,250,000	37,500,000	31,250,000	1,000,000,000	31,250,000
Ordinary shares, shares issued | shares								1,534,487						1,534,487
Common stock, shares outstanding | shares								1,534,487						1,534,487
Beijing Baosheng
ORGANIZATION AND BUSINESS DESCRIPTION
Consideration for equity transfer					$ 13,844,895	¥ 94,045,600
2022 Share Consolidation
ORGANIZATION AND BUSINESS DESCRIPTION
Share consolidation ratio	0.17			0.17
Common stock, par value per share | $ / shares				$ 0.0016
2023 Share Consolidation
ORGANIZATION AND BUSINESS DESCRIPTION
Share consolidation ratio	1
Common stock, par value per share | $ / shares	$ 0.0096
Baosheng BVI
ORGANIZATION AND BUSINESS DESCRIPTION
Ownership interest held																		100.00%
Baosheng HK
ORGANIZATION AND BUSINESS DESCRIPTION
Ownership interest held																	100.00%
Beijing Baosheng
ORGANIZATION AND BUSINESS DESCRIPTION
Ownership interest held																100.00%
Registered capital							$ 289,540												¥ 2,000,000
Number of wholly-owned subsidiaries | subsidiary							3

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Short-term investments
Balance of short-term investments	$ 2,554,319	$ 3,082,990
Changes in fair value of short-term investments	596,796	17,335
Realized gains	3,188	0
Debt Securities, Trading, Realized Gain	593,608	10,200
Accounts receivable, net of provision for doubtful accounts
Reversal allowance for expected credit losses	702,156
Provisions for doubtful accounts		19,276,587	$ 4,155,246
Prepayments
Reversal allowances of doubtful accounts	1,243,233
Provision for doubtful accounts of prepayments	$ (1,243,233)	1,196,563	$ 2,668,421
Media deposits
Percentage of deposit on guaranteed minimum spend	10.00%
Media deposits - third parties	$ 713,938	1,281,434
Media deposits - a related party		104,390
US Treasury Bills
Short-term investments
Changes in fair value of short-term investments		7,135
Investments, Fair Value Disclosure		$ 987,600

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertiser deposits (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Impairment of long-lived assets
Impairment of long-lived assets	$ 0	$ 0	$ 434,878
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of the committed spend	10.00%
Advertiser deposits	$ 90,065	$ 541,444

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets, net and Long-term investment (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recorded impairment against long term investment	$ 128,204	$ 0	$ 0
Software | Minimum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of intangible assets	3 years
Software | Maximum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of intangible assets	10 years
Copy rights | Minimum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of intangible assets	3 years
Copy rights | Maximum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of intangible assets	10 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues	$ 921,834	$ 2,415,098	$ 3,911,560
Minimum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Payment term for accounts receivables	3 months
Maximum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Payment term for accounts receivables	6 months
SEM services
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues	$ 559,307	321,363	2,449,120
Non-SEM services
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues	362,527	2,093,735	1,462,440
Rebates and incentives offered by publishers
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues	887,038	1,930,188	3,663,168
Net fees from advertisers
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues	$ 34,796	$ 484,910	$ 248,392

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency translation (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Value added taxes
Value-added taxes rate	6.00%
Foreign currency translation
Year-end spot rate	7.0999	6.8972
Average rate	7.0809	6.7290	6.4508

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration and credit risk (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 item
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FDIC, deposit at financial institutions | $	$ 3,094,310	$ 5,921,461
Accounts receivable | Credit concentration risk
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of advertisers	4	3
Accounts receivable | Credit concentration risk | Advertiser one
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)	22.10%	18.10%
Accounts receivable | Credit concentration risk | Advertiser two
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)	17.70%	14.40%
Accounts receivable | Credit concentration risk | Advertiser three
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)	16.20%	13.20%
Accounts receivable | Credit concentration risk | Advertiser four
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)	12.00%
Revenue | Customer concentration risk
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of publishers	2	3	3
Revenue | Customer concentration risk | Publisher one
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)		36.80%	41.80%
Revenue | Customer concentration risk | Publisher two
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)	49.10%	13.30%	28.10%
Revenue | Customer concentration risk | Publisher three
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)	40.10%	10.70%	16.50%
Accounts payable | Supplier concentration risk
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of publishers	1	2
Accounts payable | Supplier concentration risk | Publisher two
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)	81.40%	43.50%
Accounts payable | Supplier concentration risk | Publisher three
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of risk (as a percent)		27.70%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment, net (Details)	Dec. 31, 2023
Property
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of property and equipment	20 years
Office equipment
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of property and equipment	5 years
Electronic equipment
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of property and equipment	3 years
Vehicle
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful lives of property and equipment	4 years

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GOING CONCERN (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
GOING CONCERN
Net Loss	$ (1,845,170)	$ (23,738,837)	$ (6,747,453)
Reported cash	2,259,466	1,601,481
Cash flow from operating activity	2,259,466	1,601,481	(31,213,199)
Cash and cash equivalents	3,316,062	6,679,077	$ 4,751,538
Short-term investments	2,554,319	3,082,990
Current liabilities	6,467,631	12,609,790
Advance from customers	$ 841,250	$ 748,039
Bank borrowings term	1 year

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ACCOUNTS RECEIVABLE, NET - Accounts receivable, net of provision (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounts Receivable, net of provisions
Accounts receivable	$ 39,500,254	$ 49,783,610
Less: provision for doubtful accounts	(13,417,481)	(17,681,792)
Accounts receivable, net of provision for doubtful accounts	26,082,773	32,101,818
Reversal allowance for expected credit losses	$ 702,156
Provisions for doubtful accounts		$ 19,276,587	$ 4,155,246

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ACCOUNTS RECEIVABLE, NET - Movement of allowance for doubtful accounts (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Movement of allowance for doubtful accounts
Balance at beginning of the period	$ 17,681,792	$ 6,426,781
Charge to expenses		19,276,587	$ 4,155,246
Reversal of expenses	(702,156)
Writing off of accounts receivable	(3,067,433)	(7,239,204)
Foreign exchange (income) loss	(494,722)	(782,372)
Balance at end of the period	$ 13,417,481	$ 17,681,792	$ 6,426,781

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PREPAYMENTS - THIRD PARTIES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
PREPAYMENTS - THIRD PARTIES
Prepayments to third party medias	$ 1,540,597	$ 2,957,346
Less: provision for doubtful accounts	(581,462)	(2,153,390)	$ (2,701,166)
Total	959,135	803,956
Reversal of expenses	1,243,233
Provision for doubtful accounts of prepayments	$ (1,243,233)	$ 1,196,563	$ 2,668,421

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PREPAYMENTS - THIRD PARTIES - Movement of allowance for doubtful prepayments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
PREPAYMENTS - THIRD PARTIES
Balance at beginning of the year	$ 2,153,390	$ 2,701,166
Charge to expenses		1,196,563
Reversal of expenses	(1,243,233)
Writing off of accounts receivable	(271,269)	(1,547,445)
Foreign exchange loss	(57,426)	(196,894)
Balance at end of the year	$ 581,462	$ 2,153,390

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OTHER CURRENT ASSETS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
OTHER CURRENT ASSETS
Recoverable value-added taxes	$ 2,603,043	$ 2,689,170
Others	235,508	60,110
Less: provision for doubtful accounts	(6,678)	(6,874)	$ (20,621)
Other current assets	2,831,873	2,742,406
Provision for doubtful accounts of other current assets	7,061	(12,483)	56,341
Other current assets, write off	7,061		$ 35,976
Reversed provision for doubtful accounts	$ 12,483	$ 12,483

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OTHER CURRENT ASSETS - Movement of allowance for doubtful accounts (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
OTHER CURRENT ASSETS
Balance at beginning of the year	$ 6,874	$ 20,621
Charge to expenses	7,061
Reversal of charges	(12,483)	(12,483)
Writing off of accounts receivable	(7,061)
Foreign exchange loss	(196)	(1,264)
Balance at end of the year	$ 6,678	$ 6,874

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PROPERTY AND EQUIPMENT, NET (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property and equipment, net
Less: accumulated depreciation	$ (798,193)	$ (473,027)
Property and equipment, net	2,056,424	2,351,328
Depreciation expense	228,806	211,213	$ 210,208
Recognized impairment loss	0	0	$ 434,878
Property
Property and equipment, net
Property and equipment, gross	1,958,723	2,016,287
Leasehold improvement
Property and equipment, net
Property and equipment, gross	477,349	367,235
Office equipment
Property and equipment, net
Property and equipment, gross	147,734	161,997
Less: accumulated depreciation	(480)
Vehicles
Property and equipment, net
Property and equipment, gross	141,649	144,986
Electronic equipment
Property and equipment, net
Property and equipment, gross	129,162	133,850
Less: accumulated depreciation	$ (3,052)	(23,637)
Recognized impairment loss		$ 434,878

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PROPERTY AND EQUIPMENT, NET - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
PROPERTY AND EQUIPMENT, NET
Loss from disposal of property and equipment	$ (6,991)	$ (1,275)	$ (14,810)
Proceeds from disposal of property and equipment		222,916
Accumulated depreciation	798,193	473,027
Electronic equipment
PROPERTY AND EQUIPMENT, NET
Cost of electronic equipment	9,638	217,341	27,156
Accumulated depreciation of electronic equipment			25,798
Proceeds from disposal of property and equipment		222,916
Loss from disposal	6,991	1,275
Cost	129,162	133,850
Accumulated depreciation	3,052	23,637
Leasehold improvement
PROPERTY AND EQUIPMENT, NET
Cost of leasehold improvement			382,909
Accumulated depreciation of leasehold improvement			382,909
Cost	477,349	367,235
Office equipment
PROPERTY AND EQUIPMENT, NET
Cost of office equipment	866		27,071
Accumulated depreciation of office equipment			$ 13,436
Loss from disposal	6,991
Cost	147,734	$ 161,997
Accumulated depreciation	$ 480

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INTANGIBLE ASSETS, NET (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
INTANGIBLE ASSETS, NET
Less: accumulated amortization	$ (394,596)	$ (238,016)
Intangible assets, net	401,549	558,226
Amortization expense	163,813	175,807	$ 76,666
Copy rights
INTANGIBLE ASSETS, NET
Intangible assets, gross	730,810	752,288
Software
INTANGIBLE ASSETS, NET
Intangible assets, gross	$ 65,335	$ 43,954

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PREPAYMENTS FOR LICENSED COPYRIGHTS (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item agreement
PREPAYMENTS FOR LICENSED COPYRIGHTS
Prepayments for licensed copyrights | $		$ 2,735,592
Cooperation agreements | agreement		2
Games developed by third party | item		2
Distribution term		3 years
Games have not been launched | item	2
Impairment prepayments for licensed copyrights | $	$ 2,664,622

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DEPOSITS DUE FROM A THIRD PARTY (Details)	1 Months Ended		12 Months Ended
	Nov. 30, 2023 CNY (¥)	Nov. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
DEPOSITS DUE FROM A THIRD PARTY
Deposits made to a third party for future business combination | ¥	¥ 30,000,000
Nanjing Yunbei
DEPOSITS DUE FROM A THIRD PARTY
Deposit period			12 months
Deposit due			$ 2,816,941
Asset Merger Margin Custodian Agreement | Nanjing Yunbei
DEPOSITS DUE FROM A THIRD PARTY
Deposits made to a third party for future business combination		$ 2,554,539

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LONG-TERM INVESTMENTS - Components of Long Term Investments (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
LONG-TERM INVESTMENTS
Equity investment without readily determinable fair value measured at Measurement Alternative	$ 2,632,742	$ 2,261,787	$ 1,569,218
Equity investment accounted for using the equity method	4,216,222
Long-term investments	$ 6,848,964	$ 2,261,787

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LONG-TERM INVESTMENTS - Movement of equity investment without readily determinable fair value measured at Measurement Alternative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Movement of equity investment without readily determinable fair value measured at Measurement Alternative
Opening balance	$ 2,261,787	$ 1,569,218
Investment in Beijing Qucheng Technology Co., Ltd. ("Qucheng")	564,900	832,219
Impairment of long-term investments	(128,204)
Foreign exchange adjustments	(65,741)	(139,650)
Ending balance	$ 2,632,742	$ 2,261,787

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LONG-TERM INVESTMENTS - Movement of equity investment accounted for using the equity method (Details)	12 Months Ended
	Dec. 31, 2023 USD ($)
LONG-TERM INVESTMENTS
Investment in Guangzhou Shanxingzhe Technology Investment LLP ("Shanxingzhe")	$ 4,236,750
Share of equity loss in one equity investee	(9,214)
Foreign exchange adjustments	(11,314)
Ending balance	$ 4,216,222

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LONG-TERM INVESTMENTS - Narratives (Details)	1 Months Ended						12 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Jan. 31, 2023 USD ($)	Jan. 31, 2023 CNY (¥)	Feb. 28, 2021 USD ($)	Feb. 28, 2021 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
LONG-TERM INVESTMENTS
Cash consideration for equity investment without readily determinable fair value			$ 564,900					$ 832,219
Impairment against equity investment without readily determinable fair value							$ 128,204
Share of equity loss in one equity investee							(9,214)
Qucheng
LONG-TERM INVESTMENTS
Equity investment without readily determinable fair value, percent			12.00%	12.00%
Cash consideration for equity investment without readily determinable fair value				¥ 9,600,000				$ 1,397,119
Impairment against equity investment without readily determinable fair value							$ 128,204
Xinrong Fanxing
LONG-TERM INVESTMENTS
Equity interests					10.00%	10.00%
Cash consideration for equity method investment					$ 1,550,195	¥ 10,000,000
Shanxingzhe
LONG-TERM INVESTMENTS
Equity interests	42.85%	42.85%
Cash consideration for equity method investment	$ 4,236,750	¥ 30,000,000

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BANK BORROWING (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
BANK BORROWING
Bank borrowing	$ 2,253,553	$ 1,449,864

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BANK BORROWING - Additional information (Details)	12 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Jul. 31, 2023 CNY (¥)	Jul. 31, 2023 USD ($)
Bank of Communications | Credit facility agreement
BANK BORROWING
Principal amount					$ 1,449,846
Fixed interest rate				3.65%	3.65%
Interest expense arising from the bank borrowing	$ 73,406	$ 0	$ 88,518
Bank of Communications | Loan agreement
BANK BORROWING
Principal amount						¥ 6,000,000	$ 847,350
Fixed interest rate						3.55%	3.55%
Bank of Beijing | Loan agreement
BANK BORROWING
Principal amount | ¥				¥ 10,000,000

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WARRANT LIABILITIES - Change in the fair value of the warrant liabilities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Change in the fair value of the warrant liabilities
Estimated fair value, Beginning	$ 832	$ 2,744	$ 0
Issuance of warrants			2,370,376
Changes in estimated fair value	$ (832)	(1,912)	(2,367,632)
Estimated fair value, Ending		$ 832	$ 2,744

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WARRANT LIABILITIES - Quantitative information regarding Level 3 fair value measurements inputs for the Company's warrants (Details)	Dec. 31, 2023 $ / shares	Dec. 31, 2022 $ / shares	Dec. 31, 2021 $ / shares	Mar. 18, 2021 $ / shares
Volatility
WARRANT LIABILITIES
Measurement inputs of the warrants	0.2863	0.3577	0.3252	0.3126
Stock price
WARRANT LIABILITIES
Measurement inputs of the warrants	3.61	5.16	17.28	126.34
Expected life of the warrants to convert
WARRANT LIABILITIES
Measurement inputs of the warrants	2.72	3.72	4.72	5.50
Risk free rate
WARRANT LIABILITIES
Measurement inputs of the warrants	0.0420	0.0417	0.0127	0.0109
Dividend yield
WARRANT LIABILITIES
Measurement inputs of the warrants	0.000	0.000	0.000	0.000

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WARRANT LIABILITIES - Narrative details (Details)					12 Months Ended
	Mar. 21, 2023 $ / shares	May 24, 2022	May 23, 2022	May 11, 2022	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 shares	Mar. 18, 2021 shares
WARRANT LIABILITIES
Share consolidation ratio	6	3.2	50,000	3.2
Exercise price (in dollars per share)	$ 107.71
Liquidated damages upon failure to deliver | $					$ 1,000
Volume weighted average price of the ordinary shares, per trading day					$ 10
Volume weighted average price of the ordinary shares, from fifth trading day					$ 20
Private Placement
WARRANT LIABILITIES
Number of warrants issued | shares							112,610
Warrants outstanding | shares					112,610	112,610

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INCOME TAXES (Details) - HKD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
INCOME TAXES
Income tax rate	25.00%	25.00%	25.00%
Hong Kong | Assessable profits of first HKD$2 million
INCOME TAXES
Assessable profits	$ 2
Income tax rate	8.25%
Hong Kong | Assessable profits above HKD$2 million
INCOME TAXES
Assessable profits	$ 2
Income tax rate	16.50%
PRC
INCOME TAXES
Income tax rate	25.00%
PRC | Horgos Baosheng
INCOME TAXES
Preferential income tax rate	0.00%	0.00%	0.00%
Preferential income tax rate term		5 years
PRC | Kashi Baosheng
INCOME TAXES
Preferential income tax rate	0.00%	0.00%	0.00%
Preferential income tax rate term	5 years
PRC | Baosheng Technology
INCOME TAXES
Preferential income tax rate	0.00%	0.00%	0.00%
Preferential income tax rate term	5 years

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INCOME TAXES - Reconciliation of the statutory tax rate (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of the statutory tax rate to the effective tax rate
PRC statutory income tax rate	25.00%	25.00%	25.00%
Impact of different income tax rates in other jurisdictions	(4.70%)	(0.80%)	5.90%
Effect of preferential tax rate(a)	(20.20%)	(18.00%)	(23.60%)
Effect of non-deductible expenses	(1.90%)	(0.20%)	(0.70%)
Effect of change in valuation allowance	1.80%	(6.00%)	(6.60%)
Effective tax rate	0.00%	0.00%	0.00%
Tax saving as the result of favorable tax rate	$ 0	$ 0	$ 0
PRC
Reconciliation of the statutory tax rate to the effective tax rate
PRC statutory income tax rate	25.00%
PRC | Horgos Baosheng
Reconciliation of the statutory tax rate to the effective tax rate
Preferential income tax rate	0.00%	0.00%	0.00%
PRC | Kashi Baosheng
Reconciliation of the statutory tax rate to the effective tax rate
Preferential income tax rate	0.00%	0.00%	0.00%
PRC | Baosheng Technology
Reconciliation of the statutory tax rate to the effective tax rate
Preferential income tax rate	0.00%	0.00%	0.00%

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INCOME TAXES - Deferred tax assets (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Net operating losses carryforwards	$ 2,903,728	$ 1,190,713
Allowance for doubtful accounts of accounts receivable	193,032	27,745
Allowance for doubtful accounts of prepayments	3,971	70,207
Allowance for doubtful accounts of other current assets	1,668	1,717
Less: allowance on deferred tax assets	$ (3,102,399)	$ (1,290,382)

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INCOME TAXES - Additional details (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Valuation allowance	$ 3,102,399	$ 1,290,382
Net operating losses carryforwards
INCOME TAXES
Valuation allowance	$ 3,102,399	$ 1,290,381

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EARNINGS PER SHARE - Computation of basic and diluted loss per common share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
EARNINGS PER SHARE
Net Loss	$ (1,845,170)	$ (23,738,837)	$ (6,747,453)
Weighted average number of ordinary share outstanding
Weighted average number of ordinary share outstanding, Basic	1,534,487	1,534,487	1,459,390
Weighted average number of ordinary share outstanding, Diluted	1,534,487	1,534,487	1,459,390
Loss per share, Basic	$ (1.20)	$ (15.47)	$ (4.62)
Loss per share, Diluted	$ (1.20)	$ (15.47)	$ (4.62)
Dilutive stocks	$ 0	$ 0	$ 0

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EQUITY - Ordinary shares (Details) - $ / shares	Dec. 31, 2023	Sep. 29, 2023	Sep. 28, 2023	Mar. 21, 2023	Mar. 20, 2023	Mar. 06, 2023	Mar. 05, 2023	Dec. 31, 2022	May 25, 2022	May 11, 2022
EQUITY
Ordinary shares, shares authorized	1,000,000,000	1,000,000,000	6,250,000	1,000,000,000	6,250,000	37,500,000	31,250,000	1,000,000,000	31,250,000
Ordinary shares, par value (in dollars per share)	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0016	$ 0.0096	$ 0.0016	$ 0.0016	$ 0.0096	$ 0.0016	$ 0.0005

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EQUITY - Board of directors approved (Details) $ / shares in Units, $ in Millions									12 Months Ended
	Mar. 21, 2023 $ / shares shares	May 24, 2022	May 23, 2022	May 11, 2022 $ / shares	Mar. 18, 2021 USD ($) item $ / shares shares	Mar. 17, 2021 shares	Mar. 02, 2021 USD ($) $ / shares shares	Feb. 10, 2021 $ / shares shares	Dec. 31, 2021 shares	Dec. 31, 2023 $ / shares shares	Sep. 29, 2023 $ / shares shares	Sep. 28, 2023 $ / shares shares	Mar. 20, 2023 $ / shares shares	Mar. 06, 2023 $ / shares shares	Mar. 05, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares	May 25, 2022 $ / shares shares	Dec. 31, 2020 shares
EQUITY
Exercise price (in dollars per share) | $ / shares	$ 107.71
Ordinary shares, shares authorized	1,000,000,000									1,000,000,000	1,000,000,000	6,250,000	6,250,000	37,500,000	31,250,000	1,000,000,000	31,250,000
Ordinary shares, par value (in dollars per share) | $ / shares	$ 0.0016			$ 0.0005						$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0016	$ 0.0016	$ 0.0096	$ 0.0016
Stock split	6	3.2	50,000	3.2
Ordinary shares, shares issued										1,534,487						1,534,487
Ordinary shares, shares outstanding										1,534,487						1,534,487
Securities purchase agreement
EQUITY
Amount of investment | $					$ 10.0
Number of ordinary share in each unit						1,960,784
Number of shares issuable per warrant						1.5
Number of shares in a unit						1
Number of warrants in a unit						1
Securities purchase agreement | Investor
EQUITY
Number of investors | item					2
Securities Act of 1933, as Amended
EQUITY
Exercise price (in dollars per share) | $ / shares					$ 5.61
Ordinary shares
EQUITY
Ordinary shares, shares issued									1,534,487	1,534,487						1,534,487		1,062,502
Ordinary shares | Securities Act of 1933, as Amended
EQUITY
Number of ordinary share in each unit					1,960,784
Ordinary shares, par value (in dollars per share) | $ / shares					$ 0.0005
Number of shares in a unit					1
Number of warrants in a unit					0.5
Initial public offering
EQUITY
Number of shares issued during period							900,000	6,000,000
Share price | $ / shares							$ 5.00	$ 5.00
Initial public offering | Ordinary shares
EQUITY
Number of shares issued during period									312,500
Over-allotment option
EQUITY
Gross proceeds | $							$ 34.5
Over-allotment option | Ordinary shares
EQUITY
Number of shares issued during period									46,875

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EQUITY - Restricted net assets (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
EQUITY
Statutory reserve	$ 898,133	$ 898,133
Retained Earnings (Accumulated Deficit)	3,412,457	5,257,627
Horgos Baosheng
EQUITY
Retained Earnings (Accumulated Deficit)	$ 33,718,654	$ 33,718,654

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EQUITY - Cash dividends (Details)	12 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2023 USD ($)
EQUITY
Cash dividends			$ 7,269,978	¥ 50,000,000
Payments of dividends	$ 1,188,884	$ 2,170,273
Dividends payable	$ 0				$ 0

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EQUITY - Additional information (Details)	Mar. 21, 2023 USD ($) $ / shares shares	May 24, 2022 USD ($)	May 23, 2022	May 11, 2022 $ / shares	Dec. 31, 2023 $ / shares shares	Sep. 29, 2023 USD ($) $ / shares shares	Sep. 28, 2023 USD ($) $ / shares shares	Mar. 20, 2023 USD ($) $ / shares shares	Mar. 06, 2023 USD ($) $ / shares shares	Mar. 05, 2023 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	May 25, 2022 USD ($) $ / shares shares
EQUITY
Share consolidation ratio	6	3.2	50,000	3.2
Ordinary shares, par value (in dollars per share) | $ / shares	$ 0.0016			$ 0.0005	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0016	$ 0.0016	$ 0.0096	$ 0.0016
Authorized capital | $	$ 60,000	$ 60,000				$ 9,600,000	$ 60,000	$ 50,000	$ 60,000	$ 50,000		$ 50,000
Ordinary shares, shares authorized | shares	1,000,000,000				1,000,000,000	1,000,000,000	6,250,000	6,250,000	37,500,000	31,250,000	1,000,000,000	31,250,000
Ordinary shares, shares issued | shares					1,534,487						1,534,487
Ordinary shares, shares outstanding | shares					1,534,487						1,534,487
2022 Share Consolidation
EQUITY
Share consolidation ratio	0.17			0.17
Ordinary shares, par value (in dollars per share) | $ / shares				$ 0.0016
2023 Share Consolidation
EQUITY
Share consolidation ratio	1
Ordinary shares, par value (in dollars per share) | $ / shares	$ 0.0096

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RELATED PARTY TRANSACTIONS AND BALANCES - Nature of relationships with related parties (Details)	Dec. 31, 2023
EJAM Group
RELATED PARTY TRANSACTIONS AND BALANCES
Ownership interest held	6.80%
Anruitai | Mr. Sheng Gong
RELATED PARTY TRANSACTIONS AND BALANCES
Ownership interest held	10.00%
Anruitai | Ms. Wenxiu Zhong
RELATED PARTY TRANSACTIONS AND BALANCES
Ownership interest held	90.00%

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RELATED PARTY TRANSACTIONS AND BALANCES - Transactions with related parties (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Service fees charged by related parties | Horgos Zhijiantiancheng
RELATED PARTY TRANSACTIONS AND BALANCES
Transactions with related parties	$ 161,264	$ 4,464,919	$ 11,298,397
Gross Billing From Related Parties
RELATED PARTY TRANSACTIONS AND BALANCES
Transactions with related parties			92,652
Gross Billing From Related Parties | Horgos Zhijiantiancheng
RELATED PARTY TRANSACTIONS AND BALANCES
Transactions with related parties			83,909
Gross Billing From Related Parties | Guangzhou Yijiantiancheng
RELATED PARTY TRANSACTIONS AND BALANCES
Transactions with related parties			$ 8,743

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RELATED PARTY TRANSACTIONS AND BALANCES - Balances with related parties (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
RELATED PARTY TRANSACTIONS AND BALANCES
Media deposits		$ 104,390
Prepayments	$ 215,689	3,314,744
Amounts due from related parties	30,075	28,667
Due from related parties	30,075	28,667
Due to related parties	12,176	14,499
Related Party | Horgos Zhijiantiancheng
RELATED PARTY TRANSACTIONS AND BALANCES
Media deposits		104,390
Prepayments	215,689	3,314,744
Related Party | Ms. Wenxiu Zhong
RELATED PARTY TRANSACTIONS AND BALANCES
Due to related parties	3,546	14,499
Related Party | Anruitai
RELATED PARTY TRANSACTIONS AND BALANCES
Due from related parties	28,667	$ 28,667
Related Party | Others
RELATED PARTY TRANSACTIONS AND BALANCES
Due from related parties	1,408
Due to related parties	$ 8,630

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CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Details)	6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Revenues		¥ 108,783	$ 308,395	$ 2,446,941	$ 2,077,516
Gross profit (loss)		(185,812)	613,439	(31,843)	1,834,044
Provision for (reversal of provisions) for doubtful accounts	$ 1,361,656	797,760	726,294	20,460,667	6,880,008
Total operating expenses		(450,993)	$ 3,081,197	$ 24,036,140	$ 11,257,753
As Previously Reported
CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Revenues		1,470,439
Gross profit (loss)		1,175,844
Provision for (reversal of provisions) for doubtful accounts		(563,896)
Total operating expenses		(1,812,649)
Adjustment
CORRECTION OF PREVIOUSLY ISSUED MISSTATED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Revenues		(1,361,656)
Gross profit (loss)		(1,361,656)
Provision for (reversal of provisions) for doubtful accounts		1,361,656
Total operating expenses		¥ 1,361,656

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CONTINGENCIES - Baosheng Network (Details)	Mar. 14, 2023 USD ($)	Mar. 14, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)
CONTINGENCIES
Accounts payable			$ 2,292,871	$ 8,853,669
Baosheng Network
CONTINGENCIES
Penalty amount	$ 364
Accounts payable | ¥					¥ 160,965
Baosheng Network | Service fee repayment
CONTINGENCIES
Service fee amount	$ 23,338	¥ 160,965

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CONTINGENCIES - Beijing Baosheng (Details)										1 Months Ended
	Apr. 06, 2023 USD ($)	Apr. 06, 2023 CNY (¥)	Mar. 07, 2022 USD ($)	Mar. 07, 2022 CNY (¥)	Feb. 08, 2022 USD ($)	Feb. 08, 2022 CNY (¥)	Jul. 30, 2021 USD ($)	Jul. 30, 2021 CNY (¥)	Mar. 17, 2021 USD ($) shares	Jun. 30, 2019 USD ($)	Jun. 30, 2019 CNY (¥)	Jul. 02, 2023 CNY (¥)	Jul. 30, 2021 CNY (¥)
Securities purchase agreement
CONTINGENCIES
Number of ordinary share in each unit									1,960,784
Number of shares in a unit									1
Number of warrants in a unit									1
Number of shares issuable per warrant									1.5
Aggregate purchase price | $									$ 10,000,000
Beijing Baosheng
CONTINGENCIES
Amount of damages							$ 1,685,321	¥ 10,739,877
Court expenses							11,207	¥ 71,421
Amount withdrawn					$ 1,713,225	¥ 10,917,701
Amount of proceeds received from related parties			$ 1,734,604	¥ 11,053,940
Beijing Baosheng | Equity Ownership Dispute
CONTINGENCIES
Equity interest under litigation										5.00%	5.00%
Beijing Baosheng | Contractual Dispute
CONTINGENCIES
Amount of damages										$ 6,838,404	¥ 47,650,000
Loss contingencies, amount accrued							$ 1,685,321						¥ 10,739,877
Shenzhen Pusi Technology Co., Ltd | Service fee repayment
CONTINGENCIES
Amount of damages	$ 23,292	¥ 160,965
Bank deposits | ¥												¥ 171,478

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY - Condensed balance sheets (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current Assets
Cash and cash equivalents	$ 3,316,062	$ 6,679,077	$ 4,751,538
Due from related parties	30,075	28,667
Other current assets	2,831,873	2,742,406
Total Current Assets	39,520,805	50,139,482
Total Assets	48,827,742	58,046,415
Current Liabilities
Due to related parties	12,176	14,499
Warrant liabilities		832
Accrued expenses and other liabilities	727,799	744,181
Total Liabilities	6,467,631	12,609,790
Shareholders' Equity
Ordinary Share (par value $0.0096 per share, 100,000,000 shares authorized; 1,534,487 shares issued and outstanding at December 31, 2023 and 2022, respectively)*	14,731	14,731
Additional paid-in capital	41,564,418	41,564,418
Retained earnings	3,412,457	5,257,627
Accumulated other comprehensive (loss) income	(3,529,628)	(2,298,284)
Total Shareholders' Equity	42,360,111	45,436,625	$ 74,061,289	$ 41,660,861
Total Liabilities and Shareholders' Equity	48,827,742	58,046,415
Parent Company
Current Assets
Cash and cash equivalents	96,182	378,987
Due from related parties	57,661	57,661
Other current assets	1,251
Total Current Assets	155,094	436,648
Investments in subsidiaries	4,411,762	5,526,988
Amounts due from subsidiaries	37,806,599	39,515,899
Total Assets	42,373,455	45,479,535
Current Liabilities
Due to related parties		8,170
Warrant liabilities		2,744
Accrued expenses and other liabilities	13,344	31,996
Total Liabilities	13,344	42,910
Commitments and Contingencies
Shareholders' Equity
Ordinary Share (par value $0.0096 per share, 100,000,000 shares authorized; 1,534,487 shares issued and outstanding at December 31, 2023 and 2022, respectively)*	14,731	14,731
Additional paid-in capital	41,564,418	41,564,418
Retained earnings	4,310,590	6,155,760
Accumulated other comprehensive (loss) income	(3,529,628)	(2,298,284)
Total Shareholders' Equity	42,360,111	45,436,625
Total Liabilities and Shareholders' Equity	$ 42,373,455	$ 45,479,535

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY - Condensed balance sheets - Parenthetical (Details)	Mar. 21, 2023 USD ($) $ / shares shares	May 24, 2022 USD ($)	May 23, 2022	May 11, 2022 $ / shares	Dec. 31, 2023 $ / shares shares	Sep. 29, 2023 USD ($) $ / shares shares	Sep. 28, 2023 USD ($) $ / shares shares	Mar. 20, 2023 USD ($) $ / shares shares	Mar. 06, 2023 USD ($) $ / shares shares	Mar. 05, 2023 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	May 25, 2022 USD ($) $ / shares shares
Ordinary shares, par value (in dollars per share) | $ / shares	$ 0.0016			$ 0.0005	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0096	$ 0.0016	$ 0.0016	$ 0.0096	$ 0.0016
Ordinary shares, shares authorized	1,000,000,000				1,000,000,000	1,000,000,000	6,250,000	6,250,000	37,500,000	31,250,000	1,000,000,000	31,250,000
Ordinary shares, shares issued					1,534,487						1,534,487
Ordinary shares, shares outstanding					1,534,487						1,534,487
Share consolidation ratio	6	3.2	50,000	3.2
Authorized capital | $	$ 60,000	$ 60,000				$ 9,600,000	$ 60,000	$ 50,000	$ 60,000	$ 50,000		$ 50,000
Parent Company
Ordinary shares, par value (in dollars per share) | $ / shares					$ 0.0096						$ 0.0096
Ordinary shares, shares authorized					1,000,000,000						1,000,000,000
Ordinary shares, shares issued					1,534,487						1,534,487
Ordinary shares, shares outstanding					1,534,487						1,534,487

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY - Condensed statements of comprehensive loss (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2023 CNY (¥)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Revenues		$ 921,834	$ 2,415,098	$ 3,911,560
Cost of revenues	¥ (108,783)	(308,395)	(2,446,941)	(2,077,516)
Gross profit (loss)	¥ (185,812)	613,439	(31,843)	1,834,044
Operating Expenses
General and administrative expenses		(1,845,064)	(2,811,215)	(2,856,789)
Loss from Operations		(2,467,758)	(24,067,983)	(9,423,709)
Interest income		(14,492)	16,397	(57,109)
Changes in fair value of warrant liabilities		(832)	(1,912)	(2,367,632)
Loss Before Income Taxes		(1,845,170)	(23,738,837)	(6,747,453)
Net Loss		(1,845,170)	(23,738,837)	(6,747,453)
Other Comprehensive (Loss) Income
Foreign currency translation adjustment		(1,231,344)	(4,885,827)	1,393,597
Comprehensive Loss		(3,076,514)	(28,624,664)	(5,353,856)
Parent Company
Operating Expenses
General and administrative expenses		(736,646)	(769,017)	(787,744)
Loss from Operations		(736,646)	(769,017)	(787,744)
Equity in loss of subsidiaries		(1,110,118)	(22,990,360)	(8,327,398)
Interest income		771	837	57
Changes in fair value of warrant liabilities		823	19,703	2,367,632
Loss Before Income Taxes		(1,845,170)	(23,738,837)	(6,747,453)
Net Loss		(1,845,170)	(23,738,837)	(6,747,453)
Other Comprehensive (Loss) Income
Foreign currency translation adjustment		(1,231,344)	(4,885,827)	1,393,597
Comprehensive Loss		$ (3,076,514)	$ (28,624,664)	$ (5,353,856)

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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY ONLY - Condensed statements of cash flows (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash Flows from Operating Activities:
Net Cash (Used in) Provided by Operating Activities	$ 2,259,466	$ 1,601,481	$ (31,213,199)
Cash Flows from Investing Activities:
Net Cash Used in Investing Activities	(6,312,936)	(3,777,782)	(6,414,339)
Cash Flows from Financing Activities:
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs			26,507,760
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs			4,154,987
Issuance of units pursuant to a private placement, net of issuance costs			9,852,486
Net Cash Provided by Financing Activities	847,350	295,765	36,085,744
Effect of exchange rate changes on cash and cash equivalents	(156,895)	(323,238)	152,389
Net decrease in cash, cash equivalents and restricted cash	(3,363,015)	(2,203,774)	(1,389,405)
Cash, cash equivalents and restricted cash at beginning of year	6,679,077	8,882,851	10,272,256
Cash, cash equivalents and restricted cash at end of year	3,316,062	6,679,077	8,882,851
Parent Company
Cash Flows from Operating Activities:
Net Cash (Used in) Provided by Operating Activities	(755,736)	(706,913)	(824,929)
Cash Flows from Investing Activities:
Loans made to subsidiaries		(500,000)	(38,300,000)
Collection of loans from subsidiaries	503,854
Net Cash Used in Investing Activities	503,854	(500,000)	(38,300,000)
Cash Flows from Financing Activities:
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs			26,597,919
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs			4,154,987
Issuance of units pursuant to a private placement, net of issuance costs			9,852,486
Net Cash Provided by Financing Activities			40,605,392
Effect of exchange rate changes on cash and cash equivalents	(30,923)	(21,907)	127,317
Net decrease in cash, cash equivalents and restricted cash	(282,805)	(1,228,820)	1,607,780
Cash, cash equivalents and restricted cash at beginning of year	378,987	1,607,807	27
Cash, cash equivalents and restricted cash at end of year	$ 96,182	$ 378,987	$ 1,607,807